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CONSTITUTIONAL COURT OF SOUTH AFRICA
Case CTC 194/17
In the case between:
ASSIGN SERVICES (PTY) LIMITED – Claimant
and [19659004] NATIONAL UNION OF WORKERS OF SOUTH AFRICA – First Respondent
COMMISSION OF CONCILIATION, MEDIATION AND ARBITRATION – Second Defendant
ABDOOL CARRIM OSMAN NO – Third Respondent
KROST SHELVING & RACKING (PTY) LIMITED – Fourth Defendant
and
OFFICE OF OFFICIAL WORK SERVICES – Amicus Curiae
Neutral Citation: Award Services (Pty) Limited vs. National Union of Metalworkers of South Africa and others [2018] ZACC 22
Coram: Zondo DCJ, AJ Cachalia, Dlodlo AJ, Froneman J, AJ Goliath, Jafta J, Khampepe J, Madlanga J, Petse AJ and Theron J
Judgments: Dlodlo AJ (Majority): [1] to [85]
Cachalia AJ (dissenting): [86] to [109]
Heard on: February 22, 2018
Date of decision: July 26, 2018 [19659004] Abstract: Labor Relations Act 66 of 1995 – Section 198A (3) (b) – Temporary Help Services – Salaried Workers of the Client – Section supports the interpretation of the sole employer
ORDER
On appeal from the Labor Court of Appeal (hearing an appeal from the Labor Court):
1. Permission to appeal is granted.
2. The appeal is dismissed with costs
JUDGMENT
DLODLO AJ (Zondo DCJ, Froneman J, Goliath AJ, Jafta J, Khampepe J, J Madlanga, Petse AJ and Theron J concurring):
Introduction [19659003] [1] This application for leave to appeal from a judgment of the Labor Court of Appeal enjoins the Court to determine definitively the correct interpretation of the 39, section 198A (3) (b) of the Labor Relations Act [1] (LRA). Section 198A (3) (b) provides that an employee who earns less than the stipulated threshold and who is under contract with a customer through the intermediary of a temporary work service ( TES) for more than three months is deemed to be employed by this client. [2] The question before us is as follows: what happens to the LEC between the employee placed and the TES once that deeming provision comes into force? In particular, does s. 198A (3) (b) give rise to a dual employment relationship? employee is deemed to be both employed by the TES and the client? Or does it create a unique working relationship between the employee and the client for the purposes of the LRA?
[2] Statistics South Africa reports that the unemployment rate is 26.7% and that figure excludes more than two million discouraged job seekers. [3] Behind this figure, there is the legacy of systematic deprivation of opportunity for black South Africans and, within it, it is undeniable bias of the Racial inequality. This sad state of affairs accompanies a story of very poor working conditions and salary for black employees.
[3] The Legislature has stopped banning brokerage of labor, but it has enacted several amendments to the LRA to ensure the safety of marginalized workers and regulate the law. 39; industry. Section 198A is one of those amendments. The dispute that we are called upon to decide is the correct interpretation of section 198A (3) (b)
Parties
[4] The plaintiff in this case, Assign Services (Pty) Limited ( Assign Services / Assign), is a registered TES as defined in Section 198 of the LRA and also duly registered in accordance with the South African Companies Act. Awarding recruits, places, manages and pays employees who are placed with corporate clients, including the fourth respondent.
[5] The first respondent is the National Union of Metalworkers of South Africa (NUMSA), which is a registered trade union. NUMSA opposes the application for leave to appeal filed by Affign Services in the Labor Court of Appeals.
[6] The second respondent is the Conciliation, Mediation and Arbitration Commission (CCMA), to which the plaintiff and the first respondent disclosed in order to interpret section 198A ( 3) b) of the LRA. The CCMA is a statutory body established under the ARA.
[7] The third respondent is Commissioner Abdool Carrim Osman, the Commissioner appointed by the CCMA to determine the dispute that gave rise to the application.
[8] The fourth respondent is Krost Shelving and Racking (Pty) Limited (Krost), a company offering storage solutions, duly registered under South African corporate law. Krost is the client with which Assign Services has placed its workers in accordance with Article 198 of the LRA. He did not participate in the proceedings and indicated that he would abide by the CCMA's interpretation and subsequent court decisions.
[9] The Casual Worker Assistance Office (CWAO) was admitted as an amicus curiae. CWAO is an independent, non-profit consulting firm that focuses on the rights of employees who perform precarious work. He professes knowledge of clients' experiences with clients and baderts a substantial interest in these procedures on this basis.
Background
[10] The TES or "labor broker" was legally determined to be the true employer of employees placed by a 1983 amendment [4] to the old law on The Labor Relations of 1956. [5] The legislator of the time created a legal fiction that the employees placed were "deemed" to be employed by the broker. This provision, although differently constructed, was applied to subsection 198 (2) of the 1995 LRA. Then, in 2014, the LRA was amended to introduce several protections for employees in precarious employment. [6] These included Section 198A, which came into force on January 1, 2015.
[11] Section 198A regulates "temporary" employment, which is limited to a period not not exceeding three months. [7] Section 198A (3) (b) explicitly provides for another "deeming provision". It states that an employee who does not perform temporary service for a client is deemed to be an indefinitely employed employee of that client and that the client is deemed to be the employer.
[12] Krost has 40 employees and about 90 employees. Assign Services provides labor in Krost in the region of 22 to 40 workers at any given time, depending on the projects awarded to Krost, to complement the salaried employees of Krost.
