Labour Brokering: public hearings continued

Meeting report

Al Jama-ah submission
Mr Ganief Hendricks urged the Committee to recommend that Parliament amended current employment laws to remove loopholes and, once current contracts have expired, to ban Labour Brokering and temporary employment services (TES). Al Jama-ah argued that this process could be performed through the increasing regulation of the industry over the next five years such that all existing contracts in this industry would expire. The ban could also exclude first-time school leavers. The Department of Labour (DOL) must address the perception that it was inefficient and ineffective, in order to be able to implement their suggested plan.

He urged the Committee to place emphasis on job security, and on the provision of “decent jobs” which were enshrined in the Constitution. He said that South Africa (SA) had a deficit of this type of job, as jobs were being created with less and less security. He said that despite the suggestion that 500000 jobs would be created before Christmas, it was unlikely that these jobs would be decent jobs, or would provide job security for those workers.

He asked that the Committee should not equate Labour Brokering and TES with human trafficking and slavery, because in his opinion it prevented the Committee from fully engaging with labour brokers.

He said that despite the failures of labour brokers, it was clear that they have been able to develop relationships with employers that Government had been unable to develop, and had been able to provide workers with jobs. His suggestion was that Government use the expertise of labour brokers where they could.

He said that “the hands of government [were] not clean” as they had used labour brokers and TES to provide cleaning services to clean Lentegeur Psychiatric hospital in Mitchells Plain Cape Town. In this instance, and in other instances in the cleaning industry, the use of labour brokers meant that cleaners received a substantially reduced share of the profits in the form of their salaries. The situation made it difficult to determine by whom these workers were employed. It was not clear whether the employer was President Zuma, the Minister of Health, the Department of Health, the Senior Superintendent, the Consortium, or Spick and Span. This had provided little job security for the cleaners and had made it difficult for them to voice any grievances if/when the need had arisen.

He said that if you examined the sectoral determination for contract cleaners then you would find that “the Employment Conditions Commission [had] lost its way, the Minister of Labour [had] lost his way and the 17 Trade Unions who contributed to the sectoral determination [had] lost their way.”

He asked that the Committee note that the use of labour broking was not restricted to smaller firms but that many Johannesburg Stock Exchange (JSE) listed companies were also making use of similar strategies. He stated that “employers and state entities [were] also the culprits and a blot against the Freedom Charter”, not only the labour brokers.

He concluded by saying that the country would be unable to meet its aspirations to provide decent work, or provide protection from discrimination in terms of the International Labour Organisation (ILO) standards while labour broking and TES was still allowed. In his opinion regulating those industries was a waste of time, because employers would find alternative means to avoid their obligations to their workers. He also asked that government be more careful in avoiding its own use of these industries.

Discussion
The Chairperson asked how Mr Hendricks linked the idea of 500 000 jobs created before Christmas to labour broking.

Mr Hendricks replied that a lot of projects done by the Department of Public Works (DPW) used labour broking and workers were paid R50 or R60 per day. These were low paid jobs and lacked social security benefits such as pension funds or medical aids. This did not contribute to decent work or employment.

The Chairperson then asked what he meant by the statement that the Minister had lost his way, and how this was linked to labour brokers.

He said that the Minister was obviously advised by his departmental officials. The Department had signed off on the sectoral determination which had created a situation where in-house cleaners became contract cleaners and had lost their job security. Labour brokers had organised themselves into a National Contract Cleaners association which then employed cleaners and sold them to companies. They then used the sectoral determination as a legitimate platform to launch their businesses. In his view it was wrong that this had happened with trade unions acquiescence. Trade unions had attempted to resolve these issues at the labour court and at the CCMA but they had lost because the sectoral determination was the law.

Mr I Ollis (DA) said that profit seemed to be regarded negatively but that it was necessary to understand that even government made some profit in some of their dealings, including instances when they had leased property. There were many ways to make profit without exploiting workers, and there were some instances where profit allowed for the provision of benefits such as pension and medical aid. He would like the reasons for banning labour brokers.

The Chairperson replied that Mr Ollis had a misconception about profit. A difference existed between profit and surplus, and between profit and greed. There was no business that could work without a profit. In her view the problem arose when people or companies were being greedy. She encouraged Mr Ollis to listen to people who had suffered under labour brokers. There were many people who had not been paid, or had died without proper funerals because their benefits were not provided by labour brokers. Labour brokering was not like “clean business”.

Mr M Nyekemba (ANC) added that a distinction was needed between how profit was used by the public sector and the private sector. He said that in his understanding, any profit accrued by government was used to benefit the community, whereas in the private sector profit was used to develop technology, which caused job losses and loss of job security.

Mr Hendricks said that the clients of labour brokers stripped workers of their job security. He said that despite much talk of values and of the struggle, there had been little change in terms of job security over the past 15 years. Employers, including JSE listed companies, used labour brokers to avoid providing job security.

Mr E Mtshali (ANC) said that the Committee was not against profit. In his opinion the use of profit by labour brokers was not for the benefit of the people, it was for the benefit of “the slave master”.

Mr Sambatha (NUMSA) said that the reality was that it was necessary to understand how these profits were made. The profits derived from labour broking should be outlawed because they were derived from selling another person’s work.

Ms A Rantsolase (ANC) asked why employers were not employing their own people. It was because labour brokers wanted profit. Despite the Democratic Alliance having said that profit was not a sin, in her opinion selling people for profit was wrong.

Mr Ollis asked why third party arrangements in terms of labour were unacceptable. He expressed disbelief that labour brokers could not operate fairly and could not be beneficial. There was room to debate it without exploitation. Concrete solutions to the problem of exploitation were needed to allow labour brokers to continue to provide jobs.

Ms Rantsolase expressed disbelief that labour brokers would ever employ people permanently.

Mr Loane Sharpe, Business Unity South Africa (BUSA) said that there was the opportunity for labour brokers to employ people permanently. Labour brokers could take on temporary employees permanently. There was a huge variety of contracts available and it depended on the nature of the contract that existed. Labour brokers would take on employees permanently if the contract that they had, was of a permanent variety, but that this was not widespread because often labour brokers were involved with filling temporary positions. He gave the example of jobs that would be created during the FIFA World Cup which could not become permanent jobs, because they were temporary jobs.

Ms Rantsolase asked for clarification of the types of jobs that people were performing for labour brokers. She said ambiguous employment conditions existed. In her view even if labour brokers were regulated, employers would not change their attitude about providing benefits for workers. She asked Mr Hendricks what he thought would make labour brokers comply with labour laws after proposed changes.

Mr Sharpe said that the question of whether regulation would be effective to ensure compliance from labour brokers required a two-fold response. There were a number of labour brokers that already complied with and exceeded the requirements of regulation, and there were some that did not. Creating further regulations would merely provide additional criteria of compliance for those who were compliant, but would drive those that were not complying further underground which would lead to more “wicked and evil” outcomes. Regulations should address the problematic sector, and not the part that was already compliant.

Ms Rantsolase said that there was exploitation in the sector. She expressed disbelief in Mr Sharpe’s response that people would be employed permanently. She could not see how a contract or a letter of appointment that provided job security could be provided by a labour broker. This system was divisive to workers, because those who were employed directly by companies had better contracts. The labour brokers’ commitment to the client would always overcome their commitment to the worker and would allow them to treat workers as commodities.

Mr Suraj Maharaj, President: Association of Personnel Service Organisations (APSO), said that it would not be useful to cut out labour brokers. Many people needed to secure employment on a temporary basis. In the previous election Government had approached the ‘slave traders’ and ‘human traffickers’ in order to staff the polling booths for a specified period of time. Government did not promise those workers permanent jobs. It was often not practical to employ people permanently.

Mr Nyekemba said they were aware of information that government had used labour brokers, and that the meeting was not only directed at the private sector. Government was not in denial.

Ms Rantsolase asked what labour brokering was, if it was not human trafficking. Labour brokers sold people for profit. Individuals sold their labour to labour brokers for a cheap price, and those labour brokers then sold that labour for an expensive price. There was a gross difference between workers and brokers fees.

Mr Cedric Gina (NUMSA) asked if the distinction between labour brokering and slavery could be clarified, because in his opinion what was being described was akin to slavery. He asked if it were Mr Hendrick’s religious convictions that prevented him from describing it as slavery.

Mr E Mtshali (ANC) said that Mr Hendricks was trying to get the Committee to endorse something that they would not endorse. Labour broking involved the selling and buying of workers through a “slave owner”. It prevented the worker from negotiating. When workers attempted to negotiate directly with a client, they were likely to lose profit. Labour brokers were similar to slave drivers and that in his opinion he could not see that the Committee would endorse this. It was dishonest. People should be employed directly, and he would like a response as to why people were not being employed directly. Labour brokers received all profits, and that it was not to the benefit of the worker. The ANC would like to “cut” labour brokering.

Mr Riaan Ferreira (The Workforce Group) said that there was a difference between the slave trade, human trafficking and labour broking. There was a difference between employees and slaves. Slaves were not entitled to payment, and were considered as subjects rather than as people. The definition of an employee was very different from the definition of a slave and these conditions were not true of temporary employment services.

Mr Ferreira said that it was incorrect to think that employees of temporary employment services could not negotiate their contract. Employees had access to all the legislation and rights that were available, and that the only difference was who the employer was. It was unfortunate that temporary employment workers’ negotiating power was measured against the availability of work, the demand for workers, and the need for all parties to make a living. The more skilled a person was, the better his or her negotiating power would be, whether it was the TES or the client.

Mr Ferreira said that the TES were providing skills to the employees. The Committee should not forget that businesses were not operating in a perfect world. Peopled used TES in order to keep up with the increasing demands for specialisation. Labour brokers were employment specialists. All TES should comply with the statutory regulation standards, and that often they provided personal development. Human resources was a specialist field, and that TES provided a specialist service. Labour brokers were not making the massive profits that had been spoken about and there was huge reinvestment in staff, in staff training for example. There was also reinvestment in systems to ensure compliance to labour regulations by companies. He said TES also offered many ancillary services in addition to temporary employment services, because they have become so specialised. TES had huge development potential and they used this potential to develop systems in human resources.

Mr Ferreira said that DOL documents addressed the regulation of labour brokers.

A member of the public, Patrick, said that he was a victim of brokers. When workers asked brokers questions about their terms of employment, they were chased away, did not secure employment and were sometimes dismissed. The problem was that there was no method for complaints. When Mr Ollis asked questions about why they should stop labour brokers, it indicated that he did not understand the situation of workers.

He questioned Mr Ollis’ origins and said that he did not think Mr Ollis was South African, because in his opinion a South African would not share Mr Ollis’ view.

Mr Ollis replied that he was born in South Africa. He, his father and his grandfather were born in South Africa in a public hospital in East London. His great grandfather had worked on a farm in Stutterheim. He also clarified that he was an English speaking South Africa.

The Chairperson stopped this line of questioning and encouraged the debate to continue.

Ms W Newhoudt-Druchen (ANC) asked for clarity on the links between sheltered employment and labour brokers. She asked why Mr Hendricks was against sheltered employment.

Mr Hendricks said that there were 12 sheltered employment under the watch of the DOL. This was not closely related to labour brokers, but was an aside.

Mr Nyekemba said that there were a couple of issues to be discussed. Mr Hendricks had focussed on the cleaning sector in his submission and he had wrongly linked this with procurement. This was not necessarily a competency of the DOL. In his understanding, BBBBE and labour brokers used two different set ups. When a consortium was formed between a few small to medium enterprises they were required to fill in documentation when they tendered. Labour broking was different from the consortium.

Mr Nyekemba referred to Mr Hendricks comments about sectoral determination and said that he assumed that Mr Hendricks was focussing on the cleaning sector. In his understanding of Chapter 8, specifically Section 51, of the Basic Conditions of Employment Act, the Minister could set minimums in a sector where there were no bargaining councils or collective bargaining.

A member of the public, Mr Johan Le Roux, asked Mr Hendricks about the sectoral determination in the Basic Conditions of Employment Act. He referred to Mr Hendricks’ statement that the sectoral determination was used to launch legitimate businesses. He asked whether Mr Hendricks would prefer that illegitimate businesses were launched.

Ms Rantsolase said that there was a need for the definition of labour brokers, employers and workers. If labour brokering was not human trafficking, she was unclear what it was. Labour brokers were making profit out of people that they were selling, that they were not paying minimum wages and were not complying with sectoral determinations.

Mr Sharpe said that the employer was the person who had duties and responsibilities to the employee and for that reason it must be the labour broker. He gave the example of a bank and a cell phone company, where the bank only needed people at month’s end, and the cell phone company only needed people at night. The only person who could be considered the employer if someone were deployed into both of these jobs, would be the labour broker. The labour broker had the legal and regulatory duties with respect to the employee.

