Advocate Tertius Wessels | Legal Director | Strata-G Labour Solutions | mail me |
For most labour brokers and their clients, the new judgement by the Constitutional Court – which determines that TES employees are deemed permanent employees of the client after a three-month period – it means business as usual.
The judgement merely provides clarity for labour brokers who run legitimate Temporary Employment Services (TES) and the clients who make legitimate use of them. However, for companies that use labour brokers to circumvent the responsibility of employing people themselves, the new ruling has greater implications and means they will have to change the way they are doing things.
Clarity
The ruling is meant to clarify the employment relationship between labour brokers, their clients and employees in circumstances where employees are placed at a client for a period longer than three months. Continued employment after three months triggers the ‘deeming provision’ – section 198A (3)(b) – of the Labour Relations Act.
Effectively, the judgment means that if an employee is placed at a client (and he or she is not filling in for another employee who is temporarily absent from work) then for the first three months, the labour broker is the employer.
In an instance, however, where the employee has been placed at the client for longer than three months, the client is then deemed to be the employer for the purposes of the Labour Relations Act.
This means if there is a dispute relating to any unfair labour practice, the issue is escalated to the client and not the labour broker. If the employee is dismissed, it is up to the client to show it was conducted for a fair reason and according to a fair process.
Nature of services
It is imperative that organisations carefully consider the nature of the services they want to procure from a TES and the ability of the TES to continue providing that service after three months.
More importantly, organisations need to determine to what extent section 198 and 198A of the Labour Relations Act 66 of 1995, as amended, will apply to the TES service offerings and affect their accountability towards the employees placed with them by the TES.
Earnings
Firstly, organisations need to consider whether the employees placed by the TES earn in excess of the earnings threshold established by the Minister of in terms of the BCEA.
The earnings of employees placed by a TES is of particular importance, given that section 198A only applies to those earning below the threshold. Placed employees, who earn in excess of the earnings threshold, will not be affected by the deeming provision of the Act and will continue to be employed through the TES without restraint.
However, in circumstances where the employees placed by the TES earn below the earnings threshold, companies need to consider the restrictions that are imposed the on the TES.
Genuinely temporary
It is also critical that corporates consider whether the work, for which the services of the TES employee is being procured, is genuine temporary work.
The 2014 Amendments introduced new provisions in section 198 and 198A to ensure that vulnerable, lower-paid people are employed in genuine and relevant temporary work.
Section 198A(3)(b) distinguishes between employees employed by the TES for temporary work and employees deemed to be employed by the client where the work is not temporary. The restrictions of TES employment to genuine temporary work affords clarity and corporates need to familiarise themselves with the parameters of temporary services and the protection afforded to employees placed by TES.
Deemed permanent
TES employees who are placed at a company for a period exceeding three months will become fully integrated into workplace as employees of the company.
Accordingly, for purposes of the Labour Relations Act, the company now becomes the employer and the employee becomes employed on the same terms and conditions as similar employees, with the same employment benefits and the same prospects of internal growth and job security.
The TES will not be able to protect employers from the consequences of employment relationships or relieve companies from having to concern themselves with the needs of the placed employees.