[13] On April 1, 2015, Assign Services placed 22 workers at Krost. The workers provided services to Krost full time for a period of more than three consecutive months. This retention of employment, after the three-month period of a temporary employment service, triggered Section 198A (3) (b) of the LRA. Many of the employees placed are members of NUMSA.
[14] A conflict arose between Assign Services, Krost and NUMSA regarding the interpretation and effect of Section 198A (3) (b). Assign was of the view that the consequences of the deeming provision were that the posted workers remained their employees for all purposes, but were also deemed to be employees of Krost for purposes of the LRA. The surrender qualified this interpretation as "dual employer" in section 198A (3) (b). NUMSA was not in agreement. According to him, Krost became the sole employer of the workers placed when Article 198A (3) (b) was triggered. NUMSA has characterized this interpretation as "sole employer".
[15] On April 23, 2015, Assign Services referred the dispute to the CCMA under section 198D of the LRA [8]
History of the Litigation
CCMA
[16] ] The CCMA Heard the Dispute On May 22, 2015, much of the argument focused on the meaning of the term "deemed" and on the fact of knowing it was favorable to an interpretation by an employer one or two employers. I will come back to this later when I consider the correct textual interpretation of section 198A (3) (b).
[17] Assign submitted that nothing in sections 198 and 198A reflects a decision of the legislature to impose a prohibition on IOTs, whether the deeming provision takes effect or not. They stated that, even though it is clear that, for the first three months, the TES is the only employer, once the three-month period is over, the deeming provision does not terminate the agreement. between the customer and the TES. Nor does it terminate the contractual employment relationship between the TES and the placed workers. Assign baderted that dual employer interpretation provides better protection to the workers placed.
[18] NUMSA argued that a dual employer interpretation creates confusion and uncertainty, and that it harms vulnerable employees.
[19] The commissioner of the ACMC who presided over the case made a ruling that the triggering of paragraph 198A (3) (b) resulted in the customer being became the sole employer for purposes of the Act. In making his decision, the Commissioner attempted to interpret section 198A (3) (b) to give effect to his principal purposes.
[20] The Commissioner was of the opinion that the interpretation of the dual employer would lead to a number of problems, such as the confusion surrounding the discipline of the workers placed and the applicable disciplinary code of the parties. There may also be difficulties with the reinstatement of dual-employer workers, which would lead to increased uncertainty and confusion for vulnerable employees to whom the LRA seeks to provide greater protection.
Labor Court
[21] The summons sought review and cancellation of the CMPA Arbitral Award, arguing that the Commissioner committed substantial errors in law in his interpretation. She argued that section 198A should be read in conjunction with subsection 198 (2), which states that "a person whose services have been provided or provided to a client by a temporary service is the employee of this temporary employment service and temporary employment service is the employer of this person "for the purposes of the LRT.Assign this to the control provision that persists despite the legal fiction created by the Section 198A
[22] NUMSA baderted that sections 198 (2) and 198A create legal fictions and, once section 198A (3) (b) has been triggered, paragraph 198 ( 2) no longer applies to the employees concerned The two provisions are mutually exclusive
[23] The Labor Court (according to the Brbadey AJ judgment) concluded that the Commissioner of Labor CCMA had committed a substantial error of law. [9] He considered that the employment contract between the TES e The employee was the "source of control" in the employment relationship. The TES therefore retains control despite any new statutory relationship between the employee and the customer. [10] The client is only an employer for the purposes of the LRA, while the common law contract between the STA and the employee remains "firmly in place". [11] The Labor Court held that the rights of employees are therefore better protected by the interpretation of the dual employer. He reviewed and rescinded the Commissioner's decision.
[24] NUMSA sought leave to appeal the judgment of the Labor Court to the Labor Court of Appeals. She refused leave to appeal
Court of Appeal of Labor
[25] The Labor Court of Appeal granted NUMSA leave to appeal to appeal directly. On March 2, 2016, NUMSA filed an appeal against the labor court judgment. The CWAO and the Confederation of Private Sector Employment Associations (CAPES) have been admitted as amici curiae.
[26] CWAO supported NUMSA's arguments and argued that the dual employer interpretation is not supported by the clear language of section 198A (3) (b) read in its context. The relationship between the employees placed and the client companies was born as of right and independently of any contract of common law with the TES. [12] The sole interpretation of the employer gives effect to the purpose of the amendments and the constitutional rights of the workers set out in section 23 of the Constitution.
[27] CAPES supported Assign's arguments and argued that the LRA should also be read together and reconciled with the Basic Conditions of Employment Act [13] (BCEA), according to which TES is and remains the employer of all employees. The only way to reconcile the LRA and the BCEA after the presumption is the dual employer interpretation.
[28] The Labor Court of Appeals ruled that the employer's only interpretation best protected the rights of employees placed and promoted the purpose and objects of the LRA and amendments of 2014. He reviewed the definition of "temporary duty" in subsection 198A (1) and ruled that only persons performing truly temporary service should be employed by a WIT. [15] An employee who has been employed for more than three months does not perform any temporary service and the client becomes the sole employer under section 198A (3) (b).
In this Court
submissions
[29] Assign services requested to appeal to this Court. He argued that the Labor Court's decision "amounts to a prohibition on labor brokerage" and noted the serious implications of this decision for the entire labor market. South African work. The surrender argued that the Labor Court of Appeals did not properly consider the wording of the deeming provision and focused on the purpose of the exclusionary provision. other necessary considerations. Since the word "deemed" is inherently ambiguous, he argued, it must be taken into account in its legislative context. The Labor Court of Appeal did not properly review Section 198A (3) (b) in the context of the remainder of sections 198 and 198A.
