Labour Brokers - Phase Two Starts

It was Churchill who said of victory in the Battle of Britain, that "it was not the beginning of the end, but rather the end of the beginning".  We might say the same about the labour broker debate, which has now shifted a gear, and hopefully will become a rational and informed, rather than an emotive and rhetorical debate.

This phase shift was achieved over the weekend of November 7/8, when the National Executive Committee announced that Government had concluded that labour broking should not be banned, but should be regulated. This, we have argued strenuously since the topic first arose, is the only possible way forward.  A total ban, treats the reputable majority as being indistinguishable from the small outlaw minority, and recognises that the cost to the economy and to the social fabric would be on the scale of a national disaster, and would, ironically, drive those who operate outside of the law even further underground.  

Organisations such as CAPES and APSO, representing the industry have long advocated regulation, so the Government announcement is to be welcomed.  It also shows that when a balanced view is taken, Government does not subscribe to the populist rhetoric of COSATU, which damns every labour broker as a slave trader, a human trafficker, and lower than a drug dealer.  Perhaps now we can continue with a more rational discussion, and see what kind of regulation we can expect.

I think that the starting point of the discussion is the Constitutional Bill of Rights, and specifically the labour rights found in s23.  The Constitution is the supreme law in South Africa, and the Courts must apply it, strike down legislation that offends against it, and develop the common law in the light that the Constitution shines upon it.  It is an exceptional document, and every citizen should understand it, and feel protected and comforted by it.  The point that I wish to stress, is that it is to everyone’s’ advantage that the Constitution is upheld.  Unconstitutional behaviour should not be tolerated for one minute.  It threatens us all.

Unscrupulous labour brokers have denied people at work their constitutional right to fair labour practice.  It is not the only mechanism that has been used, and is one that when in the hands of reputable and responsible TES’s, need not have that effect at all.  However, the broad brush of abuse has painted every operator in the Employment Services sector in the same way – as ruthless exploiters.  This is patently not so, since it has been the Temporary Employment Services Community, and not the ‘Bakkie Brigade’ who have advocated this step.

The starting point is going to the right to fair labour practice, and the most frequently found aspect of this is in the right to be fairly dismissed.  By far the greater part of the CCMA’s work for example, over 80% relate to claims of unfair dismissal, so this is where the greatest impact will be felt.  The TES itself, as the employer is primarily responsible as the employer for fair dismissal, but it is certain that a joint responsibility for this will now be reflected on the user of TES labour, making the responsibility for a fair dismissal joint and several.   This means that reputable TES’s will (and Express Employment Services already has) put a disciplinary procedure in place to ensure fairness.  Consequently, before engaging the services of a TES, the end user will seek reassurances that there are proper procedures in place, with the net result that fairness is ensured.  Being able to reassure a client that TES employees are treated fairly, and not dismissed improperly  should this prove to be necessary, in a manner which does not leave the client vulnerable, becomes a competitive advantage for the ethical TES.

The issue of pay for TES supplied labour will become an important issue.  The unions have argued that a labour broker makes its profit by paying the employee wages that are below the minimum specified, and thus make their profit by robbing the worker of their just reward.  We showed in our previous article that this was not so.  However, recent legislation, in Britain, for example, has focussed on discriminatory differentials.  However, the area is fraught with difficulty, and it is to be hope that our courts will take the time to understand the mathematical complexities involved in analysing a wage payment structure to identify whether or not observed pay differentials are really unfairly discriminatory in nature, or in fact reflect differences such as performance, productivity, length of service, skill, and other genuine and legitimate differentiators.

Finally it needs to be clearly understood that any intervention in the labour market of this size and scope will not be without significant consequences, which will undoubtedly be loss of jobs, and the disappearance of those who are content to operate outside of the law, even further underground.  

There are 550,000 employees in employment everyday – to believe that every one of these will simply become a permanent full time employee, is naïve. What Government repeatedly refuses to understand, is that you cannot compel employers to create jobs, or to hire staff, and the more they perceive the employment environment as being oppressive and stacked against them, the less willing they will be to employ.

The need for labour flexibility is beyond debate.  So too, is the fact that no reputable or decent employer would argue in favour of labour exploitation.  Now that we hopefully have reached the point in the debate where the rhetoric and abuse has stopped, it is to be hoped that logical debate and discussion can begin, so that the optimal solution can be found. In the interim, the reputable labour broker still serves an important function in the labour market, and manages to do this within the spirit of labour legislation.  This is the time for cool heads and balanced decision making to come to the fore.  Any ‘solution’ which adds hundreds of thousands of South African’s to the numbers of the unemployed, is no solution at all.

 

Author: Andrew Levy of Andrew Levy Employment