Labour brokers: Cosatu's response bemusing, wildly off the mark

Cosatu's response to the DA discussion document, released yesterday, on the proposed new labour broking legislation is disappointing, because it fails to engage with our points of contention, and substitutes cheap sophistry in the place of considered debate.

Cosatu's argument is essentially that if you ban labour broking, every temporarily employed worker will be permanently employed. As Patrick Craven said in his statement, "companies... would still require the same number of workers if there were no labour brokers."

No. As the Department of Labour's own study pointed out:

"Employers will incur time and financial costs associated with converting temporary/fixed term contracts to permanent employment contracts (including extending benefits such as membership of a medical aid and pension fund). This suggests an increase in the cost of doing business for employers and the higher this share is in relative and absolute terms, the greater the impact of this proposed amendment on the cost of doing business in the domestic economy."

As a consequence of this, the report concludes that not all contract workers would be offered permanent positions, "with a resulting decline in total employment". This point, by the way, is straightforward and uncontroversial.

So, Mr. Craven can claim that labour brokers do not "create jobs", but the fact is that this is just a little logical sleight-of-hand - a piece of equivocation that fails to distinguish between the actual companies doing the hiring and the underlying market conditions that facilitate that. Labour brokers reduce the cost of doing business for employers, and as such help employers to afford more employees. In this way, labour brokers quite unequivocally "create" jobs in the economy. They just don't usually do the actual hiring.

How the Adcorp study, then, is supposed to support Mr. Craven's case is quite bewildering. If permanent employment is down 2.7% in a given period, and temporary employment is down only 1.6%, then this is an indication that during an economic downturn, there is some shifting from permanent to temporary employment. That the number of agency workers increased during the time cited therefore makes sense.

What exactly these figures are supposed to prove, beyond the somewhat obvious fact that difficult economic times often lead employers to try to find less expensive ways of running their business, is difficult to say. Presumably, Mr. Craven has simply cited the study in the hope that, first, the mere addition of statistics will appear to strengthen his case, and secondly, that no-one will bother to interrogate the data he provides. Both are par for the course for Cosatu's usual strategy of using cheap parlour tricks in the absence of actual economic evidence.

Finally, Cosatu's insistence on calling labour broking a ‘modern form of slavery' continues to demonstrate just how far removed this organization is from any semblance of reality. To be sure, a permanent position engenders greater job security than a temporary one, and job security is a good thing. However, as Gwede Mantashe  pointed out only yesterday, there is nothing more degrading than being unemployed. His exact words were: "Our view is that jobs must be created. Once created, then those people can engage on conditions of employment." Any view to the contrary amounts to "putting the cart before the horse", he said.

We agree. Including discouraged job seekers, one in three South Africans are unemployed, and addressing this must be our primary aim. We certainly cannot allow exploitative labour practices, but a lack of job security is not the same as slavery and Cosatu's hyperbole to the contrary is disingenuous, irresponsible and lowers the tone of a serious debate about jobs in this country

Then again, such fatuousness should probably be expected from an organization whose  argument falls apart well before this - at its first principles. On the one hand, Cosatu thinks that all labour broking jobs are slave labour, but then it also apparently values the Zuma administration's public works "job opportunities".

Not too long ago, Mr. Craven himself said that public works jobs make an "important contribution to the economy and the wellbeing of workers". So a temporary job, with no job security, digging trenches along the side of the road, is not slave labour, but a temporary job working in a call centre is? The only way to untangle the warped logic is to conclude that Cosatu would simply like the call centre agent to be unionised, and is not genuinely concerned about conditions of employment.

This is an excellent example of how Mr Craven is willing to twist the truth in order to place the interests of Cosatu before the interests of the unemployed and the country at large. Cosatu is primarily opposed to labour broking, because it cannot easily unionise the people involved. And that is why Mr Craven's response, and indeed Cosatu's position on this issue, should not receive the support of the Zuma administration.

Labour brokers help to create an environment for increased job creation, as the Department of Labour's own study shows. The fact is that 72% of the workers assigned by labour brokers eventually end up being permanently employed, indicating that this industry serves as an all-important gateway to permanent employment for thousands of people.

The only conclusion we can therefore arrive at is that Cosatu is willing to place its own interests above those of the unemployed people in South Africa. That is why we oppose this legislation.

Statement issued by Ian Ollis MP, Democratic Alliance Shadow Minister of Labour, January 18 2011

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