Cosatu slams 'myth' over brokers

2011-01-17 20:51

Johannesburg - The Congress of SA Trade Unions (Cosatu) on Monday rejected a statement by the Democratic Alliance that proposed amendments to labour legislation would result in job losses, as "a myth".

"It is a big myth, propagated by the DA and its ideological friends in business and the media, that labour brokers 'create jobs'," Cosatu spokesperson Patrick Craven said in a statement.

On the contrary, he said, only those companies actively involved in production and service delivery created jobs.

"And they would still require the same number of workers if there were no labour brokers," he said.

Cosatu was responding to a statement by the Democratic Alliance labelling the labour bills, gazetted over the holidays, "shockingly badly drafted". It called for the bills to be withdrawn and rewritten as they would result in "hundreds of thousands of job losses".

"The four bills that have been announced by the Zuma administration need to be halted in their tracks until the array of problematic provisions they contain are removed," DA spokesman Ian Ollis said.

"The problem is with the Cabinet and the department of labour, which are acceding to Cosatu's demands, with little regard for those who stand to lose jobs, or, indeed, to the plight of South Africa's unemployed, who will find it harder than ever to find work should these measures be promulgated," he further stated.

Cosatu said Ollis' utterances were "cheap propaganda", spread to convince the public that labour brokers were creating more jobs.

"We reject with contempt the argument that the only route to full employment is for workers to accept lower wages and abandon any hope of a secure jobs and a future," said Craven.

He said that the DA was suggesting that in order for the country to have more jobs, it had to settle for lower pay and worse conditions, and that if you wanted decent work you would have fewer jobs.

A report by the Adcorp Employment Index revealed that while jobs overall had declined by an annualised 2.41% by November 2010, the number of permanent workers decreased most, by 2.74%.

It also found that the number of temporary workers decreased by 1.60 percent.

According to the report, the number of workers employed by labour brokers increased by 5.59%.

Labour brokers, the report found, represented 6.8% of the total employment in the country.

"This is having a devastating negative effect on the levels of pay, job security and benefits for thousands of workers," said Craven.

He said labour brokering was "a form of modern slavery.

"If the DA and their labour broking friends have their way, millions more workers will be plunged into poverty and despair, and we will be on our way to a national catastrophe."

He said although it was not clear whether the proposed bill would ban labour brokers, the federation of unions would embark on a campaign to call for the total banning of the practice.

  • georgemichael - 2011-01-17 21:13

    Craven's right when he says Labour Brokers do not create jobs, but the significant point he misses is that Labour Brokers facilitate the growth and job creation within their clients. This happens when they provide a flexible cost option for small and big companies when they venture into new markets and products. But thats probably a bit too complex for the unions to get their small minds around. We know what their grand plan is... the government will be the entrepreneurial saviour. The government will start mines and banks and give proper decent jobs run them as well as well as they currently run their electricity company and the transport company and the airline company. Yay

  • Corne - 2011-01-17 21:14

    let them pass the bill, they are going to hang themselves in the long run, it is always good to sit back and say... We told you so !

  • GT - 2011-01-17 21:15

    So lets see - we can chose between the idealogical friends of the DA (business, entrepreneurial people etc) or teh SACP and its mates (CCCP - failed, CUBA - failed, Venezuela - failing, North Korea - failed) SACP and COSATU have never created a job in their entire existence, except for the leaders of such organisations. It is inconceivable that we have the most poorly written, unconstitutional piece of crud as a labour amendment being dictated to us by people who promote global failed policy.

  • Altus - 2011-01-17 21:39

    cosatu.. please. you are a bunch of idiots. labour brokers find work for people in need. they find work and they employ thousands of people themselves thus creating even more jobs. take 2 years to find a job on your own or call a labour broker and find a job within a month. come one.

      terence.hess - 2012-03-07 18:06

      it shows you were born yesterday

  • Export_employement - 2011-01-17 22:27

    To all manufacturers there are a number of well run Afican states still open for business and would gladly accept your businesses, better trained workers, better working workers and a freerer restrictions. They know employment is better than no employment so please close factories in South Africa and open them in Kenya, Mozambique, Zambia and Morocco even Angola is seeking foreign investment and will help you set up!! Labour broking works even if not fair. Try tell companies to employ staff permanently when its lets try put margin laws on the commission's of the brokers to try curb the problem than to just say its not legal

