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Apply careful differentiation in labour broking debate

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Werner Guse, Business Unit Executive: Human Capital Management of listed ICT services company GijimaAst, stresses the need for careful differentiation in the current labour broking debate in South Africa.

Whist there is a strong belief from organised labour that the only way to protect workers’ rights would be the outright banning of all labour broking activities, the position of Government at the negotiation table has in the main focused on extensive regulation of the labour broking industry, with employer joint liability and powers to the Minister to regulate and prohibit the practice in any specific industry.

Many stakeholders in industry do understand the need to bring some form of regulation and protection against exploitation to sectors where the supply and demand characteristics benefit employers.

In some sectors, the temptation may exist to use alternative employment arrangements to circumvent the laws that serve the interests of vulnerable employment categories.

However, like many other counter parts, there is ample evidence of professional practice and self regulation in the labour broking industry, and the economic value of facilitating flexible employment is vastly underestimated in the debate.

Let’s take Information and Communications Technology (ICT) industry to illustrate some of this argument. The ICT industry has always placed a high demand on labour flexibility which is driven through the rapid advancement of technology and the resulting skills shortages in this country. In addition, rapid mobilisation and movement of skills within the sector is common place due to the project implementation nature that new technology adoption invariably takes.

We have grown used to skills migration within the sector due to the high labour demand from the overall rapid and continuous growth that this industry has experienced over a number of decades.

We responded with the rapid re-skilling of existing resources to adjust to these ever-changing technologies, and huge emphasis is placed on education and the training of new entrants.

Regardless, a continuous skills scarcity has prevailed in the sector and persisted even through changing economic cycles. The sector has adjusted to these requirements and flexible labour practices are well accepted by all stakeholders. The industry is indeed characterised by an absence of organised labour conflict as supply and demand has generally favoured labour. High wage levels and desirable employment conditions are typical for most of the sector.

In the ICT sector, labour broking or “contracting” also remain the preferred method of employment for many highly skilled individuals. They prefer the stimulation, diversity and ongoing professional development opportunities associated with this employment model, and generally enjoy the added benefit of lucrative rates.

The rapid advancement of technology coupled with the much needed infrastructure spend will continue to place a severe challenge on the shrinking skilled resource pool in South Africa.

Flexible work practices and mobility of labour remain crucial to meeting the imbalance of skills supply and demand: the simple logic of optimising the available scarce resources applies. We cannot afford for individual employers to hoard scarce IT skills in an inefficient or underutilised fashion.

IT has become pivotal to our country’s national growth and development strategies with its pervasive role to deliver on effective communication, transport, education, crime and justice management services, as well as the participation and exchange in a global community.

The achievement of these imperatives therefore remains dependent on the flexibility of these very scarce resources. In the ICT sector, labour brokers do have an important role to play in the flexible mobilisation and deployment of resources, and I am of the opinion that the outright banning of such mechanisms will have severe consequences.

The minimum standards of employment practice for vulnerable categories should be regulated. However, free market practices should be allowed to continue in those job categories where less regulated practices are not only functioning well, but are in fact geared to solving the skills shortage challenges currently facing our country.

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