THE LABOUR APPEAL COURT HAS SPOKEN: WHEN THE LABOUR BROKER’S EMPLOYEE BECOMES YOUR EMPLOYEE

On 10 July 2017 the Labour Appeal Court (“LAC”) handed down Judgment in the matter between NUMSA & Assigned Services & Others (JA96/15) regarding the interpretation of Section 198A(3)(b)(i) of the Labour Relations Act (“LRA”) in respect of Labour Brokers.

The LAC held that the plain language of the section interpreted in the context unambiguously supports the sole employer interpretation, and protects the rights of placed workers. This interpretation does not ban Labour Brokers however, its purpose is to restrict the Labour Broker to genuine temporary employment.

The appeal against the Labour Court Judgment was upheld and the LAC has held that a placed worker earning in excess of R 205 433.30 per annum, and who works for a Client of the Labour Broker for a period exceeding 3 (three) months (and who is not working as a substitute for an employee of the Client who is temporarily absent or who is not in a category of work determined to be a temporary service is not rendering a temporary service and is therefore not the employee of the Labour Broker. Such a worker is therefore deemed to be the employee of the Client (on an indefinite basis, subject to Section 198B of the LRA).

The Confederation of Associations in the Private Employment Sector has announced its intention to appeal the LAC Judgment to the Constitutional Court.

In light of the above, all businesses utilising the services of Labour Brokers are advised to consider the effect of the LAC Judgment.

 

Should you have any queries regarding the above, please contact Tarryn Poppesqou on (031) 584 7980 alternatively admin@fpattorneysinc.co.za

This note above is a general summary of certain legal issues.

This note does not constitute legal advice and does not purport to be a detailed or complete explanation of the subject matter.