As previously predicted by many commentators it was inevitable that the government would not agree to banning labour brokers.

Click on the link to read Paul Vecchiatto’s report Cosatu gives up on ban on labour brokers — for now first published in Business Day. These random extracts are thanks to Business Day.

“The Congress of South African Trade Unions (Cosatu) admitted it had lost the battle to have labour brokers banned, but reminded African National Congress (ANC) MPs in Parliament yesterday about its agreement with the party over changes to the Labour Relations Amendment Bill.”

“’In relation to labour broking we were not successful in getting agreement for a complete and full ban,’ Cosatu parliamentary officer Prakashnee Govender told Parliament’s labour committee yesterday.”

“The committee is conducting hearings on the Labour Relations Amendment Bill and the Basic Conditions of Employment Amendment Bill. Business bodies told MPs last week the draft legislation was a disincentive to investment and job creation as it made it hard for employers to hire temporary workers.”

“Ms Govender was adamant that Cosatu’s battle against labour broking was not over.”

“ ‘We have a national congress coming up, at which we will have to report to our members on our failure to ban labour brokers, but it remains an objective of Cosatu to see them banned,’ she said after making representations to the committee.”

“Msuthu Matshani, deputy chairman for labour broking at the Construction Engineering Association, told the committee that for every R100 paid by a client to a labour broker, 36% went to statutory deductions such as the Unemployment Insurance Fund, Skills Development Levy and Workmen’s Compensation.”

“He said 5% was the industry standard administration charge for placing a worker, another 11%-13% was for recruitment, selection and placement, and 10% was the labour broker’s profit — leaving the worker with about R30 from every R100 paid.”

“Mr Matshani said labour brokers often had to carry the cost of paying their workers when their clients had not yet paid them for their services.”

“’Even public sector companies will sometimes only pay two or three months after the work has been done,’ he said.”

“Angela Dick, CEO of labour broker Transman, said brokers often had to carry the cost of ensuring workers got to work and home safely and on time. ‘My company has a fleet of 104 vehicles just for this purpose’.”