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July
2000
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Check out that labour broker
According to Drivers & More MD Linda Ledl, some brokers may offer lower rates per hour for staff but often deceive their clients. "They say they are adhering to legislation but when the 'tyre hits the tar' from unethical operations, the client is often dragged into the middle. The broker and the client are forced into a Joint and Severable Liability situation where they have to accept corrective rulings from the labour court." According to the Labour Relations Act No 66, 1995, Chapter IX, General Provisions, 198.4, the temporary employment service and the client are jointly and severally liable if the temporary employment service, in respect of any of its employed, contravenes:
Melanie Köhler, Transman branch manager, believes many companies are unaware of these provisions and are rudely awakened only when problems occur. "We try inform companies of the dangers of dealing with unregistered brokers. Unfortunately, these brokers open up under different names all the time. The reason for this stems from the fact that if the inspectors track them, they are given one year to register. They simply then open under a new name and if tracked again, have another year to register." Frightening stuff Labour brokers are required by law to pay minimum wages, deduct SITE and UIF contributions and register with the Compensation Commission. Not complying will therefore implicate the customer in any litigation. Frightening stuff, considering the asset value of vehicles, goods entrusted and company reputations. John Vorster is managing director of Espadon (Pty) Ltd, a corporate partner of Pro-Driver Logistics. He comments: "The industry has become plagued by new entrants who provide a service which they have little or no experience of. An inability by labour brokers to meaningfully screen, train and uplift the people they supply has noticeably decreased the quality of workers when compared to the average standard of drivers in permanent employment. These factors have led to negative perceptions of the service provided by labour brokers. This is tragic if one considers the overwhelming competitive advantages that outsourcing this part of the business could bring a fleet owner." Another outsourcing company, The Workforce Group, has been in operation for some 28 years. Regional director Debbie Sloth-Nielsen feels strongly that the inspectors spend far too much time checking on the registered operations. "We are easy to check; we are here. The industry would be far better served were they checking unregistered brokers." Another problem area is that of responsibility for losses in respect of accidents and stock. Most of the major brokers offer some form of cover but it is generally an added extra and needs to be stipulated. Advice from Ledl is: "Read the small print. There are brokers who cover themselves and leave the clients out in the cold. Beware of the fly-by-night.". Emphasising the importance of cover, Vorster says: "The price attached to using poor quality drivers is well understood by fleet owners. Many labour brokers offer little or no recourse on driver negligence. Civil action against brokers that have supplied a poor quality driver is costly and time consuming. And this without considering the impact a damaged truck brings on a thin bottom. And, of course, costly law suites are seldom a solution." According to Vorster, the more established companies provide some form of liability or insurance option and fleet owners would be wise to use companies providing these options as they are probably linked to some kind of quality programme within the broker company in order to manage claims. "Fleet owners should also insist on the labour brokers satisfying them that part of the money they are paying is going directly to the improvement of driver quality. Labour brokers who are not focused on driver quality usually aren't focussed on any other aspect of the law either. Larger national brokers are more subject to scrutiny and hence usually pay more attention to this detail." Evaluation methods differ These major companies believe that the choice of supplier rests largely on service and the calibre of staff supplied, more than on price. With this is mind, one would assume that selection and evaluation would play a major role and yet driver evaluation is another area where methods differ widely. "It takes us about one week before a driver is accepted", explains Sloth-Nielsen. "I have eight people constantly evaluating staff. Apart from normal license and criminal checks, we test driving skills in our own vehicles. We have also invested in eye testing equipment which I feel is essential. We are developing a weighting system that will also assist us. Drivers need to be multi-skilled and we even check familiarity with Cape Town." On the smaller vehicle side, Pro Driver Logistics tests all drivers in its own Venture checking on knowledge of road signs and basic vehicle control. "With code 10 and 14 drivers, we utilise various customers who test them on our behalf and then tell us if they are acceptable", says branch manager Cliff Vincent. "References, licenses and criminal checks are routinely done, as are literacy and mathematical tests." Drivers & More's evaluation process is most comprehensive and among others, includes eyesight, literacy, geographical and road sign evaluation. This company has also invested in a number of truck driving simulators and each