The National Employers Association of South Africa (NEASA) has given its support to organisations such as the Free Market Foundation and Business Unity South Africa in urging ANC MP’s not to change provisions in the Labour Relations Amendment Act to ban labour brokers. NEASA views this move as detrimental to all of government’s efforts to accelerate job creation and reduce unemployment.

 

‘Recent surveys have shown that labour broking is the fastest-growing sector of the South African labour market. Labour brokers constitute a R44 billion industry employing around 19 500 internal staff and just over 1 million agency workers or temps in the country. By banning this industry, the ANC-led government would in actual fact be backtracking on its goals of creating jobs and reducing unemployment’, says Gerhard Papenfus, NEASA CEO. 

 

South Africa’s unemployment rate is at 25%, which is one of the highest in the developing countries. Temporary employment is an important stepping stone for inexperienced youth who want to enter into the formal job market.  There are an estimated one million labour broker workers in South Africa whose jobs would be threatened by the proposal of ANC members of the Parliamentary Portfolio Committee on Labour to change the Labour Relations Act definition of temporary employment from “six months” to “zero months”, which would effectively end labour broking. NEASA has noted reports that they a ‘three month’ period’s been suggested following a meeting by the Portfolio Committee. 

 

According to a CCMA report, labour brokers account for a very small percentage of disputes relative to the number of workers they place. A substantial number of workers are placed in their first jobs by labour brokers, which reveals that the brokers are an important link between job-seekers and employment.   

 

‘The Labour Department’s own regulatory impact assessment has shown that the banning of labour brokers would result in the loss of employment for about 850-thousand people by labour brokers. Therefore, such a move would contribute to increased levels of unemployment and deprive households attached to these workers of a valuable source of income’, says Papenfus.

 

The answer is not in the banning of labour brokers but by ensuring that legislation is in place to prevent the extortion of workers by these employment agencies. Labour broking should serve as a tool for workers to gain industry knowledge and expertise.

 

‘Government should recognise its responsibility in creating an economic environment that encourages job creation, especially in the small and medium enterprise sector’, Papenfus said.

 

NEASA is of the opinion that by making such drastic changes to the labour relations amendment act, government could further destabilise the already fragile economy.

 

‘It would be unwise to make changes to legislation that has gone through intense negotiations between the various stakeholders at the National Economic Development and Labour Council. These bills have been under scrutiny at Nedlac for 3 years and by making changes would be undermining that process. It would also create doubt and suspicion amongst international observers’, Papenfus said.

 

For more information:

Sya van der Walt

Media Liaison

082 332 9512