Clarity as Labour Court rules on the employment of temporary employees earning below R205 433.30/year

BY TRACEY MOUTON - SEPTEMBER 10, 2015

The Labour Court has overturned a decision by the Commission for Conciliation, Mediation and Arbitration (CCMAconcerning the interpretation of provisions set out in Section 198 A (3) of the Labour Relations Act 66 of 1995 (LRA) about employers. 

This amendment in the LRA caused great confusion as to “who the employer is” after an employee, employed by a temporary employment service (TES), has worked for the TES client for a period of three months or longer. 

The matter previously came before the CCMA, in which the CCMA ruled that Section 198 A (3) was to be interpreted as meaning that the client becomes the sole employer of the temporary employee, who has been placed on the client’s premises for the purposes of the LRA. (own emphasis added).

The knock-on effect of the CCMA decision has been that many companies, who relied on temporary labour, could not afford operationally and/or financially to take on additional employees, which has led to a greater number of employees facing unemployment.  The increased number of disputes referred to the CCMA is indicative of this.

Thankfully the Labour Court decision has brought some stability to businesses, temporary workers and the temporary employment services industry.

The Labour Court decision has now clarified the employment status of temporary employees.  The court decided that the client is a concurrent employer rather than the sole employer.  The temporary employment service would thus remain the employer of the employees beyond the three month period and the client would only be the concurrent employer in respect of the purposes of the LRA.

From a practical perspective, the Labour Court decision will ensure that temporary employees are not exploited and are treated on a whole not less favourably than an employee of the TES client performing same or similar work and that if such an employee has a dispute concerning his or her rights under the LRA, he or she is entitled to prosecute that dispute against either the temporary employment service or the TES client.  However, the temporary employment service would lawfully continue to pay the employee and perform all other administrative functions for the client in respect of that employee. 

Whilst the decision of the Labour Court may bring stability to the relevant parties at this stage, it is most probable that NUMSA (being a party to the dispute before the Labour Court) will appeal the decision.  In all probability it will only be when this matter reaches the constitutional court that we will have final clarity as to the deeming provision.

Tracey Mouton is the Director:  Human Resources & Employment Law at Golberg & De Villiers Inc. Find them at Pembridge House, 13 Bird Street, Central, Port Elizabeth. Call 041 501 9832 or visit them online at www.goldbergdevilliers.co.za.