Town The copyright of this thesis rests with the University of Cape Town. No quotation from it or information derivedCape from it is to be published without full acknowledgement of theof source. The thesis is to be used for private study or non-commercial research purposes only. University Master of Laws (LLM) Dissertation Labour brokers and workers’ rights: can they co-exist in South Africa? Suzanna Harvey (HRVSUZ001) Town Research dissertation presented for the approval of the Senate in fulfilment of part of the requirements for the Master of Laws in approvedCape courses and a minor dissertation. The other part of the requirement for this qualification was the completion of a programme of courses. of I hereby declare that I have read and understood the regulations governing the submission of LLM dissertations, including those relating to length and plagiarism, as contained in the rules of this University, and that this dissertation conforms to those regulations. University Signed: …………………….. 30 September 2009 Supervisor: Debbie Collier 2 Abstract South African trade unions, and some political organizations, have recently called for the banning of labour brokers, arguing that those employed through brokers have diminished rights. Employers’ organizations, on the other hand, say that the existing legal framework adequately protects these workers, and that it is merely necessary to improve enforcement of the law. This dissertation explores the difficulties faced by labour broker employees when they attempt to realize their rights through the Labour Relations Act (LRA). It shows how section 198 of the LRA, which regulates labour brokers, operates in practice to deprive brokers’ employees of two of their constitutional rights: the right to employment security, and the right to bargain collectively with the employer. The existing legislation is therefore not adequate to protect these workers’Town rights. The dissertation also argues that an outright ban on labour brokers would probably not withstand constitutional challenge. The dissertation describes the mechanisms byCape which labour broker employees are denied their rights under the LRA, andof illustrates this description with reported and unreported decisions of the various labour tribunals. It goes on to propose and draft detailed amendments to the LRA, targeted at restoring the lost rights to labour broker employees. The dissertation also suggests how Commissioners and Judges responsible for administeringUniversity the LRA should approach cases involving broker employees under the existing legislation, in order to minimize rights violations experienced by these vulnerable workers. 3 Note The research for this dissertation was completed on 31 July 2009. On 25 and 26 August 2009, the Portfolio Committee on Labour hosted public hearings on labour brokering. The purpose of the hearings was to ‘look at the challenges the country is faced with, with regard to labour brokers which are not necessarily operating in accordance with labour law prescripts as employment agencies, and how Government can regulate labour brokering in South Africa.’1 In September 2009 a discussion document on the topic of labour broking was reportedly eventually considered at a meeting of the National Economic, Development and Labour Council (Nedlac). That discussion document has, at the time of submission of this dissertation, not been made public. Town List of abbreviations usedCape in this dissertation ANC African National Congress CAPES Confederation ofof Associations in the Private Employment Sector CCMA Commission for Conciliation, Mediation and Arbitration COSATU Congress of South African Trade Unions FEDUSA Federation of Unions of South Africa MEIBC Metal and Engineering Industries Bargaining Council NEDLAC UniversityNational Economic Development and Labour Council SACP South African Communist Party SEIFSA Steel and Engineering Industry Federation of South Africa SWANLA South West African Native Labour Association 1 ‘Comment: Labour Brokering in South Africa’ published on the Parliamentary Monitoring Group website www.pmg.gov.za accessed 10 September 2009 4 Table of Contents ABSTRACT .............................................................................................................................................. 2 NOTE ...................................................................................................................................................... 3 LIST OF ABBREVIATIONS USED IN THIS DISSERTATION ........................................................................... 3 INTRODUCTION ...................................................................................................................................... 6 CHAPTER ONE: SETTING THE SCENE ....................................................................................................... 8 CHAPTER TWO: THE LEGISLATIVE FRAMEWORK................................................................................... 11 THE CONTEXT FOR AND SIGNIFICANCE OF LABOUR LEGISLATION IN SOUTH AFRICA ...................................................... 11 THE LEGISLATIVE FRAMEWORK ............................................................................................................................ 12 Content of the rights: (i) Collective Bargaining ..................................................................................... 13 Content of the rights: (ii) Fair Labour Practices ..................................................................................... 14 SECTION 198 OF THE LRA AND HOW IT LIMITS CONSTITUTIONAL RIGHTS .................................................................. 15 The ‘TES’ or labour broking relationship explored................................................................................. 15 The triangular employment relationship ............................................................................................................ 15 International law................................................................................................................................................... 16 How section 198 works to limit fundamental rights ............................................................................. 17 Limitation of fundamental rights: (i) Collective bargaining .............................................................................Town 17 Limitation of fundamental rights: (ii) Fair Labour Practices in the form of Employment Security ............... 19 CHAPTER THREE: THE PRACTICAL DIFFICULTIES OF ADMINISTERING THE LRA IN LIGHT OF SECTION 198 ............................................................................................................................................................. 23 PROBLEM 1: CORRECTING THE CITATION OF THE WRONG EMPLOYERCape ......................................................................... 23 PROBLEM 2: DETERMINING WHETHER THERE HAS BEEN A ‘DISMISSAL’ ....................................................................... 24 Argument one: there was no dismissal because the contract terminated ‘automatically’ or ‘by operation of law’ .....................................................................................................................................of 24 a) Dismissal due to cancellation, or completion, of the service contract with the client ............................... 25 b) Dismissal at the instance of the client ............................................................................................................ 26 Argument Two: the worker is not dismissed because he is still ‘on the books’, although unpaid and without work ............................................................................................................................................ 29 PROBLEM 3: EVALUATING FAIRNESS WHERE THE BROKER HAS NO ACCESS TO THE CLIENT’S WORKPLACE ......................... 30 PROBLEM 4: FASHIONING A MEANINGFUL REMEDY FOR UNFAIR DISMISSAL ................................................................ 31 IN CONCLUSION ON ADMINISTRATION OF THE STATUTE............................................................................................ 33 CHAPTER FOUR: THE RESPONSE OF SOUTH AFRICAN ROLE PLAYERS TO THE PROBLEM OF LABOUR BROKERS ..............................................................................................................................................University 35 STAKEHOLDERS’ VIEWS ....................................................................................................................................... 36 ANC and Government Institutions .......................................................................................................... 36 The employers .......................................................................................................................................... 38 Labour ....................................................................................................................................................... 40 COSATU ................................................................................................................................................................. 40 FEDUSA .................................................................................................................................................................. 40 EVALUATION OF THE DEBATE ON WHETHER OR NOT TO BAN LABOUR BROKERS ........................................................... 41