On 22 February the Constitutional Court will hear a case lodged by Assign Services that has massive implications for workers in South Africa. The question before the court is this: do labour brokered workers who claim their rights to permanent employment and equal treatment under section 198 of the Labour Relations Act (LRA) become the permanent employees of the client company, or of both the client company and the labour broker?
Bosses and workers are passionately divided on the issue. The bosses want affected workers to have dual employers, while workers are demanding to become the employees of client companies only. For those not directly involved in this conflict, the issues can be obscured by legal language and the peculiar conditions faced by the country’s estimated 2 million plus labour-brokered workers.
For workers the stakes are incredibly high. They are fighting firstly for labour-brokered, outsourced, contract and other precarious workers to be put into a position where they can claim the rights given to them by current legislation. In other words, the majority of workers will continue to find it near impossible to access their existing rights under a dual employer dispensation. More than this, the workers are fighting for a renewed labour movement able to fight for more than what is offered by the current system of neoliberal capitalism.
Some crucial rights that workers are supposed to have under current laws are the right to bargain collectively, equal pay for equal work, fair employment practices and freedom of association. The neoliberal strategy of externalisation of labour has made these rights inaccessible for labour brokered, outsourced and casual workers. Workers cannot bargain meaningfully with labour brokers, outsourced companies and employment agencies, because the wages these employers are able to pay depend on their client companies. Workers cannot bargain with client companies, because they are not their employees. The right to collective bargaining is effectively taken away.
Equal pay for equal work is similarly undermined. In the experience of the Casual Workers Advice Office, labour-brokered workers get paid about a third of the wages of permanent workers doing similar work. Data published by the Labour Research Service suggest that more than half of labour-brokered workers were earning less than R2700 per month in 2013, while the minimum wage for permanent workers in for example the pulp and paper sector was R6318. The bosses use outsourcing, labour-broking and other methods of externalisation to cut wages and undermine equal pay for equal work.
The situation is the same when it comes to the right to fair labour practices. Labour-brokered workers often get conflicting instructions from managers in the client companies and the labour brokers. If they disobey either, which they have to, they run the risk of being disciplined or dismissed. In cases where they get dismissed by client companies they have no recourse to fight unfair dismissals, as their official employer did not dismiss them and the company that dismissed them is not their official employer. This is not an oversight or an unintended consequence. Labour-broking, outsourcing and externalisation in general are designed to undermine workers’ rights in this way.
It is also no accident that registered trade unions have on average a membership consisting of more than 90% permanent workers. Efforts of labour-brokered workers to organise are frustrated by authoritarian methods such as the use of security guards and biometric access control to block workers from meeting. All of this is facilitated by the fact that workers are working at premises not owned or controlled by their employer. The employers use this as justification to deny the workers their freedom of association. The situation is made worse by the fact that the unions are collaborating with labour-broking and outsourcing by refusing to support the struggles of the workers against the client companies upon whom their wages and working conditions depend. Union membership is therefore close to zero among labour-brokered workers, and these workers have very little freedom of association.
Years of campaigning around these issues by the labour movement convinced the lawmakers to change the LRA in 2015 in ways that promised some relief of these problems. Employers have ignored, resisted and frustrated these changes with all their might. This case by Assign Services is one of these attacks on the new rights of labour-brokered and other precarious workers. If successful, it could nullify these new rights, because the ‘dual employer’ situation would allow the oppressive and exploitative practices associated with labour-broking to continue as described above.
This is also a struggle for the future of the labour movement and the working class. The Labour Research Services data show a constant decline in wages and a steep rise in CEO income. At the same time the trade unions are weakening, splitting and abandoning their role as champions of workers. Labour-broking, outsourcing and externalisation of labour are key reasons for this. These practices have created an effectively rightless underclass in the workplace, which is super-exploited and used to undercut permanent workers. For a new workers’ movement to arise, that is capable of defending existing rights, winning new rights, and opening possibilities for a new, socialist system, the slave-like status of these workers must be done away with.
Labour-brokered workers and their allies will continue to fight their slave-like conditions regardless of the outcome of the Assign Services case. There can be no doubt though that their struggles will be greatly assisted if the Constitutional Court rejects the latest attempt by the bosses to defend super-exploitation.