By By Delisa Magagula
Business Eswatini has warned that the prohibition of triangular employment, as outlined in Section 129 of the Employment Bill No. 12 of 2024, could trigger devastating consequences for workers and the economy, including severance liabilities exceeding E250 million and more than 20,000 jobs at risk nationwide.
Triangular employment, defined as work performed by employees supplied by a third-party intermediary (e.g. private employment agencies), is widely used in Eswatini across security, agriculture, cleaning, construction, and other services.
Worth noting is that the proposed ban requires termination of all such arrangements within 12 months after promulgation of the Bill into law.
The ILO has cautioned that prohibition is inconsistent with Convention 181, which promotes regulation rather than elimination of private employment agencies.
Other Southern African Development Community (SADC) countries, including South Africa and
Namibia, have adopted regulatory approaches emphasising licensing, inspections, contract transparency, and joint liability rather than prohibition.
According to an Impact Analysis Report prepared by Business Eswatini, the proposed changes threaten to displace over 11,700 workers directly, with an additional 8,000 indirect jobs at risk across the services, logistics, and small-to-medium enterprise sectors.
In total, national job losses could surpass 20,000, further deepening Eswatini’s already severe unemployment rate of 34%.
The report notes that the burden of severance pay-outs is especially alarming, as only one-third of employers have the financial capacity to meet obligations without default.
Many businesses would struggle to shoulder the combined liabilities of more than E250 million, potentially leading to closures and mass layoffs.“The limited capacity of businesses to absorb displaced workers, currently estimated at only 28%, means that the bulk of affected employees many of them women and youth face long-term unemployment,” the report cautions.
Beyond the immediate loss of jobs and severance challenges, the report highlights broader macroeconomic risks.
Declining Pay-As-You-Earn (PAYE), Value Added Tax (VAT), and corporate tax revenues could constrain government fiscal space. Reduced household consumption and heightened risks of in formalisation may also undo progress made under the International Labour Organisation (ILO) Decent Work Agenda.
Business Eswatini during the presentation of the report therefore urged policymakers to reconsider the prohibition of triangular employment, arguing that while reforms are necessary, and the current approach risks pushing an already fragile economy into deeper crisis.
