TES INDABAThe Legislative Reform of the

Temporary Employment Services Industry

National Agreed Priorities

1. The creation of Decent Work and the eradication of poverty

2. Education3. Health4. Rural Development and land reform5. Crime, Safety and Corruption

Global Market

• Global Competition–Business – Global Economy– Labour - ILO Decent Work Agenda– Sport (Rugby World Cup, Golf & 2010 World Cup)– International Structures – UN, ILO, WTO, IMF,

G20–Organised Labour and Business must co-operate

in order to compete and to create decent work for all

Tell No Lies, Claim No Easy Victories

Always bear in mind that the people are not fighting for ideas, for the things in anyone’s head. They are fighting to win material benefits, to live better and in peace, to see their lives go forward, to guarantee the future of their children. . . Amilcar Cabral

South Africa’s under 5 Years World Golf Qualifier for 2010

International Unemployment

Real gross domestic product at market prices increased by 3,2 per cent quarter-on-quarter, seasonally adjusted and annualised

Addressing the Employment Challenge

• Nobel prize-winning economist Amartya Sen notes: “Unemployment … is also a source of far-reaching debilitating effects on individual freedom, initiative and skills”

• Unemployment remains very high and a fundamental skills mismatch hinders future job and productivity growth

• Young, lower-skilled and male workers have been the most affected

• The country does not produce the skills desired to expand the economy and to compete in the world market

New Growth Path for RSA

• Decent employment is central to human dignity, sustainable economic development, income distribution, curbing dependency, countering crime, reducing poverty and social cohesion

• Greater use of skilled labour bring many benefits, including higher productivity and real wages

• Scenario planning – stronger economic growth and a more labour-absorptive growth path

A Comprehensive Policy Framework - Not Piecemeal

• A shared priority agreement between government, business and organised labour need to be adopted at the highest level

• Improving education, training and skills development• Decent job creation needs to be maximised• National Agreement on Productivity• Training layoff was introduced – but take up was slow• Wage growth needs to be aligned with productivity growth • Fair labour protection needs to be effective enforced • Workers should not be intentionally or unintentionally discriminated

against in their search for employment by practices, regulations and laws

Research Findings• Increasing the average educational level of employees

within a manufacturing plant by one year would increase labour productivity by 8 percent, everything else held constant.

• Increasing employee voice either through unionization or employee participation in decision making raises productivity.

• The use of benchmarking raised labor productivity by 6 percent

• Investments in education and the skills development of workers are a way to ensure higher labour productivity growth without igniting wage inflation

Atypical Forms of Employment

• The increase in non-standard employment is being generated by three inter- related processes

1.Casualisation2.Externalisation3.Informalisation

Casualisation

Casualisation refers to the process whereby standard employment is being displaced by employment that is temporary or part-time (or both).

ExternalisationThe process by which employment regulated by a contract of employment is

being displaced by employment that is regulated by a commercial contract.

This can occur in one of two ways. Firstly (and most obviously) it occurs when someone is engaged as a

contractor rather than an employee, and labour legislation is by definition excluded, either because the individual is self-employed, or because s/he is regarded as a so-called independent contractor.

Secondly (and more importantly) externalisation occurs where workers are employed by an intermediary to work for someone else, whether that person is termed a client or user, and where the terms of employment are in effect determined by that client or user. The result is a so-called triangular employment relationship.

Externalisation

Outsourcing and sub-contracting are a means by which externalisation can be achieved, and a triangular employment relationship is created, but they are not the only means.. Increasingly externalisation is achieved through labour broking, or the utilisation of a temporary employment service. Another common form is through franchising

Informalisation

Informalisation refers to the process by which employment is increasingly unregulated, in part or altogether. This can be as a consequence of casualisation, in that workers (although nominally employed) are in practice not able to enforce their rights in terms of labour regulations. Or it can be as a consequence of externalisation, either because workers are not employees (they are ‘independent contractors’ in law), or because their nominal employer does not in fact control their employment (in the case of the triangular employment relationship).

Solutions

Definition of casual or part-time work: Consideration needs to be given to a definition of casual or part-time work in the BCEA. This would help to set the stage for the various definitions in sectoral determinations and bargaining council agreements, explicitly protect such workers in terms of their conditions of employment, and provide a regulated but flexible alternative to externalization. Provision should also be made to restrict the period of initial temporary employment and roll-overs with a maximum of 9 months total temporary employment;

Solutions

Incentives for employing workers on a full-time and indefinite basis: The compressed working week and averaging of working hours provide employers with temporal flexibility. They should not be allowed to exploit such forms of flexibility as well as the flexibility provided by non-standard employment. Consideration should therefore be given to the provisions for a compressed working week and averaging of working hours in the BCEA excluding all but full-time employees on indefinite contracts;

Solutions

Developing and implementing effective regulations: Such regulations should enable the shift from informality to formal status which can assist in raising productivity, increasing earnings, and extending coverage of existing rights, social protection, as well as social dialogue. It should also provide for preferential treatment in respect of the appointment to permanent positions from temporary employment positions;

Solutions

Unfair labour practice: Consideration could be given to utilising section 186 of the LRA to provide that certain unfair acts or omissions relating to the employment of non-standard workers would constitute an unfair labour practice. It should also address the employment practices to appoint temporary employees into positions that could rightfully be defined as permanent positions;

Decent Work for Decent Life

FEDUSA aligns itself with the four pillars of decent work:

workers rightsemployment social protection, and social dialogue

Employment

National employment strategies aimed at eliminating poverty:

Employment strategies should have as direct objective the eradication of the widespread poverty that plagues the country and the African continent.

Consideration should also be given to introduce a national minimum wage.

German Model (Social Capitalism)

The term German model is most often used in economic to describe according to Professor Wendy Carlin innovative industrial relations employers and trade unions, vocational training, and closer relationships between the financial and industrial sectors to cultivate economic prosperity

German have a much larger role in shaping the industrial sector than those in other Western countries

Rather than simply collecting savings and investments and issuing loans, most German banks have large interests in the commercial sector.

German model-social capitalism

As of 2009 and the recent worldwide economic downturn, some analysts have speculated that the German model of social capitalism is resurgent and is the most responsible economic system that still ensures the survival of the free market. With recent economic schemes and company abuses, such as in the Bernard Madoff scandal, the Enron scandal, and the financial crisis of 2007-2010, the German model of a rigidly structured and regulated economy has become more attractive, as part of the financial crisis could be attributed to a lack of regulation associated with laissez-faire capitalism.

Germany's socially regulated and socially responsible version of capitalism

'not hurt anyone‘

Is a proposal that we should consider to provide answers for our challenges

I Thank You