End of labour brokers, but not outsourcing

In July, the Constitutional Court ruled that contract workers provided by labour brokers will be regarded as temporary employees after three or more months at a company. These employees, which include all workers who earn less than R205 433 per annum, will be entitled to the same benefits, prospects of internal growth and job security as permanent employees at the particular organisation.

While the ruling aims to prevent the exploitation of workers by labour brokers, it could also lead to massive retrenchments across all industries. Arnoux Maré. MD of Innovative Staffing Solutions (ISS), says that millions of workers could lose their jobs when their contracts run out.

He advises companies to consider teaming up with ISS rather than retrenching employees if permanent contracts are not an option. All ISS staff are permanently employed and their skills are outsourced. ISS employees enjoy all the benefits of permanent employment, such as training and career growth opportunities, with no additional responsibilities for the client.

Maré notes: “We employ more than 10 000 permanent staff in a variety of sectors including transport, mining, logistics, engineering, hospitality and agriculture. Should a contract be terminated for any reason, the employee is simply redeployed into another contract.”

“With this approach, we are creating sustainable employment, which ensures workplace stability and continued security for workers and their families. It is the outsourcing company’s role to source the relevant skills and contractually employ the person on a permanent basis. These companies are also responsible for developing and retaining key technical skills and keeping abreast of industry trends,” he continues.

Maré adds that ISS is invested in training and there has also been only one strike among ISS employees in seven years, which was resolved within four hours. Maré notes that this speaks volumes about the company’s relationship with unions, clients and employees, as well as its ability to retain workers.

He says: “Job losses are the one thing we are trying to eradicate.” ISS can negotiate a new contract and retain current staff, who will then be employed permanently by ISS.

Maré believes that labour brokers won’t be able to simply latch onto the ISS business model. He says: “It would take years to build a similar business model. ISS has no relationship with any labour broker.”

Maré adds: “Employee satisfaction is also key to the company. The happier the employee, the more productive they will be. If they have job satisfaction, they are more likely to get up and be excited about going to work in the morning.”

He concludes: “We welcome the Constitutional Court ruling as it has effectively changed the lives of hundreds of thousands of workers for the better. The ground-breaking judgement has essentially freed low-paid workers, who are often exploited by labour brokers, and will give them much needed security.

“In the past, the majority of these workers could not apply for a loan or a house bond due to their temporary employment status. The status quo has now changed in their favour.”