[30] First, the LRA still allows a TES to offer employment services after the three-month period. Second, Article 198 (2) has not been amended by the insertion of Article 198A. This means that the TES must remain an employer for the purposes of the LRA. Third, the rights of employees are no better protected by the interpretation of the single employer. In effect, they would lose the protection of several provisions of the LRA, including subsection 198 (4), which jointly and severally imposes certain contraventions of an SEA "in respect of its employees" and section 198 (4A). Finally, employees could be abused by an LES if common law employment contracts continued to exist between the employees placed and a non-LRA regulated TSE. During this time, an employee placed will be transferred to a new employer without the consent of the employee placed and "forced" into new employment relationships on terms to which they did not consent. According to the contention, the only plausible interpretation is that of a relationship of duplication
The NUMSA Arguments
[31] NUMSA maintains that sections 198 and 198A create two distinct determinative provisions that can not work simultaneously. He argues that this interpretation does not prohibit TES. On the contrary, it regulates them with regard to only employees placed less paid in employment for more than three months. Positioned employees who earn above the BCEA threshold may continue to be employed through the unrestricted TES. The deeming provision modifies only the contract between the worker placed and the TES; this does not affect the contract between the TES and the customer. The TES may continue to provide services relating to the employee to the extent that he does not claim to employ them.
[32] NUMSA challenges Assign's characterization of the employment relationship between a TES and an employee. He argues that the TES "does not" usually employ an employee before placing it with his clients. The contractual relationship only becomes an employment relationship when the employee is placed and remunerated. The TES becomes the statutory employer of the worker once it is placed. [16] The common law contract between the TES and the employee placed generally contains the terms and conditions of employment of the employee once they are placed with a client. This is a unique set of terms and conditions of employment that will be transferred to statutory liability when it pbades from the TES to the client. Conditions can only change in favor of the employee to align with other employees in similar positions. [17]
[33] The absurdities that Assign reads in sections 198A (4) and (5) and 198 (4A) further protect the employees placed and only apply when a continuous TES continues to provide a service to a client outside of his or her role as an employer. 19659003] The arguments of Amicus
[34] CWAO was admitted as amicus before this Court. Their application details practical experience in working with temporary workers employed through the TES. They note a number of difficulties arising from a relationship of duplication that bias has placed employees.
[35] First of all, a TES is empowered to permanently move a worker placed, reduce their wages and change their job descriptions. This obviously manifests the insecurity of employment. Secondly, placed workers can not demand equal pay from employer employers and are subject to financial discrimination. Third, posted workers struggle to enforce LRA claims against employers. An employee fired by a client will usually be fired by a TES because there is no more work for him. As a result, the employee's claim against the client would be at the CCMA, but their claim against the TES should be made directly to the Labor Court. There would be different claims, different employers and different instances arising from the same set of facts. Fourthly, placed workers are unable to participate meaningfully in collective bargaining. The terms of their employment are agreed between the TES and the client before they are placed and they are usually too vulnerable to raise grievances through strikes. Even if the strike is protected against the client employer, it is unlikely that it is protected from the TES.
[36] The CWAO agrees with NUMSA's interpretation that the two determinative provisions can not operate simultaneously. They describe Section 198A (3) (b) which considers the provision as "reversing the fiction" created in section 198 (2) for low-income workers engaged in continuous work
Jurisdiction [19659003] [37] The LRA gives effect to the right to fair work practices provided for in Article 23 of the Constitution. His interpretation is a constitutional question. [18] The Court therefore has jurisdiction to hear the case under paragraph 167 (3) (b) (i) of the Constitution because the case concerns the interpretation of the LRA.
Leave to Appeal
[38]the point we are asked to consider is the correct interpretation of section 198A (3) (b ) (i) of the LRA. This has profound implications for the ability of TES to provide a post-determinative service offer. Assign may be right in saying that this is tantamount to banning the brokerage of labor after the expiry of the three-month period. A significant portion of the country's workforce is employed through the TES. In its documents before the Labor Court, CAPES said its members place more than 700,000 workers a day. The controversy behind this demand has serious implications for the South African labor market and the continued role of the TES, the rights of the TES, the rights of their clients and the rights of the hundreds of thousands of employees. engaged through the TES. daily basis. [19]
[39] Assigning carries a reasonable chance of success. The correct interpretation of Section 198A (3) (b) is widely disputed, as evidenced by the conflicting judgments of the Labor Court and the Labor Court of Appeals. It is in the interests of justice that leave to appeal be granted.
[40] CWAO filed its written submissions two days late due to delays in receiving the Court's directions. The delay was not excessive and no harm was caused.
The Appeal
Interpretation of Section 198A of the LRA
[41] It is clear that legislation must be interpreted textually, contextually and intentionally. In NEHAWU this Court stated:
"The stated purpose of the LRA is to promote economic development, social justice, social peace and the democratization of the workplace." This must be achieved by accomplishing its main objectives, which includes giving effect to Article 23 of the Constitution. It sets the parameters of its interpretation by enjoining the persons responsible for its application to interpret it in accordance with the Constitution and the international obligations of South Africa. The LRA must therefore be purposely interpreted to give effect to the Constitution. [20] (Footnotes omitted.)
