Amendments to labour legislation DO NOT restrict employment of workers through a broker to 3 months.
So much has been written in the press and elsewhere to the effect that employees of labour brokers will become fulltime employees of the clients of the labour broker after 3 months. It seems that even Government spokespersons believe this. However, this is not so. If it were so then, yes, labour brokers would all close down, because the industry relies on long-term placements with clients.
We would see labour brokers closing down right now, all over the country.
What does apply after 3 months is joint and several liability and that an employee can choose to cite the broker or the client or both as the respondent party in legal proceedings. The Bill DOES NOT say, after 3 months there will be a transfer of employment from one employer (the broker) to another (the client).
As for the joint and several liability and the citing of respondents in legal proceedings (e.g. CCMA disputes) the broker and the client are free to enter their own agreements regarding liability and costs, just in case an adverse award is handed down by the CCMA for, say, two or three months wages for unfair dismissal. Such costs are, anyway, already being absorbed by labour brokers under the pre-amended law. It is a cost which is built in to the management fee, just as many transport companies build the cost of traffic fines into their quotations to clients.
Labour outsourcing is an international and growing phenomenon – it is a reality that cannot be legislated out of existence.
By the way, there is a fine line between ”labour outsourcing” and “service outsourcing”. The security guards at the front gate are outsourced labour. The cleaning staff at office blocks or at shopping centres or hospitals are outsourced labour. If an employer wants to “outsource” his production functions inside his factory he can enter into an outsourcing arrangement in this regard.