Labour brokering will be banned, or at least limited to the extent that it becomes irrelevant. This became evident as labour minister Nelisiwe Oliphant announced groundbreaking legislative amendments to the labour law this week.
In addition to this, South Africa will get controversial loan subsidies for youth, and the government will get wider powers to create similar schemes in spite of pressure from unions against the amendments.
As part of a widescale reform of labour law, the country will get a state-controlled employment register that will involve all employers and employees.
Those affected have until February 17 to comment on this and other fundamental changes to labour regulations that have recently been suggested and have already been approved by Cabinet.
The proposals appeared in the Government Gazette on Friday and will be discussed at Nedlac.
Three amendment bills and a new act were revealed that will have consequences for nearly all employees, jobseekers and employers. In addition to all this, after years of promises and firebrand speeches, the government has implemented the ANC’s Polokwane plan on labour brokers.
In terms of the suggestions, the concept of temporary employment services (labour brokers) will disappear completely from the law. In its place comes a directive that all workers will have to be permanently appointed in future. Fixed-term contracts may only be used in cases where there is a valid reason. Once-off building projects or temping for someone on maternity leave are given as legitimate reasons in an explanatory memorandum.
In addition to this, the ban on contract work will only apply to those who earn less than a certain amount and will therefore not affect executives and specialists, the memorandum states.
Labour brokers will still exist for another three years after the new act on employment services is implemented. After this, they will have to register as “private employment agencies”. They will not be allowed to act as labour brokers, but merely as placement agencies. They will also be forced to be part of a giant state-controlled employment register of all vacant posts and jobseekers.
One of scores of suggested interim measures is that parties will be able to make submissions as to what kind of jobs should be excluded from the ban on contract work.
Though “triangular employment relationships” are still allowed through subcontracting, many labour brokers’ reason for existence is under attack. It will be impossible to pay temporary workers less than permanent ones. Firms will have to pay a premium if they don’t want to employ workers permanently.
In cases of subcontracting, the client and the employer (contracting firm) will be equally responsible for any breach of labour law.
The definitions of “employer” and “employee” have also been expanded so that not only the wage payer but the supervising company is regarded as the employer.
The expansion of liability will not affect the larger labour brokers too much, but other changes may.
The important changes are that contract workers will not only be entitled to the same pay as permanent ones, but also the same benefits.
Richard Pike, chief executive of the country’s largest labour broker, Adcorp, told Sake24 earlier this year that this kind of equalisation would seriously threaten his industry.
The suggested law stipulates that no employer will be able to ask money from workers in exchange for placements or employment.
The suggestions stipulate that in addition to other new powers, the minister will be able to regulate all kinds of contract work in any sector in the future.
To prevent unintended consequences in future, the concept of “independent contractor” will be more prominent as opposed to a contract worker who is provided through an intermediary.