Labour broking in South Africa is a multi-billion rand industry which provides employment to large numbers of employees. As an industry which employs individuals for placement with third parties, the scope for exploitation of employees cannot be disregarded.

A decision handed down in December 2009 by the Namibian Supreme Court, Africa Personnel Services (Proprietary) Limited v Government of the Republic of Namibia and others, may be food for thought for South African legislators, as well as businesses which operate labour broking services.

Of late, significant criticism has been levelled by trade unions and some politicians against the practice of labour broking, with it being equated to slavery, prompting calls for a complete ban on the practice. The last word on this debate in South Africa was that legislative provisions regulating labour broking would be reviewed in proposed changes to the Labour Relations Act. It is unclear as to whether these changes would be aimed at enforcing tighter control of the industry or whether they would go so far as to ban labour broking outright.

The same debate on the practice of labour broking recently took place in Namibia, culminating in the Namibian legislature effectively banning labour broking and making it a criminal offence to conduct the business of a labour broker in that country. Shortly after this ban, Africa Personnel Services (Proprietary) Limited, a labour broker operating in Namibia, challenged the criminalisation of labour broking. The matter ultimately came before the Namibian Supreme Court for consideration. After consideration of the issues at hand, the Namibian Supreme Court handed down a judgment in which it found that the total ban of labour broking was unconstitutional, as it unreasonably restricted the right to carry on a trade or business, a constitutional right under the Namibian constitution.

The importance of the Namibian Supreme Court decision cannot be overlooked as a similar ban on labour broking in South Africa should be subject to a similar challenge, given that the South African constitution similarly protects the right to carry on a trade or business. Accordingly, provided our legislators have regard to the Namibian Supreme Court ruling, it is increasingly unlikely that South Africa will see an outright ban of labour broking.

In our view, labour brokers and employees of labour brokers should take comfort from the Namibian ruling; if the South African legislature takes note of these findings it would be better placed to redirect its energies on eliminating abuse and unsavoury practices within the industry by way of improved regulation rather than an outright ban. This would empower the industry to continue making a contribution to the growth of the South African economy and job market.

From Werksmans incorporating Jan S. de Villiers