Retailers hedge on labour brokers

According to the Consumer Goods Council of SA, the retail and manufacturing sectors carry the biggest portion of employment in SA, with a total of 5-million people, or 33,7% of the total labour force.

It is not known how many of these 5-million people were hired through labour brokers.

“We are in the process of collecting these statistics from the retailers,” says Moshisi Lehlongwane, a research analyst at the Consumer Goods Council.

Approached for comment, none of the retailers would say whether they opposed or supported the banning of the practice.

Massmart sources staff via labour brokers in different proportions across its operations.

In Masscash, which includes Jumbo Cash & Carry and Shield, the figure is 10%. In Massdiscounters, Game and Dion Wired, it is estimated at 2,79%; in Masswarehouse (Makro) 30%; and at Builders Warehouse 20%.

Following the debate

“We have been following the debate and are in agreement that an improved regulatory environment is desirable to prevent abuses by unscrupulous labour brokers,” says Massmart's corporate affairs executive, Brian Leroni.

“We don't wish to anticipate the outcome of the current parliamentary process but if the need arises our response would be to manage and administer flexitime staff on a completely in-house basis.”

Food retailer Pick n Pay is equally cautious. “We would ideally like to see regulations put in place that protect all parties,” says Pick n Pay's human resources director, Isaac Motaung.

The food retailer uses labour brokers for lower-level positions such as cleaners, compactors and trolley porters, as well as when staff miss work to attend marches and union meetings.

Adopting a 'wait-and-see' policy

Asked whether the company is making plans should Parliament decide to curb the industry — which the African National Congress and the Congress of South African Trade Unions say exploits people — Motaung says: “We will wait to see what the outcome of the parliamentary process is before making any contingency plans.”

The Department of Labour has begun drafting legislation governing the activities of labour brokers which is set to be tabled in Parliament next year.

Labour Minister Membathisi Mdladlana says labour broking should be banned as it is not recognised by any law and results in the exploitation of workers.

However, the Consumer Goods Council questions the moves under way to regulate or ban the practice altogether. It says a curb on temporary employment services could have adverse effects on the total cost of doing business in SA.

“Our view is that innovative regulations could go a long way towards getting rid of the rogue players while enhancing and protecting workers' rights as enshrined in our constitution,” Consumer Goods Council CEO Mncane Mthunzi says.

Labour brokers contending with uncertainty

“Our stance is that the solutions to labour broking problems do not lie totally with the government.”

Mthunzi says some problems, such as full-time duties being disguised as temporary employment and workers being employed on a temporary basis indefinitely, can be addressed by the industry regardless of the law.

But until changes are legislated, labour brokers have to contend with uncertainty.

Says Loane Sharp of labour broking firm Adcorp : “Right now we would accept anything — at least it would be certainty.

“The fact that we have been dragging this out is unnecessary; we are losing business because our clients are asking questions.”

SA's biggest employment channel

Sharp says the government should also take into consideration the impact that banning the practice would have on employment levels. “It's dangerous to introduce regulations where you don't know the scale of the problem.”

Sharp says the labour broking industry is the country's biggest channel for employment, and has introduced people who have never worked before to the labour force.

There are more than 6000 recruitment centres across SA. The industry generates about R26bn in income and employs 500 000 people a year. “And this is an industry that the government wants to regulate and some unions want to ban?” Sharp asks.

Kimani Ndungu, senior researcher at the privately funded National Labour and Economic Development Institute, says that considering “almost a million jobs have been lost” recently for a variety of economic reasons, the government will be careful in making its decision.

“There is a huge fear that the consequences could be detrimental”.

Source: Business Day
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