TES INDABA CONFERENCE 26 MARCH 2010

1. TES INDABA CONFERENCE26 MARCH 2010 BY: ELIAS MONAGE

2. CONTEXT • Regulating Flexibility, Revisiting the LRA and BCEA • Regulatory efficiency of CCMA • The changing nature of work and Atypical forms of employment was a priority for research and policy formulation for 2004 • The synthesis report recommended a fundamental reappraisal of certain policies, regulation and casualisation • Legislative review The reform process was triggered by the previous President Thabo Mbeki by appointing Presidential Task Team The Task Team developed discussion documents that addresses the following: • The state of collective bargaining in South Africa • Labour Market regulation

3. CONTEXT CONT… • Specific recommendation form synthesis report include: • Harmonization of definitions of employees and TES • TES should be registered in order to qualify as the employer under section 198 (2) • Registration to be filed with Employment Services Directorate and Minimum Standards Directorate to ensure compliance • Registration to be annual • Disclosure of information on clients, number of employees, terms and conditions of employment

4. CONTEXT CONT… • Failure to register or cancellation of registration will mean that the client is liable for all labour law requirements • ‘TES’s should not be used by clients to employ temporary workers on an indefinite basis’ and therefore regulation on the maximum period of temporary work • After a prescribed period(or after a fixed number of rollovers) temporary workers become permanent • Establishment of regulatory body regulate the industry

5. Employment Services for South Africa (ESSA) 2006 • Registration Services Registration Services includes the registration of individuals, employers, opportunities and training providers. The registration of individuals includes the development of a skills profile where the person’s qualifications and experience are recorded according to the Organising Framework of Occupation (OFO) • Career Information and Guidance Services Career guidance (employment counselling) includes providing career, labour market and scare and critical skills information and guidance on accessing placement opportunities • Recruitment and Selection Services Recruitment and selection services include the proactive identification of opportunities through networking with stakeholders, the matching of individuals to opportunities, recruitment and selection for a particular opportunity, and placement

6. Employment Services for South Africa (ESSA) 2006 (cont…) • Skills Development Service Skills development services include developing the provincial implantation plans, identifying scarce and critical skills, registering training courses with the National Skills Fund, allocating funding for skills development, selecting training providers, contracting training providers, monitoring training, processing training provider claims and scheduling assessments at INDLELA • Information Services Information services include producing information brochures/pamphlets and packages and advocacy on accessing employment and skills development services

7. Employment Services for South Africa (ESSA) 2006 (cont…) • ES System outputs • An integrated system, that includes: • A profile of the skills of South African citizens • An accurate record of scarce and critical in skills in SA • An effective career information and guidance service to South African citizens that includes information on scarce and critical skills • Project Objectives • an accurate register of work – seekers in SA • an accurate register of employers in SA • an accurate register of placement opportunities/ vacancies in SA • matching individuals to placement opportunities (supply and demand) • an accurate record of placement of individuals into opportunities

8. Making Visible the Invisible: Confronting South Africa’s Decent Work Deficit by “Edward Webster” • Adaption of standing’s seven security indicators: • labour market security: employment opportunities in the sector • Employment security: protection against arbitrary dismissals • Job security: opportunities to build a career and increase income • Work security: protection against accidents and illness at work and limit on working time • Skills reproduction security: opportunities to gain and retain skills • Representation security: protection of collective voice, independent unions and employer’s associations • Income security: regular minimum income and comprehensive social security

9. Subcontracting in Platinum Mines • Reconfiguration of employment away from Standard Employment Relationship shift from full–time towards subcontracting: • no minimum wage • no benefits • no health and safety • micro landing and other deductions non-compliance and lack of enforcement

10. Subcontracting in Mining 2003 2005 • SER : 438 000 322 063 • SUB: 90 231 122 589 NB: No Union protection, no benefits, no security, no basic wage & exorbitant deduction

11. Global Trends • ILO Conventions and Recommendations • ILO Decent Work Country Programme • Conceptualisation of Decent Work by ILO provides a fair income, employment security, social security benefits and healthy and safe environment

12. EU: Directive gives temporary agency workers new rights Aim The directive’s purpose is to ensure the protection of temporary agency workers and to improve the quality of temporary agency work by: applying the principle of equal treatment to temporary agency workers, and recognising temporary work agencies as employers At the same time, the directive seeks to take into account “the need to establish a suitable framework for the use of temporary agency work with a vies to contributing effectively to the creation of jobs and to the development of flexible forms of working” Scope The directive applies to workers with an employment contract or employment relationship with temporary work agency who are assigned to user undertakings to work temporarily under the supervision and direction of these undertakings It applies to public and private undertakings that are temporary work agencies or user undertakings engaged in economic activities, whether or not they are operating for gain

