Transformation is the Casualty of Labour Broking in the Mining Sector

Mining Sector In South Africa
Image credit: Fleminggulf

While the Congress of South African Trade Unions’ (Cosatu) has been campaigning for their outright ban; Cabinet has recommended that the Basic Conditions of Employment Amendment Bill and the Labour Relations Amendment Bill be amended repudiating the unions’ position.

This is a position backed by the Black Business Council and other black business organisations. To proponents such as Adcorp, the country’s biggest labour brokers, this argument does not make sense.

They argue that they are offering an essential entry-point into decent formal employment for the jobless and for first time job seekers. Outlawing the practice would leave thousands of people without employment at a time when the government is on a major drive to create jobs.

While both positions may have some merit, I sincerely believe they are both missing an important point: the practice of labour broking as a long-term solution to meeting workforce requirements on an operation, blocks and ultimately retards transformation.

Over the past decade we have seen through our engagements with the mining sector at Managing Transformation Solutions (MTS) that casual workers employed via labour brokers are not part of the critical (and regulated) transformation agenda.

The labour broker is not concerned with such aspects of workforce ‘skills development or empowerment’, nor employee welfare and such initiatives will further likely raise the cost of mining companies utilising their services on a monthly basis.

This is a sad state of affairs given that labour broker workers number almost a million according to The National Association of Bargaining Councils (NABC) 2010 figures. The Commission for Conciliation, Mediation and Arbitration (CCMA) in 2010 produced figures that indicate labour brokers represent 7.6% of total employment in South Africa.

That is a significant portion of workers that are being legally left out as participants in the transformation of this country. It is unacceptable and untenable.

The major criticism against labour brokers is that they exploit workers and their practice is primarily designed to evade labour laws and regulations. They are said to promote casualisation of work and offer low wages without minimum benefits like medical aid and pension.

MTS has been to-date, advising its clients to more effectively manage their labour broker contractors within their Social and Labour Plan (SLP) compliance processes (planning and reporting). This enables a core focus to be retained by the mining right holder and very largely, permanent core business contractors.

However we have further advised them to put in place plans for bringing all contractors on board over time aligned to the Mineral and Petroleum Resources Development Act (MPRDA) requirements.

We have proffered this advice because we know that the Department of Mineral Resources (DMR) is opposed to labour brokers being utilised on any mining operation and as such our advice has also been supplemented with a plan to phase them out of usage in operations – where feasible.

Where this has not happened and/or cannot happen, and the labour broker is involved in the core business of mining, we suggest that they be included in the compliance of the operation to its SLP.

In practice this therefore means that the labour brokers’ employees must be included in all reporting aspects of the SLP and as such directs the need for the employees within the labour broker company be involved in training, mentoring, skills development etc.

However this also creates a problem as generally labour brokers are not accurate data/record keepers and the integrity of the above processes and deliverables may be questionable.

The degree of assistance required to minimise these risks is dependent on the number of employees with the labour broker and the level of cooperation gained by the person tasked with the responsibility of compiling the relevant information for inclusion in the SLP management and reporting processes.

Whilst I acknowledge that labour brokers are often utilised as a mechanism for ‘local’ recruitment at an operation whereby local employees of a labour broker are brought onto the permanent workforce, such practices are dependent on the recruitment needs and job vacancies within an operation.

This obviously fluctuates over time aligned to the mine’s business plan and the strategy must be aligned to broader transformation objectives such as women in mining targets. As such, this clearly requires the integration of the labour brokers into the broader strategic SLP management programme and not simply side-lined or, at best, utilised when required to improve progress reports.

I believe labour brokers should be strategically managed and integrated more effectively (if they are not able to be constructively phased out) for real transformation to be achieved within the mining industry.

It remains our sincere belief that every sector in South Africa has a responsibility to facilitate and drive transformation to rectify the inequalities of the past. Leaving out a significant portion of the populace out of the transformation agenda will simply not work.

Companies should therefore be demonstrating their commitment to economic transformation by allowing all their workers to fully participate in transformation, especially those previously disadvantaged by for the colour of their skin.

By definition labour brokers, in their current state, have no place in a fairer South Africa until they seriously consider this question; “What is their contribution to skills development in a South Africa plagued by shortage of technical skills amongst the majority of South Africans. Is Labour broking in any way contributing to meaningful job creation?”

Written by: Sue Brandt – CEO of Managing Transformation Solutions (MTS),  a consultancy specialising in the management and implementation of transformation as a holistic business requisite.


Leave a Reply

Your email address will not be published.