Home FleetWatch 2011 New LRA will hit trucking industry hard

New LRA will hit trucking industry hard


For companies who believe the proposed amendments to the Labour Relations Act and the Employment Services Bill are something for labour brokers to fight about, they need to think again. Passed in their present form, there will be enormous impacts on how business is conducted in South Africa with the transport industry being hard hit by the changes writes FleetWatch special correspondent Stephanie Platt.

For a start, labour brokers and temporary workers will vanish. Seniour labour law consultant with SA Labourguide, Jan du Toit, explains what it will mean to the industry: “Section 198 of the Labour Relations Act will be repealed meaning that Temporary Employment Service providers are no longer recognized in the Act.’

In addition to the above, it is proposed that a new section be inserted in the Act stating that “an employee must be employed permanently, unless the employer can establish a justification for employment on a fixed term.’

Employing staff temporarily instead of using a Labour Broker will therefore also not be an option. Those employers that will be able to justify the use of temporary staff as per section 200B of the proposed amendments, will have to be extremely careful since section 186 (1) (b) that deals with the meaning of dismissal will also be amended.

The transport industry relies on labour brokers mainly for the provision of drivers, van assistants and distribution staff. This means a need for both skilled and unskilled labour.

This attacks the base and heart of management. Business will be dictated to as to who they may employ. Angela Dick, CEO, Transman
This attacks the base and heart of management. Business will be dictated to as to who they may employ. Angela Dick, CEO, Transman

Angela Dick, CEO of Transman, cites as an example, the particularly scarce resource called a Code EC (14) driver with Hazchem certification, PrDP and valid passport.

“Under normal circumstances, a transport company needing such a person – be it for one day, three months or permanently – could take up to six weeks to source. Transman are probably able to assist a company within an hour,’ she says.

Public employment service
A further piece of proposed legislation, the Employment Services Bill, hasn’t received as much attention. However, it could possibly have an even greater impact on the industry.

If tabled, a private company will no longer be able to employ anyone without first considering job seekers listed on a government database of unemployed South Africans. Failure to do so could result in heavy fines for companies.

Government intends to establish a public employment service. The task of this department will be to create a database of all unemployed people in the country. The employment service will then link job seekers to companies that have vacancies. The bill also stipulates that employers will have to register all their vacancies with the service in 14 days.

Companies will then be provided with the names of possible candidates to fill those posts. Considering the reality that most government departments are hopelessly backlogged with their normal business, being at the mercy of a bureaucrat to find your specialised transport staff doesn’t bear thinking about.

According to the proposed bill, any company failing to appoint candidates who meet the requirements from the database, will need to provide written reasons for their actions.

Preposterous situation
To highlight how preposterous this situation is, take this example: An event company approaches a truck hire company called Rapid Rentals. They need 20 eight ton panelvans to transport gear, lighting and stage equipment to various venues around South Africa over a period of three weeks. If the truck rental company does not have the capacity to supply 20 code EC drivers during this period, they will have to employ them permanently.

In addition to finding these twenty “competent’ drivers, the “vacancy’ will have to be listed with the department and a choice will have to be made from the supplied list. Pity if this all has to happen in a hurry, which is the often how truck rental works.

This is what COSATU is calling for – and President Jacob Zuma confirmed changes in his State of the Nation address on the 10th of February when he said: “Parallel to the job creation incentives, we will also undertake policy reforms related to improving the lives of our workers. Government, with its social partners, is reviewing legislation on labour brokers and the policy framework for the provision of public employment services. This will enable government to maintain a database of job seekers and job opportunities’

What has angered COSATU is the reality that there are employers who use the services of labour brokers as a means to avoid labour issues. Either they don’t have the capacity to manage it, or they have been exposed in the past to strike action, being called to the CCMA, being faced with retrenchment issues and so on.

For various reasons, there are companies who don’t want to monitor leave, pay sick leave or carry the payroll. Possibly nervous of compliance with labour laws this, on the surface, is understandable. Unfortunately, often these operators don’t want to carry these costs either and shop around for the cheapest rates.

What labour brokers charge is made up of the employee wage plus provision for benefits such as leave pay, UIF, SDL contributions plus a reasonable admin fee. It stands to reason that the lower the rate charged, the lower the employee is paid in terms of wages and benefits. This has created the monster resulting in the present impasse.

The cellphone operator

Enter the “labour broker’ operating with little more than a cellphone. Barely paying minimum wages, they conclude contracts to supply labour at lower rates and it is the hapless worker who bears the brunt.

 They exploit us. No benefits, no leave pay, no sick-leave.... Leslie Williams, Temporary Worker
They exploit us. No benefits, no leave pay, no sick-leave…. Leslie Williams, Temporary Worker

“They exploit us’, says Leslie Williams, who will be glad when the new legislation comes into play. Williams works for a labour broker operating from home in one of the Cape Flats suburbs. He has no benefits, no leave pay, no sick-leave and believes that these changes will give him an opportunity to go out and get a decent job.

“The brokers have all the work and nobody advertises for drivers anymore except them. I would much rather go out and negotiate my own work. This way I will earn more because the company can pay me what they are paying the broker.’

Recently he was given an allowance of R100 for going on a two day country trip. This was to cover all his meals and sleep-out allowances for the full period. He slept in a truck without a sleeper cab.

