COSATU's response to FMF and DA on labour brokers

The Congress of South African Trade Unions totally rejects the argument, advanced by the Free Market Foundation (FMF) and their political allies, the Democratic Alliance (DA), that "job seekers should defend labour brokers because they create jobs".

The DA claimed in a statement on 7 June 2013 that "the banning of labour brokers would result in the loss of employment for over 850,000 people currently employed by labour brokers".

 "Instead of destroying jobs through unwise labour legislation," said FMF chairperson Herman Mashaba, on 10 June 2013, "the government should be exploring every possible way to increase the demand for labour".

Both statements are made in response to the proposal by ANC members of the parliamentary portfolio committee on labour to change the definition of the Labour Relations Act relating to temporary employment from "six months" to "zero months", which, claim the FMF, "would effectively end labour broking", exactly what COSATU has been demanding.

Nothing less than a total ban will be acceptable. COSATU fervently hopes that the view of the ANC parliamentarians is voted into law, but is waiting for the result of the vote before celebrating what would be a historic victory for workers.

As the federation has repeatedly pointed out, it is a lie that labour brokers "create jobs". Only those companies actively involved in production and service delivery create jobs. And they will still need the same number of workers as before. Labour brokers merely act as intermediaries to access jobs that already exist, and which in many cases would previously have been permanent full-time jobs.

Generally the labour broker and the so-called ‘client' firm, negotiate a price for which stipulated labour services will be supplied for a given period, while the true suppliers of labour (the workers) are excluded from this process, thereby undermining their rights to negotiate their wages and employment terms.

The ‘client' companies are absolved of any responsibility to ensure that these workers receive the wages and benefits to which they are entitled. It saves them from paying UIF, medical aids and pension funds, all of which the labour broker theoretically takes care of, in return for a fat fee from the client, which is supposed to cover these statutory benefits.

But the lion's share of this fee is creamed off as profit for the broker, while most of the workers employed by the labour brokers not only earn poverty wages but do not enjoy pension fund/provident funds, medical aid benefits, etc.

The employers dump these workers into the government social security system, thereby increasing the state burden to provide for them in their retirement. This means the taxpayers are subsidising the employers to make super profits.

Labour brokers do not practise the principle of equal pay for work of equal value and their workers work longer hours and work on Sundays and public holidays without any compensation.

Labour broker are also anti-trade union. Because their workers are constantly being moved around from one workplace to another within short periods, often with no access to union officials or the possibility of stop-order deductions for union subscriptions, they find it very hard to join a union or to remain members.

Brokers also contribute to the progressive de-skilling of workers, especially as a result of the short-term and irregular nature of the contracts associated with labour brokering and other forms of atypical labour.

Apart from undermining collective bargaining rights, labour brokers also provide scab labour and therefore serve as strike breakers!

That is why COSATU calls labour brokering a modern form of slavery, equivalent to the trading of human beings as commodities.

And it is getting worse. The latest Adcorp Employment Index for May 2013 (though its statistics have to be treated with suspicion since Adcorp itself is a labour broker) suggests that labour broking is the fastest-growing sector of the South African labour market.

They claim that labour brokers constitute a R44 billion industry employing around 19 500 internal staff and just over one million agency workers or temps and that it now constitutes 7.5% of total employment in South Africa, and it is likely to grow further.

The FMF mislead the public when it says: "Unemployed people face great difficulties in finding jobs. Labour brokers provide a valuable service in finding employment for them."

"Finding employment" is a service already provided by employment agencies, which merely act as go-betweens between employers and job-seekers, and help to recruit individual workers for genuine employers. They play an important function and will not be affected by the legislation. FMF is opportunistically misrepresenting the position on these bodies and confusing them with labour brokers in order to gain the moral high ground. 

COSATU rejects with contempt the argument that the only route to full employment is for workers to accept labour brokers, lower wages and no hope of a secure job. Poverty is already at an outrageous level. If the DA and the FMF friends have their way, millions more workers will be plunged into poverty and despair, and we will be on our way to a national catastrophe.

Statement issued by Patrick Craven, COSATU national spokesperson, June 11 2013

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