The Congress of South African Trade Unions is absolutely outraged by the City Press report (27 July 2014) that labour brokers are getting the lion’s share of government tax rebates under the Employment Tax Incentive (ETI) Act.
Not only have these exploiting human traffickers not been banned, as COSATU has been demanding, but they are now being generously subsidized by South African tax-payers.
The first taste of work for thousands of young workers is therefore to be sucked into the worst form of exploitation – rented out to other lsquoclient’ companies, on poverty pay, no benefits and no job security. The Act should now be renamed the Exploitation Tax Incentive Act!
The annual report of the biggest labour broker and recruitment agency, Adcorp – a sworn enemy of the trade union movement – reveals that in January and February, the first two months in which the incentive became available, it had already made R7 million from the scheme, equivalent to R42 million a year and a 14% boost to the group’s operating profit, based on its latest results. And that could be an underestimate, because Adcorp could increase its use of the ETI over the rest of the year.
And that is for Adcorp alone. At least one other labour broker – Workforce Holdings – is mentioned in the article and there could be many more.
Even the client companies which the young people actually work for are being ripped off, as they receive no benefit for the young workers they get from these intermediaries. The tax rebate goes only to the labour brokers.
COSATU has always opposed the ETI, formerly known as the youth wage subsidy, because it was never going to provide any solution to the very real problem of high youth unemployment, but line the pockets of businesses for employing workers who in many cases they would have employed even without the subsidy.
It can be claimed for newly hired workers aged 18-29 earning less than R6 000 a month. But it imposes no conditions for the employers to train those workers, no guarantee that they will be retained after the tax rebate expires and nothing to stop employers retrenching an equal number of older workers.
Now our worst fears have been realised and the biggest winners are proved to be the worst employers of all – labour brokers, which:
1. Trade in human beings as commodities
2. Do not create jobs but merely act as intermediaries to access jobs that already exist, and which in many cases would have existed previously as permanent full-time jobs.
3. Destroy permanent jobs as they lead to insecure contractual relations and downgrading of wages and employment terms.
4. Do not practise the principle of equal pay for work of equal value.
5. Pay workers differently to permanent workers, and do not provide the same benefits.
6. Undermine collective bargaining rights,
7. Allow employers to evade their obligations as stipulated in the LRA. This is a way of outsourcing labour relations to a third party, and making it much more difficult for workers to exercise their rights.
8. Are anti-trade unions because lsquotheir’ workers are constantly being moved around from one workplace to another within short periods, often with no access to union officials or the possibility of stop-order deductions for union subscriptions, they find it very hard to join a union or to remain members.
9. Provide scab labour and serve as strike breakers
10. Contribute to the progressive de-skilling of workers, especially as a result of the short-term and irregular nature of the contracts associated with labour brokering and other forms of atypical labour.
The ANC government has conceded that labour brokers are responsible for ldquocertain abusive practicesrdquo and have brought in new laws to better regulate them, and limit the time that an employers can make use of them to three months, which in COSATU’s view is three months too long. They have however refused to ban them.
COSATU does not believe that increased regulation of the industry will work. The Department of Labour cannot enforce current regulation of employment conditions and safety, let alone adding another area of enforcement.
And now the National Treasury, scandalously, is justifying subsidising them from our pockets to make super profits. ldquoIf a labour intermediary is paying the salary,rdquo it told City Press, ldquothey are eligible to claim the incentive. We believe that even in an environment where intermediaries are present, the incentive will still be effective in stimulating labour demand. Questions on the sharing of the benefits of the ETI are matters relating to the relationship between the intermediary and its clients, as well as the agreement that regulates that relationshiprdquo.
It is bad enough that the government is still allowing these parasites to continue, but to hand out huge subsidies to them is totally unacceptable. COSATU will seek to engage urgently with its alliance partners and the Treasury to address this crisis.
Meanwhile we shall take the matter to the streets, with a picket of Adcorp’s head office, to demand that this human trafficking be banned immediately and that all workers be employed only by the firms that they work for, that they comply with all the labour laws, pay paid decent wages and provide the benefits their employees are entitled to.
Source : Congress of South African Trade Unions