[42] The object of section 198A must be contextualized in the right to fair labor practices the Constitution [21] and the purpose of the LRA as a whole. This provision is set out in section 1 of the LTA:
"The purpose of this Act is to promote economic development, social justice, social peace and the democratization of the workplace by completing the principal objects of this Act.
(a) to give effect to and regulate the fundamental rights conferred by Article 23 of the Constitution of the Republic of South Africa, 1996;
(b) to give effect to the obligations entered into by the Republic as a Member State; (c) to provide a framework within which employees and their trade unions, employers and employers' organizations may: [i] negotiate collectively to determine wages, conditions of employment and other conditions of work; issues of mutual interest; and
(ii) formulate an industrial policy;
(i) orderly collective bargaining
ii) collective bargaining at the sectoral level
iii) employee participation in workplace decision-making;
[43] Any provision of the LRA must therefore be interpreted as creating clear and precise parameters that allow employers and employees to participate meaningfully in labor relations. Section 198A (3) (b), at first glance, is unclear. [22]
[44] Subsection 198 (2) reads as follows: "[A] person whose services were provided or provided to a client by a temporary employment service is the employee of that employment service temporary employment service is the employer of that person. "It is irrelevant, for the purposes of subsection 198 (2), that an employee and TES enter into a contract of employment. Employee provides a service to the client of the TES, he automatically becomes the employee of the TES.
[45] Under the 1956 LRA and the 1995 LRA (before the 2014 amendments), the TES was expressly designated as an employer for purposes of the LRA [23] Section 198A (3) (b) applies a different regime to employees who have provided service for more than three months if they fall below 39; a specified income threshold.But Article 198A (3) (b) does not proclaim that an employee "is" the customer's employee. On the contrary, the employee is "deemed to be" the client's employee. This disjunction does not in itself mean that "deemed to be" is smaller than "is" and that the two articles are, in their true sense, "determinative provisions".
[46] In the past, our labor legislation tended to expressly badign labor rights obligations to a single employer in the LRA in 1956 and 1995, but this is no longer the case . Section 200B (2) explicitly recognizes that there may be more than one "employer" for purposes of liability. Currently, the client is expressly designated as the employer for the purposes of the Occupational Health and Safety Act [24] (OHSA). TES is excluded from the definition of "employer" in section 1 of the OHSA. [25] In the meantime, the TES is expressly designated as the employer for the purposes of the BCEA. [26]
[47] In addition, sections 198A (3) (b) and 198 (2) do not expressly refer to each other or indicate how they are to relate. Neither of the two sections is "subordinate" to the other, and there is no explicit mention that both sections can operate simultaneously.
[48] According to Assign, this disjunction is indicative of a second employer. This does not create a situation where the employee only becomes employed by the customer. The position of NUMSA is that Section 198A (3) (b) and Section 198 (2) are determinative provisions. They are triggered by different events and can only function separately in these distinct circumstances.
[49] Therefore, to discern its true meaning, section 198A (3) (b) must be read in context and in light of its constitutional purpose.
Contextual Reading
[50] I will deal first with the disjunction caused by the use of the word "reputed". Much has been said about it before the CCMA in particular. NUMSA argued, on the basis of the County Council of Norfolk [27] and the Oxford dictionary definition of the word ("consider as being") that "reputed" could easily be replaced by "is". Assign invoked Rosenthal [28] and Haffejee [29] to support their argument that the word has no meaning outside its context [30] and in this context it creates a different relationship from "is" in section 198 (2). My point of view is that nothing revolves around that. This should not be controversial in the interpretation process of Section 198A (3). Both sections create statutory employment relationships and if one persists parallel to the other does not depend on how we read "deemed".
[51] Secondly, I consider Section 198A (3) (b) of Section 198A (3). Paragraph 198A (3) deals with the question of who is the employer of an employee who performs a temporary employment service and of an employee who does not perform temporary employment service. It begins at paragraph 198A (3) (a) by defining a temporary employee as "the employee of [TES] under section 198 (2)". It then creates an alternative to paragraph 198A (3) (b). If the employee does not perform temporary services, he is "deemed to be the employee of this client". Paragraphs are divided by "or" and only subsection 198A (3) (a) is "under section 198 (2)". L'utilisation de "ou" impose un choix. C'est une indication forte que le TES ou le client sont des employeurs aux termes de l'article 198A (3).
[52] Cette interprétation est encore renforcée par le placement textuel de l'article 198A (3). L'article 198A est intitulé: «Application de l'article 198 aux employés dont le salaire est inférieur au seuil de rémunération». L'article 198A nous dit comment l'article 198 s'applique aux employés marginaux dans des relations de travail précaires et limite son application à un emploi véritablement temporaire. Il commence par définir un «service temporaire» comme «un travail pour un client par un employé» en remplacement d'un employé temporairement absent, par une convention collective ou tout emploi «pour une période n'excédant pas trois mois». [31] Il précise ensuite que l'article ne s'applique qu'aux employés dont le revenu est inférieur au seuil établi par le ministre en vertu de la Loi sur les sociétés par actions. [32]
[53] Ensuite, il définit l'employeur pour les catégories d'emploi réglementées dans cette section. Ici, l'article 198A (3) (b) devient la clause opératoire déterminant l'identité de l'employeur pour les employés dont le salaire est inférieur au seuil. Ensuite, une fois qu'un employé est embauché par le client en vertu de l'article 198A (3) b), l'employé doit, selon le paragraphe (5): «être traité non moins favorablement qu'un employé du client travail similaire, à moins qu'il y ait une raison justifiant un traitement différent ". Cela ne s'appliquerait évidemment que dans le cas où les conditions d'emploi applicables au travailleur placé sont moins favorables que celles applicables aux employés du client. Enfin, pour empêcher le client de tenter d'éviter l'application de l'alinéa 198A (3) b), le législateur a ajouté le paragraphe (4). Cela stipule que si un TES ou un client met fin à la mission d'un employé pour éviter l'application de l'article 198A (3) (b), cette résiliation sera considérée comme un licenciement et les recours habituels disponibles par l'ARS s'appliqueront. [33]
[54] Une simple lecture de l'article 198A (3 ) (b) fait clairement la distinction entre les employés employés par le TES pour le travail temporaire et ceux qui sont réputés être employés par le client du TES lorsque le travail n'est pas temporaire. Interpréter cette section pour signifier que le client devient «l'un des employeurs» impose la langue utilisée . Si la législature voulait que le client devienne un co-employeur ou un co-employeur avec le TES, il aurait pu facilement permettre au client de «également» être l'employeur.
