TRUTH ABOUT THE FUTURE OF TEMPORARY EMPLOYMENT SERVICES (TES) IN SA MARCH 2009

1. TRUTH ABOUT THE FUTURE OF TEMPORARY EMPLOYMENT SERVICES (TES) IN SA MARCH 2009

2. Introduction • Private employment agency statistics • R26,000,000,000 size of industry • 3,140 private employment agencies in services sector alone • 408,616 daily average assignees in services SETA jurisdiction alone • 32% flex-to-perm conversion each year • 83% black assignees • 50% previously unemployed • Clients across all sectors, predominantly in manufacturing, wholesale and retail, transport, construction, local government, banking, information technology and communication • R415,000,000 annual skills levy • 5% of all learnerships NSDS1 2

3. Labour market context Disintermediation Labour supply Intermediation Labour demand Employed persons Filled positions Unintermediated or unregulated Intermediated by government Persons actively seeking work Job creation and destruction Unfilled positions Intermediated by regulated private sector Intermediated by government Unemployed persons 3

4. Labour market context Industry superstructure * CAPES representation 4

5. QUOTES • “Next year is going to be exciting because of this (labour brokers) issue. I have demanded the papers from Namibia” (Minister of Labour) • “There are corrupt people everywhere, even in Government, and we also have them in our industry…we feel that for the Minister and Unions to say that because there are a few non-compliant labour brokers, the whole system should be shut down is unfair…there are some corrupt unions out there, lets shut them all out” (Marius Coleman, CE Origin Consulting) • “Contingent staffing firms can offer their key staff members continued job security due to the fact that they have many clients who have many different production needs at different times. When one client experiences a severe workload fluctutation…the staffing form will be able to transfer these resources to another client” (Alex McCormack, MD Oxyon Group) • Trade unions attribute the lack of quality jobs in SA to labour brokers (Sunday Times, 15 Dec 2008) • “…erken die ILO se 1997-konvensie juis hierdie positiewe rol van arbeidmakelaars. CAPES wil spesifiek groei met geregtigheid balanseer…verskil aansienlik van Namibie, wat nie n oorlopende liggaam het wat reeds vir dekades selfregulering toepas nie…die debat sal eerder op beter beheer uitloop” (John Botha, CAPES – Namibia) 5

6. STAKEHOLDER ENGAGEMENT & POSITIONING • ANC: REGRULATION OF TES INDUSTRY • “…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, sub-contracting and outsourcing, address the problem of labour broking and prohibit certain abusive practices”. • COSATU: REGULATION OR BANNING - ISSUES • - wage equality • - benefits • - duration • - freedom of association/ collective bargaining • FEDUSA/ NACTU: REGULATION & COLLECTIVE BARGAINING • - open to building relationship to regulate and bargain collectively • BUSINESS (BUSA): 1 OF TOP PRIORITIES FOR 2009 • GOVERNMENT: TOP PRIORITY @ NEDLAC • NEDLAC 6

7. ILO CONVENTION 181 (Private Employment Agencies - 1997) • “Being aware of the importance of flexibility in the functioning of labour markets…” • “Recalling the need to protect workers against abuses…” • “Recognising the need to guarantee the right to freedom of association and to promote collective bargaining” • “The legal status of PrEA’s shall be determined in accordance with national law and practice after consulting the most representative organisations of employers and workers” • “…shall determine the conditions governing the operation of PrEA’s in accordance with a system of licensing or certification..” • “…shall take the necessary steps…freedom of association, collective bargaining, minimum wages (and other terms), statutory social security benefits, access to training, OHS, COID, insolvency protection, maternity and parental protection 7

8. Trends – International & Local • ILO: Decent Work Country Programme – “…decent and productive work in conditions of equity, security and human dignity”. Biggest challenge is fundamental convention on Freedom of Association and Collective Bargaining. • EU Parliament issued Agency Worker Directive giving all 27 EU states 3 years to implement equal treatment rules (already exist in some form in 20 countries where equal treatment is required from day 1 – UK are looking at 12 week threshold) 8

9. NAMIBIAN HIGH COURT • A Constitutional Challenge of a Statutory Provision (s128 – no person may, for reward, employ any person with a view to making that person available to a third party to perform work for the third party…in the interest of decency and morality) • Applicant failed to establish a legal right to carry on a business of labour hire as the latter is not lawful under common law employment contracts (similar reasoning to s200A of SA LRA) • Locatio conductio operarum (personal service between master & servant) versus Locatio Conductio operas (IC)/ Locatio Conductio Rei (letting or hiring a thing for reward) – hiring an employee for reward = slavery?? • Third party offends common law, statute & Namibian obligations to ILO which “prohibits commoditisation” – therefore is not lawful 9

10. PROGNOSIS The bend in the road is not the end of the road unless you fail to take the turn! • ASGISA/ JIPSA (economic growth, poverty and unemployment) • GLOBAL ECONOMIC & FINANCIAL REALITY • CURRENT LEGISLATION RECOGNISES TES (LRA, EEA, SDA, BCEA, BC’s) • 40% OF ASSIGNEES FALL UNDER BARGAINING COUNCILS ALREADY • CAPES & SELF-REGULATION STEPS • NEDLAC ENGAGEMENT • TES ONLY 4% OF EAP • GLOBAL TRENDS – GROWTH OF TES & LESS RIGID LABOUR LAWS • BUSA – PREJUDICE TO BUSINESS • SOCIAL SECURITY & RETIREMENT REFORM • OUTCOME?? • STATUTORY CO-REGULATION (BOARD, PENSION FUND, CERTIFICATION INSTITUTE) • ORGANISATIONAL RIGHTS – INNOVATIONS • COLLECTIVE AGREEMENT 10