Rumours of “work opportunities” are greatly exaggerated 6

Are you looking for a work opportunity? Find a labour broker. At least this is according to the argument put forward by the Democratic Alliance’s Anchen Dreyer.

Membathisi Mdladlana – the Minister of Labour – has responded that the legislation will be amended, and that labour brokers who: “act between the client company and the workers to lower labour costs, to reduce direct exposure to labour legislation” will be prohibited from running their businesses. But he didn’t respond directly to the question raised by Anchen Dreyer of who will fulfil the role that labour brokers play, providing work opportunities to thousands of work seekers? (I-Net Bridge March 12 2009 17:08)

The question then is: if labour brokers are providing work opportunities – apparently a valuable service – why do we need to amend the legislation?

First step – look at the legislation. You won’t find the words “labour broker” in our employment legislation. (You will find many references in Income Tax law.) The Basic Conditions of Employment Act (section 82) only defines Temporary employment services. (TES) This section covers persons: “…whose services have been procured for, or provided to, a client…”

From this definition, it appears to me that the TES doesn’t actually have work or a work opportunity for the person – the work opportunity exists in the business of “the client”. Yes, the TES is providing the service of finding the person – rather than the in-house HR department, or a recruitment company.

Surely, the labour broker cannot provide an opportunity that does not already exist – all they are doing is finding the person. No, not so simple. The person is an employee of the TES – why, you ask? Why does the TES not simply take a commission – like the recruitment agency they in fact are? Once again: no, not so simple.

If you take the opportunities afforded by the skills development legislation you could benefit from discretionary funding to train unemployed workers (18(2) Learners), receive your grant, train the previously unemployed persons and place them with an employer to gain their work experience. Surely, this is a good thing? Once again: no, not so simple.

If the client was filling a vacancy that existed within their staff complement, the new employee would be entitled to the prevailing terms and conditions, and benefits, and be employed permanently. As the person who has now been found by the “labour broker” will remain the employee of the TES, they are entitled to the terms and conditions of the TES. This is not all – far more importantly – the employee of the TES is terminated when the client contract ends, or when the client advises that they no longer want the person to work for them.

The heart of the matter is – it is the difference in the status of the persons employed by labour brokers that is the issue – their terms and conditions of employment, and how secure they are in their positions, that is: how quickly they can be terminated.

The best illustration of this can be found in a report commissioned by the Department of Labour – the Sociology of Work unit at Wits University report entitled: “Making Visible the invisible: confronting south Africa’s decent work deficit”. For those wanting to really understand what is behind this argument, the report is available on:…download the document here

The question then is: Are labour brokers really creating “work opportunities” if the work they “create” is insecure, and with no benefits?

An additional question is: if the workers of today have no retirement funding, who will provide for them when they need to retire? Answer: The taxpayers of tomorrow – our children and grandchildren. Is this another example of the American solution?

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6 thoughts on “Rumours of “work opportunities” are greatly exaggerated

  • Sylvia F. Hammond Post author

    Yes Peter, I would definitely agree with that. It seems to me that the real skills shortage that we have is of management expertise – the ability to put aside personal viewpoints, prejudices and stereotypes in order to be able to realise that human potential. I am sure that the Pygmalion effect operates in many of our businesses where management fall to demonstrate confidence in their employees’ ability to perform and their assessment becomes the self-fulfilling prophecy. Whereas whenever there is someone – be it a teacher, manager, coach or mentor – who demonstrates a faith in their ability to achieve, this is invariably rewarded.
    In an interview on eNews today Blade Nzimande talked about universities and tertiary institutions still demonstrating elitist views of working class students – I’m sure that ultimately such views equally hamper successful performance by students.

  • Peter John Trollope

    Thanks for that Sylvia – I once saw a fantastic presentation about a cement company that was voted, “best employer” The reasons , for wanting to achieve this, were based on the need to enhance company performance. It was fascinating to see the detailed planning that went into this with envolvement from every level of employee. You can imagine the work landscape and the level of employee involved – lots of unskiled and semi-skilled labour! A huge amount of time and effort was spent on training management and all levels of staff were involved and participated in achieving the common goal. The outcome was the achievement of the “Best employer award”, but the amazing stats relating to the dramatic performance improvement of the organization were the real eye opener.

