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The conflict that may define SA's future: Labour broker...

South Africa

South Africa

The conflict that may define SA’s future: Labour brokers’ side

A court case between one of South Africa’s largest labour brokering firms and Cosatu is currently underway in the South Gauteng High Court. It goes to the very heart of Cosatu’s fight with the private sector: it wants the government to ban labour brokering. Angela Dick, the CEO of Transman (Pty) Ltd, spoke to SIPHO HLONGWANE about her dispute with Cosatu and the challenges facing her industry.

On 7 March 2012, a faxed letter arrived at the branch offices of Transman in Phuthaditjhaba in former Qwa Qwa, about 330km east of Bloemfontein in the Free State. It came bearing the logo of the Congress of South African Trade Unions and was signed by Doctor Monareng, the federation’s local secretary. In it, a thinly veiled threat was made against Transman.

“We, the Congress of South African Trade Unions in the Qwa Qwa local are instructed by our 12,782 members to advice (sic) you to close you (sic) Office offices 220-218 Naledi Mall, Phuthaditjhaba, in our local,” the letter read. “Cosatu is opposed to the practice of labour brokering, which is another form of human trafficking that continue to condemned (sic) thousands of worker to insecure jobs, with poverty pay and with no benefits and no job security and your business does not assist our people to get out of poverty but rather sink them into the highest level of poverty. Basically you are the exploiters of the masses of our people, particularly the youth, so you have to see yourselves out of Phuthaditjhaba with immediate effect otherwise we shall not rest until your exploitative business is permanently banned in our country and in our local.”

Having arrived 10 minutes before the end of business, the letter gave Transman 10 minutes to close its business in the area, or else “the workers will never rest until you are out”. 

Transman’s chief executive officer, Angela Dick, took immediate action. She called in her lawyers and filed papers in the South Gauteng High Court. As a labour broker, she has faced years of name-calling and verbal abuse from Cosatu and its affiliate members – but for the first time, a threat was directed specifically at her company, and her employees.

On 3 June, the legal team representing Transman met in the high court in central Johannesburg to face the judge. Dick was present – no representative of Cosatu’s came. But it was early days, and the advocates spent the day laying out the groundwork of the applicant and the named respondents.  Those include Cosatu, the chairman of the Qwa Qwa Local of Cosatu, the National Education Health and Allied Workers’ Union, the South African Democratic Teachers’ Union, the minister of safety and security and the provincial police commissioner. This case is going for the jugular – Transman will argue that the unions have no right to compare it to human traffickers and purveyors of slave labour. 

The first day in court makes it very clear that this case may drag on for months, and not for any light reasons. The case goes to the very heart of Cosatu’s biggest fight with the private sector: it wants the government to ban labour brokering. 

A few days later, at the Transman offices in Parktown, Dick is livid. Her staff in the 22 branch offices around the country have faced varying degrees of physical threat and abuse, and the threatening fax was a step too far. 

“We’ve had all sorts of things happen to us. We’ve had our vehicle stoned, we’ve had hundreds of thousands of rands in damages, et cetera. We’ve had our people assaulted. And not just only our permanent staff, but our temporary staff as well. All they want is a job, for God’s sake. Let them work, and what we are saying to Cosatu is: we don’t have a problem with the debate but don’t defame us and label us as human traffickers because it is not true,” Dick says. 

She reads from Cosatu’s fax that was forwarded to head office from Phuthaditjhaba: “‘Pack you stuff and get out otherwise we will never rest.’ Really? You don’t call that a threat? I call that a threat,” she says. 

In the answering affidavit to Transman’s motion, Cosatu general secretary Zwelinzima Vavi (after claiming that the first application is impermissibly vague) dismisses the research and evidence supplied by the applicant as being selective and of “unknown origin”.

“The applicant’s stratagem of seeking such a gagging order of motion (Transman seeks the court to bar Cosatu from calling it ‘human traffickers’ and ‘slave labourers’), coupled with the short time periods which the applicant has insisted Cosatu must comply with, places Cosatu at an extreme advantage,” the replying affidavit says. 

“It is deprived of the right to obtain discovery of the documents which would show the full picture of how the applicant in fact conducts its business and to test the applicant’s evidence by way of cross examination, it is denied the opportunity to obtain and present its own expert evidence and it is hamstrung in obtaining on short notice affidavits from witnesses who are generally in an extremely vulnerable position as they are employed by Transman and other labour brokers.”

Cosatu then points out that the debate has raged on for many years, and thus there are many facts that will be in dispute. 