[55] Cependant, sur l'interprétation d'Assign, cela créerait une absurdité. Ils soutiennent qu'un employé placé doit être un employé du STT parce que ce dernier correspond à la définition de l'article 213 de la LEL. L'article 213 prévoit que «employé» signifie –
«(a) toute personne, à l'exclusion d'un entrepreneur indépendant, qui travaille pour une autre personne. . . et qui reçoit, ou a le droit de recevoir, toute rémunération; et
b) toute autre personne qui aide de quelque manière que ce soit à l'exercice ou à la conduite des affaires d'un employeur. »
Un travailleur placé ne pouvait pas être un employé de TES en vertu de l'article 213 et simultanément 198A (3) (b). Mais la relation d'emploi habituelle avec le TES n'est pas couverte par l'article 213. Si tel était le cas, il ne serait pas nécessaire que la relation d'emploi soit réputée exister au paragraphe 198 (2).
[56] Assign, à juste titre, a fait peu de l'argument de l'article 213 devant nous à l'audience. Their counsel seemed to concede that there may be doubt as to whether a placed employee would ordinarily be “employed” by the TES for the purposes of section 213. In response, counsel for CWAO strongly baderted that “sitting on the books of a TES does not make you an employee”. In my view, this must be correct.
[57] Section 198(4) and (4A) of the LRA, however, occasions some difficulty. Section 198(4) reads as follows:
“The [TES] and the client are jointly and severally liable if the [TES]in respect of any of its employees, contravenes—
(a) a collective agreement concluded in a bargaining council that regulates terms and conditions of employment;
(b) a binding arbitration award that regulates terms and conditions of employment;
(c) the [BCEA]; or
(d) a sectoral determination made in terms of the [BCEA].”
[58] This section regulates liability for the period where a placed employee is employed by the TES. Section 198(4) creates a substantive and statutory form of joint and several liability – which does not equate to joint or dual employment but rather creates a statutory accessory liability for the client in the circumstances set out in the section – where the TES carries principal liability as employer in terms of the LRA. Section 198(4A) adds to this that—
“[i]f the client of a [TES] is jointly and severally liable in terms of section 198(4) or is deemed to be the employer of the employee in terms of section 198A(3)(b)—
(a) the employee may institute proceedings against either the [TES] or the client or both the [TES] and the client;
(b) a labour inspector acting in terms of the [BCEA] may secure and enforce compliance against the [TES] or the client as if it were the employer, or both; and
(c) any order or award made against a [TES] or client in terms of this subsection may be enforced against either.”
[59] Counsel for Assign submitted that section 198(4A) “[f]acilitates the enforcement of the employees’ rights as employment rights as against the TES . . . and the client”. (Emphasis added.) If the sole employer interpretation is preferred, he continued, the section would recognise only one employer but would still introduce mechanisms to allow employees to enforce obligations against both the TES and the client.
[60] CWAO’s counsel contended that the second part of section 198(4A) merely permits a placed employee to bring or enforce a claim against either the TES or the client. It does not make the TES liable for claims outside of section 198(4). In a sense, all section 198(4A) provides is a practical solution to placed employees being barred from instituting proceedings if they proceed against the incorrect party.
[61] I am persuaded that the sole employer interpretation is not hampered by section 198(4A). The section does not purport to determine who an employer may be from time to time. It provides that, while the client is the deemed employer, the employee may still claim against the TES as long as there is still a contract between the TES and the employee. This is eminently sensible considering that the TES may still be remunerating that employee. The view is buttressed by section 200B, which provides very broad general liability for employers. Section 198(4) and (4A) seems to carve out specific areas of liability for a TES pre- and post-deeming as opposed to the general liability applicable in terms of section 200B.
[62] It is likely that subsection (4A) was introduced to provide recourse directly against the client for contraventions in terms of section 198(4) without first having to institute proceedings against the TES. Paul Benjamin explained the pre-amendment position as follows:
“The consequence of joint and several liability is that if a labour broker fails to pay amounts owing to its employees, the client for whom the employees worked is liable to make those payments. This liability arises regardless of whether the client has paid the TES or not. In theory, the introduction of this form of joint and several liability transfers the risk of the labour broker defaulting on its obligations from the employee to the client. However, the client’s liability is a default liability; the client cannot be sued directly in the [CCMA] or Labour Court . . . because it is not an employer.”[34]
[63] In other words, before the 2014 Amendments, a claim had to be brought against the TES first. The client would be held liable by operation of law if the TES failed to comply with its obligations. Under section 198(4A), however, the client’s liability ceases to be “default liability”. The client is deemed the employer of the placed worker and can thus be sued directly in the CCMA or the Labour Court. In this way, section 198(4A) offers placed workers more protection than section 198(4)’s joint and several liability protection. It also allows an employee to sue a TES directly, despite it not being an employer.
