Does this decision ring the bell on Labour Broking as
we know it?
Multiple companies from the labour broking industry‚ which
employs about one million people‚ believe the industry will continue to exist.
Outsourced cleaners and security
guards’ lives are not about to change dramatically after a Constitutional Court
ruling on labour brokers.
The country’s apex court ruled last Thursday (26 August 2018) that
workers earning under R205‚433 a year‚ provided by labour brokers to companies‚
should not be regarded as temporary workers after three months. This means they
become permanent employees with job security from month four.
The case‚ brought by union Numsa
against a labour broker company‚ made 22 employees permanent at a shelving
company. Some unions said the ruling signalled the end of labour broking.
But lawyers and the temporary
employment services (TES) industry disagree.
Multiple companies from the labour
broking industry‚ which employs about one million people‚ believe the industry
will continue to exist.
What the judgment means
Legal firm Cliffe Dekker Hofmeyr
said: "Whilst the court does not ban labour broking in its entirety; it
aims to ensure that the provision of temporary services is truly temporary.
Part of this protection entails that placed employees are fully integrated into
the workplace as employees of the client after the three-month period."
Lawyer Craig Kirchmann‚ who was involved the case for the
Confederation of Associations in the Private Employment Sector (CAPES) said:
"The Constitutional Court ruling changes very little. It merely confirms that after three months employees
have labour relation rights against the client (where they work).
Ordinarily‚ the labour broker will remain the employer of the placed worker in
terms of contract."
Kirchmann said many companies would keep labour brokers to deal
with human resources issues.
"If the labour broker‚ by
agreement‚ falls out the picture‚ then the client will have to ensure that it
has the necessary manpower and skills to deal with the management of the
employees‚ all human resources related matters‚ payroll administration‚
up-skilling ability and the like. These are services generally rendered by the
labour broker. There is a direct cost to the client/employer to ensure that
such skills are available. Even then‚ labour brokers are specialists and generally
perform such tasks better."
Kirchmann‚ speaking on the way unions viewed the judgment‚ said:
"It is sad and unfortunate that
unions are misconstruing the judgment. Labour representatives are
suggesting that the judgment takes labour brokers out the picture after three
months and hence it will be the end of the labour broking industry. This is
clearly incorrect."
"The Constitutional Court
has made it clear that labour brokers remain involved in a ‘triangular’
relationship … An objective assessment of the judgment reveals many positives
for the industry and accordingly when disinformation is seen for what it is‚
the role of labour brokers will be appreciated."
Why cleaners and
security guards are not all about to be insourced
Contrary to popular belief‚
outsourced cleaners and security guards are not seen as temporary employment
services or staff provided by labour brokers‚ but are known as independent
contractors‚ who are treated differently in the Labour Relations Act.
Kirchmann explained: "Ordinarily‚ cleaning and security staff
are not labour broker employees. They are normally employees of outsourced
companies which render a service (and do not supply placed workers to work
directly for the client). The … judgment does not impact upon independent contractors
such as security and/or cleaning companies."
Gavin Mulvenna from Kusile labour brokers said: "Genuine independent contracting
arrangements‚ like often the case in the provision of cleaning and security
services‚ remain unaffected and are not‚ as some may think‚ now required to be
‘insourced’. An independent contractor and a Temporary Employment Service
are not the same thing and are treated differently in law … An independent contractor is specifically
excluded from the definition of ‘employee’ per Section 213 of the Labour
Relations Act."
Mulvenna explained further: "A temporary employee service
procures and supplies labour for a fee. The independent contractor is not under
my control as to how the work is done – all I want is the result. Conversely‚
persons supplied by a temporary employment service to the client‚ are under the
control of the client – in respect of both what is done and how it is
done."
Does the judgment say
labour broking will end?
No. It says the "triangular
relationship" between brokers‚ their employees and the client continues.
Paragraph 75 in the judgment
states that: "This is not a transfer to a new employment relationship but
rather a change in the statutory attribution of responsibility as employer
within the same triangular employment relationship. The triangular relationship
then continues for as long as the commercial contract between the TES and the
client remains in force and requires the TES to remunerate the workers."
Adcorp Holdings‚ which provides
such services‚ explained what that meant. "This confirms that the
temporary employment services companies remain involved after the three-month
period and that there is not a transfer of the employment relationship but
rather a continuation of the triangular relationship between the TES and the
client."
Legal firm Cliffe Dekker Hofmeyr
said: "This triangular relationship then continues for as long as the
commercial contract between the Temporary Employment Services (TES) and the
client remains in force and requires the TES to remunerate the
workers."
30 July 2018 - 09:59BY KATHARINE
CHILD
