How do we navigate the rising gig economy as temporary employment services in SA?

This view is informed by a number themes that are shaping the global and domestic economic fundamentals. These include the aggressive monetary policy tightening in the US, in response to multi-year record inflation outcomes recorded in that country. The on-going Russia-Ukraine war and its implications for the European Union. A concerning development is the weaponizing of gas supply by Russia to Germany, which will have recessionary consequences for Germany, the largest economy in the EU and South Africa’s second largest trading partner. The dominance of Russia and Ukraine in the food inputs and commodity complex is driving inflationary pressure globally, reinforcing the need for central banks around the world to increase interest rates. China’s aggressive zero-covid policy, in which the last round of lockdowns has affected the economic hubs of Shanghai and Beijing have contributed to a slowing global economy.

These themes will continue to dominate the global economic narrative and the slowing of global economic growth. Steel production is highly correlated with economic growth and the early warnings signs of a slowing growth rate are evident in the reduction of iron ore prices, a key ingredient in steel production.

In dollar terms iron ore price have decreased 28.6% year to date 2022 and down 49.3% year-on-year to July 2022. This is despite a reduction in sea-borne supply from Ukraine. Domestically basic iron and steel sales declined by 8.1% year to date, other fabricated metals declined 8.5% and structural steel products declined 1% over the same period.

Compounding the global headwinds are weak domestic fundamentals that are also feeding into the outlook. The energy crisis, which was the worst on record in Q2 2022, is a major constraint and risk to the outlook. Electricity availability is an essential input into the metals and engineering sector. The sector is comprised of energy intensive users of electricity who have to cut production due to electricity curtailment. Whilst the sector also comprises producers that are less energy intensive, load-shedding causes a complete halt to operations. The state of local government and the lack of service delivery is another major constraint. Companies in the metals and engineering sector are spread across the length and breadth of the country and are adversely affected by service delivery failure at local government level. The inefficiencies of local government breed costs for producers eroding their competitiveness. It goes without saying that, now, more than ever before a national strategy on industrialisation is needed to stabilise and reignite the metals and engineering sector, which must include an aggressive infrastructure programme and a dedicated focus on economic reform rolled-out in partnership with the private sector.

To borrow the adage that a rising tide lifts all boats, means that the inverse is also true. In a less supportive global economic environment with headwinds intensifying, domestic economic policy and reform has to do a lot more heavier lifting to support the economy. With a fragile global environment, a sluggish local economy, an outlook for the remainder of the year and into 2023 remaining uncertain and the prospects of things getting worse before improving now would be a good time to adopt a more frugal outlook.

HOW DO WE NAVIGATE THE RISING

Gig Economy as Temporary Employment Services in SA?

The Temporary Employment Services (TES) industry is adapting to a changing labour market. The Fourth Industrial Revolution has ushered in exciting developments such as the everyday use of artificial intelligence, wireless digital technologies, robotics, a constantly expanding internet as well as a fusing of digital and physical worlds.

Undoubtedly, these have played a major role in giving rise to new business models which are currently affecting the nature of work and employment relationships worldwide. While the successful adoption of these technologies is promising for businesses and consumers, it has also presented new challenges to the labour market. It has brought with it economic disruption with uncertain socio-economic consequences for Africa.

Unblurring the lines

The gig economy is a labour market made up of freelance work, as opposed to permanent, in-house jobs. As work tends to be temporary or project-based; gig workers are independently hired to complete a specific project for a specific period. While seeming like TES work, gig work is not to be confused with TES. There are online platforms where gig workers privately offer their services and get into contracts with businesses. TES or labour broking involves companies or the end users employing a temporary workforce through TES companies, which are agencies that provide these workers for a short period of time. Both these types of arrangements are often called alternative or non-standard work arrangements as opposed to traditional, permanent employment.

More and more South African workers are opting for the “non-standard” approach to making ends meet. Many of these are looking towards TES providers to protect their interests and rights in business relationships. Albie Rheeder, from the Tem-

porary Employment Services Division (TESD), remarks that the recently proposed amendments to Draft National Labour Migration Policy and the Employment Services Amendment Bill raises pertinent questions for the digital labour market utilising these gig workers.

Adapting to an evolving labour market

“The inclusion of digital platforms in the act means that businesses like e-hailing services, will need to adapt their models to comply with the changes.” Rheeder goes on to pose the question whether a young entrepreneur that has conceptualised an application which provides a service for South African companies and creates the required employment opportunities be required to report the freelance foreign gig worker in the Baltic states and India that do the development? Do these need to be recorded as employees or workers? “Only time will tell if these international corporations shy away from bringing new technologies and if the act wants to create opportunities for South African citizens,” adds Rheeder. The TES industry helps to boost the economy by creating employment and supporting end users by efficiently providing a supply of shortterm labour. The industry will need to evolve with the modern times and updated regulations to continue benefiting the South African economy.

In the interim, the Temporary Employment Services Division (TESD) is providing TES companies with a stakeholder forum to potentially help regulate this specialised industry, helping their members to serve the needs of the client and to protect the rights of the TES candidate, like the gig worker, in a legally compliant environment. The division continues to increase awareness for and supports industry compliancy. It is essential that TES providers comply with all current requirements. In terms of the proposed draft and amendment, good practice requires that there is no missing documentation for foreign workers and that the job application is relevant to the skills on an issued permits for temporary workers who are foreigners in South Africa.