  • Mike - 2011-01-17 22:29

    Cosatu's blinkered and skewed economic thinking totally misses the point. georgemichael is right: Labour brokers cater for TEMPORARY jobs -- in other words, those jobs which companies cannot make permanent because they are only temporary in nature. By working through brokers, workers can enjoy far greater permanence and security than if there were no brokers. The real reason for Cosatu's opposition to brokers is that they want to control labour for their own greedy political purposes, and brokers stand in their way. The ANC may think it's clever to give into Cosatu's despotic agenda, but it will find out to its cost what the real price will be to pay.

  • RSSV - 2011-01-17 22:53

    Greate logic. It can be extended to middle men evrywhere. In their definition therefore services do not create jobs. Let' pass a law that forces farmers to sell directly to you and I. Clearly the middle men (distributors and maybe even the outlets are not creating jobs). Can these guys not see that labour brokers are providing a service (carrying out activities) that the employers themselves don't want to do. The farmer doesn't want to sell to you and me. It's too much hassle. Banning labour brokers just means that someone else (the employer) must do the searching etc. It's less efficient and the cost structure of the employers must increase!

  • Etienne - 2011-01-17 22:59

    What an idiot! Demand is not always constant (except maybe Johnny Blue if you are ANCYL) and peaks can only be catered for by using a flexible work force. I would rather let my contract employees go than close the business because of increased overheads that cannot be carried -- would like to see how many people will loose their jobs if this moron gets his way.

  • Tango - 2011-01-17 23:07

    Lessee, we currently have loads of workers receiving money on a regular basis ... doing work of a temporary nature ... often because the client does not want to permanently employ for the required work. Government, working on a MOERSE assumption, will now attempt to prove its THEORY, by gambling with these workers' livelihoods. Why not a gradual phase-in of a solution, with voluntary co-operation by labour brokers with a solution that actually works ?? Utterly amazing. Two years down the road we will have to say ... Told you so !

  • Excalibur - 2011-01-17 23:08

    The only catastrophe with labour broking is that it cannot be unionised, leaving Cosatu without support. Labour broking, as georgemichael pointed out, is the only way to provide the sort of flexible labour options business needs to be entrepreneurial. I do not grow my business SOLELY due to the fact that I get lunbered with employees that I cannot fire if my venture to grow is unsuccessful. So, instead of possibly getting a long term job by taking short term risk, the "wekker" DEFINITELY gets nothing. SO, I make "enough" for me, and will employ my family if they are mad enough to work for me, and sod the rest.

  • Tango - 2011-01-17 23:09

    Labour brokers do not create jobs ! They direct cash to workers ! Why ??? Because the jobs do not exist !!! You are putting these guys out of work ! Not out of a job, but out of regular meals ! Ja comrades, let them eat cake !

  • @georgemichael - 2011-01-17 23:20

    I think that you are missing the point. Labour brokers rip off contracted workers. The "facilitation" process can be easily be carried by HR department of those companies requiring workers.

  • Joe - 2011-01-18 02:02

    They think that workers deserve high paying jobs in companies that make little profit. No wonder investors are steering clear of the disastrous policies of the South African labor department. Soon they'll 'demand' themselves out of existence.

  • Roadvark - 2011-01-18 05:49

    Labour brokers will be replaced by queues outside factories, workers on street corners etc. At least the labour brokers have infrastructure to find the vacancies and channel the workers in the right direction. They also have the records to build up profiles on the workers they assist and give references to prospective employers. Take the Labour Brokers out and a crumbling sinkhole will appear in the labour market. Maybe we shouldn't care and just let it happen. Another socialist disaster.

  • Abe Zarco - 2011-01-18 06:11

    Consider a scenario: A large manufacturing business has a temporary increase in orders and needs machine operators. Phones the Labour Broker and reserves 10 experienced workers on their books. The workers are contacted and report for work the next day and work for a week. Business is happy, Labour Broker is happy and worker has wages. Now consider banning Labour Brokers. Firstly all the staff of the Brokers will be out of work. Business needs short term increase in production. Cannot get suitable workers from the queue outside their works. Decides to work overtime and on weekends to achieve required production. Decides to invest long term in automation to solve the problem.Queues get longer outside works. Employment numbers drop again.