There is no doubt that the union federation has every intention of converting Transman’s application for urgent relief into a drawn-out case. Though Cosatu favours street politics over court battles, the nature of the dispute could potentially bring the case to the forefront of national politics.

As Dick puts it, her company is guilty of nothing more than bringing many people into the employment economy, people who would otherwise have had no other way of accessing jobs with regular pay. She estimates that her company, since its inception in 1983, has placed over one million people into temporary jobs. Every day, about 10,000 people are placed into jobs around the country. Transman is the largest, privately owned labour brokering firm in the country.

“To be honest with you, my company is the worst one that Cosatu could have been picked on for this court case. Since 1983, we were compliant with the legislation and with all the benefit structures,” Dick says. “Have you ever had an individual come to you with barely any education, who is barely literate and who can barely communicate in English, dressed like a rag with no shoes or anything, and he can’t afford anything else. He stands in front you and he wants work. What have the trade unions ever done for those people?

She continues: “Now this guy needs a job, okay. Is he in a position to approach the supervisor or the production manager or the CEO or the human resources manager of a particular company and say ‘I need a job’? Forget it. It’s just not going to happen like that. Otherwise, you must know we put one job ad in the paper and get like 1,200 responses. Which one do you choose? You think the CEO is going to sit there and wade their way through 1,200 job applications? They won’t. They can’t. 

“So the function we perform is critical for these people. I can pick up their file, I can phone the production manager, I can make an appointment to see him, I can negotiate on their behalf for the best deal I can get from the various benefits and so on and so forth. The working conditions, the rates of pay, you know, what job it is going to be. 

“And I can persuade the client to assist me to assist the worker concerned to actually develop the skills and ultimately he then becomes potentially a very valuable permanent member of staff,” Dick says.

To Dick, the main misunderstanding that Cosatu has with what she does is not that labour brokers somehow makes massive profits out of temporary staff (their profit margins are far less than retailers, she reveals) – but that brokers prevent temporary labourers from organising by making their monthly wages fluctuate in order to prevent them from affording monthly union fees. She claims she has no problem with her employees organising (many of them are union members) and has gone so far as to offset the inherent risks of an unsteady supply of wages by creating a unique provident fund (which has been in place since 1989) for workers on her books that can “overlook” missed payments for up to three months and still provide cover.   

It is not entirely without reason that the labour brokering industry has a bad reputation in South Africa, Dick says. She says that the big firms have no option but to be compliant with the various regulations that govern the industry – it is simply too easy for regulators to come after large companies. It is in the self-interest of large labour brokers to be compliant. It is the minnows in the stream that cut corners and create the bad reputation. Dick calls them the “bakkie brigade”. They find idle hands, load them on to the back of a pickup truck and take them to locations where temporary labour is needed.  It is a makeshift business, and in South Africa where up to 50% of the population does not have the skills to be employed in the formal sector, exploitation is all too easy.

The government has recently introduced a raft of labour law amendments, which also introduce sweeping changes to the labour brokering industry. Dick says she was never consulted, even though the government claims that it sought out the contributions of all major stakeholders in its regulatory impact assessment. Several labour lawyers have said that the new laws, if passed, will actually cause more permanent staff to lose jobs, rather than ensuring that more temporary staff get jobs. Dick agrees. 

In response to the demand by government that clients be deemed permanent employers of workers placed with them for more than six months, the prevailing opinion is that employers will choose to sack their permanent staff and then perhaps keep rotating temporary staff every six months. The situation is curdled by the fact that South Africa is one of the least flexible and most litigious labour economies in the world.  Inadvertently, the government is proposing to open a loophole to allow companies not to keep a large portion of staff permanently – and it works out cheaper because work experience and skill need never come into the negotiation, at least not when there’s no guarantee of job security for those with better skills and more experience. 

In an economy that is only growing by 2.4% every year, government’s latest interference could spell disaster. According to Dick, labour brokers in general place less than 20% of the sum total of employed people into jobs. What the government is proposing to do will affect the entire working population, and not to their benefit. 

“The government has very little understanding of business and what we do,” she says. “You would’ve thought that regulatory impact assessment would at least consult every major labour broker in this country. I was never asked questions, I was never surveyed. So who answered the questions?  We reckon we will be lucky if we get 800,000 people getting permanent employment as a result of the new laws. But we think South Africa is probably going to lose about a million jobs overall.” DM

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Photo: Men hold placards offering temporal employment services in Glenvista, south of Johannesburg, October 7, 2010. (REUTERS/Siphiwe Sibeko)


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