Labour Brokers – The Pace Hots Up

Friday, 28 August 2009 | Written by Andrew Levy Employment

That there will be legislative changes affecting labour brokers is now certain, although the form it will take remains to be seen. There are those in Government who maintain that a ban is the only answer,but this would rank as a folly equal to the Skills Develoment Act. If it survives, however, the most probable outcomes are in themselves of great significance to employers. Firstly, there will be a responsibility that falls on the user of brokered labour to ensure that dismissals are fair – substantively and procedurally.

This requirement is logically sound, supportable, and can be taken in the stride of any employer who wishes to without any difficulty. We will focus on some of these issues in another note.

Far more significant are noises indicating that it will become ‘unfair’ or unlawful to pay brokered labour less, in aggregate, than those permanent employees that they work alongside. Government are blithely talking about the ‘benefits’ package, however, there is a very vague and poor understanding of what benefits are, or are not. This in itself will create huge confusion. However, this is not the nub of the issue.

At its heart, is the fact that it would represent a huge increase in minimum wages, as well as placing a responsibility on the private employer to provide the basic health and retirement plans that government should be doing – another obligation upon which it is failing to deliver.

Equally importantly, is that it will represent a huge increase in employment costs for the employer, and this will simply result in further ‘lump’ employment (a term used to describe employment which is not registered, and which is completely outside of the regulatory and tax environment), as well as massive labour displacement.

Employers who rely on brokered labour would do well to start thinking about how they will repond to these changes, which could come late this year, or more probably, early next year.

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