Business Day

Victory for workers hired by brokers

- Theto Mahlakoana Political Writer mahlakoana­t@businessli­ve.co.za

Employers who use labour brokers are obliged to take on staff after three months if they fall below a certain earning threshold, putting to rest a long-disputed provision of the Labour Relations Act. In a landmark judgment, the Labour Appeal Court settled a protracted battle among unions, employers and labour brokers over the interpreta­tion of the most recent amendment to the act regulating labour brokers.

Employers who use labour brokers are obliged to take on workers after three months if they fall below a certain earning threshold, putting to rest a long-disputed provision of the Labour Relations Act.

In a landmark judgment this week, the Labour Appeal Court settled a protracted battle among unions, employers and labour brokers — or temporary employment services — over the interpreta­tion of the most recent amendment to the act regulating labour brokers.

The court found that companies that use labour brokers are the sole “employer”.

The clarificat­ion arose after there was confusion among unions, companies and labour brokers about a “deeming provision” that some parties misinterpr­eted to mean that labour brokers and their clients were dual employers.

The National Union of Metalworke­rs of SA approached the court to obtain clarity on who was obliged to hire staff permanentl­y following three-month stints as temporary workers.

The amendment to the act was effected in January 2015 after a protracted campaign against labour brokers by labour formations including Cosatu.

Employees who earn less than R205,433 a year will now qualify for permanent employment if they complete threemonth stints on contract.

Most people employed through labour brokers are vulnerable and are yet to reap the benefits of the amendment to the act, which was intended to protect them from exploitati­on.

Shortly after the amendment was implemente­d, workers and unions flocked to the Commission for Conciliati­on, Mediation and Arbitratio­n to seek clarity about section 198a of the act, with many referring cases of unfair dismissal.

The appeal court concluded that the Labour Court had “misdirecte­d itself” in its interpreta­tion of the section.

Lauren Salt, employment and compensati­on practice senior associate at Baker McKenzie, said although the court found it would “make no sense” for companies to retain labour brokers in the employment equation after three months have lapsed, the transition would not be seamless given that services such as salary payments and other regulatory obligation­s including the Unemployme­nt Insurance Fund would be handled by employers.

She raised the question of historical liabilitie­s incurred by labour brokers.

Despite the appeal court providing clarity on the “dual employer” issue, brokers were not completely in the clear. Unions including the Communicat­ions Workers Union were still challengin­g cases of unfair dismissal after employees were released as soon as their threemonth period ended.

Salt said workers who had found themselves in this situation had the right to “go after” labour brokers and their clients.

“If the dismissal happens between month one and the end of month three before it kicks in, they can lay a dispute with the [labour broker],” she said.

“If it is after three months and the [labour broker] is still deemed as the employer, they [workers] can go after the [labour broker] and clients.”

MOST PEOPLE EMPLOYED THROUGH BROKERS ARE YET TO REAP THE BENEFITS OF THE AMENDMENT

 ?? /The Times ?? Protracted battle: Thousands of Cosatu and other union members march in Durban against labour brokers and e-tolls in this file picture. A landmark judgment has ruled that employers who use labour brokers are obliged to permanentl­y employ qualifying temporary staff after three months.
/The Times Protracted battle: Thousands of Cosatu and other union members march in Durban against labour brokers and e-tolls in this file picture. A landmark judgment has ruled that employers who use labour brokers are obliged to permanentl­y employ qualifying temporary staff after three months.

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