HomeOpinion & AnalysisColumnistsLabour broking: To ban or to regulate?

Labour broking: To ban or to regulate?

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“Mutare-Based Labour Broking Firm Spreads its Wings to Harare”, proclaimed the Financial Gazette of February 24 2005. The news article was about plans by Clive Bruce and Charles Consultancy, a labour broking firm founded in 1999 to expand its operations into the capital city, Harare.

Labour broking (also known as “labour hire” in Namibia) is not a widespread phenomenon in Zimbabwe. However, just across the border in South Africa, it is currently a hot topic of debate.

Any discussion of labour broking evokes different emotions depending on which side one belongs to. Before delving into the views of the main stakeholders involved in the debate, it will be helpful to take a brief glimpse of the South African labour broking industry.

It is estimated there are around one million workers working under labour brokers in South Africa mainly in the manufacturing, construction, wholesale/retail trade, mining, transport and security industries. The labour broking industry is a highly profitable business there and generates turnover in excess of R23 billion per year. The most frequently cited reasons for the use of labour brokers include seasonal changes in product demand, the need for employees with scarce skills only for short periods (for example plant shutdowns), the occurrence of peak periods, the irregularity of certain work, contingencies and project work such as construction. Average wage rates vary between R8 per hour in the agricultural sector to R430 in the mining sector.

Various players in the labour broking debate differ fundamentally on a number of issues, key being whether the practice should be banned or regulated. The Congress of South African Trade Unions (Cosatu) has made the loudest noise calling for an outright ban of labour brokers. Cosatu, the largest labour federation in South Africa with a combined membership of close to two million workers, has attacked labour broking as being tantamount to exploitation and enslavement of workers. Only last month, Cosatu organised a march to pressure the government into banning labour brokers whom it blames for the increasing casualisation of labour in South Africa. Cosatu also contends that this form of atypical employment effectively displaces and destroys decent jobs contrary to the ILO notion of decent work. Fedusa, one of the three large worker federations has, however, adopted a moderate stance, calling for regulation of the labour broking industry as opposed to a total ban.

On the other hand, and as expected, organised business has been in favour of retention of the system. The Confederation of Associations in the Private Employment Services has argued that the labour broking industry is a valuable contributor to the fiscus and the creations of jobs. Rather than the government throwing away the baby together with the bath water, it is only the exploitative and opportunist labour brokers who should be weeded out.

The ruling African National Congress (ANC) government initially took a pro-Cosatu stance with one of the fiercest critics of labour broking being the former Labour minister Membathisi Mdladlana.
Speaking at the 19th Annual Labour Law Conference in Sandton on July 6 2006, he vitriolically attacked labour broking as: “A form of human trafficking and an extreme form of free market capitalism which reduces workers to commodities that can be traded for profit as if they were meat and vegetables”. The Department of Labour described labour broking as a ploy by employers to avoid labour regulations.

It appears the ANC has climbed down from its initial position and now favours regulation over an outright ban, which only entails amendment of relevant laws. In an obvious retreat from her party (ANC)’s initial position, Labour minister Mildred Oliphant recently said labour broking “is here to stay”, but suggested that legislation could be passed restricting temporary work to a maximum of six months. Beyond that, one becomes permanent.

Opposition parties — the Democratic Alliance (DA) and Congress of the People (COPE) have issued a joint position paper on labour brokers stating that they believed labour broking industry was a critical component of the country’s economy and should therefore continue to exist. The DA even went to the extent of providing evidence that the government was also using labour brokers — the South African Police Service had spent a whopping R339 million on labour brokers, mainly private security firms, in the 2008-2009 financial year!

The ILO’s Private Employment Agencies Convention 181 of 1997 refers to labour brokers as “private employment agencies” and acknowledges the importance of flexibility in the functioning of labour markets. It expressly states that one of its purposes is to allow the operation of private employment agencies — as well as protection of workers using those services in relation to collective bargaining, freedom of association, minimum wages, working time and conditions, statutory social security benefits, occupational health and safety and so on.

In Namibia, labour brokers mushroomed prominently after its independence in 1990, mostly emanating from South Africa. Labour brokers mainly target the unskilled and semi-skilled employees in the fishing, retail and mining industries. The Namibian Labour Act Number 11 of 2007 sought to prohibit labour broking. Section 128 of the Act provides that “no person may, for reward, employ any person with a view to making that person available to a third party to perform work for the third party”. In Africa Personnel Services (Pvt) Ltd v Government of the Republic of Namibia, (2009), the Supreme Court of Appeal (SCA) of Namibia held that though the country was not signatory to ILO Convention 181, a blanket prohibition of labour broking via Section 128 of the Namibian Labour Act was unconstitutional and hindering the right to free economic activity. The SCA noted the ILO Convention 181 did not ban labour broking, but rather sought to regulate this economic activity to ensure workers so placed were not exploited. In my view, the SCA was correct in its decision. No country can escape the fact that it is a member of the global marketplace.
The SCA also endeavoured to strike a balance between the right to freedom of economic activity and the protection of worker rights. It is only logical that the law must be fair to both employers and workers.

With the various players being poles apart on the fate of labour broking in South Africa, one thing is for sure — there is not likely to be consensus any time soon on the subject. Zimbabwean labour law does not explicitly provide for labour brokers. We continue to follow the developments down South with keen interest as the outcome of the debate will have a strong influence on labour broking practices in Zimbabwe.

Isaac Mazanhi is a labour analyst. He writes in his personal capacity. He can be contacted on email: imazanhi@hotmail.com

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