Labour Brokers: An Opinion
How will the banning of Labour Brokers affect the life of a banqueting waiter? Stephen Hickmore tackles this contentious topic that, at the time of writing, was leading to a general strike on the 7th of March.
COSATU's call for the banning of Labour Brokers is ill-conceived and self serving. I am the first to support the unions in a call to ban all abusive labour practices and any other violation of human rights and dignity. But a strike on the 7th March supporting a motion that will lead to massive unemployment and misery is abhorrent to put it mildly.
The existing Labour Laws are far reaching, but the present structures in government do not have the strength to enforce these laws. It does not matter how advanced our statutes are but lack of enforcement will always lead to the unethical taking advantage. Strict prosecution of those who break the law would be sufficient to protect the rights of the workers, along with some amendments to the present legislation. But a ban on legitimate and responsible Labour Brokers is not the answer.
The Government are however cautious when broaching the subject of labour brokers and the ban called for by COSATU. In President Zuma’s recent state of the nation address he called for “common ground” to be found on this issue. I am sure the Government see the creation of jobs as vital to the success of South Africa and understand the role that Labour Brokers play in this. Perhaps they also realise that the banning of Labour Brokers would mean a loss of Tax income as well. SARS charges the VAT to the Brokers client at 14% on top of the salary earned by staff. So the Treasury puts Millions of Rands in its pocket every day as a result of Labour Broking; not to mention the income tax.
There is irrefutable evidence that Labour Brokers contribute to decent work in South Africa. A recent study showed that 43% of labour brokers’ staff find permanent employment within 12 months. One in four jobs created since 1994 have been filled by a brokerage. In the face of this evidence Unions still accuse Labour Brokers of being “Modern Day Slave Traders”. The Hospitality and Tourism Industry is a leading employer in South Africa. Let's look at a simple example? Have the Unions considered how the life and livelihood of a casual banqueting waiter will be affected by a banning of Labour Brokers?
For a banqueting waiter to earn a reasonable living out of his skill he needs to find work at a number of establishments. Hotels, conference centres and venues have a high demand for skills but on an irregular basis. So, for our waiter to get a reasonable monthly income he would need to get regular work at perhaps 6 or 7 establishments. This would normally give him an average of 5 days work in a week, 195 hours a month.
A Labour Broker (Temporary Employment Service or TES) represents the interests of our waiter and through the one organisation is able to get bookings at a number of different establishment. Filling up his week and co-ordinating his working diary. He is represented as a professional waiter in the market place.
Question is, if TES’ were banned how is he going to be able to co-ordinate his time with all the different establishments to get a full months work? Truth is he cannot, it would be logistically impossible and he would be left scraping around town trying to convince dozens of venues to use his skills.
Let’s talk about money. TES’ are in it for the bucks like any business. They have a very small mark up on their services based on the hourly salary of the worker. The TES has to supply large numbers of staff for the business to be profitable. This means that they need to constantly look for more work for their staff to make profit. More business for the TES equals more jobs, and more working hours for our banqueting waiter.
To attract the best skills a TES needs to pay the worker better than a competitor. So naturally TES’ are constantly negotiating staff salary levels with their clients. The higher the rate the better the skills and the more cash per hour our banqueting waiter gets. Most TES’ in the hospitality industry pay above legislated minimum wage. For the TES to provide a better service they need to train. TES’ are one of the highest users of the Skills Development Levy in South Africa. Training is what the client wants, this is free to the client and free to our banqueting waiter.
What other benefits does our banqueting waiter get from being represented by a TES or Labour Broker :
- Transport is very expensive and due to go up. A good TES will normally have its own safe well maintained vehicles that will transport staff if working late free of charge.
- It's hard for an individual to negotiate better terms like, working hours, meals on duty, 13th Cheque, performance bonus. The TES does this effectively. Happy staff equal better service and a happy client, leading to more work for our banqueting waiter.
- All statutory deductions and contributions are made by a responsible TES. Leave pay, sick pay, family responsibility leave, Workman’s Comp and UIF for example. How would these be accumulated if our banqueting waiter was employed by dozens of different establishments? How would the Government get its UIF, Workman’s Comp, Skills Development Levy and Employee’s Tax?
- A responsible TES regards their staff with the same rights as a permanent employee and recognises the right of the individual to join a trades unions.
- The TES can negotiate benefits such as Funeral, Death and Disability and Provident Fund Cover and Medical Aid on a group basis passing on cheaper and better cover to the staff.
- Our Banqueting Waiter Will always get paid for his hours worked plus overtime, even if the client does not pay the TES.
So, COSATU think again. Call for better legislation and enforcement. Not a ban. Not unless you have no regard for our banqueting Waiter his family and the quality of his life.
This article was originally published on the Hospitality Marketplace website which can be found on www.hospitalitymarketplace.co.za. Stephen Hickmore’s company Hickmore Recruitment can be reached on www.hospitality.co.za or Hickmore@iafrica.com. Stephen Hickmore is also an Associate of The Hospitality Solutions Company (HSC); a prominent supplier of staff to 5 star hotels and hospitality industry in Johannesburg