Cabinet’s recent approval of the Basic Conditions of Employment Amendment Bill and the Labour Relations Amendment Bill has sparked controversial debate in the labour broking industry. 

Sean Snyman, director of litigation at LabourNet, says the amended legislation almost renders the entire labour broking business practice null and void, and warns government that over-regulating this sector could have a disastrous impact on the South African economy.

According to research published by Adcorp, more than 1-million people in South Africa are employed through labour brokers and make up 7,5% of the total workforce.

“Banning or over-regulating the practice of labour broking simply does not make economic sense, however proper regulation is critical to ensure ethical business practice and to protect employees,” says Snyman.

In addition, a survey conducted by Bloomberg reveals that South Africa has the highest official unemployment rate among the 61 surveyed countries.

“In a country where we have an appalling 25% unemployment rate, temporary and contract-based employment plays a vital role in creating jobs and growing the economy. Furthermore, given the competitive nature of the global economy, it is unrealistic and economically unviable to simply demand that all temporary and contract workers become employed full-time.”

Proper regulation similar to that in the financial services sector is essential for proper management of the labour broking industry and should be intended to protect employees, the broker and the client alike.

“The first step should be establishing an independent regulatory body which would require that all labour brokers be registered and be licensed to trade,” says Snyman.

“Furthermore, labour brokers should subscribe to an industry standard code of conduct. This will not only protect employees from unscrupulous brokers but also reassure employers of ethical business practice. Employees or companies that use labour broking services will have the right to lay a complaint which can be investigated and if necessary, the relevant constructive action should be enforced. If the labour broker is found guilty of misconduct or unethical business practice, then the regulatory body would have the power to revoke the labour broker’s license.

“Labour broking plays a critical role in our economy and it is an industry issue that cannot be ignored. Proper regulation would ensure fair play for the employee, the labour broker and the client. Government should be addressing the issue rather than targeting the industry,” Snyman adds.