applicant is put through his paces on these simulators to determine his level of expertise. According to the company, the simulators act as sure-fire pointers as to the level of skill of a driver. Nice touch as it is cheaper to crash a truck on the simulator's computer screen than it is to crash on the road while hauling a client's goods. Transman do standard numerate and literacy tests, reference and criminal checks. Although they do not road test drivers, they require a minimum of five years driving experience. Another company we spoke to, Employment Solutions (formerly Rent a Driver), confirm that although they also do not conduct road tests, the fact that their drivers have been working for them for many years they regard as sufficient. They assured us that they complete reference and criminal checks as well. Local company Drivers for Hire provide 24-hour service and state that they do road tests as well as license verification and reference checks. Means to
an end He worked on contract for Transman for a number of years before the company offered him a permanent position as a supervisor. A major part of his day is spent delivering and collecting staff and he confirms that all of them are working for Transman in the hope of permanent work. "Companies use Transman as a probation period and if the driver works well, there is always a chance the company will offer him a job". Workforce Group's Sloth-Nielsen is passionate about care for the workforce. "I regard everyone on our books as our "worker-bees" and we need to make sure they are looked after. For this reason, we try level out assignments to create a living wage for everyone. For example, should any of our workers be injured, we insist on taking over and ensuring that families are informed and adequate medical care is provided. We need to develop staff loyalty so that they don't see themselves as 'odd-job' workers." Another problem that seems to have been addressed is one of temporary drivers having to get themselves home after assignments. This can lead to conflict with a driver stranded in the evening. The client then sits with the problem of an irate driver and the client may well be the only person there and in no position to assist. Workforce, Pro-Driver Logistics, Drivers for Hire and Transman all operate a 24-hour shift and will ensure that staff are collected and dropped off either at home or at central points. In the case of Drivers & More, the driver is transported to work but has to find his own way home. Employment Solutions say their drivers have their own personal transport. Vincent from Pro Driver Logistics says that a 24-hour operation is essential in Cape Town. "Public transport is insufficient as after 19h00 there are no busses or trains running. This is all part of how we want to change our business in the future. We are looking at grading drivers, operating out of the client's area as well as focussing on training and orientation." Outsourcing labour is a major business - and a growing one. In the USA it is a R490 billion industry. Workforce claim to have 30 000 workers on their national database. The reasons that companies outsource staff are many and varied but those companies who believe they are shedding the responsibilities of an employer, would be well advised to check out both the legislation and the supplier they are using.
Fleet owners place great emphasis on price and in the labour brokering environment, this is dangerous as it is still an unregulated industry with few entry barriers. Many labour brokers are small or micro enterprises started on a "shoe string" budget with promises of service, which they have little experience in delivering. So price should merely be the starting, not the end point. FleetWatch decided, as a matter of interest, to do a random check on the pricing structures of the brokers we spoke to and anonymously sent out a request for quotes to these companies. The brief given to suppliers was for a Code 10 driver for a two-week period, doing local deliveries with the possibility of overtime. The Western Cape falls into Category B of the wage determination bill and therefore this costing comparison would only be applicable to this region. The rates charged by the various companies are nevertheless interesting in respect of what they offer in terms of selection, evaluation and service - and we urge operators to check out what these offerings are bearing in mind the points made in the accompanying article. The bottom line is: comparisons should not be made on the basis of price alone. There are many other factors that come into play. These are the rates quoted, all prices excluding VAT: Company :-
Transman Company :-
Employment Solutions Company :-
Drivers & More Company :-
The Workforce Group Company :-
Pro Driver Logistics Company :-
Drivers for Hire |
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The
days of regarding labour brokers as suppliers of scab labour have
passed. Today, the outsourcing of drivers and general workers has
become a viable alternative to many companies. What you get for
your money, however, depends on how well you have done your homework.
A closer look reveals the danger that your labour broker may charge
too much and deliver too little, or charge too little and promise
too much. FleetWatch's Western Cape correspondent, Stephanie Platt,
talks to some of the players in the Cape market and concludes that
operators would be well advised to check out the legislation and
the supplier they are using. And that applies nationally not just
locally.