Mr V Ndlovu (IFP) asked for a definition of who the employer was in a situation where three people were involved: one who was looking for a job, one who was a labour broker, and one who was a company.

Mr Sharpe said that in Mr Ndlovu’s example the employer was the labour broker. It would be unusual if there was only one client for the broker, and that this situation would allow the worker to work at a number of sites. Labour brokers allowed for companies to fill temporary positions with workers. The labour broker then had the legal duties and obligations to the worker.

Mr Ndlovu asked from where the employee’s benefits would be derived.

Mr Sharpe replied that the labour broker would be responsible for the employee’s benefits. When a temporary contract ended the labour broker would often undertake to find further employment for the worker, whereas a business would not be interested in doing this. The labour brokers or temporary employment services still had the duty to find the worker further opportunities, when there was work available. There was greater possibility for people to secure more work when they used a labour broker.

Mr Elias Monage (CAPES) said that South African law was not silent on TES. Section 198 of the Labour Relations Act clearly defined what TES were and regulations that were in place. He said it made clear the employer-employee relations and the statutory liabilities to the employee and the client. There were contracts between brokers and the employees and they were like any other contract and defined the length of work and wages. Insinuations that labour brokers did not have respect for human rights, were a fallacy.

The Chairperson said that it was not clear who the employers were and that at some stage labour brokers became facilitators. Labour brokers were middlemen. She asked why the Committee should not just get rid of middle men.

Mr M Sambatha (National Union of Mine Workers) said that parliamentarians should debate whether they want people to be employed directly by employers, or would they like somebody to employ people to employ other people on behalf of an employer. Whether they felt that people should derive their profit from selling another person? In his view when that answer was resolved, the path of action that they would have to take would become clearer.

Mr Sambatha asked why middlemen should exist when in his opinion contracts should be between employees and employers. Labour brokers would never employ people permanently. Placement services that placed someone in a position and then disappeared were fine but this did not happen with labour brokers. Middlemen were not temporary, but were perpetual and would always exist in the relationship. There was nothing temporary about labour brokers. [Mr Sambatha continued speaking in an African Language but the English translation was not given].

He asked why a hospital should employ nurses through a labour broker when there were nurses who were employed by government. Nursing as a profession was not a temporary service, and thus they should be employed on a full time basis. In his opinion labour brokers were destroying the existence of permanent jobs.

Mr A Louw (DA) responded that many nurses used temporary employment by choice, and that many nurses overseas had chosen to use labour brokers.

Mr Nyekemba said that TES were also under discussion because there were loopholes in the law. The issue was that a labour broker could not be an employer. Both the TES and the client were responsible. What that meant was that by legal standards there were now two employers. The labour brokers present in this meeting were shifting their positions, because the previous day they had said that they were facilitators and but now they were saying that they were employers.

Mr Ollis said that SA did not exist in a vacuum as it seemed to be presented here. There were many countries where labour brokers operated without exploitation. SA was not the only country where exploitation existed, and the Committee should be focussing only on acting on those cases where exploitation had occurred.

Mr Monage said that the Committee should draw on international references and regulatory models. All brokers were aware that there were some brokers who were non-compliant. The global economic response talked about social partners finding solutions to abuse. They played a role in the provision of ‘decent work’. It would be relevant for the Committee to consider international and African examples.

The Chairperson said that the Committee would read and learn from international examples but that they would do what was best for the South African situation.

Mr Monage said that when it was obvious that people had already taken a position it made it very difficult to engage with the issues at hand. If the Committee had already decided that they would not engage then the public hearing was “a waste of time”. It would prevent them from looking at all the things that labour brokers were doing in terms of skills development and the contributions that had been made across SETAs. When parliamentarians had already labelled brokers as ‘human traffickers’, it prevented engagement.

Mr Monage that a mechanism needed to be developed to deal with those who were non-compliant, and protect particular types of employees. It was important to look at international regulations around labour brokering and TES and see how other countries had dealt with similar issues of non-compliance. South Africa had not ratified ILO Convention 181, which specified the nature of private employment agencies.

Mr Monage said that the previous day labour brokers had been lambasted by the Chairperson and Members of Parliament and in his opinion it appeared that parliamentarians had given them “no hope in hell”. He said it would also prevent Parliament considering international options. If Parliament had already decided that they were not going to have labour brokers, then Parliament should let the labour brokers know so that they could begin seeking other opportunities for business.

Mr Monage said that the previous day they had been cautioned not to make threats. His statements were not threats. He asked what the point of a public hearing was if the Committee had already decided to ban labour brokers.

The Chairperson expressed surprise at the idea that the Committee had come to the public hearing with a position. If that were the case, the Committee could have decided in a meeting. In her opinion it was Mr Monage who had come to the hearing with a position. He was not listening and had come to the hearing with a position and with propaganda that was false.

She said that NEDLAC’s processes would be implemented by Parliament but their processes were not final. The ANC party had fought for freedom of expression and the right for Mr Monage to come forward and voice his opinion. The Committee would let him express himself in the manner that he would like to. The Committee would not be discouraged by what Mr Monage, or any labour brokers were saying. The DA might have a different opinion from the ruling party that favoured business and Mr Monage’s position.

She asked why labour brokers did not employ people permanently, and she said that they did not have a work place. It was a gap in the Labour Relations Act. Even Section 198 had loopholes that allowed labour brokers to exploit people. The Committee did not want exploitation. Labour broking was a global issue and the Committee would fight it.

She said that this public hearing was happening to debate the labour broking process, and not to debate good or bad labour brokers. She used the example of the drug trade to imply that if the labour brokering practice was problematic, then labour brokers would be problematic. Mr Monage should speak for all labour brokers. If the labour brokers present in the meeting became defensive it would not help.

Mr Sambatha (NUM) said that labour brokers were attempting to blackmail Parliament by saying that the Committee members had come to the hearing with a position. The labour brokers had come to the hearing with their own position and hoped to get the Committee to legislate in their favour.

Mr Maharaj said that the bombardment by terms that were inflammatory such as ‘slave traders’ and ‘human traffickers’ indicated a pre-conceived position on the debate. He asked that they be referred to as labour brokers or TES.

The Chairperson said that she was not convinced by what Mr Maharaj had said.

Mr Nyekemba said that the advert released for the public hearings said that government had a core objective of facilitating public participation and involvement in legislative processes. He thought that that was what had happened. The public hearing was not the place to make a decision. They were there to receive contributions that would influence their decision making in the legislative process.

The Chairperson said that the ANC was against labour brokering, whether it was government or the private sector using it. The decision that they made in Parliament would apply to all sectors.

Women on Farms submission
Ms Fatima Shabodien, Women on Farms Director, was accompanied by a young farm worker, Julia, who told her story in Afrikaans and Ms Shabodien translated for her.

Julia said that she came from an area 13 kilometres outside of Stellenbosch and that most of the people who lived there were farm workers and most of them used brokers. Her parents were farm workers, she had four brothers and four sisters and she was a single mother of two children. She was forced to leave school in 2005 to support her family. She then began working for a labour broker. Through the labour brokers she earned R50 per day, which was less than the minimum wage. No deductions were made from her wages. Brokers did not pay them when they did not work, so they did not get paid if it was raining or if they were ill, or on public holidays when they did not work. She did not know who her boss was. She was contracted by the broker, but when they were working on the farm then the farmer could also tell them that they should go because there was no more work for them. The farm workers were packed onto the trucks like animals. Some of the workers had to pay the brokers for transport. Her work was seasonal and that for around six months of the year her family went to bed hungry. There were eleven people in her family and only two of them had work with the brokers. She did not feel that it was right that she should live this way. She pleaded with Parliament to do something.

Ms Shabodien said that she had dealt with businesses who had said that this sort of evidence was “anecdotal” evidence. She challenged the businesses that were there to tell Julia that her experience was not real. The brokers should talk to non governmental organisations (NGOs) and trade unions and dared the brokers to say that this evidence was not real.

She said that her submission would be limited to the agricultural sector, because that was where she worked. She had done research into the impact of labour brokers in that sector, specifically 107 Grabouw fruit workers. None of them said that they would have chosen to work for a labour broker if they had any other option. Most of the brokers in that sector were farm workers who had chosen to become brokers when they retired because they did not have any retirement benefits after they had worked on agricultural estates for their entire lives. There were many positions that were not entry level posts. Many women had worked in these positions for ten years or longer, and these were jobs that people were working in for their livelihood. None of them were paid the minimum wage, none of them had had contracts and none of them had had deductions made from their cheques.

There was also a race and gender dimension. This had divided the workforce. Most of the permanent workers were coloured males whereas most of the temporary workers were African women. Tensions were developing for which farmers would not take responsibility. Many coloured women had felt displaced, and farmers had confirmed that they had a preference for migrant labour. The farmers said that these workers did not cause problems. She argued that this was because those people lacked the social networks to be supported.

Many of these people were subject to abuse because they did not know their labour rights. Many migrant workers were sourced from areas outside of the Western Cape and had arrived without any possessions or money. She said this had created a situation where these workers were locked into financial debt with the brokers, with high interest rates. This was very similar to human trafficking.

none of the workers were unionised. In her opinion this was because it was almost physically impossible to bring all of the workers together to strategise. Many workers were scared to join a union because they were scared to lose their jobs. Many workers depended on these brokers.

In her research she had found that farmers and workers acknowledged that the use of unregistered brokers was widespread. Farmers used unregistered brokers knowingly. She said that it was the Department of Labour’s responsibility to monitor this.

Ms Shabodien stated that labour brokers were part of a broader problem. It was clear that there had been significant backlash against the laws introduced in the post 1994 period. There was an urgent need to secure the rights of workers. Farmers were using labour brokers to avoid complying with the law. Many workers arrived at her office without knowledge of the name of the farmer that they worked for.

Farm workers’ share of the industry was very low. The people who were already marginalised were the most likely to be affected and subjected to abuse (sometimes even sexual abuse). She gave an example of cases where women were only given employment from labour brokers after promising to have sexual relations with the brokers. This often left them indebted to the brokers.

She concluded that in her view there were several things that were needed. The first was urgent and drastic legislative reform. The law should take into account that most workers were not permanent and were not unionised.

The second thing that needed to happen was specific regulation. The most effective methods of regulation should be pursued and international examples should be taken note of. Banning often drove brokers underground and it was not clear that the state had the capacity to enforce further regulations, given that they had problems enforcing the minimum wage for farm workers, which was already in place in legislation. They had been left with a system where, when workers resisted brokers, they were not protected.

Third she said that it was often left to NGOs and trade unions to educate workers about their rights. If the law did change, then a budget should be allocated for the purpose of educating workers about their rights. Government subsidies should be provided to trade unions to allow them to develop and grow. In the agricultural sector many unions could not draw large enough subsidies from their members. These subsidies should not only be financial, but should take the form of other types of support. She noted that only three percent of the workers were in unions, whereas around 50% were casual.

She thanked the Committee for the opportunity to present. This was an issue that her NGO had forseen as a problem. Labour brokers were always more expensive than employing people directly. Farmers were not using labour brokers to save money, but were using them to avoid their legal responsibility. It was up to Parliament to close the loopholes.

Discussion
The Chairperson commented that they had heard from the victims themselves. There were people representing labour brokers in the meeting who had not provided any useful response to any of the questions they had been asked.
 
Most people practicing labour brokering came from a particular class, or community, that had benefited from the economy of the country. Most of the victims came from communities that had not benefited. She asked the labour brokers to assist the Committee and said that it was unfortunate that most of the industry was white male dominated. She asked for specific recommendations from labour brokers that would be useful. Labour brokering was a problematic system, and the Committee was there to fight against the system.

Mr Kevin Cowley, Chairperson: Confederation of Associations in the Private Employment Sector (CAPES), referred the Chairperson to the saying ‘the pot calling the kettle black’. One could not say that because labour brokers were acting in an unregulated way in certain sectors the whole system was bad. The responsibility to so something belonged to the DOL. The DOL should police and control regulations.

The Chairperson said that the Committee was aware of the inefficiency in the DOL, particularly the shortcomings of labour inspectors. When inspectors visited farms, many farmers had guns and dogs. Something needed to be done to empower the investigators and “give them some teeth”. In her opinion investigators should be armed. They should protect themselves against farmers who were armed. Inspectors “must have teeth, whatever those teeth were.”

Mr Mashele (NACTU) said that the labour brokers were benefiting out of “bloodstained” hands. They were exploiting people, and none of them were responding to the fact that they were exploiters. In his view, amending the law was not the solution. Labour broking should be banned.

