Our views regarding the feasibility and advantages as well as cautionary considerations

regarding personnel outsourcing are recorded below.

Definition of a Temporary Worker

A temporary worker can be seen as a person who works part-time, a person who is

appointed for a limited duration of time.

General Background

There are an estimated 12.5 million workers in South Africa and approximately 3.7 million

are temporary workers.

This trend towards temporary employment is a worldwide phenomenon and predictions

are that 80% of workers in the future will be in the temporary sector.

Whatever the reasons for the increased trend towards temporary personnel utilization,

outsourcing enables companies to focus on their core businesses and this has now

become common practice.

Why Contract Manpower?

Focus on Core Business

A company can focus on core business, whilst remaining in a position to maintain its

specific company culture.

Flexibility

Contract manpower provides for greater labour flexibility and hence variable labour cost.

Database

The personnel supplier has a comprehensive data base on personnel availability and is

therefore better positioned:

Training and International Sourcing

 “Lean on us for your personnel sourcing”

M&S Projects is actively involved in training of HDSA’s. At present 36 African trainees are

enrolled in formal learnerships. These trainees are both male and female and have

theoretical N-certification, ranging from N2 to N5, with enhanced knowledge of

mathematics, sceince and technical drawings. After a 6 month period of intensive training

in our accredited centre as 

undergo further training in a practical environment under the mentorship of qualified

artisans. The aim is to have 50 trainees to become qualified artisans per annum. M&S

projects as a last resort have the facility to source international skills if local skills are

absolutely unavailable on short notice.

Productivity

Examples of improved productivity exist in industry and may be ascribed to the following:

     personnel complement is not required anymore, but carried by the company

     productivity

Labour Relations Act 66 of 1995 updated in 2005

In terms of the Act, responsibility is removed one step away from the Client:

The personnel supplier is the primary employer responsible in terms of the Act, but

employees are seconded to the Client’s management and supervision should they elect

to do so. The time consuming and costly liaison with employees, labour unions and

statutory bodies is handled by the personnel supplier.  This has evolved in a function with

numerous hassles, which is now removed from the Client.

With specific reference to joint and several liability in terms of the Act.

The personnel supplier takes responsibility for costs and penalties where applicable,

provided the Client’s personnel act responsibly.

The Client’s guarantee by the supplier is reinforced because the Client is always in

possession of an amount equal to at least 30 days invoicing from the supplier, but usually

it applies to 60 days invoicing.

The supplier indemnifies Clients with regards to the cost of any arbitration awards or

court orders involving contract manpower.

Access To Limited Duration Contracts (Ldc’s)

The client obtains access to LDC’s and although legally the Client may utilize LDC’s directly

the present business environment tends towards exactly the opposite, i.e. permanent

employment.  Access to LDC’s has the following advantages:

     manpower complement to match actual requirement

     supplier, as easy replacement of personnel is possible

     re-instatement actions

Mobilisation and Demobilisation

The time and cost involved in recruiting personnel, transport to site, synchronisation of

commencement of work, employment contracts and all general administration and

logistical problems related to mobilisation and demobilisation of personnel is removed

from the Client.

Personnel Administration

Attention to the needs of personnel, both in the work environment and on a personal

level is managed by the supplier.  This is under normal circumstances an extremely time

consuming and expensive process, which now becomes the responsibility of the

contractor.

Termination of Supplier Services

The Client can terminate the services of the supplier on a mutually agreed contractual

basis, should the supplier’s performance not be satisfactory.  Suppliers who want to

survive must therefore perform to the satisfaction of the Client.

Payroll Function Removed

The payroll function converts to a contract management function.  The payroll function

also includes compliance with statutory requirements, i.e. Workmen’s Compensation

(COID), U.I.F., Training Levy, applicable Bargaining Councils and SARS.   Regarding SARS,

presentation of a valid IRP30 by the suppliers, removes any liability from the Client

regarding PAYE and VAT. 

Administration of loans to employees, credit facilities, compassionate leave and

assistance all fall within the ambit of the supplier’s functions.

Innovation

The supplier is committed to continuously develop innovative ideas to advance personnel

in order to create a workforce at competitive rates on a sustainable basis.  The basic idea

is to create a win-win situation for the workforce, the Client and the personnel supplier.

In this regard there will have to be close liaison between the parties on a continuous

basis to ensure conformance to requirements.

Financial Resources

Any reputable personnel supplier is in a position to fund the labour requirement of any

project in South Africa.