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Reforming Labour Broking:
A Joint Policy Paper 
PAGE1 
 
 A Joint Position Paper by 
the Democratic Alliance
 and   and   and   and  
 
the Congress of the People
Reforming
 
Labour Broking
 
 
Reforming Labour Broking:
A Joint Policy Paper 
PAGE2 
 
Introduction
 
Labour brokers or Temporary Employment Services have become prominent role-players in the SouthAfrican economy where they facilitate employment creation, train workers and assist business to optimisetheir operational design. If there was no need for the services they offer, they would not have evolved orsurvived in the marketplace.The stated purpose of brokers is to:
•
 
Facilitate cross-utilisation of temporary workers between multiple organisations and sectors(individual workers will not be able to find multiple opportunities in a short space of timethemselves);
•
 
Provide administrative services in respect of companies that are unable to provide it for staff (ormore cost effectively) such as payroll admin, leave, UIF, Workmen’s compensation, which allowsorganisations to focus on core business;
•
 
Provide evaluation, training and relocation of unskilled, semi-skilled and skilled workers; and
•
 
Provide a ready workforce to fill critical short-term vacancies in the various industries.The industry generates turnover of in excess of R23 billion per annum and places more than 500 000temporary assignees in jobs every day in South Africa.Concerns have been raised about exploitative practices in the industry. These require urgent evaluation andattention.The question of labour brokers, and how this industry is going to be handled, will have a far-reaching impacton how South Africa tackles its problems in the future. It is for this reason that the
Democratic Alliance
and
 the Congress of the People
have decided to publish our own joint policy paper on the matter.
___________________________________________________
 
Reforming Labour Broking:
A Joint Policy Paper 
PAGE3 
 I. The labour broking market
 
The increase in temporary employment services isan international phenomenon, indicative of theneeds of a rapidly changing global village, whereindustries expand and contract at increasing speedand modify their product offerings to matchprevailing global demand.Temporary workers are often needed to assist intimes of rapid change and retooling. Industries inthe throws of this rapid change may not have therecruitment skills to locate temporary workerswithin the required time frame. This function isoften filled by brokers and temporary employmentservices.Many industries, including agriculture, are cyclicaland therefore need more staff at particular times.The employment of full staff compliments duringoff-peak times is not efficient or affordable. Labourbrokers help workers during off-peak periods tofind work.Labour brokers operate across the entire economy,including the professional and manual labourmarkets. Brokers provide temporary staff forgovernment and state owned enterprises (SOEs),the IT industry, the financial sector, productionindustries, construction and mining. Labourbrokers are, therefore, a key component ofeconomic activity, and provide a vital service to theworkers they place and the companies they staff.The concerns that have been raised regarding theexploitation of individuals employed by labourbrokers are real and need urgent attention. It islikely, however, that an outright ban or excessiveregulation will deepen exploitation by driving theindustry underground.The Namibian Model is instructive in this arena.Having introduced legislation in November 2007,aimed at an outright ban on labour brokers ortemporary employment services, many ofNamibia’s temporary workers are nowunemployed. (Figures quoted range between 10%and 40%). If a similar approach to labour broking isintroduced in South Africa, many hundreds ofthousands of jobs could be lost. This will bedevastating to the many currently employedpeople who will be forced to join the ranks of theunemployed.
An outright ban on labour brokers will result in:
1.
 
Immediate job-losses for temporaryworkers who will not have the resources tolocate temporary work opportunities inmany dispersed locations.2.
 
Vacancies in some industries going unfilleddue to an inability to locate staff with thecorrect skill-set.3.
 
A rise in costs due to employers needing toemploy larger in-house Human Resourcesand recruitment staff to fill the gaps left bythe exit of temporary employment services.4.
 
A switch to the use of small sub-contractorsinstead of temporary workers (therebydefeating the objective).5.
 
Fewer people being employed in the longterm.6.
 
The industry continuing to operate,illegally, with an increase in exploitation.
II. The proposal
Self-regulation, with industry peers andgovernment monitoring the process, is requiredand will involve:1.
 
Mandatory registration for all practitioners.2.
 
The establishment of an Institute or self-regulatory Board of Labour Brokers thatwill enforce a set of standards for theindustry.3.
 
A code of conduct, enforced by theindustry board itself. (Legitimate players inthe industry have an incentive to stamp outthose labour brokers who exploit workers –they place the industry at risk and takeaway business).
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