LABOUR brokers contracted to the Nelson Mandela Bay Municipality are devastated by Mayor Zanuxolo Wayile’s announcement at the weekend that their services are officially banned.

They said many businesses might not survive the move and it would create even further unemployment.

This comes after the National Treasury revealed that labour brokers had generated R10-billion in tax revenue in the 2008/09 financial year.

It was resolved at a full council meeting last month that the municipality would do away with the services of employment agencies, or their contracts would not be renewed once they had expired.

The majority of councillors also agreed that “all (municipal) directorates, with immediate effect, cease the practice of using the Contract 99 recruitment process for anything outside the occasional emergency purposes for which it was intended”.

This was confirmed at the weekend by Wayile, who told about 500 workers – who claimed to have been abused by labour brokers – that the municipality had taken “a conscious decision” to terminate all agency contracts.

Nicola Monsma, branch manager of PAG Recruitment, said they had not been officially informed by the municipality about the decision, despite the company being one of the biggest labour brokers contracted to the municipality.

“We have 30 to 50 workers with the municipality. This would definitely affect us badly, but we can still survive.

“I’m really worried about the smaller companies, though. They won’t make it and it’s just going to create more unemployment.”

Thando Madyibi, managing member of Temba Kunye Recruitment, said the municipality was a “major client” and that its decision would affect them negatively.

However, the business would not shut its doors just yet as there were other major clients that would keep it going, he said.

Quest and Capacity executive Zola Mbulawa said: “The banning will mean some lose their jobs in the industry.

“We understand there are issues in the industry that need to be changed, but I think regulation of the industry is perhaps the solution.

“There are people who are very nervous about this”.

Municipal spokesman Kupido Baron said the municipality had taken the initial decision in June to do away with the “haphazard” way of using people.

“The relevant executive directors will have to check for funding to take the workers on, on a permanent basis.

“There are about 1000 workers contracted to the municipality altogether,” Baron said.