    The video’s that have been made available on this site re- “Staff retention” and “managing diversity in the workplace”, allude to similar strategies.

    It seems that approaches which involve the unlocking and realization of human potential versus the suppressing of threats are always the beter option…

  • Peter John Trollope

    It seems to me that all this debate puts labour into a box labeled “a thing that can be conveniently purchased and switched on and off as business requires.” There is no doubt that these services used in the right manner and for the correct purpose are in demand and can be very useful. However, this process can be subject to abuse.

    I have personally witnessed employees treated like trash by managers and supervisors because they are threatened with removal from site. “All I need to do is phone your office”. I have seen the frustration of very real grievances being bottled up and pushed aside. I have seen staff sexually abused and harassed, with no one to complain to. I have seen staff spoken to with no respect! Staff sworn at, and treated like absolute rubbish. Great for the manager because he could never do this with his own staff. But is it good in general…. People forget about the potential human nature has if allowed power without consequence… Of course this is not a sentiment that is endorsed by the senior execs of most reputable companies, but they all employ ordinary souls who occupy positions of minor authority within their companies… How do I know this? I have worked in labour intensive industries, I have trained supervisors and middle managers, I have trained labour , both permanent and contractual, and I have dealt with providers of labour services.

    The fault does not lie with labour brokers; the problem is with the end user. Now, it seems to me that we all whine about employment legislation (I have been a large employer of people in the past), but fail to realize that maybe it is necessary. Not for you and me, (the good guys who never do anything wrong…) but for the bad guys out there. It also seems to me that maybe people are important enough to treat with some respect, to have some rules in place governing what you can and can’t do. As companies we expect the same. My experience of the labour act is that everything is balanced and fair -there are expectations of the employer and employee to be met. A lot of employed junior and middle managers simply do not have the skill to performance manage staff. Either they are scared of conflict and leave things to fester, or pass the buck, or confront issues in the incorrect manner and create an escalation of the problem, initially minor, to a major conflict, formal I.R. processes etc. For these folk – labour brokers are the answer to their prayers.

    Less regulation from government can mean one thing to some and the complete opposite to others.

    What about – pay them whatever you want. Hire and fire them as you like. Treat them like the dogs they are. Whip them or hang them if there is an uprising. Phone for a replacement if they are cheeky when you swear at them (insolent rabble). Change them if they look at you skeef!

    Come on guys! Are we ever going to evolve…I have seen ordinary teams of people perform miracles with the right leadership and supervision. I guess it all depends on how you value the potential of your human resources.

    Last point. Our sports stars are paid a fortune and yet even then, coaches hire top psychologist’s to help them maximize the potential of the team…

  • Heather Brown

    Hear, Hear!! Well stated. If anyone does not believe there is a place for Labour Brokers (TESP’s) then one only needs to look at the CAPES statistics on their web page. The point Pierre has made about temps becoming permanent is extremely valid – in the industry we have a 32% temp to perm conversion per year, and 50% of our assignees were previously unemployed.

    I think it is important to note that when Namibia outlawed “Labour brokers”, most of the temps found themselves without jobs, contrary to the expectations of the Namibian government.

  • Fanie Agenbach

    Many truths in what is said above but I believe that employers are using TES because :
    1. Some tasks are time bound and they do not have the time nor the ability to search for suitable employees going through all the paraparnalia to get the right one. Just ask the TES.
    2. To escape requirements put to them by the labour law. It is much easier to call the TES to get rid of an employee that gives grief than to go through the steps as per the Labour Act.
    3. TES has got a database of people looking for employment. Employers do not have such databases. TES act as central point of interest for employees and employers to satisy needs.

    Trouble with TES is who is responsible for training the employees. On one hand the TES must ensure that the employer it places is up to standard and on the other hand the emoloyer where this employee is placed also has a responsibility towards training. Question is who can claim what from the seta? The employee is on the books of one but work for another.

    My opinion is that if labour brokers are prohibited, employers, already overloaded with responsibilities towards many Acts etc, will be forced to rationalise and prioritise better in turn to do what they can with what they have. Employees might become more “job fit” (call it multy skilled and utilised if you wish) but my opinion is that labour brokers are a good scapegoat for many iritating things in the workplace while it’s existense suit the employee and the employer. Leave them be.