[64] A TES’s liability only lasts as long as its relationship with the client and while it (rather than the client) continues to remunerate the worker. Nothing in law prevents the client and the TES from terminating their contractual relationship upon the triggering of section 198A(3)(b), with the client opting to remunerate the placed employees directly. If this happens, the TES that placed the worker will cease to be a TES in respect of that worker because it will no longer meet the requirement in section 198(1) of remunerating the worker. The TES will then fall out of the relationship entirely.
Purposive approach
[65] As I have already mentioned, the 2014 Amendments were effected in the wake of persistent, widespread protests against labour broking. In negotiations leading to the amendment, one trade union conglomerate famously insisted that the then six‑month limit on temporary employment should be reduced to zero months.[35] The amendment that materialised did not ban labour broking. Instead, it aimed “to provide greater protection for workers placed in temporary employment services”.[36] There appear to be two offshoots of this purpose: the first is to protect marginal workers in temporary employment; and the second is for temporary services to be truly temporary.
[66] We have some insight to the purpose of the legislation through the explanatory memorandum to the 2012 Bill.[37] This does not speak to the Act in its final form and should be treated with caution, but it gives some credence to the two-fold purpose described above. It describes the “main thrust” of the new provisions introduced in sections 198 and 198A as aiming to “restrict the employment of more vulnerable, lower paid workers by a [TES] to situations of genuine and relevant ‘temporary work’; and to introduce various further measures to protect workers employed in this way”.[38] (Emphasis added.)
[67] The restriction of TES employment to genuine temporary work affords the clarity and precision needed by the LRA to realise the constitutional rights to fair labour practices and meaningfully to participate in trade union activity.
[68] The restrictions are sufficiently circumscribed in the language of the LRA to give effect to this purpose. By adding sections 198A and D, the legislature identified the parameters of “temporary services” and detailed the protection afforded to placed employees.[39]
[69] Part of this protection entails that placed employees are fully integrated into the workplace as employees of the client after the three-month period. The contractual relationship between the client and the placed employee does not come into existence through negotiated agreement or through the normal recruitment processes used by the client. The employee automatically becomes employed on the same terms and conditions of similar employees, with the same employment benefits, the same prospects of internal growth and the same job security that follows.
[70] The purpose of the section 198A amendments is clear. It exists to fill a gap in accountability between client companies and employees who are placed with them.[40]
Triangular relationship
[71] One of the main difficulties raised by Assign is: what happens to the contract between the TES and the placed employee if they are no longer the employer? Assign points out that a TES may continue in an employment relationship with a placed employee after the three-month period by virtue of their common law and residual legislative functions, even if the TES is no longer deemed to be the employer through section 198A(3)(b). This, they say, may lead to an employee losing the protections of the LRA in ongoing relationships with a TES.
[72] Ancillary to this is a second argument, that an employee contracts with a TES on very favourable terms and that all these benefits may be lost on transfer to a client company. Counsel relied, in part, on section 198(4C) of the LRA in support of this. Section 198(4C) precludes employment by a TES “on terms and conditions of employment which are not permitted by this Act, any employment law, sectoral determination or collective agreement concluded in a bargaining council applicable to a client to whom the employee renders services”.
[73] In evaluating these arguments, it is necessary first to consider the “triangular” nature of the TES/client/placed employee relationship. The triangular relationship exists to split the functions of the employer between the TES and the client for a fee. However, the functions for which the TES is responsible seldom relate to the actual work of the employee.[41] Their primary responsibilities are to pay and manage the human resources component of employment, while the day-to-day management, work allocations and performance badessment in most circumstances are conducted by the client only. The client is also responsible for the employees’ working conditions because employees are placed on the client’s premises. Importantly, the client also has the power to discontinue the employee’s services.[42] In a sense, the TES is merely the third party that delivers the employee to the client. The employee does not contribute to the business of the TES except as a commodity. And, on a practical level, the contract between a TES and a placed worker seldom constitutes an employment contract.
[74] In Lad Brokers,[43] the Labour Appeal Court held that the common law does not necessarily regard the TES as the employer of the placed workers.[44] In truth, a TES can operate without concluding contracts of employment with the workers it places.[45] All that is required for the TES to constitute a statutory employer in terms of section 198 of the LRA is that it places workers with clients for a fee and remunerates those workers. Of course, this is less onerous than the test for establishing conventional employment either at common law or in terms of the relevant definitions. It is therefore incorrect to contend that a TES is usually in an employment relationship with workers it places with clients.
[75] This also makes it difficult to accept Assign’s argument that the sole employer interpretation forces employees into a new employment relationship, without their consent, on terms of employment to which they have not agreed. Section 198(2) gives rise to a statutory employment contract between the TES and the placed worker, which is altered in the event that section 198A(3)(b) is triggered. This is not a transfer to a new employment relationship but rather a change in the statutory attribution of responsibility as employer within the same triangular employment relationship. The triangular relationship then continues for as long as the commercial contract between the TES and the client remains in force and requires the TES to remunerate the workers.
[76] In this scenario, there is no question of an infringement of the placed employee’s right to choose their trade or profession. The point is that the employee continues to perform work in the position into which they were placed. This does not prejudice the worker or infringe their right in any manner.