Ms Alice Kilimani, Hotel, Liquor, Catering, Commercial and Allied Workers (HOTELICCA), said that labour brokers were exploiting women. Sometimes she felt that nothing had changed since apartheid. Differential salaries from labour brokers made it difficult for women to feed their families, because men were paid more. Labour brokers should be banned.

A NACTU representative said that it made it difficult to know who could be taken to the CCMA as employees were not sure who their employers were. When workers joined unions, they were dismissed by labour brokers. There should be a way to monitor the whole system. In some instances workers were not given notice when they were dismissed, and were replaced with other workers by the broker. Clients and brokers should also have to contribute to this trust.

Mr M Mfayela (Business Process enabling South Africa) (BPeSA) said that the Committee should listen to both positive and negative submissions on the issue. There were partners on the side of labour brokers. BPeSA employs people who could not enter the workforce. In their industry working with labour brokers had worked. The unions and employees had challenged the industry ten years previously and the industry had developed a code of conduct. Often they had taken people, including school leavers, that were unemployed and had given them a job or placed them in a situation where they were able to give value. He suggested that there was the possibility for all groups to share knowledge. The youth had to be considered. With the advancement of technology people wanted to choose when and where they work. The internet allowed for this. The challenges faced by certain industries need not be seen as blanket challenges and it was important to work with the Committee to understand how these challenges worked. Training and providing skills to South Africans would enable knowledge sharing and would enable everyone to move forward.

Mr Ferreira said that there was a general problem about employers abusing employees. The blame had been placed on employment services when only a quarter of all TES staff was employed by the industry. It was not productive to attack all labour brokers when it was only the actions of a small group that were problematic. He said that the topic of an enforcer had been avoided. If existing laws were properly applied, then the solution would already be there. The first action should be to enable the DOL to do its work and protect workers. The solution should not be to drive away a system of work that could be monitored, but they should strengthen the ability of the DOL to monitor it. If this happened then a large part of the problem would be resolved.

The Chairperson asked how workers who were scattered and were not permanent workers could be traced by trade unionss. In addition to the problem of the DOL, the problem of migrant labourers should not be ignored.

Mr Ivor Blumental, CEO: Services Sector Education Training Authority (SSETA), said that there was a way to track these workers and that they were already being tracked on the national learner record database. Young people were tracked as they built up their Curriculum Vitae. The instrument used there and could be modified for the purposes of the Committee.

Mr Sharpe said that the industry was sitting in the wrong forum. When the Committee was considering loan sharks, they would not have taken banks to task for loan sharks. The same principle applied in this instance, and it was those who were already compliant who were trying to understand Parliament’s resistance to the industry.

The labour brokering and TES industry had proposed regulation before. In 1993 they had proposed a bargaining council covering all a-typical employees including labour brokers employees and it was rejected. In 2007 a proposal for a co-regulatory framework using the industry’s own resources to monitor and remedy existing problems in the industry had been prevented. Parliament could not say that they did not have the capacity, because the industry had offered their own capacity to deal with it.

Nobody present would defend the abuses in the industry. He asked what the incidence of the abuse was in the industry. He said it was important to know because it affected the solution that could be proposed. If the problem were sectoral, then the regulation changes should be sectoral. Sweeping changes did not help and legislation covering the entire market was not the appropriate remedy. The Committee should be aware that legislation could have unintended consequences. If the industry was overregulated, it would result in more abuse rather than less abuse.

The industry suggested a co-regulatory body, termed the Private Employment Agency Board, jointly administered by the Department of Labour and the industry. This would give responsibility to the industry to monitor and report abuses of this kind. He called for the acceleration of putting this body in place.

Mr Thembinkosi Mkalipi (General Executive Manager: Labour Relations, Department of Labour) said that many speakers had attempted to divert the discussion onto the DOL. He did not deny the limits in the capacity of the Department but it must be noted that labour brokering itself was a problem. Labour brokers reduced wages, undermined the job security of workers, made it impossible for workers to unionise, made it impossible for people to be paid according to their value, made it impossible for inspectors to do their work and made it difficult for workers to remedy complaints. If the companies present were ‘good’ labour brokers then they should explain how they did not cause these problems. Even if the DOL improved, it would not be able to ensure that trade unions had access to the labour brokering firms. The DOL was working on improving their inspection capabilities.

Mr Sharpe congratulated Women on Farms for the work that they had done and noted that what they reported was undoubtedly problematic. If this was what defined the industry, then he was not interested in being part of the industry. There was a need to deal with the problem of seasonal workers. There should be a special registration mechanism set up for people who work with seasonal workers. There should be a body to drive out the malpractices and police the industry.

He suggested that consideration should be given to a levy on the payroll. Those funds could be used to provide training, or labour brokering firms could be compelled to provide training or a combination of the two. In his view the Committee and industry should join forces on that issue.

Mr Gina asked what caused those in the Business Process Outsourcing sector to use labour brokers. There were contracts that were not temporary in that sector and he thus did not understand why employees should be supplied by labour brokers. He would like to hear more from the labour brokers on their contribution to skills development, as he had not heard of an artisan produced by this industry.

Mr I Blumenthal responded that of the 22 000 apprentices and artisans registered by the Department of Labour throughout all the SETAs in 2008, TES had produced 11 000 certified artisans.

Mr Gina said that in his experience most of the workers who died on the job were workers supplied by labour brokers. Labour brokers did not have the capacity to train workers on health and safety. He asked whether the labour brokers present were saying that they had that capacity.

Mr Blumenthal said that all training in the TES was up to standard and it did have a health and safety element as a core contextual requirement. He said that he came from a sector where they had tried to regulate labour brokers but had not managed to.

Mr Gina said that an additional issue was that it was very easy to register a company via the Companies and Intellectual Property Registration Office (CIPRO). This allowed for companies to change their names very easily and made it more difficult to track employers. He said that CAPES had not been clear about the type of regulation. There should be more entrepreneurs in South Africa, and labour brokering had affected the thinking capabilities of the businessmen involved in it. Labour brokers should approach government and get involved in developing entrepreneurship.

Mr Blumenthal said that he had worked on and researched Standard Industrial Classification Codes (SIC) for ten years and this had included the labour broking industry. They had been struggling for co-regulation throughout this time. They had invited people to work with businesses and meet with them. It had taken five years for any federation to come to one of these meetings. This had happened in 2004, and it was essentially a bargaining council environment.

In his experience the companies that wanted to work with regulations were the types of companies that would work within a bargaining council framework and a co-regulation framework. Those companies that did not operate under a bargaining council framework, like agriculture and retail, did not play by the rules. Around 15% did want to work within the framework.

The same complaints that were targeted at the DOL could be targeted at bargaining councils. The industry should be held accountable. Industry bodies should be dealing with criminals and sending them to jail. The decriminalisation of non-compliance did not make logical sense.

The exclusion of Small to Medium Enterprises (SMEs) from compliance was another problem. A five person office could have up to 1000 temporary staff in their records. The problem was that SME’s were exempt from complying with requirements. He said it was difficult to control SMEs and easier to control big businesses which did not make sense. Part of the problem was that it was too easy to register as a labour broker. The application to become a broker was only a one-page form.

The DOL should become a quality assurer rather than a policing service. Inspectors could hold the bargaining councils responsible rather than acting as a policing service. He suggested that the DOL use the learnerships developed by SETA to grow their enforcement sector.

Ms Rantsolase expressed frustration that the question of the definition of employer, employee, and TES had not yet been provided by the labour brokers who were present. The prevalence of migrant labour made it difficult for employers to deduct the Unemployment Insurance Fund (UIF). She asked how it would be possible to ensure UIF compliance under the new regulations that they proposed.

She asked the labour brokers why they would comply with new legislation if they did not comply with current legislation. People were being abused via charges for transport and accommodation. The practice of labour brokers was the practice of human trafficking.

She asked why the artisans that were being trained were not being deployed into relevant sectors. She said this was linked to the lack of clarity on the definition of the employee and employer.

She expressed incredulity at the idea that the Committee had already “made a decision”. It was the responsibility of labour brokers and TES to convince the Committee, but if they continued not to answer the relevant questions, they would not be able to do so.

Mr Nyekemba said that Mr Mkalipi had raised fundamental issues. In his experience as a former union official, Section 12 of the Labour Relations Act made reference to union access to the workplace. The union official had a right to speak to workers after hours in the place where they were employed. In cases where a labour broker was involved, workers should then be able to meet with unions in the offices of the broker, rather than the site at which they were working.

He welcomed comments on the issue of registration. The Committee should converse with other Departments, and suggested that the Department of Trade and Industry was responsible for this registration.

Labour brokering made membership of a trade union difficult. If workers wanted to have a protected strike then they lost their job security. Primary employers would simply ask the labour broker for alternative workers, who would not strike. In times of dispute the labour broker and the primary employer should be cited. In his view, labour brokers would have better access to legal support than complainants. The CCMA could not reinstate a worker to a labour broker, it was a technical impossibility.

He asked how there could be a TES that provided permanent employment given that they were ‘temporary employment services’. He suggested that a time frame should be applied to all TES. After a particular period, workers should either become permanent employees or the position should be advertised. Despite labour brokers saying that they were training people, he would like clarification about what type of training they would be provided.

Mr A Louw (DA) reaffirmed that the public hearing process was not a decision-making process but was for the purpose of hearing other views on the matter. He asked why it was necessary to ban labour brokering when labour brokers had shown willingness to create jobs. Not all labour brokers were bad. After listening to the submissions it was important to ask what value labour brokers added in terms of the fiscus of the country, and how many people the industry employed across all spheres.

Confederation of Associations in the Private Employment Sector (CAPES) submission
Mr Elias Monage and Mr Kevin Cowley made their submission. Mr Monage said that he would respond to some of the criticism that had been levelled at brokers thus far, and Mr Cowley would continue with the submission.

Mr Monage said that they did not support the practice of a number of labour brokers, and recognised that a number of unregistered labour brokers were non-compliant. For the past seven years CAPES had tried to involve the industry in taking control of them. The industry played a role in registering brokers. Section 24 of the Skills Development Act required TES to register for a two-year basis.

CAPES estimated there were 3140 agencies, and around 2000 of those were not registered labour. He said if they were allowed to continue to operate then they were encouraging unethical conduct and practice within the industry.

He noted that the issue of compliance was a problem. Convention 181 of the ILO prohibits charging a fee to a work seeker and CAPES members were not charging any such fee, nor did they support such a fee being charged.

CAPES supported the right to collective bargaining and respected the right to individuals joining a trade union. CAPES had agreements with a number of trade unions to that effect. There had been a suggestion that benefits were not offered by labour brokers. This was not true of all cases, and cases where benefits were not offered should be investigated. They were in support of a uniform standard across the industry.

They had submitted the proposal to the Financial Service Board on the issue of an industry fund in order to compose a board on this issue. Part of the statutory benefits that CAPES was making was a contribution to a number of SETAs, which was worth around R400 000 000 as an industry. CAPES was adhering to statutory benefits.

They had addressed the definition of an employer. Section 198 of the Labour Relations Act dealt with different forms of employment, and dealt with triangular situations like those that existed in labour broking situations. Non-compliance was not sufficiently addressed in this legislation and it should be addressed.

He concluded by saying that CAPES was not denying that there were problems in the industry, and there were problems. Termination of contracts, jurisdictions and adjudication were some of the areas that the industry were aware of. The co-regulation model attempted to deal with these and a number of issues.

The industry represented R23 billion per annum. This industry should thus be considered as a valuable asset.

If Black Economic Empowerment (BEE) was considered, the TES industry was key in complying with BEE.

He asked the Committee to re-consider the co-regulation model. The Committee needed to find a mechanism to deal with issues of compliance. They were in the process of developing a contribution fund for benefits. The co-regulation model would address the issue of registration.

Mr Cowley presented CAPES’ submission. CAPES wanted to be seen as able to regulate the industry, as in his view it was an important industry. It was clear that certain positions on the issue had already been formed.

All of the people present had invested time in the industry. CAPES did not appreciate the use of emotive terms like ‘slave traders’ and ‘flesh mongers’ and rejected that terminology. They did not sell people, and were involved in the trade of skills. CAPES was against slave and child labour and any other kind of workplace abuse.

CAPES recognised that there was an element in the industry that created these problems and did not comply with regulations, known as the “bakkie brigade” and CAPES believed they should be made to comply. There were also other industries and departments that had problems.

CAPES was part of a federation that continued to educate and strived to improve conditions within the industry and had committed itself to ILO standards. CAPES was fully committed to the idea of decent work and decent country work standards as advanced by the ILO.

A memorandum of understanding had been signed with a large trade union present at the hearing, in order to co-regulate matters of mutual interest including freedom of association.

CAPES did adhere to the statute of benefits as set out by the Basic Conditions of Employment Act. They also tracked the assignments of employees and the nature of those assignments.

