There are dozens of Labour Court cases asking the question about the definition of the employee, which will be handled in another column at a later stage.
In this column, we discuss who is your employer. This might sound strange as most employees fully understand who their employer is by merely looking at their payslip and their contract of employment.
Although in most cases the answer is simple, we have another set of rules and regulations and indeed legislation indicating that the answer is not as simple as the question.
One such part of the Labour Relations Act No 66 of 1995 (as amended) needs to be unpacked carefully. It affects thousands of employees in South Africa today. Section 198A(3)(d) looks at placed workers who are deemed to be employees of the client.
In other words, should the employee be placed to work elsewhere other than the supposed employer, that employee will have to question his or her employment relationship. We have an entire industry in South Africa called labour brokers or temporary employment services.
The labour brokers specialise in engaging staff and then placing them with client companies who require staff from time to time on either a short- or long-term basis.
On many of these occasions, the staff are placed with the client literally for years. The Labour Relations Act deals with this situation and in particular looks at the employment relationship between the placed employee and the client. This placement is also subject to two other issues.
First, the placement employee must be earning under the Department of Labour threshold.
Currently, this threshold is R21 000 a month. Boldly I state that most of the employees placed by the labour broker, or the temporary employment service are earning below the threshold. Furthermore, the employment of people in temporary service is limited to a period not exceeding three months.
Should the employee be performing a temporary service for the client beyond the three months then that employee is deemed to be indefinitely employed by the employer (the client).
The interpretation of the section in the Labour Relations Act has been subject to numerous court cases and literally thousands of arguments at the Commission for Conciliation Mediation and Arbitration (CCMA ) and the bargaining councils.
Court cases in the various courts have often not agreed with each other and invariably the issue of who is the employer has been bandied about for years. The issue was finally decided by the Constitutional Court under case number CCT194-17 (Assign Services (Pty) Ltd).
It should be noted that no less than 10 of South Africa’s most celebrated judges exercise their joint legal wisdom to write a majority judgment and a final outcome of the argument as to who is the employer. This judgment was handed down on July 26, 2018, and although Acting Judge Cachalia did not agree with the interpretation of the court, he was in the minority.
The court specifically found that if an employee is placed at the client for longer than three months and the employee is earning under the departmental threshold, then that employee becomes a permanent employee of the client.
The labour broking service (or temporary employment service) is now merely the administrator and not the employer. This has enormous consequences for the entire labour broking industry.
Furthermore, the judgment has great consequences for the employees who now have to look to the client to honour the labour legal obligations. The concept is strange and is certainly not practised in other jurisdictions around the world.
In essence, I personally don’t like the practice and the outcome of the Constitutional Court ruling, but we as South Africans and all employers in South Africa are bound by the ruling and there cannot be an appeal from the Constitutional Court.
* Michael Bagraim.
** The views expressed here are not necessarily those of Independent Media.
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