With rampant wildcat strikes continuing in South Africa’s mining sector, and with mines firing tens of thousands of strikers, how are companies staying afloat? Welcome to the world of labor brokering -- companies that find contract workers to fill gaps. Unions have fought to outlaw the practice of labor brokering, but the brokers say they fill a critical role in a nation with strict labor laws and an unskilled workforce.
South Africa’s Gold Fields mining company fired 8,500 workers on Tuesday after weeks of illegal strikes at its mines.
The workers were hoping to win better living and working conditions and higher pay. But, the harsh reality is that there are many, many, many others just like them who are ready to take over their jobs.
In fact, major companies have great reserves of labor they can draw from at a moment's notice.
The companies find these replacements through labor brokers, the middlemen who fill gaps in the workforce when workers go on strike. The brokers' methods are simple: they drive around in pickup trucks, called bakkies, and round up willing workers.
The workers’ short contracts don’t give them the same legal status as permanent employees, though they sometimes perform the same work. The employer pays the broker directly; the broker pays the workers.
The Congress of South African Trade Unions said earlier this year that the nation has some 980,000 labor-brokered workers. They say up to 30 percent of the workforce is involved in atypical, casual labor that is not fully protected under labor laws.
Lesiba Seshoka of the National Union of Mineworkers says the system is prone to abuse. He says brokered workers are often threatened with their jobs if they join a union. He also says the brokers take a substantial cut of the brokered workers' salaries.
He says all of the mining companies that have experienced strikes have used labor brokers. His union and the main trade federation have fought unsuccessfully to ban the brokers outright.
“In one way or another they are enslaving the majority of the people," said Seshoka. "Because in a sense, a labor broker hires you for a company. You work for the company but you are paid by the labor broker in the mining industry. And that is problematic because if the company pays, for example, 4,000 for its work force, and gives 4,000 which is the same amount, to the labor broker, the labor broker then gives you 2,000, or 2,500 or so . That is problematic because that does not help us in working towards a living wage.”
Basil Skopelitis is the CEO of a Johannesburg-based labor brokerage called Ziyabuya. His company mainly works in the construction industry. In the last year, he’s placed between 600 and 800 workers.
He says two things make him necessary: South Africa’s strict labor laws, which he says often compel employers to keep underperforming workers; and a general lack of skilled and well-educated workers.
He says his company fills a valuable role in placing often unskilled workers into jobs they badly need, but he says that there are unscrupulous labor brokers out there.
“I‘m not going to profess that all labor brokers are angels, because I know first hand not all of them are, but I do believe that if properly regulated the government can use labor brokers as a tool to help secure a large pool of the unemployable people in this country,” said Skopelitis.
Lonmin, the platinum mining giant whose workers sparked the wildcat strikes in August, says nearly 40 percent of its workforce are contract workers. Spokeswoman Sue Vey says the company counts 11,000 contractors and 28,000 permanent employees on its rolls.
Despite opposition to the practice, South Africa’s unemployment figures and tight labor laws appear to bolster the demand for labor brokers. The government estimates nearly a quarter of South Africans are unemployed.
The brokers provide an answer to this perennial question: in a market where workers outnumber the available jobs, is it better to have a job that’s not ideal, or no job at all?
Seshoka says the unions think that question is unfair.
“Of course from the look of things it will be better that they have a job," he said. "But if those people are really necessary in the economy that they are employed by labor brokers, why can’t they be employed directly by the employers?”
But with tens of thousands of open mining jobs, many unemployed South Africans may soon find themselves making that very choice.