Provision was made for compliance with UIF and occupational health and safety.

The DOL did not have adequate resources to enforce existing regulations. CAPES had proposed a public-private partnership to register TES providers and investigate irregularities, and to deregister problematic entitities. The issue had been discussed at the National Economic Development and Labour Council (NEDLAC). In CAPES opinion it was the poor enforcement of current statutes and regulations that caused the problem and enforcing existing statutes would be more successful than introducing new legislation.

A large scale advocacy campaign was required to educate stakeholders on their rights and obligations.
 
A properly resourced co-regulation body would be required (the Private Employment Agency Body). This was not the first time this proposal had been made, and it had been made many times without progress. This would require that TES members signed a commitment and adherence to a code of conduct that related to skills developments and benefits. The staff of this board should be permanent staff. The representative from this body should be given a seat on all primary labour market institutions.

TES could play a fundamental role in assisting government in administration of payroll, social benefits and other important areas. The Private Employment Agency Board could be important in the development of a new world of work.

They were in support of decent work as conceptualised by the ILO and the industry had been on study tours to develop their knowledge of industry best practice. TES played a large role in job creation. Temporary placement often resulted in permanent employment. In his opinion demands for banning labour brokers were out of touch with reality and that strict compliance rigorously enforced by bargaining counsels would be effective. CAPES had taken measures to ensure that labour brokers and TES were registered with the bargaining councils.

To regulate the proper use of labour broking services, there had been engagement with trade unions and SETAs in order to establish whether the services of labour brokers was necessary by some clients. Bargaining councils had allowed labour broking companies to request a six monthly audit to certify that the company was observing all industry requirements. A number of measures were in place to avoid abuse and to put the employee using a labour broking service on equal footing with all other workers in the industry.

CAPES did not support any further regulation of the industry. Proper education and regulation would allow further problems to be avoided. The establishment of a Private Employment Agency Board which would aim to promote and maintain the standards of conduct in the industry, was essential. This board would adopt and enforce a code of conduct within the industry. This board would make recommendations to the Director General in relation to all applications and registration of private employment agencies. The board would adequately protect and support the rights of employees, and lobby the Department of Labour to assist them to protect these rights. The purpose of the regulations supported by the board would be to promote productive and freely chosen employment, to improve the occupational mobility of employment, and to establish a structure that ensured that proper regulations were implemented.

He cautioned the assembly not to ignore the problems linked with over-regulation of the sector and reminded the Committee that 500000 jobs had already been shed. In his view, the people who best knew the industry were those who operated and worked within it. He called for the DOL to be more effective.

Federation of Unions of SA (FEDUSA) submission
Mr Dennis George (General Secretary) said that in November 2008, FEDUSA had passed a resolution stating that they must prevent the abuse of their workers. They found that this was not only a South African, but an international challenge. They had undertaken a number of international study tours and had met with the developers of the ILO Convention 182. When they had studied the ANC manifesto, they had asked President Zuma to brief them on this issue. He had done so. They had had some engagement with South Arican trade unions and had discussed labour brokers and the “bakkie brigade”. They had signed a memorandum of understanding with CAPES to try and ensure good work. They had met with an academic in Germany who prepared her doctorate on this specific issue.

FEDUSA believed that workers had the right to decent work and that TES could add value in South Africa. They referred the Committee to the rapid growth of the sector. They asked whether it was because the employers bypassed labour rights and used an unregulated third party or whether it was because there was a real demand for these services that were used often. FEDUSA believed it was both. Although TES created around two million jobs every year, it only represented about 4% of the South African workforce.

He expressed disbelief that 500 000 workers were forced by circumstances beyond their control to be in a temporary environment. He suggested that what was more likely was that there was real support for this form of labour amongst the general public. FEDUSA provided support for people seeking temporary placements out of choice such as school leavers and women who had specific work needs due to family commitments.

In his view there was a real benefit from temporary employment across the world and that TES provided workplace skills, vocational skills, learnerships and work experience to workers in a diverse manner. TES served as a first point of entry for many school leavers. TES was the first to be affected by economic growth but it was also the first to be negatively effected by economic downturn. TES contributed around R23 billion to South Africa’s economy and FEDUSA believed that TES could add value to the world of work.

FEDUSA believed that the problem lay with the end user, rather than with the labour broker. If the end user made use of TES for reasons that were not financially sound or were for financial gain, this abuse was wrong and should be addressed.

He quoted from the ANC 2009 election manifesto:

"In order to avoid exploitation of workers and ensure decent work for all workers as well as to protect the employment relationship, introduce laws to regulate contract work, subcontracting and out- sourcing, address the problem of labour broking and prohibit certain abusive practices."

In his view the prohibition of abusive practices referred to the end user.

FEDUSA believed the TES industry should be regulated rather than banned. If it were banned the end user would think of ingenious ways to bypass labour laws, for example, the introduction of temporary work contracts. This was not uncommon and had happened in Germany, the Netherlands and elsewhere.

Regulation could be done and effected in one of two ways. A national legislative framework supplemented by collective agreements, or a national framework agreement typically brokered at NEDLAC supplemented by sector or industry agreements. No matter which one South Africa chose, the real issue would not be regulation alone but would also be the enforcement of regulation. In his view, without an enforcement agency it would be meaningless. He provided the example of the Netherlands where they had not only an enforcement agency but also fines. In his view, calls for jail sentences were going too far and fines should be sufficient. If there were financial means to force agencies it would be good.

Regulation should be two fold. There must be administrative regulation that would deal with registration, licensing, compliance and penalties. In addition there should be regulation to deal with workplace issues such as working hours and equal treatment. Administrative regulations could be dealt with via a statute or framework and a tripartite regulatory body such as the CCMA. Workplace issues and the regulation thereof was more complex but in FEDUSA’s view it should be regulated by a very broad legislative framework supplemented by collective agreements between social partners.

It was not necessary for South Africa to reinvent the wheel, as most of the issues had already been dealt with in the 2008 Report entitled “Temporary Agency Work and Collective Bargaining in the EU” by the European Foundation for the Improvement of Living and Working Conditions (Eurofound). South Africa should look at best practice from a number of examples. He expressed caution at the use of European examples because of the differing levels of development and state benefits that some countries had.

The Department of Labour had actually tabled this document at NEDLAC. Questions on the definition of the employer were under the conception that it was either the labour broker or the end-user. This was not standard in Europe. In the Netherlands there was joint-liability and joint responsibility on the part of brokers and end-users and both were penalised for non-compliance. FEDUSA favoured this idea because it held both parties accountable.

FEDUSA believed that temporary workers should not be any worse off than any other worker and should not be placed on wages that were any lower than the minimum wage.

The provision of social benefits was not standard for all companies and in his experience there were a number of permanent employees who did not have access to retirement benefits or medical aid. Issues like this must be broached with sensitivity. He noted that there were suggestions that had already been made about a joint pool that people paid into, and could benefit from when they retire.

The time frame between working as a temporary worker and becoming a permanent worker was not standardised. In the Netherlands, contracts could only be renewed three times, and then they became permanent.

Even in contexts where it was highly regulated, problems still arose and many workers did not ever get to a permanent contract. He said that on their side there were legislative restrictions on the length between the first period of placement and permanence, with the allowance of one additional temporary period. If there was still a need for a particular post after 18 months or two years then that person should be made permanent or the post should be advertised and there should be proper competition for the post.

He agreed that it was not only small businesses that were making use of labour brokers and they had had exposure to SAA exploiting loopholes in the law and placing temporary people in positions that needed to be filled permanently. It was necessary to consider what was defined as a ‘temporary’ and what was a ‘permanent’ post.

Workers did have a right to become a member of a trade union in order to bargain collectively. Only three percent of workers belonged to a union both in South Africa and internationally. This was linked to the difficulty in recruiting temporary workers and the difficulty in ensuring that they could convene. It was necessary to look at ways to facilitate organising within the industry.

The arbitrary ‘take back’ clauses which were used when labour brokers were informed by end users that a particular person was no longer wanted for whatever reason, should be investigated. A speedy dispute resolution mechanism should be introduced and there should be at least a formal inquiry into why the person was not being taken back. Proper right and recourse should provided.

He concluded that four areas had been identified by FEDUSA. He called for the effective registration and monitoring of TES and their proper regulation as agreed upon. They supported the establishment of a proper regulatory framework and decent work. They recognised the ILO Convention 181 on private employment agencies and that Convention 188 provided a framework that allowed for improved functioning of the labour market. This could be achieved within a context of proper and disciplined social dialogue.

In FEDUSA’s view there was a place for both TES and labour broking and misuse by the end user must be addressed. FEDUSA believed there was a place for the TES industry, in so far as it was properly regulated.

Discussion
The Chairperson asked for comments on both CAPES and FEDUSA’s submissions.

Mr Ollis asked the presenters from CAPES about the nature of the regulatory board that they proposed and asked if it would be similar to the Estate Agency Affairs Board.

Mr Monage (CAPES) replied that the composition of the board they were proposing would be triangular or tripartite. The industry would be represented, labour would be represented and government would be represented.

Mr Goni asked for clarity on the relationship between NACTU and FEDUSA. Comparisons with international companies should be done carefully because of their varying levels of development. He asked if the unemployment in the international examples provided in FEDUSA’s submission was as bad as the South African context. He asked if these countries had particular social benefits that South Africa did not have.
 
Mr Ferreira said that the unemployment levels were much lower than South Africa’s but that this did not prevent SA from using international examples to find what the best practices were. None of the countries had dealt with the problem the same way. It was possible to look at other countries and learn, whilst recognising that their social security net was far superior.

A member of the public said that the submissions from NACTU and FEDUSA did not provide any resolutions. His organisation had had a discussion with COSATU on the same issue and had come to a decision that they would have to make submissions. Their position was clear in terms of their paper.

A NACTU representative asked CAPES about the co-regulation model which was drawn largely from Europe. In his view it would be difficult to apply this to South Africa where businesses were already not compliant with the minimum standards. When the industry was deregulated in Uruguay, this had a negative effect on workers wage share and work conditions. Uruguay had then reversed deregulation. He asked if the labour brokers were then motivating them to experiment with things that had failed in other contexts.

He asked for comment on Mr Blumenthal’s statement that South Africa had made an error 15 years ago, by decriminalising employers who were operating outside the minimum standards.

He asked what the implications of TES on South Africa’s social and economic development were. COSATU had had a meeting with the Minister of Trade and Industry where BUSA had made a submission that in their view if South Africa did not improve its skills training and development, then the industrial competitiveness of South Africa would go down. This suggested that the quality of training in South Africa did not meet World Trade Organisation standards. This could mean that in the long run it was necessary to take a patriotic approach in order to achieve what needed to happen.

A FEDUSA members said that Germany was not an example of co-regulation, it was an example of deregulation that did not work, like Uruguay. In contrast co-regulation worked in the Netherlands and in Belgium where it worked well.

The problem with criminalising people who operated outside minimum standards would come with the enforcement of the law. In South Africa it would be sufficient to use fines to enforce a proper system of regulation.
 
Mr Nyekemba questioned the references made by CAPES to sections of the Employment Equity Act and other acts. In his understanding the sections that they had referenced in the Employment Equity Act, Section 54 and 198 of the Labour Relations Act and Section 82 of the Basic Conditions of Employment Act pointed to different things. He did not understand how these sections fitted with their submission, and they had used certain sections selectively to make their point. CAPES had overestimated their employment potential by suggesting that 500 000 workers were employed each day by them. He asked for clarity on the nature of employment that they were providing.

He referred to CAPES statements that they provided employment to around 20 000 learners. In his experience these positions only lasted around one year and then learners took money from the National Skills Fund. The Skills Development Act was clear on the agreement that had to be signed between the learner, the employer and the training provider. He asked CAPES which role they would be playing in that scenario. Learnerships were a combination of theory and practice and should allow learners to grow. He expressed disbelief that CAPES could provide training without a means of production. He asked how CAPES achieved this.

He thanked FEDUSA for quoting the ANC manifesto, but said that their interpretation of it was wrong and that the ANC did not agree with FEDUSA. The ANC manifesto was opposed to labour broking.

He had found a definition of an employer under the Employment Equity Act, and he said that it excluded labour brokers. He asked for FEDUSA’s comment on this.

Mr George said that the President had met with FEDUSA and discussed the manifesto with them and that they would not like to comment further on that matter.

A member of FEDUSA responded that their experience in the sectors that they worked in was that learners were able to gain experience from a variety of types of operations and that placements took place from general worker up to the highest level. The DOL was following what the manifesto said and that was to regulate labour broking. This was why at NEDLAC the suggestion was made to push back boundaries. FEDUSA felt that boundaries could be pushed back by encouraging responsibility on the part of industry and employees. Job security could be achieved by making clear the definitions of permanent workers and permanent jobs, and temporary workers and temporary jobs. It was the role of the legislator to ensure that legislation lined up in terms of definition.
 
