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South Africa – The end of labour broking?

29 August 2013

The Labour Relations Amendment Bill has been passed by the South African Parliament, which could spell the end of labour broking in the country. Temporary employment services (known locally as labour brokers), as a result of the bill,will become much more heavily regulated.

The Amendment was proposed two years ago and was passed with 248 voting in favour and 81 voting against. In June,the Democratic Alliance walked out on a scheduled vote, protesting that the bill would destroy hundreds of thousands of jobs.

Jacques Van Wyk, South African employment law specialist, said: “Some commentators believe that for all intents and purposes labour broking has met its end. Labour broking is extremely limited now to the extent that it can be used by a client of a labour broker... It was unlimited or is unlimited until the new Act comes into being. It will now be limited to three months, where after an employee of a labour broker will be regarded as a permanent employee.”

“In addition, the client now becomes jointly and severally liable. In other words can be held liable for the ill deeds or the wrongful acts of the labour brokerage, as if it was the employer… The veil which protected the client from these consequences has to a large extent been pierced by the proposed changes to the Labour Relations Act,” he added.  

In June, the Congress of South African Trade Unions (Cosatu) expressed its disappointment that the government was not banning labour broking outright. The union has long campaigned for the eradication of labour broking, which it claims treats workers as commodities.

The impact of the reduction in available temporary labour, and the predicted reluctance of employers to recruit temporary workers in future, are causes for concern. Additional legislation could leave business with greater inflexibility.

Mr Van Wyk added: “It will therefore mean that an employer will have to think long and hard before utilising labour broking employees, fixed term employees, or even part-time employees. For instance, to address a sudden rise in production, unless the employer can put forward one of the justifications permitted by the law. So it is certainly a narrowing of the flexibility on the part of the employer to utilise these forms of non-standard employment.”    

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