13. Implementing Equal Treatment in the UK • Summary of the Commission‘s Recommendations: a) The scope of equal treatment should be limited to basic salary and other basic statutory rights: • A simple definition of what equal treatment covers is essential in order to avoid the kind of uncertainty, bureaucracy and cost that would impact on the viability of agency work in the UK • The definition of pay should be limited to a basic hourly rate. Occupational benefits and financial participation schemes that vary from one user enterprise to another should be excluded • Agency workers are already entitled to the statutory holiday pay which is rising to 28 days. Any extension of holiday pay to equivalents in the user enterprise would add bureaucracy and complexity with agencies having to establish different holiday entitlements for each temporary assignment

14. Implementing Equal Treatment in the UK cont… b) Equal treatment must be easy to establish • The text of the EU Directive does not refer to comparables. Therefore, equal treatment should not be established on the basis of an existing comparable worker, a predecessor to that role or a ‘hypothetical’ comparable worker • Equal treatment for temporary staff after 12 weeks of an assignment must be established with reference to what they would expect if recruited directly by the employer to occupy the same job

15. Implementing Equal Treatment in the UK cont… c) The 12 weeks qualifying period must be easy to administer • Ensuring that the 12 weeks period is easy to administer will avoid unnecessary bureaucracy and will limit the number of assignments that are terminated prematurely • There should be recognition for a genuine break between assignments. The Commission recommends that a break of 4 weeks should constitute a legitimate break • Although temporary workers in sectors such as social care and supply teaching may only do one or two days a week, the qualifying period should be 12 calendar weeks regardless of the amount of work carried out during those weeks • The 12 week period should apply to a specific job in a specific location and unit rather that to any role within the user enterprise

16. Implementing Equal Treatment in the UK cont… d) Liability must rest with the end user as well as the agency • The specific responsibilities of end users and recruitment agencies must be made clear in the regulations • The agency should be expected to take reasonable steps to establish equal treatment but should not be held responsible if that information turns out to be incorrect. There must be an element of compulsion on the user enterprise to provide relevant information to the agency • Liability issues to other employment structures such as umbrella companies and master and neutral vendors will need to be considered in detail

17. Implementing Equal Treatment in the UK cont… e) Measures to limit the increase in employment tribunals must be promoted • Enforcing equal treatment should be through the Employment Tribunal System. However informal ways of resolving disputes before a case reaches an Employment Tribunal should be encouraged (although the regulations should not be prescriptive on this) • The Commission will actively work with ACAS and TUC to propose informal methods of resolving disputes around equal treatment. The key is to provide agencies and employers with a range of options rather than one prescriptive formula

18. Implementing Equal Treatment in the UK cont… f)The provision of the directive should be limited to individual workers • Professional flexible workers such as interim managers and IT contractors supplied through limited companies/umbrella arrangements are often paid more than permanent workers. They are not the individuals that the legislation is aiming to protect and should be excluded in order to avoid unnecessary bureaucracy for agencies and user enterprises. • The Commission proposes that Personal Service Companies be excluded as they are providers of business services and not engaged as workers. • The recruitment industry will continue to support initiatives to address instances of bogus self-employment.

19. Implementing Equal Treatment in the UK cont… g) UK regulations must support legitimate means of derogating from the principle of equal treatment • The Commission welcomes the option of being able to form workplace agreements which would avoid the bureaucracy of establishing equal treatment for each assignment • Agencies that employ their temporary workers directly and pay them between assignments should also derogate from the principle of equal treatment • Welfare to Work services should be excluded

20. Implementing Equal Treatment in the UK cont… h) A clear communication strategy is essential for effective implementation • Proceeding with implementing the Directive without clear communication and understating will result in confusion and a massive increase in disputes with associated cost for all involved. A comprehensive communication campaign aimed at user enterprises, agencies and job seekers must therefore be a key part of the implementation process • There should be a minimum 12 month lead in time between the regulations being published and formal implementation. This will allow for the publication of guidance and the necessary systems to be put in place and end users to be reassured about the application of the Directive

21. Implementing Equal Treatment in the UK cont… i) Implementation must be delayed until October 2011 • The implementation of the regulations should be delayed until October 2011 because of the worsening economic climate. In addition, this will allow for employers and agencies additional time to fully prepare for the new regulations • Any eventual economic upturn will be seriously hampered by restrictions on the flexibility of the national workforce

