Labour Amendment Bill: Labour Brokerage Arrangements

Introduction

The Labour Act in its current form does not regulate labour broking. The legislature must have realised that labour broking is a reality in the economy and hence the need for its regulation. Labour broking involves three parties, there is the labour broker, who provides labour to a client and the labour. The labour then works for the client, but all conditions of services are managed by the labour broker. The labour has a contract of employment with the broker and not with the client. In the event of an employment dispute, it is the broker that is liable and not the client. The result is that all risk associated with the employment of an individual is borne by the broker and not the client. This triangular relationship often leads to disputes and without regulation employees and the client can become vulnerable.

Conditions of Service

The conditions of service for the labour provided by a labour broker are governed as follows:

“(2) Employees employed by virtue of a labour brokerage arrangement shall have conditions no less favourable than—

(a) other employees in that grade or occupation employed by the same employer; or

(b) the collective bargaining agreement for the undertaking or industry, where the third party only employs its employees in terms of a labour brokerage agreement.”

Here, the legislature is pushing for equality within the workplace. Labour supplied by a Broker should have the same conditions as other employees under the same employer. The conditions of service must also comply with the CBA of the industry. These are the only limitations to labour broking.

In South Africa, labour broking is highly regulated. Labour is only supplied for the client for 3 months and in substitution of an employee who is not around for a fleeting period of time.[1] If the labour is not provided under these circumstances, they become permanently employed for the client. We do not suggest that this is what is supposed to be implemented in Zimbabwe but leaving this arrangement open-ended like is being proposed can have profound consequences.

Joint and Several Liability

The legislature seeks to deal with damages emanating from a labour brokerage arrangement as follows:

“Unless the labour brokerage arrangement specifies unambiguously which of the parties to the arrangement is responsible for the payments or damages in question, the labour broker and the third party are jointly and severally liable for any payments”

The provision is clear-cut and serves to protect the employee in the event of damages arising from a contract of employment. The problem may arise when the broker does not have any assets as is usually the case as some of the brokers may just be using briefcase companies. What’s the employee’s recourse? This is where the legislature needs to protect employees by ensuring that labour brokers meet a certain criterion to allow employees to recover damages that may arise from an employment contract.

Conclusion

The amendment is proposing the regulation of labour broking in Zimbabwe. Unlike the South African arrangement, ours is an open-ended arrangement with not much restriction as to the period a labour broker can supply the labour. The bill posits that the conditions of service for the labour provided by a labour broker should be the same as other employees of the client as well as other conditions in the industry. The client and the broker are jointly and severally liable for the action arising from the labour supplied to the client, in the absence of an agreement clearly stating who is liable for such action.


[1]              See McGregor M (2014), Labour Law Rules, Siber Ink CC, South Africa.

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