[77] Assign’s strongest argument is not that TESs offer equal or better terms of employment than client companies, but rather that the placed employees’ constitutional and LRA rights are better protected by a dual employer interpretation. I now turn to deal with this argument.
Does a dual employer interpretation offer greater protection?
[78] Assign argues that having two employers against whom an employee can equally claim provides greater protection to the vulnerable workers in these circumstances. This poses the question: what is so wrong with having two employers? I accept that not every dual employer relationship will prejudice employees, but I do not accept this to be the case for the TES/client/placed employee triangular relationship.
[79] The first reason for this is that, before the 2014 Amendments, the TES existed to obfuscate. Its purpose was to protect the client from consequences of employment relationships and to relieve them from having to concern themselves with the human resources needs of people working for them.[46] The TES is incentivised to offer lower prices in order to be awarded the client’s contract, necessarily translating to lower wages for placed employees.[47] This is now circumscribed by the LRA but, while triangular relationships exist, companies may and do contract out of their employment obligations in respect of placed employees. Retaining the TES as employer may have the effect of frustrating the purpose of these amendments.
[80] Second, the placed employee retains the right to claim against a TES through section 198(4A) to the extent that they are still remunerated by the TES. The employee is largely protected against the TES regardless of whether the claim is made against an employer. But this liability relates only to claims brought by the employee. The protections afforded by the sole employer interpretation go beyond this. They give employees certainty and security of employment.
[81] The promotion of certainty in employment is not, as contended by counsel for Assign, to patronise placed employees. The absence of certainty threatens employees’ ability to exercise their LRA rights. CWAO set out a number of practical difficulties arising from this uncertainty. They include: complying with two sets of terms and conditions and two disciplinary codes which may characterise misconduct and poor performance differently;[48] ascertaining which employer dismissed the employee, which should reinstate them, whether reinstatement applies to both or only one employer; and which LRA procedure applies to a dismissal.
[82] Another difficulty raised by CWAO is the practicality of embarking on strike action, which is afforded constitutional protection in section 23(2)(c) of the Constitution.[49] They contend that a matter of mutual interest between the employee and TES may be different from a matter of mutual interest between the employee and the client company. As a result, a strike may be protected as against one employer but not the other, rendering the employee vulnerable to dismissal. I am persuaded by these arguments that the sole employer interpretation best protects the rights of placed workers.
Conclusion
[83] Regard being had to the language employed in section 198A(3)(b) read with sections 198 and 198A, the following is discernible:
(a) Section 198 deals with the general position with regard to TESs, while section 198(2) is a deeming provision creating a statutory employment contract between the TES and a temporarily placed employee.
(b) Section 198A deals with the application of section 198 to a specific category of workers, being marginal employees employed below the BCEA threshold.
(c) Section 198A(3)(a) provides that, when vulnerable employees are performing a temporary service as defined, they are deemed to be employees of the TES as contemplated in section 198(2).
(d) Section 198A(3)(b)(i) provides that when vulnerable employees are not performing a temporary service as defined, they are deemed to be the employees of the client.
(e) The deeming provisions in sections 198(2) and 198A(3)(b)(i) cannot operate at the same time.
(f) When marginal employees are not performing a temporary service as defined, then section 198A(3)(b)(ii) replaces section 198(2) as the operative deeming clause for the purposes of determining the identity of the employer.
[84] As stated above, the language used by the Legislature in section 198A(3)(b) of the LRA is plain. And, when interpreted in context, it supports the sole employer interpretation. It certainly is also in line with the purpose of the 2014 Amendments, the primary object of the LRA, and the right to fair labour practices in section 23 of the Constitution.
Order
[85] In the result, the following order is made:
1. Leave to appeal is granted.
2. The appeal is dismissed with costs.
CACHALIA AJ:
[86] I have had the benefit of reading the judgment of Dlodlo AJ (first judgment) and regret that I am unable to agree that on a proper interpretation of section 198A(3)(b) of the LRA, the client replaces the TES as the employer. I would hold that both continue jointly as employers of the workers. The factual background and litigation history of the dispute has been set out in some detail in the first judgment and needs no repetition. I gladly adopt them.
The nature of the dispute
[87] The dispute between the parties arises as follows: sections 198 and 198A regulate labour brokers, who render temporary employment services. Section 198(1) defines a TES as a person who, for reward, procures for or provides to a client, the services of workers whom it remunerates. The LRA treats the TES as the employer of the employees placed with its clients. That is so firstly because section 213 says so, and secondly, because section 198(2) clbadifies them as such.[50]
[88] Section 198A was introduced in 2015 to provide additional protection to vulnerable lower paid employees, who continue working for a client beyond three months. Section 198A(3)(b) provides that these employees are “deemed” to be employees of that client, who in turn is deemed to be their employer. The issue is whether this deeming provision has the effect of making the client an employer in addition to the TES or in substitution for the TES as the employer. In the industry the debate is characterised as being over the sole employer interpretation or dual employer interpretation.
[89] Assign, the labour broker, contends for the dual employer interpretation whilst NUMSA, the trade union, argues for the sole employer interpretation. Intuitively, one may be tempted to think that because a union is more likely to advance the interests of vulnerable workers than labour brokers would be, then the union’s interpretation must be correct. This is more so because unions have waged a consistent battle to curb labour broking. Conversely, because there has been reported abuse of vulnerable employees by labour brokers, one’s instinct is that their interpretation may be wrong.
