Labour brokers ruling may be to workers’ detriment, experts say

Unemployed workers will soon be able to claim up to a year’s benefits instead of eight months. Archive photo: Thembela Ntongana

Unemployed workers will soon be able to claim up to a year’s benefits instead of eight months. Archive photo: Thembela Ntongana

It could initially lead to fewer people using labour brokers, leading to more unemployment, or temporary work contracts of shorter duration.

The Constitutional Court judgment on the Labour Relations Act (LRA) may have far-reaching consequences, way beyond what unions wanted, while in the long run not much may actually change, experts warned yesterday.

Labour analyst Terry Bell explained the judgment in favour of the unions has removed the dual employer situation, where a worker can be employed by the labour broker to work under contract at another company.

“If they work at a place for more than three months, then they have to be given equal rights of employees at that place of employment,” Bell said.

However, this exposed workers to temporary contracts of shorter duration, such as two months at a time, for example.

“That’s the thing I worry about. It could also encourage certain employers to hire people on individual contracts as a private contractor or as a freelancer,” Bell said.

The other problem was the employee might not necessarily know what agreement the labour broker and employer had reached.

“That is always the danger in something like this,” said Bell. “There are some people who have been working for labour brokers for 10 years, so that at least has been stopped.”

Attorney of record for the Confederation of Associations in the Private Employment Sector Craig Kirchmann said there was a feeling not much would change.

“Initially, there may be a reduction in using labour brokers, the consequence of which would be a reduction in employment itself, or an increase in unemployment. When people understand the judgment properly and the role of labour brokers things will balance out again,” Kirchmann said.

Kirchmann said the amendments made in the Labour Court, regardless of how they were interpreted, had killed off unethical labour brokers. “Ethical labour brokers will continue. They will have to rearrange their contractual arrangements to make sure they can do what they’ve traditionally done but in the main, they will continue.”

Government was one of the biggest users of labour brokers, Kirchmann confirmed.

“The unions were placing pressure on it to reduce its use of labour brokers, but it continues to be a significant player in the market.

“And the reason for that is clear, it doesn’t have the people capable of managing it. So it relies on labour brokers”

The majority judgment, penned and delivered by Justice Daniel Dlodlo, noted Statistics South Africa reported an unemployment rate of 26.7%, which excluded more than two million discouraged work-seekers.

“Behind this number lies the legacy of systematic deprivation of opportunities for black South Africans and within it is the undeniable skew of racial inequality. This dire state of affairs is coupled with a history of very poor working conditions and pay for black employees,” Dlodlo said.

“The legislature has stopped short of banning labour broking, but it has enacted several amendments to the LRA to give security to marginalised workers and to regulate the industry.”

National Union of Metal Workers South Africa spokesperson Phakamile Hlubi-Majola said the judgment “is a blow to the labour broker industry as we know it”.

It’s been a long battle for workers’

When Constitutional Court justice Daniel Dlodlo announced his order dismissing Assign Services’ application yesterday, there was a long moment of silence of near disbelief before the court erupted.

“This has been a long, long, battle for workers,” said National Union of Metal Workers spokesperson Phakamile Hlubi-Majola. “For more than two decades workers have been trying to fight against labour broking.

“In spite of what people say, this system has proved in practice to be extremely abusive and we came here with hopes, but we were worried.

“We were here in February, it is now July, so the length of time the court took in making a decision left us anxious,” Hlubi-Majola said. “We thought perhaps the court might in find in favour of what the other company was fighting for.”

Hlubi-Majola said for the court to confirm and define the way Numsa always understood it, was “a huge relief, a huge victory and we are going to celebrate.

“But we have a lot of work to do.

“We have to make sure all workers who fall into that category are, indeed, absorbed as permanent employees of the employer.”

Hlubi-Majola said the finding went back to when the law was amended, around 2015.

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