Public hearings on proposed amendments to the law on labour brokers continued in Port Elizabeth on Wednesday, the department said.
"Labour and business, as in Cape Town on the first day of presentations, appeared as far apart as ever," it said in a statement.
"While labour is calling for an outright ban, business is urging government to tread more carefully and rather regulate."
The department hoped everyone would "find each other" at the National Economic Development and Labour Council when the body met on February 20.
The proposals include one that seeks to make employers contribute equal or similar benefits for fixed term contract and for permanent workers.
Another change would allow sectoral determinations that may prohibit or regulate the placement of employees by temporary employment services, subcontracting and contract work.
The department says it is also considering changes to the circumstances in which children under the age of 15 are allowed to work, with school being prioritised.
Trade union Solidarity said in a statement on Wednesday that "irresponsible" changes to legislation could see at least one million jobs lost.
Johan Kruger, head of the Solidarity Research Institute, warned that the labour market would come under severe pressure if labour brokers were declared redundant, if restrictions were to be imposed on strikes and if the director-general of labour's powers were to be expanded.
"Although the current proposals do not impose a direct and complete ban on labour brokers, they essentially declare the function of labour brokers redundant," he said in a statement.
He believed the likely result of certain clauses, like determining who the employer of labour broker employees are, would be that fewer of those employees would be able to be contracted.
The amendments could also jeopardise the jobs of people who already worked in this system.
"The government's plans to create [five] million new job opportunities will definitely not be accomplished by means of these amendments to legislation," he said.
The next round of hearings is in Bloemfontein on January 24.
Under discussion are the Basic Conditions of Employment Act, the Employment Equity Act and the Labour Relations Act and the Employment Services Bill.
The bills were published on December 17 last year with the closing date for public comments set for February 17 2011.
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