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A contract workforce is becoming the norm

Workers waiting for short-term job opportunities.     Henk Kruger  African News Agency (ANA)

Workers waiting for short-term job opportunities. Henk Kruger African News Agency (ANA)

Published Sep 24, 2018


We have almost 10 million people who are able to work but unable to find employment. 

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We know that small business is the engine room for job creation, and unfortunately we know that big business across the world is in the process of shrinking its workforce. Typical employment is a 9am to 5pm job where the individual is employed from the age of 18 to 65.

The world is evolving at an enormous pace, and atypical employment is almost becoming the norm.

Wherever I go in the world, I engage labour legal colleagues who explain how the Fourth Industrial Revolution is changing our approach to employment, and certainly is helping to fashion changes in our labour law.

Section 198 of the Labour Relations Act tackles the issue of temporary employment services (labour brokers).

Temporary employment service is defined as any person who for reward secures or provides to a client other persons to perform work for the client and who are remunerated by the temporary employment service.

In other words, a labour broker will employ an individual and send that individual to their client to work.

The individuals who are sent to work at the client should receive the same conditions and benefits as the other employees who are doing a similar service.

Over and above, those employees have the full protection of the labour legislation, and in particular the protection of the Labour Relations Act and the Basic Conditions of Employment Act. Those employees must receive sick leave, holiday pay and overtime payments as per the Basic Conditions of Employment Act.

The labour broker has to adhere to all the labour laws, and in particular has to register with the bargaining councils, which are active within those areas of actual service.

Certain concerns arose when that employee of the labour broker was earning below the threshold, which is currently R17200 a month, and works for the client for more than three months.

If that employee enters into his or her fourth month, then that employee is deemed for the purposes of the Labour Relations Act to be an employee of the client only.

There was an argument that arose with regard to the dual employer situation whereby the employee could look to either or both the labour broker and the client as the employer.

The Constitutional Court, in the Assign Services case, stated categorically that for the purposes of the Labour Relations Act the employee was and is the sole employee of the client.

However, for the purposes of all the other labour legislation, including the Basic Conditions of Employment Act, the employee is in fact employed by the labour broker.

This is a slightly confusing situation, but it is important to understand that if that employee is subject to any breach of the Labour Relations Act, the employee will look to the client.

Many labour brokers have structured their agreement with the client recognising the Assign Services judgment and have undertaken to indemnify the client for any claims made by the employee or the employee's representatives (often the trade unions).

One can certainly understand why the Constitutional Court has ruled in this manner: the unions need certainty, and the employees need to know who is the actual employer.

When a union wishes to assert any rights or even to gain recognition, it would approach the client and not the labour broker.

Furthermore, when the unions wish to bargain for better terms and conditions, or at least to ensure that their members are properly treated, they would enter into negotiation with the client and not the labour broker.

Any employee earning over the threshold would remain a client of the labour broker, and any employee working less than three months would remain in the employ of the labour broker.

The labour broking industry ensures employment of more than a million workers, and we in South Africa should do everything in our power to ensure that no jobs are destroyed in over-regulation.

We still have a situation in South Africa where many employers don’t adhere to our labour law, and many of the labour brokers, known as the bakkie brigade, recruit casual labourers at minimal rates of pay and charge the clients enormous mark-ups.

It is important for the individuals and the unions to be vigilant about these situations and not to damn the entire labour broking industry because of the wrongdoing of the few. Unfortunately, the informal sector is incredibly difficult to monitor and police.

The workforce would gain much by receiving labour information and by acting as their own police. Workers are advised to report any breach of our labour laws to any Department of Labour office across South Africa. In this rapidly changing economic environment and with the shrinking of the workforce, labour brokers have become very effective in recruiting and placement, and have become a vital partner in job creation.

One of the ways to halt the tide of retrenchments is to ensure that our workforce is able to adapt to the Fourth Industrial Revolution. Labour brokers have found their niche in helping the businesses to access individuals who can effectively ensure that productivity remains at a high.

The Assign Services court case does provide additional protection to those employees under the threshold who work for longer than three months, in that they do have a claim against the client, who, for all intents and purposes, is supported and underwritten by the labour brokers.

* Michael Bagraim is a labour lawyer.

** The views expressed here are not necessarily those of Independent Media

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