  • Tony - 2011-01-18 06:37

    The only myth around is the one that proclaims that Unions have a valuable role to play withinn the employment circle.The amount of monies they recieve from member fees is astronomical.It would be interesting to have a look at their 'real' financial statements and compare it to what labour brokers are doing.Having been in the business i know just how cut throat and risky it is as not only do we end up performing the recruitment process but in most cases we finance shutdowns etc for the client so our level of financial risk is extremely high. Many times i have encountered union officials forcing people to join,within a couple of hours i would have authorisation documents to deduct fees off them and apon pay day the workers would querie the deduction and demand refund of monies. Im currently living in OZ and here temporary agencies are a common and managed type of employment.Most trades people are self registered business entities and invoice the agencies directly.There is no negative connotation attached to temporary workers What the unions tend to forget is that outsourcing is a world wide option that any Organization will do,in order to focus on its core business. Lets see where this goes

  • @GT - 2011-01-18 06:52

    Never read so much truth as that statement about the only jobs they ever created was the management of the unions - which leeches on the sheeple who pay membership fees.

  • Mangena - 2011-01-18 07:12

    georgemichael, do you think that the ANC doesnt know why these companies don’t perform well. You must ask yourself why there are some forces that are pushing privatisation of these companies. I won’t be surprised if you are one of them. Casatu is correct by saying labour brokers don’t create jobs. They only promote corruption and exploitation of workers (majority black people). What I can notice from some of the comments with regards to labour brokers is nothing but resistance to change. It is evident that the majority of people who are working for labour brokers don’t like working via labour brokers because of the ill treatment that they are receiving, so I don’t understand why some people expect our government to protect something that people don’t want.

  • Mandy - 2011-01-18 07:24

    This is also about limiting choice. I worked as a "temp" for about 10 years, through the same labour broking company. I chose to do this, and I did not want full time, permanent work. There are many people out there who also choose this type of work situation. Because I was good at what I did, the labour broker always found me work when I wanted it, and I always got paid above average rates as I got a cash salary with no perks. I gained wonderful work experience in many different companies and as a result I am much more employable today. The unions are too conservative and rigid in their thinking. Exploitation may occure but so to does training, experience and the chance to prove oneself.

  • Ravs - 2011-01-18 07:28

    My nephew worked through a broker at the JHB International - the broker received R26.00 per hour, the broker pays my nephew R14.00!!!!!!! Ban the thieving brokers!!!

  • ian - 2011-01-18 07:34

    As far as I am aware Craven is not and has not ever run his own business successfully. The academic idiot should try this first so that he actually understands cash flows, resourcing etc. Labour broking serves to balance out peak and troughs resourcing.

  • VB - 2011-01-18 08:02

    rt @GT: Craven's right when he says Labour Brokers do not create jobs, it is totally uncalled for for the lot of the country to remain poor despite the amount of resources in the country. Maybe the labour policy is not convenient for the selfish gain of the 10% in the country, but we need to get rid of poverty. Do you have any ideas?

  • Vincent Mandy - 2011-01-18 08:22

    Can anyone inform me, in money terms, how much the broker gets compared with the amount the labourer receives.

  • jack - 2011-01-18 08:24

    The real myth is that Cosatu has ever done anything for the poor or unemployed. Thier task is to make the existing workers richer by adding more perks and increasing cost to company. When the company fails, everyone loses thier jobs. This is of no concern to Cosatu. Job losses are blamed on the ANC while they credit themselves with having improved the lot of those who are already gainfully employed. Its time the ANC woke up to the reality.

  • Stuff the unemployed - 2011-01-18 09:48

    COSATU only cares about their political power and the high life of the Cosatu bosses. They don't care about those without jobs and have no intention of doing anything that will enable job creation.

  • Raz - 2011-01-18 09:54

    Why not conduct a survey amongst small and medium-sized enterprises to fully understand the impact of the new legislation? Take the guess work out of the bill's impact from the start. Although I respect COSATU on their political no-nonsense approach, it is evident that they fail to grasp realities in the labour dirt in this country and instead subscribe to la-la land economics. All evidence in the world suggests that jobs are created by facilitating investment, NOT by forcing their creation. Who has created more jobs in the last 25 years - France or Spain? Guess which one is more liberal and you have your answer...

