Unregistered contractors

Despite the pressing need to address South Africa’s dire unemployment rate, the Building Industry Bargaining Council (BIBC) advises caution when hiring unregistered building contractors.  

Findings by the BIBC indicate that businesses not registered with this organisation do not have the basic infrastructure in place to deliver high-quality outcomes. In addition, they often miss deadlines and budget targets.  

The BIBC’s council spokesperson for business, Danie Hattingh, emphasises that failure to address the gaps that exist between registered and unregistered parties can be detrimental to both the industry and economy. 

Unregistered contractors

The BIBC’s council spokesperson for labour, Luyanda Mgqamqo.

Labour concerns 

Unregistered employment accounts for 38% of all jobs in South Africa’s construction sector, of which the building industry forms a large part. Concerns for those workers include: 

  • Not being protected by labour laws that govern minimum wage requirements, overtime pay and workplace safety regulations. 
  • Frequently exploited to undercut competitors. 
  • May not receive the negotiated minimum benefits applicable in the industry, receiving whatever the non-compliant employer arbitrarily decides.  
  • Lack of stability and security with workers facing uncertainty about future income and job prospects.  
  • Irregular working hours, fluctuating income and reliance on temporary work. 

“Of particular concern to the BIBC is that those employees and their dependents are also not protected in the event of death and disability,” says the BIBC’s council spokesperson for labour, Luyanda Mgqamqo. 

Registered benefits 

A registered building contractor is obliged to meet quality standards, construction regulations and customer expectations. This promotes higher standards of workmanship, safety and project delivery. 

Unregistered contractors

The BIBC’s council spokesperson for business, Danie Hattingh.

Employees registered with compliant employers receive daily contributions towards their annual leave, sick leave, retirement fund and bonus. In the BIBC’s experience, those employers are more likely to be compliant in other areas, such as adherence to health and safety and unemployment insurance regulations. 

The consequences of non-compliance  

Unregistered labour can compete unfairly by circumventing regulations and standards. This may hinder government tax collection, infrastructure development and efforts to promote sustainable housing solutions.  

“Where both the ‘giver of work’ and the contractor have a culture of non-compliance, the impact on sustainable and decent employment is even more pronounced,” Hattingh adds. 

Positive transition 

The BIBC has been instrumental in driving the transition from unregistered to registered employment by establishing standards, negotiating agreements, managing compliance, offering support services and promoting dialogue and collaboration among stakeholders. 


“Businesses have a critical role to play in promoting registered employment by ensuring that only employers who adhere to legal requirements are contracted to do work in the building industry.” – Danie Hattingh, BIBC 

For more information, contact the BIBC: 

Email: bibc@bibc.co.za 

Website: https://www.bibc.co.za/ 

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