# Regulatory Compliance Category > General Regulatory Compliance Forum >  Parliament to hold hearings on labour brokering

## I Robot

Parliament to engage the public, labour brokers, unions and                    business on labour brokering     

21 August 2009 

Parliament's Portfolio Committee on Labour on 25 to 26 August 2009 holds a two-day public hearing on labour brokering. 

Labour brokering has become one of the hotly debated labour issues in the post-apartheid South Africa. The practice arose as a result of the changing nature of work, globally. This change in the nature of work has been driven by technological advances and globalisation. 

It is against this backdrop that the committee will hold public hearings to ascertain the views of the public on this issue. The hearings will look at the challenges the country faces with regard to labour brokers not necessarily operating in accordance with the Labour Relations Act and whatever interventions may be necessary. 

In conducting the hearings, the committee will engage with various stakeholders including trade unions, workers, business, researchers and academics, civil society and labour brokers. 

The exercise happens at a time when South Africa is experiencing a recession that is affecting the whole world. The issue has been debated in the media for sometime now and the exercise by the committee is a step towards appropriate interventions around labour brokering. 

This consultation and public participation process is necessitated by the marked increase in new forms of employment that include casual workers, part-time workers and workers in subcontracted work or who are supplied by labour brokers resulting in tension between employees, labour brokers and client companies. 

The key element in the debate about labour brokering in South Africa has been around disputes on who exactly is the employer in this tripartite relationship. Indeed there have been incidents in which both the company and the labour broker seem to be unclear as to who exactly is the employer during disputes with the workers. 

Once the hearings are completed, the committee will deliberate and table a report in the National Assembly.

More...

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BBBEE_CompSpec (03-Nov-09)

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## Dave A

> The practice arose as a result of the changing nature of work, globally. This change in the nature of work has been driven by technological advances and globalisation.


Maybe that's what started labour brokering, but what has made it the option of choice is restrictive labour legislation.

In my opinion, if business could fire staff as easily as we can hire them, labour brokers would lose a lot of business.

What do you think?

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BBBEE_CompSpec (03-Nov-09)

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## Marq

Yes, I believe labour brokering came about as a result of needing specialists in the IT field. Brokering labour then came into its own as a result of the restrictive labour laws.

I dont think a change in the labour laws will necessarily harm the broker business. The tax laws probably sorted out the deadwood in that industry. I think it would carry on based on corporations and government not needing or wanting to carry specialist staff for short contract periods and create further admin hassles. Also it is a great way to hide expenses for budgets in large corporations. Staff would be allocated to salaries and related costs would be incurred. Headcounts and staff costs are always under scrutiny and the whip. Far easier to allocate to project costs or consulting/professional fees or some other line item.

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BBBEE_CompSpec (03-Nov-09), Chatmaster (04-Oct-09), Dave A (24-Aug-09)

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## Dave A

This is interesting, particularly when you consider Marq's observations above:



> The banning of labour brokers in Gauteng's state hospitals will harm patients, according to trade union Solidarity.
> 
> It said the Gauteng Department of Health and Social Development was planning to phase out certain categories of nurses who are employed by labour brokers.
> full story from Business Report here


Government departments are using labour brokers! Is this to avoid giving permanent employment, or is this part of the budget management considerations Marq referred to?

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BBBEE_CompSpec (03-Nov-09)

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## Yvonne

I heard of a senior nurse who works for a hospital for normal hours, and then works for a labor broker at the same hospital for " weekend overtime", and said that if she loses her "overtime -second job", she could not cope financially, and would consider immigrating.
Simple cause and effect of restricting how many hours overtime are permissable in our labor law. 
(Very obviously safety standards play a role in a hospital, but that is not the issue in this post!)

A labor brokers value is based mostly on taking over the accountability and responsibility of restrictive labor laws, and administrative costs involved in payroll accountability. 

The underlying motivation, for this debate and discussion,  is labor's socialist attitude that "brokers" are "taking" the money that should be due to the workers themselves. (Julius!) and that workers are not guaranteed employment benefits as per normal employee labor law.

Will the public hearings be similar to the hearings of the public opinions of the Skorpions? 

Labor brokers are likely to be history - without any of the real problems being resolved.

Yvonne

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BBBEE_CompSpec (03-Nov-09)

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## Marq

> A labor brokers value is based mostly on taking over the accountability and responsibility of restrictive labor laws, and administrative costs involved in payroll accountability.


I don't think its only about this and I am not even sure that this is the foremost reason for the labour brokers existance. Its about directing and organising staff/resources into the right area at the right time. Its about getting on with your business without worrying about the specialties required in dealing with people or even specific tasks. Projects that come and go, seasonal markets like the farming side. Its about another way of ensuring that you usually have a form of income by not putting your eggs into one basket. 

Yes you can allocate expenses to different areas and not get involved in pension plans and personnel problems, but If I was doing a special task, say IT or draughting or something that was not the norm in my business then I would rather have somebody else on call to do the running for me. Same for the general labour force required in say a 2010 stadium project - a one scenario with a fixed contract price.

Sure there as always been unhappiness at the broker/recruiter/promoter/consultant/manager for taking a cut at the top and sometimes that cut is bigger than the workers cut, but then if it was so easy, why did they not get out there and score the job themselves? While they are doing that particular job - who is lining up the next one for them?

I dont see the end of the labour broker. We may have the name changed and some formats changed, but they are still going to be out there.