According to Williams, all the guys he works with feel that they are in the same trap. It’s the only way they can get work but there are few rewards, no future prospects and little hope of secure employment. Small wonder the unions are able to garner the support they have. Yet there are many labour brokers who operate ethical businesses that reflect their willingness to offer “decent work’ for decent pay. They meet all of their obligations and pay their dues.

Within the transport sector there is the Road Freight Association that issued their codes of practise that, in theory, will protect workers rights. Angela Dick started Transman in 1983 and has been at the forefront of establishing measures that protect the rights of temporary workers and afford them the benefits enjoyed by their permanently employed colleagues. Through the RFA Bargaining Council Agreement, all of their transport workers are covered by UIF, Provident fund, leave pay etc. Dick is actively involved in lobbying and submissions regarding the proposed legislation, as Vice President CAPES, Chairman: Trade Policy Committee BUSA, Trustee Board of Trustees BUSA, Chairman TESP Committee APSO and Member Millennium Labour Council.

Completely ineffective

“The tragedy of the whole situation’, she says “can be placed squarely at the door of the Department of Labour. They have been completely ineffective in inspecting non-compliant labour brokers. They take no action unless
a complaint comes in from a worker. This seldom happens, since these workers are marginalized in the first place’.

The Road Freight and Logistics Industry prevails as a leader in terms of the regulation of the labour broking practice in that it was the first to have introduced a limit to the amount of people any company in the industry may source from labour brokers.

The provisions of the Main Agreement further stipulate that individuals supplied by labour brokers – or any other temporary or part-time employee for that matter – may not earn less than what a permanent employee, who performs the same duties, earns.

According to Magretia Brown- Engelbrecht, Labour Relations Manager at the RFA: “A ban of the labour broker practice would not only affect the flexibility of this industry whose business is dictated to by seasonal and operational fluctuations, but it will also, most definitely, cause considerable job-losses. Companies will be unable to afford to appoint all their temporary staff permanently and carry them during times where operational demand decreases.’

How many freight companies comply with the RFA agreement is debatable since although there may be sanctions against members who don’t adhere to the provisions, there are many transport operators who operate quite successfully outside of the RFA.

We have used temp staff for ten years. Demands fluctuate daily... necessitating extra staff! Marius van Niekerk, Branch Manager, Kargo
We have used temp staff for ten years. Demands fluctuate daily… necessitating extra staff! Marius van Niekerk, Branch Manager, Kargo

At Kargo, a national freight company, Cape Town branch manager Marcus van Niekerk says they use temporary workers on a daily basis and have been doing so for ten years.

“Demand fluctuates daily. For example, we deliver to chain stores one day a week necessitating extra staff. We also have seasonal fluctuations. We get trained staff who work for us as needed and the other days the labour broker places them elsewhere’.

Since Kargo is a member of the RFA, they only use brokers who are compliant. Van Niekerk believes that these amendments will force him into employing far fewer people than he uses right now. He does not look forward to the prospect of employing fewer people and working them harder to get the work completed. He regularly checks that his temporary workers are happy and he prefers to use the same drivers for as long as possible.

“It makes sense not to chop and change, purely from the driver abuse angle. A driver is allocated a vehicle and he will stay on that one as long as possible. If one of our permanent drivers resigns, we always take one of the temp drivers and offer him a permanent position.’

Frightening idea
As far as the government running a national database of vacancies and filling them with qualified work seekers goes, the idea is frightening.

Van Niekerk says that to consider this is “pathetic as they want to tell me how to run my business!’ He likens it to buying a DSTV and having government tell him which channels he may watch. He cannot see it running efficiently. However, he will gladly supply the DOL with full details of his entire staff compliment if that’s what they want to monitor.

“This attacks the base and heart of management,’ says Transman’s Dick. “Business will be dictated to as to who they may employ. And this is apart from the question as to how the Department of Labour, with their 170 branches, intends to handle a job presently serviced by 4 000 registered labour brokers and recruitment companies.’

This sounds as far fetched as government trying to legislate the minibus taxi industry out of South African society.

Labour (3)During 2010, several important pieces of research appeared regarding the South African labour broking industry. Among these was the estimate that there are 979 539 labour broker workers in SA. In addition, 85% of labour brokers are individual owned and 98% pay Skills Development Levies.

As van Niekerk says: “Anyone who uses a labour broker that can charge the same as what their own staff costs must know that something is wrong.’

As it stands, the legislation proposes throwing the baby out with the bathwater. Speaking to a number of labour attorneys, there is general consensus that it cannot go ahead in its present form. Public hearings are underway and the RFA, the Association of Personal Service Organisations and CAPES are making presentations to NEDLAC. FleetWatch will keep a close eye on proceedings.

Editor’s Note: At the time of writing, the deadline for public comments on the Labour Relations Act (LRA), Basic Conditions of Employment Act (BCEA), Employment Equity Act (EEA) as well as the Employment Services Bill had passed. A day after the deadline (February 17th), a meeting of Nedlac social partners was held to chart the way forward for the four Bills under review.

The task team comprises members from Nedlac constituents from business, labour, government and the community. The parties were to meet until they reached consensus. “From Nedlac, the Bills may have to go back to Cabinet if there are any major changes. The intention, however, is to table the Bills in Parliament which will then decide on its own process,” said Les Kettledas, deputy director-general for labour policy at the Department of Labour in a press statement at the time.

Related Images:


Please enter your comment!
Please enter your name here