The Fight over E-Tolling and Labour Brokers

On the 7th of March 2012, the trade union body, COSATU, led a national strike in thirty-two cities across South Africa. The strike was in protest against two issues; the labour brokering employment system and the implementation of the open road e-tolling system in the Gauteng province – which is due to come into affect on the 30th of April 2012.

COSATU has combined the protest against labour brokering and e-tolls viewing it as part of “the war to salvage the working class from an assault on its living standards.” Though COSATU has a wide range of support from various segments of South African society for e-tolling, they do not share the same support for their position on labour brokering. Their positions are summarised below.

The Problem with the e-tolling System

COSATU’s view is that the tolls will add to the burden of the poor, who will be forced to pay for travelling on the tolled roads. They note that it adds to the cost of transporting goods and will have an immediate effect on food inflation. Many low-income earners use private cars to travel to work, precisely because the public transport system is unreliable. Public transport is also unavailable outside of peak commuter hours, including weekends, when Gauteng residents travel distances across the province to visit friends and attend funerals. Therefore the tolling system would effectively permanently exclude the poor from access to the best roads.

In the view of COSATU, Public transport remains inadequate both in quality and in the numbers of people that it serves. A third of trade union members use private cars to get to and from work. This, they believe is not a free choice, but rather an action made necessary due to the public transport system being expensive, unsafe, and unreliable.

 The toll roads are therefore a reflection of the divisions that still exist in access to basic services. Good health and education services currently belong to the wealthier sections of society, who can afford to pay.

Other stakeholders echo COSATU’s view. The leader of the DA (and Western Cape Premier) stated, that while they believe in the user-pay principle, in this particular case the users have already paid. The public pays a very high fuel levy, which was supposed to be used for the upgrading of the road network system and for transport matters in general. The public already pays licence fees, which in Gauteng amount to more than R2-billion a year. The DA therefore believes that there should be cross subsidies, which are also catered for in the fuel levy and licence payments.

The DA Member of the Provincial Legislature Neil Campbell also highlighted that the cost of every item transported along the toll roads would increase because distributers would resort to raising their prices for transporting goods. “This will impact on every resident in Gauteng, as the price of every item transported, including food, will rise.”

Government’s Current Position on the Labour Brokering Issue

Despite the thousands of protesters on the streets and the threat of more action, including civil disobedience should e-tolling still go ahead, the position of Government on e-tolling is that it will still go ahead.  Government notes that concessions have been made and are urging motorists to buy their e-tags from SANRAL before the 30th of April 2012.

“The statement from Government was that extensive consultation with stakeholders in business and civil society had taken place already. Following these consultations, government considered various ways to secure progress on the issue of e-tolling. In response to public concerns, government went back to the drawing board and made available R6 billion to support the e-tolling project and minimise the impact on the consumers. As a result of this toll fees were significantly reduced. Furthermore, in sensitivity to the needs of poor citizens, passengers in taxis and buses will not be affected by the e-tolling project. These transport modes will pass through the gantries free of charge. Government will continue to hold discussions with stakeholders to explain in even greater details its position on the matter.”

The Problem with Labour Brokers – COSATU’s view

COSATU argues that no less than 30 percent of the work force has been casualised. The face of casualisation is predominantly the black working class youth that is employed by labour brokers. The industry is an exploitative businesses designed to circumvent labour laws and regulations. Labour brokers drive down workers’ wages and conditions of employment. They do not create any jobs but instead, sponge off the labour of others and replace secure jobs with temporary and casual forms of employment.

The National Association of Bargaining Councils suggests that there are 979 539 labour broker workers in the country, significantly larger than suggested thus far. While workers under labour brokers take home a pittance, their bosses reward themselves with millions.

 COSATU notes the following cases in point:

  • Whitey Basson, the chief executive of Shoprite, earned the highest-ever monthly earnings recorded in a single year in 2010 – R627.53 million in salary, perks and share options. This contrasts sharply with the situation of many Shoprite workers. Shoprite and Checkers have a staff complement of about 73 000, of which 35 percent are full-time workers, 5 percent are 40-hour full-timers or flexi-timers, and 60 percent are variable time employees or casuals. Expansion or growth does not translate into employment growth but increases the intake of labour brokers.

  • At Pick n Pay there are 36 538 workers, 16 000 are full-time with almost 20 000 in categories of variable time employees or casuals supplied by the labour brokers.

  • At Woolworths it is estimated that there is a ratio of 70 percent casuals to only 30 percent permanent workers.

  • In smaller retail companies, the situation is more dire.

 COSATU demands a total ban of the labour brokers, a system they have described as human trafficking and modern-day slavery.

Naledi Research Paper – Towards a COSATU Living Wage

Opposition to the Banning of Labour Brokers

The Democratic Alliance (DA) together with the Congress of the People (COPE) released a joint position in which they argue that the banning of labour brokers would negatively impact on the country’s economy.

  1. Immediate job-losses for temporary workers who will not have the resources to locate temporary work opportunities in many dispersed locations.
  2. Vacancies in some industries going unfilled due to an inability to locate staff with the correct skill-set.
  3. A rise in costs due to employers needing to employ larger in-house Human Resources and recruitment staff to fill the gaps left by the exit of temporary employment services.
  4. A switch to the use of small sub-contractors instead of temporary workers (thereby defeating the objective).
  5. Fewer people being employed in the long term.
  6. The industry continuing to operate, illegally, with an increase in exploitation.

Their counter proposal is based on self regulation:

  1. Mandatory registration for all practitioners.
  2. The establishment of an Institute or self- regulatory Board of Labour Brokers that will enforce a set of standards for the industry.
  3. A code of conduct, enforced by the industry board itself. (Legitimate players in the industry have an incentive to stamp out those labour brokers who exploit workers – they place the industry at risk and take away business).
  4. Annual consideration of profit margins attained.
  5. Initiatives to promote job creation.
  6. A redesigned, resourced and better managed labour inspectorate with a computerized database of registered brokers, transport to all remote corners of the Republic, powers to search premises and issue notices, and the support of the SAPS to gain access under certain conditions. This would include access to the records of the Institute/Board to be established.

Reforming Labour Bro King

Government’s current position on the labour brokering issue

Government has not bowed to its Tripartite Alliance partner’s demands. Instead government has called for NEDLAC to expedite its analysis into the problem and to put forward a proposal.

‘Following the discussions at NEDLAC between Government, organised business and organised labour, we have come to an agreement on a wide range of issues which I now have to brief the Executive about. There are areas of disagreement which reflect opposing perspectives and interests of the parties and this is the essence of negotiation,’’ – Labour Minister Mildred Oliphant