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Casualisation-stepping stone towards the new underclass?

Alison Eloff

Over 1000 temporary employees (casual workers) at South African Postal Office (SAPO) agreed to return to work after a four month strike. These workers were represented by the Communication Workers Union (CWU) even though casual workers don't belong to the Union. The casual workers and the union leaders want labour brokering banned and temporary employees to be made permanent.

Temporary employment services (TES), also known as labour brokers, conduct the interviews, recruitment and other HR tasks and then provide suitable workers to the client. The labour broker is paid directly by the client, and, in turn, pays the worker. The client has no obligations towards the worker and as a result, the rights enjoyed by the worker under the Labour Relations Act are sometimes exploited

In the case of the post office, SAPOs group executive of mail business, Janras Kotsi, said ‘SAPO had already informed labour brokers of its intention to phase them out over the next three months.’

SAPO wants to employ casual workers directly, instead of through labour brokers. A task team consisting of the Department of Communications representatives, consulting firms, SAPO management and CWU members has been assembled to look at permanent employment prospects.  

"We did this because we discovered that labour brokers were not paying employees their full wages that we paid to them," said Mr Kotsi.

In February this year, COSATU General Secretary, Zwelinzima Vavi, said in his address to the Nedlac Labour School that: “Casualisation atomises workers, deprives them of benefits and job security, intensifies competition among them, and drives down wages. That is why employers are still so keen on it. But, rather than admit that they simply want to exploit workers more ruthlessly, they try to convince us that in the long run, cutting wages, making it easier to retrench them and relaxing “inflexible” labour laws is the key to creating more jobs."

In June 2012, a joint report by the International Labour Office (ILO), Organisation for Economic Co-operation and Development (OECD), International Monetary Fund (IMF) and the World Bank titled ‘Boosting jobs and living standards in G20 countries’, reported that in South Africa unemployment exceeds 20 percent of the labour force and long-term unemployment (period of 12 months or more) has risen sharply.

COSATU’s call for labour brokers to be banned has been labelled extremist. Namibia banned labour brokers and all it did was push labour brokers underground and increase unemployment.

Casual employment should not be completely removed from our labour market, but those workers who are employed and exploited for a long period, under the pretext of “casual worker” should be not be ignored. In a presentation to the parliamentary committee on labour, the Centre for Rural Legal Studies (CRLS) said that controlling legislation had been found to be the answer. The increase and change in labour patterns involving part-time workers and contract employees was a worldwide phenomenon.

The main drivers of income inequality at a household level, are to be found in the labour market. According to the OECD, a gap exists between permanent workers with strong job protection and those employed as casual staff and the completely unprotected informal sector. In this regard, G20 Leaders endorsed the commitment of Labour and Employment Ministers to step up efforts to promote decent work, and to encourage the effective application of Fundamental Principles and Rights at Work in conjunction with the ILO.

However, the gap in earnings and working conditions has widened. The employment arrangements for casual workers are unstable and they tend to move in and out of the workforce, with long periods of being out the workforce completely.

Recruitment agents within the public sector are constantly reminded about developing “a skilled workforce” and “increased productivity” in our public service, but often forget that casual workers usually have no vested interest in the job or organisation that makes use of their services and employers have little interest in the casual employee.  A culture of training and development cannot be formed without stable employment arrangements.

OECD research shows that areas of low-productivity and poor service delivery actively pursue the recruitment of low-skilled workers to avoid benefit contributions and labour regulations.

Emerging market countries, often neglect the long-term view and it seems South Africa is no different. Job creation and recruitment should be should be high on the policy agenda but is not when it comes to the casual worker/informal sector argues the OECD. Hiring permanent employees and contributing to their training and development would be more beneficial over a longer term. Building a skilled workforce would raise the share of jobs with rights to benefits, protection and provide a secure base for tax revenues.

No picture provided.  Alison Eloff is a journalist for HR Pulse.