Media

There is growing opposition from all sectors of business and industry to the government’s draft legislation in three major bills before parliament. These include the Labour Relations Act (LRA), Employment Equity Act (EEA) and the Basic Conditions of Employment Act (BCEA).

Nritika Singh, MD of Isilumko Staffing, a national recruitment company, which offers temporary, flexible and permanent staff, comments, “As part of the recruitment industry we would like to add our voice to the mounting opposition and concern over draft legislation before parliament, which includes major amendments to current Acts, as well as an entirely new Act.

“In a nutshell the following amendments are proposed: to the Employment Equity Act –

• Substantial increases to the fines for EE non-compliance. 2-10% of annual turnover. Was a maximum fine of R900K, R500K for first offendor.
• Unfair discrimination if different salaries for the same work. “Equal work, equal pay principle”. Employees and managers above the earning threshold to be excluded.
• Removes first undertaking, co-operative element. Goes straight to a Compliance Order.

“To the Basic Conditions of Employment Act –

• Proposes similar or equal value wages and benefits between temporary and permanent staff. This is administratively problematic with pensions and medical aid schemes and will push up the employment costs. Likely to result in a loss of jobs.

“To the Labour Relations Act-

• Repeals Section 198 of the LRA dealing with Labour Brokers (Temporary Employment Services). No outright ban though.
• Removes the certainty of knowing who the employer is in the triangular relationship. Currently the TES is defined as the employer. May mean that both client and agency can be sued in future.
• Joint liability in sub-contracting. Hugely problematic and would be contrary to the trend elsewhere in the world.
• Presumption of permanent employment. Employee must be employed permanently unless the employer can justify the fixed term.”

Singh adds that there is a new Employment Services Bill proposed, with the following provisions: Agencies will need licences issued by a newly appointed Registrar. Licences can be withdrawn. Changes the definition of “Employer” which seems to exclude Labour Brokers. Includes “directs or supervises” in the new definition. New reporting duties on companies for vacancies and positions filled. Does this mean that the government becomes an agency?

Singh says, “We need to know if this is effectively a ban. Our recruitment business seems to fall under private employment agencies, however we don’t know our role and functions. The Minister has the power to ban agencies. Labour Brokers would need to register. There would be a 3 year transitional period. It creates uncertainty, lack of flexibility and a likely massive loss of jobs. Even the regulatory impact assessment report commissioned by government cautions that the proposed changes may well lead to significant job losses. This would be catastrophic in a country where the government has promised to increase the number of jobs. Ironically the government itself is one of the largest employers of temporary staff. What is clear is that it labour brokers play a significant role in the employment sector, with an average of close to a million temporary workers employed in South Africa every day.”

Singh points out that in December 2009 the Namibian Supreme Court of Appeal held that the banning of labour hire is unconstitutional. The ruling reversed the situation and declared it permissible for labour hire to continue operating. This ruling may influence the Department of Labour (DOL) in their deliberations. SA is supposed to have the most progressive constitution in the world. This may well be tested by the Constitutional Court if the Acts are passed in their present form.

Singh believes that the DOL and the institutions who are entrusted to enforce legislation, need to ensure capacity to enforce legislation which we have now, instead of passing additional legislation.

Singh concludes, “ It is significant to note that approximately 980,000 people were employed through labour brokers in SA last year. This is under 10% of the total employment in South Africa. APSO, of which we are a member, has been at the forefront of moves to achieve self-regulation in our industry, with a proposed tightening of controls on the code of best practice and ethics. If we as an industry act in a unified way and follow all the current Labour Law legislation to the letter and introduce a strong self regulatory system in our TES division we could successfully counteract the threat of wholesale labour law changes currently being drafted by the government.”