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Labour brokers – do you really know what they do?

Jul 31, 2014 | Blog

The labour broking debate has been a hot topic recently due to changes regarding the temporary and contract worker legislation. But what have been the issues surrounding this much-discussed area of employment?

The way that labour brokers, such as recruitment agencies, are perceived is considered to be one of the prime reasons for the recent law changes. But why are labour brokers seen in a negative light by many? It has become apparent that it is due, in part, to assumptions  made about the function babour brokers have in recruitment.

Labour brokers and their role

In this blog we cover some of the most common misconceptions about third party involvement with contract and temporary recruitment.

Labour brokers take money from the worker

Absolutely not the case. Labour brokers are forbidden from taking a cent from the worker. They work closely with the client and it is only the client that pays them. 

Without the ‘middle man’ the worker would earn more

Not true. The employer’s statutory costs are paid to the labour broker. These costs have to be paid regardless of whether the labour broker was involved or not. That money does not go to worker.

Temporary employees do not receive benefits

Regardless of the fact that a large percentage of South African permanent workers do not enjoy benefits, temporary workers are often eligible for the same treatment as their perm counterparts. The grey area here concerns the fact that benefits are dependent on the company that the temp worker is at and the benefits they offer. This is not something that a third party decides.

However, it is worth mentioning that there are statutory benefits for all employees, which includes temps. These are things such as being paid on public holidays if they fall on a normal working day for the employee.

Temps get stuck being temps

Statistics actually show that the use of a labour broker significantly improves the chances of employment for individuals. On average, it takes 90 days for a job seeker to secure work via a third party, and 800 days without assistance.

The difference with using a broker is that they are able to continue to look for work while an employee is completing a temporary contract. This may or may not lead to permanent positions, but it certainly helps the chances of having continued employment, or employment with fewer and shorted gaps between jobs.

Labour brokers add no value to workers

Third parties offer faster placements thanks to client relationships and expert knowledge of the industry. This is all expertise that directly benefits the worker. Agencies offer continued support for workers and can continuously look for work for them. 

Labour brokers offer no value to clients

With the increase in flexible workforces within companies, TES companies are perfectly placed to efficiently accommodate the client’s needs and requirements.

Labour brokers add no value to the South African economy

TES companies work to actively reduce unemployment not only with job placement, but also by increasing the long-term employability of workers.

The TES industry alone turns over more than R40 billion annually, contributing significantly to government revenue with tax and VAT.

The industry directly employs almost 20,000 people and over 1 million temporary workers every day.

The TES industry, it would seem, has not earned the reputation that it is only recently starting to shake off. When you look at the reality of how labour brokers benefit workers, clients and the economy, you find a viable and worthy industry that South Africa would be far worse off for not having.

The imminent new laws are aimed not at relegating labour brokers, but rather at helping both broker and client to put contract workers on the same level as permanent staff. The new laws will essentially mean that client and third parties are equally responsible for implementing and adhering to them. In the next blog post, we will be covering these new laws and exactly what they mean for all involved.


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