And if you think I am pro labour brokers - I only have two bad debts this year in my business - both were labour brokering companies - but thats another story.

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BBBEE_CompSpec (03-Nov-09)

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## Dave A

Reading Marq's last post, a thought occurred.

Labour brokering could be (or become) a competitive labour representative system to unionism.
Could it be that unions see this competitive threat and are seeking to eliminate it through politics?

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## sterne.law@gmail.com

> Reading Marq's last post, a thought occurred.
> 
> Labour brokering could be (or become) a competitive labour representative system to unionism.
> Could it be that unions see this competitive threat and are seeking to eliminate it through politics?


The defence by pro labour brokers that it enables the use of special skills for a short period is a well made point. However then why not use a Fixed term contract? Be it time or task specific it handles that issue. the key is that with Labour Broking the REAL employer can say I do not like this guy, get rid of him, thus going around the labour relations act and an employers responsibilty. Hence, although Labour broking and fixed term contracts have a place and forfill a need, employers, in general, exploit this, and hence the intentions of fair labour practices are virtually eliminated. 
What I also do not understad is that employers pay between 8-12% for thsi convenience, of being able to dictate. At those fees you could afford to employ or retain good labour advice, invest in recruiting processes, training and heck even have cash to spare for payouts at the CCMA. Seems like another way to be lazy managers to me.

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## BBBEE_CompSpec

While preparing Workplace Skills Plans for the Services SETA I was requested to assist a Nursing Agency (Broker) who had in his employ just over 600 nurses (PENs) and nursing sisters (RNs). He also employed some 400 odd care givers.

He is based in the East London Area and services about seven (7) private as well as provincial hospitals. He only has four (4) permanent employees including himself. Every person registered with him receives continued training. His SDL exceeds R1 000 000 per annum. He cannot claim his portion of the Mandatory Grant as the training is provided by the hospitals and they keep the records.

Now the government wants to outlaw Brokers. Who is going to employ over 1000 nurses from one company in the Eastern Cape? Who is going to pay relocation costs for them to go to other provinces to find and engage in work?

Who does the government think built the soccer stadiums for the 2010 FIFA World Cup in South Africa? None of the Contractors are going to keep their brokered employees on a permanent basis. Vavi and the Minister of Labour are going to be responsible for over a million job losses in South Africa alone. Once he makes that decision he better find himself a tiny hole somewhere and go bury himself. 

Tito Mboweni was a much better Minister of Labour than the existing Minister is. It's such a shame.

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## BBBEE_CompSpec

Just over two years ago I was contracted to a company in Markman Port Elizabeth that manufactured all the plastic parts of motor vehicles to GMSA and sundry.

I was there to improve production and was allowed cart blanch on my spending and decision making.

I embarked on a project with a large Labour Broker (Transman) where we would take on non matriculants in the Motherwell area, they would be employed by Transman and trained in machine operating by the company I was employed by. Transman would supply all their safety wear and equipment, we would provide free recognized training.. No salaries/wages changed hands. We trained 10 learners per week. This continued for 14 weeks with new learners starting each week. The machines were large plastic injection moulding. The average weight of the tools involved was 500kg through to 2.5 tons.

At the end of the project we had trained 140 learners. No monies had changed hands at all. The company I worked for had gained an extra 400 hours "FREE" production per week. Transman then employed the total learners. This operation was in time for the general strike called by COSATU for the banning of casualization. The company ran at 91% to capacity on the day concerned.

A year later my contract came to an abrupt halt (I had a two year fixed term contract) as the business was sold.

The results of that exercise: 21 of the learners were taken over by the new owners (taken from Transman) for permanent employment. The rest have served with Transman ever since. Companies in the area and surrounding areas would rather take on trained people that take on their own and still have to provide training.

Not all Labour Brokers can be classified as the Minister classifies.  The only reason that Vavi wants the labour brokers banned is that he has no monetary gain from them and he cannot control them. I have never known COSATU to genuinely act on behalf of its members. There is a monetary value involved and the higher the salaries the higher is his portion. Please remember: Union fees are calculated at 1% of the wages earned.

In 2005 it was calculated that the affiliates of COSATU took out over R35 000 000 per month from Kwa Zulu Natal alone in union fees. What have they shown for such a gain?

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## Dave A

> the key is that with Labour Broking the REAL employer can say I do not like this guy, get rid of him, thus going around the labour relations act


Why do we need a law that forces employers to continue employment of employees they don't "like" in the first place? Inevitably you end up with an unhappy employer *and* employee. Is this _really_ a good idea?



> In 2005 it was calculated that the affiliates of COSATU took out over R35 000 000 per month from Kwa Zulu Natal alone in union fees. What have they shown for such a gain?


Unionism certainly seems to be good, profitable business for unions.  :Big Grin:

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## sterne.law@gmail.com

Again the answer to what is a vicious circle, is such is human nature that we need to be controlled. Humans are afterall the only species spending thousands of hours and millions of US Dollars, finding a way to kill ourselves quicker. Unfortunately there are employers who will just get rid of the guy for some insane reason, prejudice, jealousy, bad mood etc, ect - so there has to be some protection from these beings. The converse is true - if there is a good reason then you can get rid of the person, just follow the rules.

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## Dave A

> Unfortunately there are employers who will just get rid of the guy for some insane reason, prejudice, jealousy, bad mood etc, ect - so there has to be some protection from these beings.


Now if I was the employee in that situation, I'd rather be out of there with my notice pay rather than have to resign to get away from the a$$hole.

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