Constitution Ruling With Regard to Temporary Employment Services (TES)

Much has been said in the Media with regard to the recent Constitutional Court Reading with regard to Temporary Employment Services, or what is more commonly knows as Labour Brokers. The judgement clarifies the amendments to the Labour Relations Act of 2014.

The amendments of 2014 sought to protect employees in Labour Broker arrangements which were clearly articulated in a letter addressed to NUMSA by employees of Concor Engineering which were sent to them in 2009 (Labour brokers: The good, the bad, and the ugly). It is particularly clarifying clause 198A 3 (b),i.e.

1. For the purposes of this Act, an employee –
   1. Not performing such temporary service for the client is –
      1. Deemed to be the employee of that client and the client is deemed to be the employer; and
      2. Subject to the provision of section 198B, employed on an indefinite basis by the client.

It is important to clarify a few issues which were raised in the judgement:

1. The judgement only affects employees who earn below R205 433.33 per annum (gross salary) or R17 119.43 per month. These are regarded in the law as vulnerable employees.
2. The judgement affects employees who are employed by a Temporary Employment Service (TES), but whose activities cannot be considered as Temporary. In other words, they are doing work that is core to the business of the client and that will last for longer than three months or in perpetuity.
3. The employee is not replacing another employee who is sick or on maternity leave.
4. The important thing is to distinguish between a TES and a sub-contractor or service provider.
   1. A sub-contractor has his own employees and provides not just the labour, but also the materials and tools required to do the work required.
   2. The sub-contractor has expertise which is not the core business of the client (e.g. security)
   3. The sub-contractor employs managers which directly supervise the employees in the carrying out of their duties.

By contrast, the TES merely supplies the labour who are then supervised and provided materials and tools by the client.

It is important to note that all TES providers must be registered as such and certified by the Department of Labour. The Department in the process of certification inspects and ensures that the TES is operating in accordance with all labour legislation.

We will see with interest what the effect of this judgement is going to be on the TES Industry.

For more information please see the press release on the Numsa website: NUMSA wins landmark Constitutional Court decision on labour brokers!