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Shopsteward Volume 27 No. 2

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COSATU Today  |  COSATU Press Statements

COSATU answers DA on labour brokers

The Congress of South African Trade Unions totally rejects the statement by the Democratic Alliance that the proposed amendments to labour legislation “would place literally millions of jobs in jeopardy, would in all likelihood be unconstitutional, would have serious de-stabilising effects in the labour market, and would result in significant other unintended consequences”.

The federation is still examining the details of government’s draft amendments to the Labour Relations Act (LRA), Basic Conditions of Employment Act and Employment Equity Act, and a new piece of proposed legislation – the Public Employment Services Bill.

But COSATU utterly rejects the argument of Ian Ollis, DA Shadow Minister of Labour, that the proposed repeal of section 198 of the LRA, which regulates labour brokers, will effectively prohibit labour broking and lead to job losses and “almost certainly exacerbate SA`s unemployment crisis”.

It is a big myth, propagated by the DA and its ideological friends in business and the media, that labour brokers ‘create jobs’. On the contrary only those companies actively involved in production and service delivery create jobs and they would still require the same number of workers if there were no labour brokers.

Their role is as intermediaries, who provide cheap labour to their ‘client’ companies, thus relieving them of any responsibility to ensure that these workers receive the wages and benefits to which they are entitled, and saving them from paying towards medical aids and pension funds.

Most of the client companies never calculate whether this actually saves them any money, because the excessive cost of paying the labour brokers. The lion’s share of this money is creamed off by the broking companies, with only peanuts going to the workers, who receive poverty pay, minimal or no benefits and have no job security. That is why we call it a form of modern slavery.

And it is getting worse. A report by the Adcorp Employment Index revealed that while jobs overall had declined by an annualised 2,41% by November 2010, the number of permanent workers decreased most, by 2,74%, while the number of temporary workers decreased by only 1,60%. Meanwhile the number of ‘agency’ workers (i.e. those employed by labour brokers) increased by 5.59%.

The survey shows that there are nearly 100 000 more labour broker workers than previously estimated. They now represent 6.8% of total employment in South Africa and 23.2% of the 2.13 million workers who are currently classified as temporary. This is having a devastating negative effect on the levels of pay, job security and benefits for thousands of workers.

It is cheap propaganda for the DA, acting as the employers’ spokesperson, to spread the lie that there has to be a trade-off – that if you want more jobs you have to settle for lower pay and worse conditions, and if you want decent work you will have fewer jobs.

It is still not clear whether the repeal of Section 198 will in fact have the effect of banning labour brokers, but COSATU will continue to insist that nothing less than a total ban will be acceptable. We shall also campaign relentlessly again the casualisation of labour and for all workers to receive the protection they are entitled to under the labour laws and the constitution.

We reject with contempt the argument that the only route to full employment is for workers to accept lower wages and abandon any hope of a secure jobs and a future. Poverty is already at an outrageous level. If the DA and their labour broking friends have their way, millions more workers will be plunged into poverty and despair, and we will be on our way to a national catastrophe.

Patrick Craven (National Spokesperson)
Congress of South African Trade Unions
1-5 Leyds Cnr Biccard Streets

P.O.Box 1019
South Africa

Tel: +27 11 339-4911/24
Fax: +27 11 339-5080 / 6940
Mobile: +27 82 821 7456
E-Mail: patrick@cosatu.org.za