A while ago we posted an article regarding the changes in South African Labour Law and the concept of deemed employment.  When the Employee makes out a case for deemed employment, the question arose: Does this have the effect that the client of a Temporary Employment Services (TES), or Labour Broker become the sole employer?

The Labour Court ruled earlier this month according to an article and summary we found on FIN24 (See footnote for reference) that regarding the Temporary Employment Services (TES), or Labour Broker industry, the client organisation is a concurrent employer rather than the sole employer.
The court had to interpret the word “deeming” in the newly amended Labour Relations Act and found it must be regarded as an augmentation rather than a substitution.  This first “test” case of the new amended act was brought by Assign Services against the CCMA and others.
There was uncertainty experienced in the market as to who – the TES organisation or the client employer – is ‘deemed’ to be the employer of TES employees earning less than the earnings threshold (currently R205 433.30 per year) and who has been placed at the client for more than three months.

The Labour Court ruling sets aside the previous ruling – by the CCMA arbitrator – that the client organisation is the sole employer of TES employees after three months.  Acting Judge Martin Brassey found, among other things, the TES remains the employer of its employees, beyond the three month period.  The extension of the “deeming” provision is sufficient, only as far as extra protection of rights of TES employees in terms of the Labour Relations Act only.  Nothing in the law states that TES is to be substituted by client after the three month period.  The judge found that the client is a concurrent employer for the purposes of the Labour Relations Act as both parties need to ensure compliance with the act and that TES placed employees have an election (only when there’s a dispute relating to rights under the Labour Relations Act) to prosecute against either TES or the client.

Our conclusion is that the matter is now more clearly defined in practical terms, the concurrent employer concept has the result of giving this election to the Employee of who to hold responsible, but does this mean that both become the de facto employers of the employee.  This question still remains unanswered and may lead to uncertainty in terms of our Labour law, rights and duties as a whole outside the concept of fair and equal treatment and disputes arising as envisaged by the amendments and the Court ruling.

Deon Louw

http://www.fin24.com/Economy/Labour-Court-rules-on-temporary-employment-20150909