Mr Monage responded that they had used particular section of the acts because they referred to the statutory liability to TES. They were linked in that manner. They also provided definitions of employees and employers and demonstrated points on compliance and non-compliance.

He responded to Ms Kilimani and said that on the issue of compliance. Part of the regulatory model that they had proposed included attempts to deal with the registration of brokers, so that the body could deal with non-compliant operators. The composition of the body provided submission from industry, government and from organised labour.

In terms of wage rates and flexibility there were minimum rates that were agreed upon by industries and across bargaining councils and sectoral determinations. This applied to the entire industry, but there were processes for exemption by parties, individuals or companies. They were not arguing for exemption because they were complying with the standards that were already set and often exceeded industry minimums which in his view indicated their ethical commitment to these standards. All of these things demonstrated the willingness on the part of business to be compliant.
 
Mr Nyekemba said that they had not responded to his question on the issue of learnership. He asked how labour brokers could become involved in a learnership when there would be an employer, a training provider and a learner.

A representative from FEDUSA responded, but said that he was not responding on behalf of FEDUSA. It was common practice to fund learnerships and vocational training out of a discretionary grant.

Mr George responded that they had focussed on artisan development. In 2008 they had had a graduation of 500 of their members who had been unemployed or retrenched. They had chosen to pursue learnerships through their company and had become certified artisans. This had given them an opportunity to re-enter the labour market.

Mr B Stemmet, BASWI Agricultural Workers Union of South Africa (BAWUSA), asked CAPES whether the Capital Outsourcing Group was a member of their group. He had received a number of contracts from workers which had contained clauses preventing workers from striking, stating that employees who did strike would be blacklisted from all Capital Outsourcing Group and all associated brokers nationwide. If CAPES felt that they were ‘good brokers’ then he wanted their opinion on this and if they endorsed this.

He said that in terms of Section 198 of the Labour Relations Act and the sectoral determination there were some problems around the termination of employment. Some of the contracts provided by labour brokers allowed employers to provide only one shift’s notice before the dismissal of a worker, regardless of whether that person had worked there for a long time or not. He recognised that this might not be the norm in the industry, but this allowed labour brokers to use people as commodities and part of the product instead of being considered as producers. When workers refused to sign contracts that obligated them to such conditions, they were not given further contracts, regardless of their previous length of service.

He was not in favour of labour brokers providing financial services, such as funeral policies because often these were given on blanket terms and did not allow workers to choose the type of cover or policy that they would like. He noted that this might have been the responsibility of trade unions, but that unionised workers did not fall into the majority of those who were violated and exploited. He would like CAPES explanation for such practices, and said that they were avoiding responsibility by blaming the DOL and government institutions. If more legislation were introduced, it would only allow labour brokers five more years to continue with such “atrocities” before the Committee was forced to meet again on this issue.

A representative from CAPES said that it would be difficult to identify at this stage whether the said company was a member of their confederation.

Mr Stemmet asked FEDUSA whether they had considered the relevance of the differences between other countries and South Africa, as this would have an impact on whether it was regulated or banned in South Africa. He asked what research had been done on non-compliance in those countries. He added that history was important and asked whether some research had been done into human rights abuses in the countries that were studied.

A representative from FEDUSA said that they had researched the abuse of human rights in their international examples. Not only were there ample examples of human rights abuses in all of these countries, and in terms of their record of colonisations and human rights violations.

Mr Sharpe said that he could not comment on the content of particular contracts made by particular individuals. Some of the problems were with the provision of benefits. They had tried to facilitate meetings between insurers, banks and temporary employment workers. Many of these workers were young people, who were early in their careers, and thus did not qualify for financial services. Labour brokers had encouraged banks unsuccessfully to consider the benefits of providing credit to temporary employment workers, because they often had a greater continuity of income than was required by financial services. It was the failure of those typical sources in providing these services, that the industry had come to provide these services itself. This was often subsidised and there was nothing sinister in the provision of these services by the industry, nor were they in place to make a profit.

A representative of FEDUSA said that international examples had varied relationships between employers and employees with Germany and France having poor relations whereas Belgium and the Netherlands had better relations that favoured the workers. In his view, South Africa was fortunate in that there was balanced power between employers, organisations and employees to such an extent that there was an alliance between COSATU and the ruling party which was not present in any of the international examples studied. These countries did not often keep a record of compliance with regulations.

A member of the public, Mr Vincent Phillips, commented that he did not believe that labour brokers could be linked to a trade union. This was because trade unions argued in the interests of employees, whereas labour brokers would argue for the rights of employers. FEDUSA’s suggestion of further regulation was problematic. Why had FEDUSA not considered African models rather than European models, and asked whether this was because of inherent Afro-pessimism. FEDUSA was encouraging an industry that was composed of 78% Afrikaner labour brokers, and that Afrikaans people have had “scant regard for the fundamental rights of people”. Fines were insufficient penalties for those who avoided compliance with regulations. He passionately said that no amount of “window dressing” would convince him that labour brokering was not inherently evil. The laws could not be reformed and labour brokering must be banned.

A member of the public, Ms Nama, spoke in Xhosa and was summarised by Mr Nyekemba as follows: She had worked in the hospitality industry for a labour broker. In the hotel where she was working, a guest claimed that his watch was missing. She was called by security and was strip searched by a female security member. She was not found in possession of the watch. She was given a polygraph test to determine whether the watch was stolen by her, even though she did not have the watch. Later the watch was found in the room where it had been allegedly missing. After the incident she felt that the conduct of security company was disrespectful to her and she had wanted an apology. That was not done. She believed that her treatment was because she was black and that same treatment would not happen to a white employee. Her working conditions were poor. She was not allowed to have tea or lunch breaks. She was told by her employer that she was working for a labour broker, but she did not know the labour broker. Her salary was not transferred to her bank account timeously. Sometimes she was paid only on the 9^th of the following month which made it difficult for her colleagues and herself to afford the public transport to get to work. Some of her colleagues had been forced to quit their jobs.

Mr Sharpe responded that in light of the number of devastating accounts of abuse heard over the past two days, it would be useful to examine what the appropriate remedy was. He argued that although the lady had thought to report this to a trade union, he felt that it would be more effective to have a co-regulatory body. The industry was in favour of such a framework.

Mr Goni asked whether those labour brokers, such as CAPES, who were providing financial services had registered with the Financial Services Board (FSB).
 
Mr Sharpe responded that all of those associated with CAPES had achieved the required certification, and were regulated according to legislation, but that he was not able to vouch for the agencies who were not affiliated with CAPES.

COSATU submission
Mr Zwelinzima Vavi, General Secretary, stated that this process was considered extremely important by COSATU. He hoped that COSATU would be able to implement a system where the labour brokering system would be outlawed or banned. In our economy there would always be a need for seasonal and temporary employment. In COSATU’s view it was not practical to suggest the banning of the use of temporary and seasonal labour.

There were huge differences between temporary and seasonal work and human trafficking. Labour brokering did not come under the standard definition of employee-employer relations. Labour brokers bartered with people for profit that was not shared with the workers. This was linked to trafficking. It prevented workers from fulfilling their rights and allowed for the abuse of workers because of a lack of knowledge about their official employer.

He suggested that the Committee should not seek to travel internationally or in Africa to assess best practices but should rather approach South African workers to find out their experiences of abuse. He suggested that they should attend provincial hearings and hold meetings with workers from all sectors. This would allow workers to provide the Committee with a realistic understanding of labour brokers and would dispel the myths that some labour brokers were ‘good’. The Committee should consider the type of society they were hoping to build and in his view they should no longer promote the capitalist values of “dog eat dog, survival of the fittest and the law of the jungle”.

Given the fact that access to fair labour standards was a cornerstone of democracy the Committee should take the issues of the ability to enforce those standards and legislation. It was not practical to have only 800 investigators employed by the DOL, but this was no reason to deliberately avoid compliance with legislation.

One was dealing with a structural crisis of the economy inherited from our past including colonialism. He asked that the Committee considered that the situation would not be successfully addressed without addressing structural problems in the economy. The state must address huge inequalities.

In his view labour brokers were a social ill like HIV/AIDS, crime, or corruption. They were in place to take advantage of sections of the population who were already marginalised. Women, black people, Africans and young people would be the worst exploited if labour brokers were allowed to continue. They were subject to abuse such as strip searches, transactional sex and were raped. The cornerstone of the Committee should be to provide a more equitable society. These atrocities would continue if the system of labour brokering was not addressed. The ANC would not succeed in its commitment to provide decent work unless something was done to deal with labour brokers. Regulation would not be enough, because legislation was already present.

Trends showed that workers share of the national income had declined since 1981 and democracy had not reversed that. At the same time Chief Executive Officers received excessively high rates of pay. It was those people who were highly paid who wanted the regulation of brokers rather than their banning. In light of the frightening inequality figures, the Committee should make an intervention on behalf of the weak, in line with the Constitution which called for them to protect the weak, vulnerable and defenceless people of society.

The current employment conditions had created an army of unemployed workers who were becoming increasingly vulnerable every day. Labour brokering did not provide job security or benefits such as medical aid or retirement benefits. This would make temporary workers the future burdens of the state. It was the responsibility of labour brokers to take a stance and encourage other brokers to fulfil their responsibilities.

The struggle had been to liberate black people in general and Africans in particular. Statistics showed that the same pecking order from Apartheid remained, and it made clear who were the victims of labour broking. If the Committee was aware that they did not have the capacity to enforce legislation, and chose not to ban labour broking, they then they would have failed to address the national question, and failed black people and Africans. This was gendered in that women were subjected to dangerous conditions daily.

The dispute was highly classed with all classes defending their interests in a class war. COSATU was there in defence of the working class. Labour brokering was an extreme form of worker exploitation. The Committee, as representatives of the people had, in COSATU’s view, a responsibility to intervene on behalf of workers by banning labour brokering. This would give meaning to the Constitution, which embodied fair labour practices.

The labour brokering undermined ILO Convention 100 which provided for equal pay for work of equal value. Many black male workers had been forced out of necessity to sign contracts that were unfair to them to avoid retrenchment, particularly mine workers. It was important to ensure that South Africa’s democracy was not built on exploitation, and that people should not be allowed to become permanent casuals. It was necessary to maintain a sense of ubuntu in all working environments. He responded to some of the complaints that had been made. The Committee should take forward the principles of the ANC manifesto in order to allow the Government to move forward and protect vulnerable workers. Regulation, or the introduction of a regulatory body would not help.

Labour brokering affected the ability of South Africa to train and skill their workers.

It would not be practically possible to hold labour brokers to the regulations that were present because it was more appealing for them to avoid the regulations and earn more money. It was a myth that if labour brokering was outlawed, it would result in job losses. Labour brokering did not address the crisis of unemployment and labour laws were too flexible.

National Union of Metalworkers of SA (NUMSA) submission
Mr Cedric Gina, President: NUMSA, said that trade unions had come a long way. In 2005 the issue of the labour market had been raised and NUMSA had worked with their colleagues to ensure the rights of the labour movement. NUMSA was not going to stop fighting for these rights, and nobody would be able to stop the workers from achieving decent work.

He highlighted a number of issues around labour brokers. Labour brokers were “fictitious employers” and said that their explanation of their role was not sufficient. Some of NUMSA’s members felt that labour brokers were similar to “pimps”. NUMSA was dissimilar to labour brokers. NUMSA encouraged workers to approach them, so that they could discuss the use of brokers.

Labour brokers had been linked to exploitation. In the United Kingdom profit was around 13.5%, but in South Africa the level of profit had been much higher, and that this was unjustifiable. The levels of labour broking and outsourcing were very high. Some companies had downsized, and had reduced the number of permanent employees, and had begun to use labour brokers. This had resulted in workers being paid less and losing out on benefits.

The Department of Labour had attempted to use the Mining Industry as an example to show that labour brokers could be regulated. NUMSA had attempted this, but this had not been successful because labour brokers changed their names every day.

He said labour brokers paid workers a different rate from the set market rate. Permanent employees were employed with the market rate, but labour brokers paid only the minimum rate. Labour brokers were benefiting from increases, but the workers that worked for them did not get similar benefits.

Despite their explanations, in his view, labour brokers did sell people for gain. Labour brokers undermined the right to strike, by supplying workers during strikes. Labour brokers must be banned because regulating them would not work.

In the case of dismissal, it was often the primary employer who dismissed the workers. This meant that workers could not discover the reasons for their dismissal, and the labour brokers could not provide them with further work.

