CityPress - - Business - DEWALD VAN RENS­BURG dewald.vrens­burg@city­

Labour bro­kers will have at least an­other year’s grace be­fore the con­tentious “deem­ing” pro­vi­sion – in­tro­duced into labour law at the be­gin­ning of 2015 – po­ten­tially shuts down a large part of their in­dus­try.

A rul­ing by the Labour Ap­peal Court this week struck down a hugely in­flu­en­tial 2015 labour court judg­ment by act­ing Judge Martin Brassey on the deem­ing ques­tion.

An ap­peal to the Con­sti­tu­tional Court was al­ready be­ing pre­pared, said Craig Kirch­mann, at­tor­ney of record for the Con­fed­er­a­tion of As­so­ci­a­tions in the Pri­vate Em­ploy­ment Sec­tor. This is the bro­ker in­dus­try’s um­brella lobby group.

Most im­por­tantly, merely fil­ing this ap­peal would sus­pend this week’s judg­ment, he told City Press.

This fi­nal le­gal show­down marks the end­point of nearly a decade of union cam­paign­ing against labour bro­kers.

In 2010, the de­part­ment of labour ini­tially pro­posed to ban labour bro­kers out­right. Amend­ments to the Labour Re­la­tions Act were sub­se­quently re­worked and on Jan­uary 1 2015, the new deem­ing dis­pen­sa­tion came into ef­fect.

Ac­cord­ing to this dis­pen­sa­tion, af­ter three months a bro­ker-pro­vided worker is “deemed” to be an em­ployee of the client com­pany where they work.

This is sub­ject to a num­ber of ex­cep­tions, but likely cov­ers a ma­jor­ity of labour bro­ker staff, gen­er­ally es­ti­mated to to­tal be­tween 600 000 and 1 mil­lion peo­ple in South Africa.

Un­for­tu­nately, the new rule could be in­ter­preted in two op­po­site ways.

The “dual em­ployer” in­ter­pre­ta­tion sees the worker re­main em­ployed by the bro­ker, but gain the abil­ity to pur­sue dis­putes about work­ing con­di­tions, pay or dis­missal against the client as well.

The al­ter­na­tive “sole em­ployer” in­ter­pre­ta­tion, favoured by cam­paign­ers such as the Na­tional Union of Me­tal­work­ers of SA (Numsa) against labour bro­kers, sees the bro­ker dis­ap­pear from the equa­tion.

The deem­ing pro­vi­sion has led to nu­mer­ous dis­putes at the Com­mis­sion for Con­cil­i­a­tion, Me­di­a­tion and Ar­bi­tra­tion (CCMA) and the estab­lish­ment of other labour dis­pute fo­rums such as bar­gain­ing coun­cils.

At first, CCMA com­mis­sion­ers faced with deem­ing cases ap­plied the sole em­ployer rule.

Then the Brassey judg­ment made them fall in line and ap­ply the dual em­ployer rule.

The Ca­sual Work­ers’ Ad­vice Of­fice (CWAO), a small non­govern­men­tal or­gan­i­sa­tion based in Ger­mis­ton, par­tic­i­pated in about 70 of these dis­putes, which af­fected about 4 500 work­ers al­to­gether.

CWAO co­or­di­na­tor Igh­saan Schroeder called this week’s judg­ment “a huge thing”.

“Com­pa­nies have just stalled and made max­i­mum use of Brassey,” said Schroeder.

“In all cases but one, the com­pa­nies have in­sisted on the dual em­ployer sta­tus, right down to wear­ing [the bro­ker’s] branded over­alls.”

The CWAO joined the case against As­sign Ser­vices as a friend of the court. As­sign Ser­vices had sup­plied work­ers to Krost Shelv­ing and Rack­ing. Many of them had worked for the com­pany for more than three months.

In join­ing the le­gal ac­tion, the CWAO was hop­ing to show how the dual em­ployer sys­tem had failed in its main aim: equal­is­ing em­ploy­ment con­di­tions be­tween bro­kered and di­rectly em­ployed work­ers.

“Some do equalise con­di­tions, but most just ig­nore it,” said Schroeder.

“We have ‘per­ma­tised’ al­most 5 000 peo­ple, but the com­pa­nies be­have as though noth­ing has changed.” The in­dus­try makes the op­po­site ar­gu­ment. “The goal was to pre­vent abuse. I think dual em­ploy­ment achieved that,” said the bro­kers’ lawyer, Kirch­mann.

“I can­not be­gin to imag­ine how sole em­ployer pro­tects work­ers any bet­ter. Some­times the labour bro­ker is the more sta­ble player and it is the client that will present the worker with more pre­car­i­ous job


se­cu­rity and rights. Should the Con­sti­tu­tional Court rule against us, there will be an up­heaval and a de­gree of chaos,” he told City Press. Jose Jorge, a di­rec­tor at law firm Cliffe Dekker Hofmeyr’s em­ploy­ment prac­tice, agreed that the dual em­ployer sys­tem was al­ready an ef­fec­tive in­ter­ven­tion to root out the so-called bakkie brigade – low-end labour bro­kers. “It is per­fectly able to achieve the ends of labour law – to elim­i­nate un­fair pay dif­fer­en­tials,” said Jorge. “I had high hopes for the dual em­ployer sys­tem.” Op­ti­misti­cally, it would take a year to re­solve this ques­tion if the Chief Jus­tice choose to ex­pe­dite it, he added. Ruth Ed­monds, Numsa’s at­tor­ney, was more op­ti­mistic, say­ing it would likely be six months. The case against the dual em­ployer ar­gu­ment was largely about job se­cu­rity, she said. “There is a great deal more job se­cu­rity in hav­ing a sin­gle em­ployer.” No one has de­pend­able num­bers, but Ed­monds said the num­ber of work­ers af­fected was “vast”. “It is cre­at­ing in­ter­nal ten­sions is the labour sys­tem; vide the ex­tended post of­fice strike,” she told City Press.

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