Government slaps itself with labour broker whip
October 22, 2009
Hoist with its own petard. That is the government. At least nine departments have used the services of labour brokers. This revelation from the DA comes after harsh comments from Minister of Labour Membathisi Mdladlana, who earlier this year likened labour brokering to human trafficking.
This comment was in response to research conducted by the department that indicated that employees engaged through brokers are, among others, paid less than those who are directly hired by employers though they perform the same work.
If this is the case, although the industry refuted the research, then it means government departments are guilty of paying people poorly. According to the DA the Departments of Water and Environmental Affairs, Agriculture, Public Service and Administration, Social Development, Health, Transport, Communication and Finance all used labour brokers to complement their permanent staff.
In total these departments spent, in the 2008/09 financial year, R142.5 million on temporarily employing 721 people, according to preliminary figures provided by the various departments.
Over and above this, parastatals such as SAA, and no doubt others, have also used labour brokers to hire temporary staff to help with the work load in peak seasons.
So the government seems to have placed itself in rather a predicament. It has indicated support for Cosatu's call for a ban on labour brokers, but if it follows this route it may well feel the negative effects as departments and parastatals will have their hands tied when it comes to employing additional staff to work on temporary projects, or help out during busy periods.
When all has been said - and a lot has been said from both sides of the debate - a deal will be done, hands will be shaken and the industry will continue operating. But it will be a lot more cautious about cutting any corners. So all this hot air may well prove to be a good thing.
Some good news too
Not all the news about the economic downturn in the country is that bad, it emerged at a session of the National Assembly trade and industry portfolio committee with the national credit regulator Gabriel Davel and his staff yesterday.
Davel said regulator statistics indicated that aggregate consumer credit disbursements were down by about half between the last quarter of 2007 and the second quarter of this year. In the second quarter of this year R50.9 billion in credit was granted, down from R102bn in the fourth quarter of 2007. Consumers' applications for credit had dropped: "They are cautious... it is not just the banks."
The regulator's assessment of the impact of the financial crisis is that the highest risk lies with the middle and, to some extent, the higher income groups.
"This relates fundamentally to categories of consumers who are both at high risk of job loss or income reduction and subject to high debt levels."
The highest risk lies with the group earning between R6 000 and R17 000 a month but risk is present for those above and below these levels. The most significant declines in credit are for home loans and motor vehicles.
Applications for credit fell from nearly 700 000 in the last quarter of 2007 to under 600 000 in the second quarter this year.
The regulator is involved in a national campaign to provide consumers with information and advice, assisting consumers - through debt counsellors - who have experienced job loss or a reduction in income, and ensuring that primary residential properties are not lost.
ANC MP Ben Turok is concerned about "conspicuous consumption" by the middle and upper class. Parliament should speak out about the culture of South Africa moving towards "reckless borrowing", he says.
One hesitates to go there, but it seems Turok means that conspicuous credit extension should be banned.
Cartel activity concern
The admission by construction and engineering group Murray & Roberts (M&R) yesterday that it had received conditional leniency from the Competition Commission once again raises concern about the extent of cartel activity in the economy.
M&R said the conditional leniency had been granted in respect of concrete products, mining roof bolts, mesh reinforcing and reinforcing steel.
The commission has initiated investigations in the construction sector, which could raise the cost of infrastructure projects. These include steel products, wire, bricks, building aggregates and cement.
The importance of the investigations should be evident because of the government's commitment to infrastructure development and the drop in government funds to finance these projects.
The commission has already fined listed construction group Aveng R46 million for its involvement in a concrete pipes cartel. Criticism has been levelled at the commission over its corporate leniency policy, which provides immunity from prosecution for the first firm to provide the watchdog with information. It has countered this criticism by pointing out that its success in uncovering cartels has been boosted by the use of the policy.
The commission's stance has been that it would have been extremely difficult to uncover and act against cartel activity without the assistance of whistle-blowers, who are most frequently companies, or individuals from companies, that have been actively involved in this illegal activity.
The drive has been to focus on eradicating as much cartel activity as possible from the economy to increase competition, ultimately reducing prices and improving the efficiency of the economy. Many sectors of the economy have already been in the Competition Commission investigators' spotlight. But what has been uncovered to date tends to suggest the local economy is ridden with anti-competitive practices and cartel activity.
Edited by Peter DeIonno. With contributions from Samantha Enslin-Payne, Donwald Pressly and Roy Cokayne.
|
|