Labour brokers should not say that they were employers, because in his view they could not provide employment because they did not have the means of production.

South Africa was a sovereign country and did not have to mimic other countries in the formulation of laws.

He disagreed that there had been training provided by labour brokers. He disagreed with Mr Blumenthal’s statistics on the creation of artisans, because he did not know where these artisans were, or where they had been deployed. Mr Blumenthal should have been specific about which skills were developed, and how they were specialised.

NUMSA had dealt with workers who had worked for a company for a long length of time. These workers were transferred to the responsibility of labour brokers after having been retrenched, without the awareness that their contract had been changed. Even though they were performing the same job for many years they were not considered more skilled because the labour brokers recorded them as having only short contracts. This prevented workers from developing into qualified artisans and prevented skills mobility. In this experience the company had avoided providing benefits by using brokers, and had not paid the agreed deductions into a fund. There was no trust between workers and brokers. This was not uncommon, and he listed a number of examples of companies that had been problematic.

Since labour brokers could change their business name, it was difficult for the workers to know that they would not be protected. It was difficult to enforce an arbitration award and in some cases it was necessary to go to Labour Court. The benefits from the industry continued to be transferred to white males.

Permanent workers were able to use their provident funds as collateral in order to purchase property. Temporary workers who worked for labour brokers could not perform the same task because they were not permanently employed but they also could not access RDP housing because they earned above the accepted amount. This meant that many workers could not buy a house.

There was a conception that South Africans did not save money. Workers who did not qualify for accounts at retail outlets, would have to pay cash. Many people who worked for labour brokers could not save money, and thus could not afford to buy the clothes they needed for school uniforms. They also could not afford to buy safe cars, and thus there were many accidents on the road.

Labour brokers made it difficult for workers to organise. It made it difficult for people to take leave from their work, because they were not employed permanently and were not guaranteed paid leave. This prevented workers from spending quality time with their families.

In his view the Committee was ready to fight to do away with labour broking in the same way that they had done away with Apartheid. Nobody should stand in the way.

South Africa Commercial, Catering and Allied Workers Union (SACCAWU) submission
Mr Mike Abrahams rejected the idea that workers did not understand labour brokers. Labour brokers attempted to erode the gains that had been made by working people. This was a continuation of increased flexibility. They rejected the idea that they created jobs, because the jobs would be there if there were no labour brokers. Companies used labour brokers because they provided work at a lower cost, and thus labour brokers had to make their money by exploiting workers.

He said they rejected further regulation because it did not protect their most vulnerable workers. Many workers who worked long and irregular hours were the workers of labour brokers. A weaker union was in the interest of labour brokers.

Labour brokers were de-skilling rather than providing skills. Labour brokers fragmented the ability of workers to accrue knowledge.

The way that labour brokers marketed themselves made it clear that they would act in the interest of business. The fact that labour brokers said that they would make workers go for medical tests before deploying them, made them similar to the apartheid regime.

The trade unions did not call labour brokers ‘slave traders’ because they did not understand the way that they worked, but rather because they did understand it.

Food and Allied Workers Union (FAWU) submission
The FAWU representative stated that Section 189 of the Labour Relations Act was a loophole. It reduced access to job security since 1992. Workers were afraid of joining unions which made it difficult for them to defend their rights. It was even more difficult to organise workers who worked for labour brokers.

Labour brokers made workers more vulnerable, specifically farm workers and domestic workers. Labour broking in those industries was more informal than in other industries, and were often people from the same community as the workers who had access to transport and cell phones. When workers who worked for labour brokers were involved in workplace accidents they were not protected. In his view the conditions of employment of people working for labour brokers was sub-standard. Their security was linked to their employment. Many farm workers had been subjected to retrenchment and evictions, only to be re-employed by labour brokers.

He referred to the Women On Farms’ submission and supported their suggestion for a bargaining council in their industry, but in his view this should not include labour brokers. Labour brokers detracted value from workers. In the processing industry there were problems with migratory labour. Workers who worked for labour brokers moved between different types of processing plants, which made it difficult for them to be part of a union that properly represented their interests because trade unions were sector specific.

In all workplaces where labour brokers were concerned, the lack of a concrete workplace made it difficult for trade unions to organise workers in sufficient numbers. Labour brokers and primary employers often worked together against the interests of organised labour.

FAWU felt that any type of regulation was not an option and should not even be considered. It was FAWU’s view that the ILO conventions as well as the government’s agenda of ‘decent work’ was being undermined. Labour brokers did not offer quality employment or support the right to work. In FAWU’s view, labour broking allowed employers to absolve themselves from responsibility. He asked that the Committee should ban labour broking in the interests of workers, in line with the Namibian example.

Discussion
Mr Ollis said that the Committee had heard the details of exploitation for the past two days. Prior to this, the Committee had heard submissions by experts from Women’s Groups in their meetings. He said he had heard COSATU and its affiliates concerns. He was yet to hear that exploitation did not occur in the TES and labour broking industry. In his view, nobody had disagreed that there was exploitation. In his view it was unnecessary to spend their time listening to emotional rhetoric, when that was not the issue that they were debating. He asked whether COSATU was attempting to say that apartheid was not as bad as the current system. The link made by Mr Gina between labour broking and road accidents was ludicrous. COSATU’s suggestion that a regulatory board would be “thieves regulating thieves” was emotional blackmail, and that there were a number of similar boards that were successful across South Africa. The debate was about how the exploitation would be stopped. There were two approaches. The first was presented by COSATU which was to shut down the brokers. The second was to involve people in the industry in regulating it.

Mr Ollis said that COSATU had given up on regulation for two reasons. This was because of exploitation, but the second reason was that the Department of Labour could not perform its job. COSATU was implying that because Parliament could not make sufficient funds available, that the Department of Labour could never do their job. In his view these two reasons were not good enough to shut the industry down.

He said that there were problems that they needed to deal with as a Committee. They could deal with the Department of Labour if they had sufficient political will and if they got the funds and if they managed the situation correctly. There were problems that could be sorted out in the Department of Labour which would mean that they did not need to shut the industry down. He asked COSATU if those were the only two reasons because in his view these were not sufficient reason to ban labour broking. Whether they shut down labour broking or not, they would still need to deal with the problems in the Department of Labour.

Mr Ollis said that if they shut down labour broking, it would be driven underground which would cause more problems. In his view, regulation was the only option. This could include making workers aware of whom they were employed by and could hold both the labour brokers and the employers responsible. He was not convinced by COSATU and its affiliates submissions.

The Chairperson responded to the challenge raised by Mr Ollis on COSATU’s submission. In her view the call to ban labour brokers came from the victims themselves. The people who were representatives of those victims were asking for banning on behalf of those victims. She asked for whom were Members of Parliament standing for if it were not the vulnerable members of society. The people encouraging regulation were not from the vulnerable groups. The perpetrators were educated people who had distorted the statistics to suit their actions. The blame could not be placed on the Department of Labour because it was the labour brokers who were abusing workers and tearing families apart. Those who said that labour brokers should be listened to should convince the Committee. Members of Parliament should represent the people and should not ignore the accounts of the vulnerable. In her view further legislation would not necessarily make labour brokers comply.

Mr Sharpe said that organised business and the representatives of employers across the country had agreed that there were abuses and that remedies were necessary. The remedies that they proposed were very different from banning. He thought that an important issue was being skirted. To address the problem of abuse, you had to look at the fundamental causes. Unemployment created the desperation that led people to engage in contracts that were abusive. This was a national issue and it had national solutions. The problem was not caused by labour brokers, business or employers. There was a huge gap in wealth between insiders (wealthy) and outsiders (poor and unemployed). He asked who was responsible for looking after the interests of outsiders and their introduction into the world of work. The only mechanism for outsiders to become insiders was the temporary employment services industry, and labour broking. It was a large industry and to ban such a large industry was a huge political risk. The industry had introduced 3.5million people into the world of work in the last decade. This may indicate the scale of the problem, but it was nevertheless an achievement. He was shocked that the industry had been cast as exploitative in totality, when it played a critical role.

Mr Sharpe said that 82% of the people placed by the industry were African youth, 57% had never had work before. Within one year 32% of all employees employed by the industry became employed in a permanent position and within three years 47% of people became permanent. This was not an industry that attempted to keep workers as temporary. The average length of people in temporary position was 8.4 months. The industry clearly played a significant role in the mobility of workers. These examples indicated the complexity of regulating the employers. He was worried about joint accountability because it could lead to a lack of accountability. The labour broker should be considered as the employer. He asked COSATU about the scale of abuse and what their statistics were and from where the statistics came. It was critical for these statistics to be understood in order to deal with the crisis. Banning implied that the abuse occurred in 90% or more of the industry. If the abuse occurred in a smaller percentage then they should reconsider.

The Chairperson asked Mr Sharpe if he would be opposed to the idea that the Department of Labour should take responsibility for placing people in positions of work, and labour brokers should be removed.

Mr Sharpe said that he seriously doubted that the Department of Labour would be able to assemble the necessary recruitment, placement agents, labour relations and payroll experts, attendance management experts in a workforce given their inability to assemble a sufficient number of inspectors. This was not a personal opinion but was said with awareness of the Department of Labour’s unsuccessful attempts to establish a national database of unemployed persons and employment centres. The number of Department of Labour employees often exceeded the number of work seekers in their employment centres, and the Department of Labour did not have statistics to show that people had been placed, or whether the work provided was decent work. In his view the Department of Labour would not be able to run this in a sustainable way. It would not be possible for the Department of Labour to replace the 7000 employment centres offered by CAPES by 127 bureaucratically operated centres. He wished that this were possible, but that over the previous 40 years, evidence had shown that this would not be possible anywhere.

The Chairperson referred Mr Sharpe to the pieces of legislation that he had said had already failed. She asked why then was he in support of more legislation that would not be implemented.

Mr Stemmet said that BAWUSA was a new and independent trade union that based their opinions on the lived experience of workers. The reality of abuses were not emotive statements, nor were people comparable to statistics. He asked for a response from CAPES on the issue of blacklisting people when they used their right to strike. This was an infringement of their constitutional right. Mr Ollis’ statements would discourage him from believing the DA’s statements about labour in the next election. Any legislation that had been introduced should be done to protect the human rights of people. Accidents happened when workers worked for labour brokers because of unsafe working conditions, and workers were not protected. On the understanding that these companies had knowledge of the laws concerning workers, this should prevent them from creating contracts that were blatantly exploitative of workers. The Labour Relations Act protected workers, but labour brokers were using contracts that did not comply with this.

BAWUSA proposed the banning of labour broking. Regulation would not help. [He continued in Afrikaans but the translation was not provided]. He asked for the political will from the ruling party to listen to workers and take decisions in the interest of the workers. The workers’ interests were not negative for South Africa, but would be a positive step.

National Council of Trade Unions (NACTU) submission
The representative said that the onus was on the state to intervene. Current conditions did not allow for people to be treated with dignity and prevented people from being paid according to the value of their work. He linked this to the inability of people to secure comfortable living arrangements.

Their recommendations were that there should be immediate prohibition of labour broking and that legislation should be amended to reinstate normal employer-employee relations. There should be the development of skills for workers. Private employment services should be restricted. He asked the Committee to intervene as representatives of the state and show their “muscle”.

A representative of NACTU said that he felt that the victims of labour brokers had not been given sufficient time to present to the audience. Triangular relationships involving labour brokers undermined the ILO regulations. The ILO had arisen because of employers who were concerned about exploitation. In South Africa there were now employers who did not want to comply. He asked that the Committee ensure that minimum standards were met. He referred to the Constitution which had human dignity, the achievement of equality and the advancement of human rights and freedom at its core. If labour standards were not adhered to then it showed disrespect for the Constitution. He asked the Committee as custodians of democracy to ensure that human dignity was provided.

He noted that employers’ references to the ILO Conventions that allowed for their existence were not sufficient. Of the eight essential conventions of the ILO, six were being violated by the business of labour broking. The level of development of South Africa should be measured in terms of the way that workers were treated. Substantial growth that occurred because of exploitation was worthless. Workers were not working under decent standards. Statistics South Africa had noted the increasing levels of “informalisation” of labour. Labour brokers were central to increasing informality in South African work and must be banned.

Labour broking organisations did not allow for collective bargaining. The existence of labour brokers were going to lead to increasingly violent labour relations. The share of income of workers had deteriorated globally, and South Africa was second worst in terms of the decline. This had been linked to insufficient minimum wages and collective bargaining coverage rates were very low. Structural intervention was extremely important to eradicate some of the problems faced by the economy.

The sectors that were affected by “informalisation” were the most dangerous industries such as the construction industry. This made it difficult for workers to have recourse because they did not have contracts. He appealed for the Committee to ban labour brokers.