22. Implementing Equal Treatment in the UK cont… Temporary agency work is a crucial part of a modern labour market ; providing vital flexibility to user enterprises and workers alike. the speed at which recruitment agencies can react to business needs is a key part of their offering , which is why it is crucial that any new regulations do not add unnecessary bureaucracy and slow the process down. Agency work is an area which has not traditionally been well researched. However in recent years a number of surveys , from the REC , TUC , and BERR among others have shed light on the market place. Key facts include : • In 2007/2008 the UK recruitment industry places 1.2 million people into work in temporary assignments. Since 2003 this number has remained consistent which highlights the ongoing benefit of agency work for employers and jobseekers. • Today the recruitment industry has a turnover of 27billion. This presents a steady rise from 24 billion in 2001/2002 in the REC’s annual industry survey. In 2007/2008 22.7 billion of this turnover came from temporary work placements.

23. Implementing Equal Treatment in the UK cont… • Temporary work creates jobs and takes the strain from the permanent workforce: In our REC/BMG Tracking Survey of the views of temps , agencies and user enterprises , only 12% of user enterprises said they would take a permanent member of staff on if an agency worker was not available • Temporary work provides job opportunities for target groups: Research shows that agencies employ a higher proportion of new entrants into the labour market (of 16-24 years old , 21% are employed through agencies, compared to 15% in the labour force as a whole) as well as a higher proportion of older workers (over 55 years olds make up 20% of agency workers , compared to 13% in the labour force as a whole) • Agency work provides opportunities for black and ethnic minority candidates. 11% of agency workers are from a black or ethnic minority background , compared to 7% in the workforce as a whole

24. Global Dialogue • Global Union and CIETT Corporate Members on Temporary Agency - the parties support the establishment of a regulatory of temporary agency work • The agreement is global in scope with mutual commitments • The agreement recognises that temporary agency work contributes to improving the functioning of labour market by implementing active market policies, improving life-work balance • Prevent unfair competition by fraudulent agencies

25. Agreement in Principle for TES • Collective Employment Agreement for Temporary Employees 2009-2014 • The Agreement covers the following: Remuneration, Training, employment conditions, trade union facilities, pension fund, duration and adherence • Skilled workers regulation – review the regulation after two years

26. 2009 ANC Election Manifesto The ANC has identified five priority areas for the next five years: • creation of decent work and sustainable livelihoods • education • health • rural development, food security and land reform • the fight against crime and corruption

27. More Jobs, Decent Work and Sustainable Livelihoods • The ANC government will: • 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 • provisions will be introduced to facilitate unionisation of workers and conclusion of sectoral collective agreements to cover vulnerable workers in these different legal relationships and ensure the right to permanent employment for affected workers. Procurement policies and public incentives will include requirements to promote decent work

28. Forward to Achieving Health Care For All • Introduce the National Health Insurance System (NHI) system, which will be phased in over the next five years • NHI will be publicly funded and publicly administered and will provide the right of all to access quality health care, which will be free at the point of service

29. Framework for South Africa’s response to the International Economic Crisis: 19 February 2009 • Employment measures • We have taken note of the concern by organised labour that there is an increasing trend in the use of outsourcing and labour brokers and a rise in non-compliant practises in labour broking and agree that Nedlac should on an expedited basis, discuss outsourcing and labour broking with a view to addressing labour’s concerns

30. Social Partnership in Response to the Crisis • The measures embrace elements that seek to promote economic growth and sustainable businesses, assist and protect workers and the vulnerable and help our country to meet its developmental objectives • Protecting and expanding decent work is at the core of our programmes. For this reason we are committed to various measures to reduce the possibility of retrenchments • Nevertheless, with existing high levels of unemployment and poverty, though they have reduced in recent years, the condition of the poor and the vulnerable have to be addressed directly and in the shorter run, through employment creation programmes, promoting sustainable livelihoods, public investment, and effective social relief and support

31. A sobering Reality for SA • The parliamentary public hearings on labour broking and the recommendations from the portfolio committee • Triangular employment relations • Lack of compliance and enforcement mechanism • Regulatory model • Bargaining council • Legislative provisions in respect of outsourcing and sub-contracting • Regulated flexibility • The changing nature of workplace • Decline in employment and its outlook • The legal problem – conceptual model of employment underlining the current legislation • ILO Convention 181 and Recommendation 188 call for proper allocation of responsibility

32. ENDThank you