A labour broker, the provider of a so-called Temporary Employment Service (TES), may soon become a PEST and provide a Permanent Employer Service for Training and other services.
• convert workers to employees on an indefinite contract basis, after six months; and
• ensure ‘equal pay for work of equal value (equal work)’.
Presently a labour broker (defined in section 198 of the LRA as ‘temporary employment service -TES) performs many of the functions of an employer by handling all issues relating to the use of workers employed by the labour broker. The workers they provide ‘do work for a client’ but do not ‘work for the client’ and are regarded as employees of the TES and not the client.
If the status of those persons changes from ‘doing work for a client’ to ‘ working for the client’ there is no good reason why labour brokers should not also change their role and formally take over many of the functions of the employer client.
Employers may well engage the services of the erstwhile ‘labour brokers’ and contract with them on the basis of performing most if not all the functions of the employer. This could be done in many different ways, such as agency or sub-contracting.
Equal pay for equal work (more properly work of equal value)
What really needs to be properly understood is the meaning of ‘equal pay for equal work’. Employers who are required to make a profit will only pay the same for work of equal value. This means that outputs and not inputs are important to employers.
Previous blogs were devoted to this topic and it was stressed that there has to be a structure with seven occupational or work levels. Within one such occupational level employees are theoretically doing the same work but there need to be three job levels within that occupational level to cater for employees
• entering that occupational level,
• performing properly in that occupational level; and
• at an advance stage and ready to move into the next occupational level.
In this structure employers would be able to justify a differential of nearly 100% between employees in the same occupational or work level because the ‘value’ they add will depend on the progress through the three job levels.
See:
LC: Equal pay for equal work – dismiss or lockout but unlawful to change pay unilaterally
Labour market: Two-tier system – what about equal pay for work of equal value?
Themes for new labour laws (Groeneveldt – Ifaisa)
Business Day kindly allows me to post extracts from articles first published by them and your are encouraged to read the entire article by clicking on the heading of the artilce or going to Business Day.
Random extracts
“The government has made firm proposals to amend the law on labour brokers and these have been under discussion in the National Economic Development and Labour Council (Nedlac) since last May. The government’s proposal — which has not yet been officially made public — more than meets Cosatu halfway in its bid to have labour brokers banned. It does what the African National Congress (ANC) promised in its 2009 election manifesto: ‘Introduce laws to regulate contract work, subcontracting and out sourcing, address the problem of labour broking and prohibit certain abusive practices’.”
Government proposals
“Populist messages such as these have been made possible by the government’s failure to communicate its proposal on how to deal with labour brokers. Finalised without agreement in Nedlac a month ago, it will amend the Labour Relations Act to:
• Make it illegal for anyone to be employed in a position by a labour broker for more than six months. After six months, labour-broker employees will automatically be deemed permanent employees of the client they are servicing, with the full range of organisational rights and benefits kicking in; and
• Enforce equal pay for equal work.
Since many labour brokers undercut the wages of permanent employees, this provision will in effect remove much of the incentive for employers to use brokers. Workers placed by brokers will become more expensive once broking fees a re included, leaving saving on “the hassle factor” as the only incentive to continue using them.
With these two provisions in place, it is hard to argue that “abusive practices”, which have unfairly kept thousands of workers as “casuals” for the same companies, doing the same jobs for years on end, will not have been eradicated. But Cosatu says the activities of brokers should be limited to matching employers and employees. The labour broker’s responsibility for the worker must end at the door of the workplace, it says.
Organised business has opposed the equal pay for equal work provision, which will raise labour costs for employers who have relied on broking to lower labour costs at the bottom end of the skills scale. Putting business under pressure is another reason Cosatu’s leadership advances for the general strike.”
Political unionism
“So, most of all, rather than bringing about a real shift in what the government has already promised on labour brokers, tomorrow’s (7 March) strike will give meaning to Cosatu’s brand of political unionism, extend its influence and demonstrate its ability to pull large numbers of people on to the streets”.