Discussion
A member of the public said that there was collusion between the capitalists (labour brokers and companies/clients). Attempts to portray the system as though labour brokers brought employment to the vulnerable were not accurate, but they were actually being used to reduce the amount of money that would be paid to workers. Capitalists were aiming to maximise profits. Labour brokers did not have good intentions in providing employment to people. The failure to employ people permanently meant that workers did not benefit. It was nonsense that people had gained skills from labour brokers. The ANC had a clear mandate to ban labour brokers because they exploit people. Once labour was sold, the person was open to exploitation. It continued to place people into vulnerable positions.

Mr Mashele (NACTU) said that labour brokers should be banned. Labour brokers did not allow for freedom. They were only 7000 people and they were exploiting the whole of South Africa. They were not needed.

Mr Louw pointed out that there had been misconceptions around the DA’s position on this matter. It was important that those labour brokers who did exploit people should be closed down. Those labour brokers who were reputable should not be shut down. There was an overemphasis on rights, and an under-emphasis on responsibility. All rights came with responsibilities. This industry had ensured employment for a number of people. The reasons provided that day for banning had not convinced him. The pressure of the global economic climate, including increased rates and taxes, and exorbitant food prices and additional living costs had served as catalysts for the increased number of strikes and marches. Banning would not work. They should follow the best practices of other countries and look at instances where labour broking worked. They should be mindful of other areas where there were transgressors, such as the National Credit Act, but they should seek to deal with transgressors only rather than the industry as a whole.

Mr B Komphela (ANC) said that the reports of abuse were only the tip of the iceberg and that many more abuses existed. When abuses occurred, it was the duty of Government to ban them. The contracts referred to by Mr Stemmet were undemocratic, and only sourced from labour brokers. There were more than two reasons to ban labour brokers. The exploitation by labour brokers was not the only thing that made them look bad. Labour brokers did not provide skills and human development. Development in the workplace was a right so that people could develop.

[Mr Gina said that he would like to note that Capital Outsourcing belonged to Mr Richard Pike. To his knowledge it was a member of CAPES.]

General Industries Workers' Union of South Africa (GIWUSA) submission
Mr John Appolis said that there was a myth that there was a difference in the behaviour of big and small labour brokers, and good and bad labour brokers. The R23 billion that labour brokers cited as their contribution should belong to the workers who had produced work for them every day. Labour brokers were supporting a myth that people were permanently employed. There was no incentive for labour brokers to make people permanent because it would result in brokers losing contracts. They thus did not do so.

Labour brokers could not be regulated because of the nature of their contracts which he described as “fictitious” because they did not own factories or means of production. Employees only gained skills when they used the tools of a primary employer. It was wrong that employees could work in the same job for a number of years without benefits. These were problems inherent to labour brokers and they mimicked the features of Apartheid markets. Black people remained at the bottom and white people remained at the top. He pleaded with the Chairperson not to believe the brokers “nonsense” that the average period of temporary employment was 8.4 months.

Mr Sharpe interjected that these were statistics that were published and had been delivered to the Department of Labour and the Minister of Labour and could not be debated.

Mr Appolis said that if labour brokering continued it would prevent workers from accessing the benefits accessed by permanent workers. The regulatory models suggested by labour would be “another tricameral Parliament” and would not be successful. It would provide different rights to temporary workers and permanent workers which would lead to further fragmentation of the labour market. This would reverse all the gains that the labour movement had made over the years.

FEDUSA’s comments that workers would be used for a limited number of contracts meant that FEDUSA was perpetuating job insecurity and the temporality of workers. There would never be an incentive to employ people permanently. Labour brokers should be banned.

Discussion
Mr Sambatha (NUMSA) said that class interests were important on this issue. During the elections there had been a slogan that said “Vote ANC, increase corruption” and in his view a slogan for this process had also arisen which was “Ban Labour Brokers, Increase Unemployment”. Peoples should not listen selectively. He urged the Chairperson to encourage the mmbers of the Committee to listen.

A member of the Committee corrected Mr Sambatha and said that the ANC did not have the view that banning labour brokers would result in increased unemployment.

Mr Sambatha responded in Xhosa but the translation was not provided. He said that it was not true that banning labour broking would increase unemployment. Labour brokers did not have employees. People were only registered with them on behalf of employers that would become their clients. In his understanding there was a difference between labour broking and placement agencies. Placement agencies recruited and then placed people. Labour brokers did not allow workers to be placed.

Parliament should never become an institution that protected profits used by individuals when these were profits gained via exploitation. He said that 98% of the workers from NACTU and COSATU would urge Parliament to ban labour broking. They were representing workers not employers.

Mr Vavi called on the Committee to listen to the cases of workers like those involved in the SASOL fire who had been employed by labour brokers. Labour brokers had visited workers in the hospital to terminate their contracts, because the workers were hospitalised and could no longer fulfil their contracts. The huge numbers of unemployed people and the desperation of these people would allow labour brokers to continue to exploit people. The high levels of unemployment increased the likelihood that people would look for work through labour brokers. These abuses were occurring in the thousands. It was time for the state to intervene and the Constitution must be adhered to. The victims’ experiences could not be discounted. COSATU was present to support the “outsiders”. The youth were the most likely to become vulnerable and use labour brokers. They were not discussing placement services, and COSATU was using these services. The ANC had a duty to ban exploitative labour relationships and to secure the rights of employees. These relationships were not the cheapest way of doing business but they existed because employers wanted to avoid their responsibilities. The DA’s statements about responsibilities were used to deflate the attention from labour broking. The relationships were indefensible. This was a deliberate attempt to deflect attention away from the labour brokers.

Mr Ollis attempted to respond but the Chairperson prevented him from doing so.

Mr Vavi said that the DA would not beat him by street fighting.

Business Unity South Africa (BUSA) submission
Mr Sharpe apologised that Mr Jerry Vilikazi, BUSA President, could not be there. Mr Sharpe said that as political and economic situations changed, everything should be evaluated in terms of new national priorities. Agendas that were appropriate two years ago should be revisited. The 4 million South Africans who were looking for work should be considered and the 1.5 million South Africans who had given up ever finding work. In the context of high job losses, labour brokers were key facilitators of jobs and had never claimed that they would be the creators of jobs.

Temporary employment services provided services that businesses could not provide themselves and employers did not have the capabilities to manage workforces themselves. Employers could not undertake to recruit people from scratch every time a temporary need arose. This would not be economically sensible.

It was also not always in the employee’s interest to be managed by employers. Temporary employment services allowed workers to be recruited once, and their skills to be used across a number of assignments. This allowed continuity of employment which was not possible if there was no third party.

Employers and businesses needed someone to manage the complicated logistical process of recruitment of atypical workers, and to administer contracts on behalf of business. Temporary employment services and labour brokers provided employers with a pool of available skills.

He said it was not the purpose of business to undermine wages in the labour market. The industry would like remedies against non-compliant members.

The Minister of Labour had proposed regulations. The Department of Labour had submitted a discussion document to NEDLAC. He asked whether the Minister’s recommendations strengthen what was positive in the industry and whether they eradicated what was negative within the industry. In BUSA’s view the opposite would happen.

There was a global context to contract employment that he felt had not been properly considered. It was not a unique South African problem and it need not have unique South African solutions. Contract employment was growing everywhere in the world and in some countries it was growing by up to 50% per year. It was important to ask what was happening globally that had given rise to this. 59% of total employment in the construction sector was contract based and the Minister’s suggestion that contract employment should be banned would have a huge impact on the business and economic performance of the country. It would contribute to volatility. The Department of Labour’s research on the matter was flawed and they had been presented with flawed statistics.

There was more to the process of labour broking than just recruitment. Mr Blumental had presented statistics on skills development. They had been taught more than just particular skills such as using a drill. They had been taught workplace and employment skills that enabled them to be “workplace ready”. There was performance measurement and enhancement and that this was a complicated process.

Career progression was important to TES. The TES were the employers and dealt with the practical difficulties faced by employers. Many temporary workers became permanent workers after three years.

TES provided a number of services including recruitment, payroll services, attendance management services and training services. Their employees were trained and skilled and were not arriving on the back of a truck. Recruitment was not the primary service of most TES.

Organised business had grave concerns about the Department of Labour’s discussion document presented at NEDLAC. The industry was deliberately excluded in the Department of Labour’s research in developing regulations. The Department of Labour had not considered any international research which meant that they had missed international options. There was a grave concern that the Department of Labour had not considered the unintended consequences of over-regulation and this could boost the negative elements of the industry. There was concern that the proposed regulation had not considered enforcement regulations. In his view a co-regulatory framework seemed like a viable option. There was a heavy penalty proposed on agents which arose from a misunderstanding of the role of agents involved in the industry. In his view huge gaps existed because the process had been hastily developed without proper process.

He concluded by summarising that:
1. Existing laws were sufficient to address abuses.
2. Enforcement was lacking and specific enforcement mechanisms needed to be created or bolstered.
3. Piecemeal or poorly thought out regulations would give rise to worse problems.
4. BUSA supports the co-regulatory framework as the only sustainable option for control of the industry.

Metal and Electricity Workers Union of South Africa (MEWUSA) submission
Mr M Sebei said that coming to Parliament had reminded him of the things that had been fought for in the liberation struggle. Labour brokers did play a role in exploiting people and some of their practices were “barbaric”. This discussion about labour broking was long overdue.

In MEWUSA’s view this was an opportune time to talk about the issue given the context of economic crisis. This sort of climate would result in attempts by the capitalist class to exploit workers. It was MEWUSA’s view that the process of labour broking should be totally liquidated.

Labour brokers added no value to the process of production and were “parasiting like bloodthirsty ticks” on the surplus value emanating from the productive process. Labour brokers were a device of employers who were trying to flout the Labour Relations Act.

Labour brokers resulted in poor workplace conditions, from wage levels to workplace safety. The main providers of work were by definition not the people who were in control of the workplace, and thus those people had no obligation to the workers. This was linked to the absence of necessary training which then exposed workers to health hazards. This resulted in human suffering: physical, emotional and economical. Labour brokers attempted to maximise profit at the expense of human beings. Labour broking was a reversion to the “dark days”.

He concluded that labour brokers undermined the struggle for a decent wage. It rendered workers unable to fight for a better wage. The existence of a labour broker meant that heavy deductions were made from workers which resulted in meagre earnings. It was always difficult for workers to access advice and assistance like that which was provided by unions. This resulted in the loss of benefits for workers. The conditions of the working people were worsening despite high levels of profit earnings. MEWUSA wanted labour broking to be liquidated and thus submitted that Parliament should pass legislation that brought this “scourge of capitalist exploitation” to an end, which was in the interest of sound labour relations for the country.

Discussion
Mr Komphela said that BUSA was of questionable character. He was aware the labour broking phenomenon was not unique to South Africa, and that the unions were saying that it was a foreign thing that had been brought into South Africa. BUSA was saying that they performed rigorous personality testing before deploying people, but he expressed disbelief that BUSA had trained or skilled those workers. There was very little evidence of human development, and he asked for empirical evidence that BUSA was providing these skills. He informed BUSA that the DOL had never introduced regulations without comment. Documents were widely discussed. Regulations were not drawn up by the Minister alone, or Parliament. There was no need for BUSA to attempt to scare people.

Mr M Gona (ANC) said that labour brokers had acknowledged that there was a problem in the industry and had called for regulations, including self-regulation. He asked why then did BUSA have grave concerns about the regulations proposed. They had also made reference to the national importance of labour broking. Labour brokers seemed to be taking on the responsibilities of employers and in his view this should not be done by labour brokers, but by employers. It was something done by labour brokers to maximize their profit.
There were people who raised the issue of the constitutionality of banning labour brokers. He asked if in the view of BUSA it was unconstitutional, and if so, they should explain how this was.

Mr Nyekemba said that BUSA had provided them with a number of figures, but these figures did not clarify their role in business. BUSA had said that labour brokers had said that they were there to facilitate, and that facilitation and employer status were two different things. They had mentioned skills development of school leavers. It was his assumption that they were referring to learnerships and asked how they were involved in this. Labour brokers were not employers and he asked for comment on this. The definitions of labour brokers as employers was not recognised by legislation.

Mr Gina responded to Mr Ollis’ query about whether they were saying that exploitation at present was worse than in 1967. That was what they had said, but encouraged the DA to read COSATU’s entire submission so that they could take COSATU’s statement in context.

He asked BUSA what made labour brokers into an industry. He responded to the statement around outsiders and insiders as raised by BUSA. COSATU had done a great deal for job creation and pro-working class policies. The unions in South Africa had said that the Growth Employment and Redistribution (GEAR) policy of Government was not good for South Africa. The unions had encouraged Government to invest in the economy. They did not only care for workers who were already employed, and he said that they also fought for people who were unemployed.

