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Cosatu demands ban on labour brokers

A battered as the continuous struggle by workers, a stained glass window delivers a poignant message and reminder on the 10th foor of COSATU House in Braamfontien. Picture: Steve Lawrence 14/07/05

A battered as the continuous struggle by workers, a stained glass window delivers a poignant message and reminder on the 10th foor of COSATU House in Braamfontien. Picture: Steve Lawrence 14/07/05

Published Dec 18, 2015


The recently concluded Cosatu 12th National Congress, held in November, was very clear regarding the issue of labour brokers: it must be totally banned!

Our federation and all of its affiliated trade unions have for many years campaigned for the banning of labour brokers. Our members regard labour brokering as an unacceptable and insulting form of modern slavery. Cosatu remains resolute that labour brokering is inhumane.

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Labour brokering is an ever growing part of the South African labour market. It had roots in previous formations such as recruiting agencies, which imported migrant labour from deep rural areas such as Transkei and neighbouring states to work in our mines. Today almost 1 million South Africans are precariously employed by labour brokers.

These are typically short term, low paying casualised jobs, not new jobs created by labour brokers. Here and globally, its continued existence is largely fuelled by greedy capitalists seeking to maximise profits at the expense of decent employment conditions. There is an unrelenting pursuit for permanent jobs with social benefits and decent wages to be outsourced in order to provide insecure contract cashiers, packers, drivers, security guards, cleaners and even manufacturing jobs.

Bosses love labour brokers as they can pay their workers slave wages and dismiss them at a moment’s notice, when such workers attempt to unionise to improve their working conditions. This crushes any union attempt to bring decency to the work place.

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An example of the absurdity being hailed as a progressive intervention to address the problem of youth unemployment, is this: In 2014, government enacted the Employment Tax Incentive Act (ETIA), which we vehemently objected to. Our objections were simply just ignored. The ETIA’s stated and lauded intention was to incentivise employers to create new jobs for unemployed youth. Since its introduction, Treasury has spent billions on implementing the ETIA.

Ironically, whilst government claims to have resolved the problems of labour brokering through the 2013 Labour Relations Amendment Act, a large part of the R2 billion youth employment incentive so far disbursed has accrued to labour brokers.

For instance, virtually all of the 2014 profit of Workforce Holdings, the second-largest South African labour broker, is derived from the youth employment incentive. In its annual report, this company states that, in 2014, it had claimed R53.4 million from the incentive whilst declaring a profit before tax of R51.2m.

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Massive profit margins

In other words, workers’ hard earned taxes are now being freely handed out by our government to labour brokers. Our taxes are now subsidising labour brokers’ massive profit margins! Labour brokering’s reach is not just felt in the supermarket retailer, where workers now often fall under half a dozen different employers and with insecure contract employment conditions. Today, labour brokering has reached deep inside the public sector, as well as in our institutions of higher and further education.

We call for labour and civil society resistance to this form of modern slavery, and not just to rely on legislation. The battle against this scourge must continue.

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The Communications Workers Union has been fighting a two tiered wage labour broker situation at Telkom and the Post Office. Nehawu in alliance with our student movement have fought valiantly to end labour broking across the university sector. As far back as February 2007, our clothing, textile and leather affiliate (Sactwu) secured a precedent-setting bargaining council gazetted collective agreement that bans labour brokering in the carpet and blanket sub-sectors of the textile industry.

Cosatu’s recent 12th National Congress has called on all our affiliates to step up the fight, and to strike if need be. In response to workers and Cosatu’s demands, President Jacob Zuma committed to phase out labour broking and outsourcing in government during the ANC’s 2015 January 8 statement.

This commitment must now be decisively implemented. The government must lead by example and end all outsourcing in the public service immediately. It must end all subsidies for labour brokers. Those funds must instead be used to support real job creation and to promote industrialisation.

Corruption must be crushed

All too often, many government officials who disburse tenders are often shareholders of the very same labour brokers! Such corruption must be crushed, without fear or favour.

We acknowledge that the ANC-led government has introduced restrictions, for the first time, on labour brokering, through the Labour Relations Amendment Act of 2013. It provides for workers to become permanent employees after three months. This was a huge victory for hundreds of thousands of workers.

However, the implementation of even this progressive amendment to our employment law has revealed significant problems in practice. Whilst this law was a massive victory for workers, it has numerous exemption provisions that allow employers not to convert vulnerable workers to permanent employees.

Its loopholes fail to conclusively resolve the problem of abusive employment labour brokering practices, hence undermining our nation’s nationally stated quest for decent work. All too often labour brokers and its host companies simply ignore this legal requirement. Labour brokers and their extreme right wing ally, the Free Market Foundation, have even gone to court to attempt to weaken this hard won victory by workers. Nowhere in our Constitution does it provide for a constitutional right to labour brokering, modern day slavery or permanent temporary work! Employers are free to contest the constitutionality of a ban in the Constitutional Court.

A key step forward is to ensure the progressively amended Labour Relation Act’s vigorous implementation, whilst simultaneously introducing additional legal measures which will result in the effective banning of labour brokering practices.

It also requires a strengthening of the Department of Labour’s inspection and enforcement capacity, a commitment which was made in the ANC’s 2014 general elections manifesto, but which is yet to be implemented. The time has now arrived to implement what we have mobilised our members to vote for during the 2014 general elections: to fully eliminate labour brokering. Sekunjalo!

* Bheki Ntshalintshali is Cosatu’s general secretary.

** The views expressed here do not necessarily reflect those of Independent Media.


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