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Johannesburg - New labour broking regulations have got most of corporate South Africa in a tizz, but it's like water off a duck's back for the CEO of IT resourcing company Paracon Holdings.
"The new regulations will focus on low-income earners and eliminate slave labour - they won't affect highly skilled labour," Mark Jurgens said on Monday at the release of Paracon's full-year results for the year to end-September.
Paracon outsources skilled IT specialists to a range of clients including Standard Bank, MTN, Eskom, Anglo American and Dimension Data. It provides both permanent and project-based staffing solutions. In addition, Paracon is a service provider for software group SAP.
Jurgens said the people Paracon outsources to clients are highly skilled IT specialists, who have specifically chosen the project space to shift between projects. Some earn over R50 000 a month.
He said the government would be focusing on low-income earners such as those in the construction industry.
"Some of our directors have had talks with high-ranking officials at the ANC and the ANC policy is not to ban labour broking completely. In that way, they are opposed to the unions," Jurgens said.
He said government would rather put in tighter controls to protect low-income earners, and therefore the IT industry would only be peripherally affected.
"Tighter regulations could even turn in our favour. The fly-by-night outsourcers will no longer be there," Jurgens said.
Experts are a little more concerned about the fact that labour broking, and by extension outsourcing, may be banned. "If it happens it would have a major impact on many industries, especially the labour broking industry," ICT law firm Michalsons Attorneys consultant Graham Giles said.
He said the ICT industry would be one of the most severely hit sectors, since most of its business is conducted through outsourcing.
"It seems highly unlikely that the minister will prohibit or ban clients from receiving the services of persons employed by labour brokers, but it may cost clients more and the law may impose joint and several liabilities on clients to ensure compliance with all the employment laws," Giles said.
Over the past year, Paracon has been experiencing a 40% dip in high margin permanent staffing placements due to the global recession.
"If the market turns, we will turn with it," Jurgens said.
- Fin24.com