He queried BUSA’s statistics that said that 32% of all temporary employees became permanent, and asked what happened to the other 68%. After three years, only 44% were permanent, and asked what happened to the other 56%.

Mr Gina would like to commend the Department of Labour for using South African experts to prepare their research. International experts need not always be consulted when a document was developed. WITS University and its academics were respected. South Africans should be proud that a Government Department had recognised the knowledge of South African experts.

He said that there was a contradiction between BUSA and CAPES statements. BUSA said the existing regulations were sufficient, and CAPES was proposing further regulation. BUSA had placed responsibility on the Department of Labour. They did not support co-regulation.

Mr M Kepadisa (NACTU) asked for comment from BUSA. They were putting forward false arguments. He said he did not support BUSA’s understanding that the ILO Conventions did not allow for the practices of TES as they were currently happening in South Africa. The Declaration on Social Justice adopted by the ILO was important and had identified the practices that they had discussed that day. There was a responsibility on the part of government, the employer and trade unions to achieve fair labour practices and better living conditions. Labour brokers did not want legislation to be reviewed because there were loopholes in the legislation that they were using. Employers were using the loopholes to evade their social responsibilities to their workers. He asked if new regulations were introduced, whether BUSA would be able to regulate upwards, and regulate employers. He asked for BUSA’s comment on non-compliance and whether they were meeting with trade unions.

A CAPES representative, Mr Thompson, said that they had never said that all businesses were compliant nor had they said that abuses were not happening. He asked how MEWUSA’s suggestion of banning would assist in solving the problems.

Mr Appolis said that BUSA’s submission had depicted a picture that had said that labour brokers contributed to the learning development and training of individuals. Some companies were able to perform the training that BUSA had undertaken to perform. If labour brokers were banned, it would not have a negative impact on businesses that were using them.

An unidentified speaker said that BUSA’s use of figures and statistics were misleading and incorrect. CAPES statistics claimed that 15% of the 500 000 jobs created by them on any day were converted to permanent employment. He asked then from where the 32% figure stated by BUSA came. Despite the existence of labour broking happening internationally, there were two processes happening which were supported by business, which was the increasing flexibility of labour laws and increasing casualisation of workers. Business’ threat was that any changes would result in job losses, and loss of investment. The current situation would only allow for the continuation of abuse of workers and women.

An unidentified speaker said that labour broking denied workers their rights.

Mr Stemmet said that he had established that Capital Outsourcing was one of the key members of CAPES, and this led them to conclude that CAPES had deliberately not answered their earlier questions. They would draw their own conclusion about why CAPES had thus decided not to respond. He asked why Capital Outsourcing was allowed to prevent workers from striking and if this was an official CAPES position. BAWUSA had provided a number of examples of how contracts provided by labour brokers undermined fair labour practices, and asked what CAPES’s position was on these examples. He asked what measures CAPES had in place to deal with members of their federation who were found to be guilty of malpractice. He asked whether CAPES had a constitution and/or policies that BAWUSA could have written access to, which showed that this was not CAPES organisational position. He said that the DA should investigate history to ensure that they knew what had happened before this.

Mr Sharpe said that the phenomenon was not unique to South Africa. Two of the member organisations of the CAPES federation had been established in the 1910s and the 1930s. Some of the stats presented showed that every sector had used temporary employment for many years. This phenomenon was not new but there may be new problems that needed new remedies. A co-determination process would result in a positive outcome for everyone as it had in other sectors such as the banking sector.

Mr Sharpe said that their empirical analysis was based on the assessments that they undertook. He would need to make a supplementary submission to illustrate exact assessments. During this process a huge volume of personnel information was collected. A huge variety of complex information was gathered in the testing of skills such as typing or driving to assess the competencies of applicants. The degree of data that existed about their employees was huge. He thus could not understand why Government did not co-opt the industry to share this database and the resources available. He would get the empirical analysis.

They were not afraid of regulations. The question that was important was what the regulations addressed, and whether they were the appropriate remedy to abuse. It was delusional to think that legislation would get rid of the problem. Co-determination would be more useful.

There was a question about the contradiction that BUSA had grave concerns about the Minister’s regulations yet BUSA also wanted regulation. He answered that the industry was calling for the judicious use of regulations, and had concerns about their consequences in specific situations. He said the regulation process in general was not of concern to BUSA.

BUSA had appeared in countless parliamentary committees over time where they had been asked to account for middlemen. In other examples where middlemen were regulated rather than employers, negative consequence had ensued and he provided the example of regulations on pharmacies. Middlemen often played important roles. The middleman was often misunderstood.

BUSA had not taken any advice on constitutional matters. BUSA had faith in the co-determination model.

There was a question about the share of wages. For every R100 obtained from the client, R3.80 was retained. This share obviously increased for more highly skilled positions. The question about the permanent and temporary models was a good question. If you were performing a permanent placement as a placement agency you took a percentage of the salary as a once off fee, and that was the end because the service had come to an end. This was different for temporary employment services, because there was no recruitment fee. The client did not attract a recruitment charge and thus usually a charge was per hour or per month. This gave all parties an interest in the employee being there for as long as possible and was more sophisticated. The fees only concluded when the person’s assignment ended. There was a difference between a facilitator and an employer. A facilitator and an employer were not mutually exclusive, and you could have one without the other or both.

It was not only learnerships that were the way for school leavers to be engaged with the industry. The other services they provided were in the employee’s interest, because a third party could place them repeatedly. It was in the employer or client organisation’s interest because that organisation could use the employee as they needed to. There was an illusion that permanent work was the norm any longer.

He said he was not aware of the specific regulations on the Occupational Health and Safety Act. This Act specifically excluded third parties as employers. It was unlikely that the drafters of 15 pieces of legislation had not considered these definitions, but said that he would need to investigate this further.

He responded that the definition of an industry need not contain the means of production, and that this was a narrow definition of an industry. The services sector was a good example of this. To think that there must be means of production for an industry to exist went back to a time when manufacturing was the only industry. We should bring our definition of an industry up to standard.

BUSA supported any process of co-determination, but that there was a problem of insiders and outsiders. Those who could not find work and who had given up hope of work were outsiders. He did not think that banning was unreasonable, but that business could not provide all of the answers.

He responded to the question of the number of people remaining who did not become permanent after one to three years. The remaining percentages remained in temporary roles either with brokers or the employer. These statistics were used to indicate that there was some choice.

He was also glad that African sources had been consulted. His problem was with Professor Webster’s report which was extremely biased. The results of the research were questionable and the processes that Professor Webster had followed were not acceptable practice. He said it was not clear how this research was linked to Wits University.

BUSA only supported the co-determination model and there was no conflict between this and co-regulation.

BUSA supported all ILO conventions and regulations. The ILO had repeatedly emphasised the role that the private sector had to play in poverty reduction. The ILO conventions cited against the industry in this hearing were not against private employment agencies but were against other nefarious practices. Such ILO conventions against private employment industries did not exist.

BUSA supported minimum standards and the notion of decent work.

He expressed concern at the idea that it was possible to create a process of economic development through regulation and legislation alone.

There were complaints that they were only citing the European Union (EU) experience. They had attempted to find information on other countries such as Russia but could not. He was not suggesting that what happened in the EU should be applied in a blanket fashion, but it was important to look at international examples.

On the issue of equal work and equal pay: if systematic differences were in place between temporary workers and permanent workers, this was probably because of differences in experience and skills or some other attribute. Wage equality could only be promoted in the context of equal skills or experience. If the candidates were equal and were not getting equal pay then he would like BUSA to be part of an investigation into this.

The consequences of a ban were unpredictable, but in his view there were serious economic, political and employment risks and these risks had not been investigated properly. In the context of poor research, problems would arise.

He had seen a circular about Capacity Outsourcing, but he would not like to implicate any particular company. He was aware that they did provide some sort of training in terms of how to use complicated technology in order to monitor warehouse stock for example.

There was a question about inconsistencies in CAPES data (15% versus 32%). He was not sure where the figure of 15% had arisen, but the figures quoted in BUSA’s submission were the official figures for the industry. He said he would certainly appreciate and attempt to understand other figures.

On the question about whether the co-regulation model was not a dual-strategy by employers and industry to avoid legislative requirements, he said that they were keen to eliminate abuses in that industry.

He offered to be tested on their ability to respond properly to the contract presented by Mr Stemmet. In terms of the sanctions imposed on companies, he said that CAPES would deregister someone that consistently violated fair labour practices. They would never do so for only one instance, but would rather ask the employer to explain how this contract had been put together. If problematic contracts were a corporate policy, CAPES would hold their holding company responsible and would eventually deregister them. This was all that was possible in their statutory power to do. He asked Mr Stemmet to provide him with a copy of that contract. The policies and procedures on non-compliance were in place, and he could certainly source copies for all concerned parties. If it was the case that trade unions have had difficulty obtaining copies, then he would like to investigate this.

Young Communist League of South Africa (YCL SA) submission
Mr Buti Manamela, General Secretary, said that the definition of a labour broker was an attempt to play around with concepts that attempted to hide the focus of the discussion. In their view labour brokers were those who facilitated employment to continuously accrue an employment fee. Contract employment was part of the exploitation and slavery that labour brokers were promoting.

Labour brokers had not secured job security and that this was a myth. The figures cited by labour brokers as their contribution to the national income should also cite what share went to workers. The real reason for labour brokers was to protect profit by employers, to prevent strikes, to avoid trade unionisation of workers and to indirectly introduce a flexible labour market.

The economic crisis was a result of capitalists manoeuvring themselves out of regulations, and labour brokers were exacting abuse on workers as part of this. Labour brokers’ main objective was profit, not the interests of the economy or workers. Stronger regulations would not be successful in holding workers accountable to regulations.

The YCL wanted to suggest that state owned enterprises should be the first to stop using labour brokers. State organisations could not justify their use of labour brokers. The YCL wanted heavier penalties for those who did not comply with regulations. The reality was that if there was work to be done, there would be a way for an employer to find an employee and there would not be the job losses that were predicted by labour brokers.

ANC Youth League submission
Mr Julius Malema, ANC YL President, said that 70% of the unemployed were young people. They were searching for jobs, and that in his view the jobs that they found should be permanent jobs that provided job security and benefits. They were subject to abuse and exploitation by labour brokers. Workers should not be forced to fight against each other, and labour brokers created divisions between workers. Labour brokers had neglected to protect workers. When workers were injured on duty, they lost money when they did not come to work. Contracts that advanced this were problematic.

The ANC YL were of the view that labour broking was exploitative, took an unfair portion of workers’ salaries and did not have fair dismissal practices. The ANC YL would fight anyone who considered supporting labour broking. They would like labour broking to be banned. They would like legislation to be put in place to transfer workers from labour brokers to permanent employers. A process was needed to oversee compliance in this regard and that comments from all stakeholders was needed in this process.

Men on the Side of the Road submission
Mr Peter Kratz said that their organisation was an NGO that recruited people who stood on the side of the road looking for work. They provided these services free of charge. The work of employee facilitators was important for people who had been completely excluded from the work process. It was difficult for casual workers to communicate with the labour market, and employers were only interested in hearing what skills workers had that suited their needs.

Men on the Side of the Road was of the view that the existing regulations and legislation that were in place were sufficient. The definition of a temporary worker should be reconsidered, and people should not be allowed to become permanent casuals. Legislation would not make the issue disappear.

The people the NGO worked with were simply concerned with survival which meant that they took the work that was offered to them. The Committee should thus encourage the Department of Labour to effectively regulate compliance.

Men on the Side of the Road had asked the Department of Labour to acknowledge the work that they did, but they had been unsuccessful. In his view this was because they were required to play a role in the placement of people into work, but they were not doing so. He asked the Committee to ask the Department of Labour what they were doing about non-compliance.

Men on the Side of the Road was of the view that the Extended Public Works Programme was relevant only to government sector work. They could expand this to the private sector and ask them to contribute. This need not entail exploitation.

Discussion
Mr Sharpe asked Mr Kratz whether he would be able to have the impact that he would like whilst remaining an NGO or if they would have to become a profit-seeking business.

Mr Kratz said that it was his view that they could not follow the path of profit-seeking. They believed that the resources could come only from non-business orientated investment.

The Chairperson thanked everyone present for their patience and their submissions. Submissions had been made on both sides of the story and that this would allow the Committee to make a decision based on this evidence. There would be no pre-conceived ideas when deliberating on this matter. She promised that the Committee would reach a decision that would consider all submissions. This might not be an acceptable decision to all. There was a call that the Committee should visit the provinces and she said that as a Committee they would deliberate on this.

Meeting adjourned.