  • BigAl - 2011-01-18 09:55

    If the government and the unions want to get rid of labour brokers, it will be the biggest mistake so far this year. NOW SIT BACK AND LEARN SOMETHING. Yes labour brokers can and do create cheap labour, but at least these people are getting something in wages even if very little. SO WHAT CAN BE DONE TO BETTER IT??? Lets look at the UK where temporary employment agencies (labour brokers) have run for years. For many years it was like here in SA cheap temporary labour, but not now. They offer a government-controlled fair wages with sick pay and holiday pay. You might only get a temp job, but you get money and job experience, which will be in your favor when seeking a permanent job. In some cases the company see your potentials and offer you a permanent job. Remember a company with a temporary rise in orders cannot take a chance to employ people, but if the rise in orders becomes permanent you stand a good chance of a job. The UK government put in controls and so can the SA government. So how does BigAl know all this??? Because I worked for a very big motor manufacturer in the UK running a very large department, when demands were up I often took on temp labour: which quite often become permanent. I have been thanked by many temp workers for the skills and experience they had learned. SO FIX IT DON’T DESTROY IT (that would make a change for the better)

  • billyjoe - 2011-01-18 10:22

    George Michael, you are very intelligent. Wisshh you could have a one-on-one debate with Vavi

  • Justin - 2011-01-18 10:40

    Their concern with Labour Brokers is that they eat a significant chunk of the moneis availible for employment. In my old employment, we had a new influx of staff, appointed by a labour broker firm, instead of us hiring directly as we normally did. When sitting down with them, we discoevered that that labour brokers was only paying them half of the monies that we were paying to the labour brokers for their employment. That is 50% going to waste as far as I am concerned. Labour Brokers use the job shortages to abuse their staff and get rewards that are not in comparison with the services they provide. I would agree with getting rid of them, unless they have an ethical business model, such as allowing the worker to go into permanent employment with the firm without deducting from his next year's salary. And only charging a decent commission structure or maybe just a finders fee.

  • Jabs - 2011-01-18 11:59

    I hve seen one labour broker employee who got paid 35% from the money paid to the labour broker for his services. Worst of all, the lady enquired if she could be moved to the company (her colleagues doing exactly the same job) had houses where she could hardly afford a flat. She got fired for that and apparently she was told she had no grounds for labour court.

  • Don - 2011-01-18 12:26

    Get rid of the Labour act, where it takes a business months to sack a useless employee. IF employers had less red-tape to employ staff, maybe contracted worker numbers would diminish. The Unions have created their own state of conflict!

  • Cynical - 2011-01-18 13:49

    How do you create jobs in an ever increasingly competitive global environment when you have unions working against common economic sense? Labour costs in SA have increased while productivity and labour unrest have increased - this is why many global companies elect not to invest in SA and create employment. The unemployment rate is bound to increase until the unions begin to understand that their push to guarantee employment and high salaries is making us uncompetitive. This may make unions redundant as members look back and realise how many former members have lost jobs and are unemployed as a result of downsizing due to business budget constraints and relocation of businesses to other countries. Maybe then they will begin to realise the unions are not helping them.

  • Objective - 2011-01-19 09:53

    I don't think anyone is disputing that there are bad eggs in the labour broking industry who take advantage of people BUT the last time I checked, that happens in every industry. Some of the fees these guys charge are horrendous BUT not all of them do. The anti-LB comments I'm reading are all highly emotive from people suggesting that "all labour brokers charge 50% upwards" and "no-one wants them anyway"...once you've checked your facts by interviewing every single worker in the country and verifying every single LB's rates, THEN I'LL TAKE YOU SERIOUSLY.

  • Pravesh Karamchand - 2011-02-02 13:18

    Labour Brokers/Outsourcing? Its the same thing. Modern Slavery! For sure. All the Look at the cost of labour broking and outsourcing, Companies pay a high package to the labour broker of the outsourced company and inturn they pay peanuts to the employee. Bulk of the mony is retained by the broker or outsourced company. Why do you need brokers when companies can retain the employees. When companies do global outsourcing, you would notice the the least paid people are outsourced and the higher paid people are retained. Where is the savings for the company? If our labor law cannot address this then we have a problem in this country. This is were COSATU needs to act.

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