Employment Agencies: Are South Africa’s Recent Legislative Amendments Compliant with the International Labour Organisation’s Standards?

• Jurisdiction: South Africa
• Pages: 285-310
• Author: Candice Aletter
• Citation: (2016) 28 SA Merc JL 285
• Date: 20 August 2019
• Published date: 20 August 2019

EMPLOYMENT AGENCIES: ARE SOUTH

AFRICA’S RECENT LEGISLATIVE

AMENDMENTS COMPLIANT WITH THE

INTERNATIONAL LABOUR

ORGANISATION’S STANDARDS?*

CANDICE ALETTER**

Doctoral Candidate, University of Pretoria

STEFAN VAN ECK

†

Professor, Department of Mercantile Law, University of Pretoria

I INTRODUCTION

At the beginning of 2015 the Labour Relations Act (LRA)

1

was amended

to provide signif‌icantly improved protection to workers engaged in

‘non-standard work’. This term covers workers engaged in agency work,

f‌ixed-term contracts and part-time employment.

2

The focus of this

contribution is on ‘employment agencies’ which constitute a signif‌icant

proportion of the South African labour market.

3

There are differing

views on the exact number of agency workers and the effects of the recent

*This article is based on research conducted for purposes of doctoral studies at the

University of Pretoria and a joint paper presented at the 21st World Congress of the

International Society for Labour and Social Security Law in Cape Town on 18 September

2015. The authors express appreciation to the National Research Foundation for their

f‌inancial contribution towards the completion of this research.

**LLB (UJ) LLM (Wits).

†

BLC, LLB, LLD (UP). Professor in Labour Law, Department of Mercantile Law, Faculty of

Law, University of Pretoria.

1

Act 66 of 1995, as amended by the Labour Relations Amendment Act 6 of 2014 of 11

November 1996.

2

Chapter IX ‘Regulation of Non-Standard Employment and General Provisions’ of the

LRA, as amended.

3

As conf‌irmed by Benjamin, ‘Law and practice of private employment agency work in

South Africa’, Sector Working Paper No. 292, International Labour Off‌ice, Geneva (2013) 1,

the ‘term ‘‘labour broker’’ is used in South Africa to refer to what are more commonly referred

to as labour hire f‌irms or temporary employment agencies in other countries. Although the

statutory terminology was changed to ‘‘temporary employment services’’ in 1995, the term

‘‘labour broker’’ has stuck and is often used with a pejorative meaning in public discourse.

The broader category of labour market intermediaries are, in keeping with international

practice, referred to as private employment agencies.’ The term ‘employment agency’ is used

in this contribution and we do not cover public employment agencies, which fall beyond the

scope of this article. The term ‘client’ is used for the user company and the term ‘agency

worker’ refers to the employee of the employment agency.

285

(2016) 28 SA Merc LJ 285

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legislative amendments in South Africa. So for example, one of the

country’s largest providers of agency workers, Adcorp, states that:

‘Labour broking is the fastest-growing sector of the South African labour

market. According to the Adcorp Employment Index for May labour

brokers constitute a R44 billion industry employing around 19 500

internal staff and just over one million agency workers or temps in South

Africa. Agency work now constitutes 7.5% of total employment in South

Africa, and it is likely to grow further.’

4

However, this statement is contradicted by researchers who contend

that extensive job losses have occurred in the wake of the regulatory

changes and that agency work is rapidly declining.

5

Bhorat, Magadla and

Steenkamp suggest that 50% of agency workers lost their jobs subse-

quent to the amendments while only 20% secured indef‌inite positions.

6

Despite this, commentators such as Benjamin and Budlender have

responded by stating that the abovementioned research is inaccurate in

so far as it is founded on a narrow foundation and does not provide a

basis for comparison with other periods.

7

Despite these differing views, one aspect remains uncontested:

employment agencies have formed and currently still form a large

proportion of the labour market and the industry has grown substan-

tially since its f‌irst inception.

8

Therefore, any changes to the regulation

of these agencies are important and could have a signif‌icant effect on the

working lives of agency workers and the way in which employment

agencies conduct their business in South Africa.

4

http://www.adcorp.co.za/Pages/

Temporaryworkgrowingdespiteoveralldownwardtrend.aspx, accessed on 23 June 2015.

5

So, for example, ‘Free Market Foundation economist Loane Sharp said ... the amended

Act will have a ‘‘disastrous impact on employment’’.’ Mr Sharp said a survey of close to 500

employment agencies, representing 90% of job placements in South Africa, revealed that

changes to the Act will cost the economy jobs. To put the expected job losses into perspective,

Mr Sharp explained that ‘before 30 April this year, 254,000 jobs are expected to be lost and of

this f‌igure, 192,000 have already been lost’. See http://www.staff‌ingindustry.com/row/

Research-Publications/Daily-News/South-Africa-Jobs-will-be-lost-and-unemployment-

will-rise-following-labour-act-amendments–33618, accessed on 23 June 2015.

6

Referred to by Paton, ‘Labour broking changes ‘‘bled jobs’’’ Business Day 7 September

2015 at 1.

7

Benjamin made this remark during a panel discussion at the 21st International Labour

Law and Social Security World Congress hosted in Cape Town between 15 and 18 September

2015. See also the reference to Budlender’s research in Paton, ‘Experts poke holes in claim of

labour-broking cataclysm’ Business Day 18 September 2015. For a related discussion, see

http://www.bdlive.co.za/national/labour/2015/09/18/news-analysis-experts-poke-holes-in-

claim-of-labour-broking-cataclysm, accessed on 23 September 2015.

8

See information contained in link provided at n4.

(2016) 28 SA MERC LJ286

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