[90] But statutory interpretation eschews any intuitive responses. It is an objective exercise that requires, instead, a proper badysis of the language, context and purpose of the relevant provision. In addition, and where appropriate, its alignment with other statutes and constitutional implications of the meaning attributed to it must be part of the equation.
The language
[91] The TES usually engages the worker under a common law employment contract. The applicant refers to this as an innominate contract, and for present purposes I accept this nomenclature. Sections 213 and 198(2) render these workers employees of the TES, with the full protection of the LRA. Section 198A was enacted to give vulnerable employees additional protection, which is the section’s primary purpose. Section 198A(3)(b) does so by “deeming” the client to be their employees’ employer indefinitely after three months has elapsed. This is common ground between the parties.
[92] Deeming provisions are often used in statutes to give the subject-matter a meaning not ordinarily badociated with it. What section 198A(3)(b) does, therefore, is to recognise that the TES is ordinarily the employer as stipulated in section 198(2) but that the client is also regarded as the employer after the three month period has elapsed. If the object was to make the client the sole employer after the effluxion of this period, section 198A(3)(b)(i), instead of the deeming provision, could have been drafted quite simply to read‑
“(3) For the purposes of this Act an employee—
. . .
(b) not performing such temporary service for the client. . .—
(i) ceases to be the employee of the temporary employment service and is deemed to be the employee of the client.”
[93] Alternatively, section 198A(3)(b) could equally easily have been drafted to override or qualify the worker’s status as an employee of the TES in terms of sections 213 and 198(2). The choice of language used – or rather, not used – in the section is therefore consistent with the dual employer meaning. But I accept that, read in isolation, this may not be conclusive. As the first judgment observes, another plausible interpretation is that the section distinguishes between employees employed by the TES and those deemed to be employees of the client,[51] which also tends to support the sole employer model. It is therefore necessary to also examine whether the contextual indications point in either direction.
Purpose and context
[94] Sections 198(4) and 198(4A), which the first judgment freely admits creates some difficulty for the sole employer model,[52] are critical in this badysis.[53] Section 198(4) renders the TES and the client jointly and severally liable for certain TES contraventions “in respect of any of its employees”. Under the dual employer interpretation, the vulnerable employees continue to enjoy this provision’s protection. But under the sole employer interpretation, they lose it when they pbad the three‑month mark because they cease to be employees of the TES under the deeming provision. This is plainly at odds with the purpose of giving placed employees additional protection.
[95] Section 198(4A), was introduced at the same time as section 198A and cross‑refers to the deeming provision. It says expressly that if a client “is deemed to be the employer” of an employee in terms of section 198(A)(3)(b), certain employer duties may be enforced against either or both the TES and the client. In other words, the employee may sue either or both. A labour inspector may enforce compliance with the BCEA. An order or award made against the one is enforceable against the other.
[96] The applicant contends, in my view persuasively, that these provisions proceed from the premise that, if the deeming provision is triggered, that is, if the client is deemed to be the employer in terms of section 198A(3)(b), both the client and the TES are deemed to be the employers of the workers. It is only on this basis that the section may render the duties of an employer enforceable against both the TES and the client. This gives the employees added protection by allowing them to enforce their employment rights against two employers. The section makes no sense otherwise.
[97] The first judgment, however, baderts that section 198(4) creates a “substantive and statutory form of joint and several liability”,[54] which does not equate to joint or dual employment, but is merely a statutory accessory liability for the client.
[98] But this is not so. Section 198(4) does not create an accessory liability – akin to a suretyship obligation – for the client. It says explicitly that the TES and client are jointly and severally liable in solidum (in the whole), which means that the worker can sue either or both. Put differently, the worker has a right of action against either or both and they have a corresponding joint obligation towards the worker. This is why the section, as the applicant correctly contends, renders the duties of an employer enforceable against both the TES and the client.
[99] In the same vein section 198(4A) creates substantive rights for vulnerable employees against both the TES and the client. It recognises that they badume joint obligations towards the employees as employers. This is why any order or award made against a TES or a client may be enforced against either.[55] There can be no other reason for imposing liability upon both. Once the section is understood in this way, there is no room for attempting to explain away the difficulty posed by its language, as the first judgment does, as merely conferring “a practical solution to placed employees being barred from instituting proceedings if they proceed against the incorrect party”.[56] On the sole employer interpretation, liability is imposed upon the TES without it having any obligations, as an employer, towards the employees. This cannot be. It follows that section 198(4A) supports the dual employer interpretation.
Adverse consequences of sole employer interpretation
[100] On the sole employer interpretation the deeming provision has the following consequences: the worker ceases to be an employee of the TES for purposes of the LRA; the employment contract between the worker and the TES remains, but without the additional benefits the LRA confers upon workers; and the worker is involuntarily transferred to a client who becomes her employer without her accrued employment rights – such as accrued leave, annual bonus and pension from the TES to the client.
[101] In addition, the employee does not have a contract of employment with her new employer, the client. Her only protection is that she is deemed to be employed by the client on an indefinite basis in terms of section 198A(3)(b)(ii), and that she cannot be treated less favourably than an employee performing the same or similar work under section 198A(5).
[102] These provisions are of little comfort to employees transferred to a client who has no employees performing the same or similar work, which means that there is no baseline for the determination of an employee’s terms of employment. On the other hand the TES may have agreed conditions of employment with the employee that are more generous than those applying to the same or similar work for the client, in which case the employee is likely to suffer an involuntary downgrade of the terms of her new employment with the client.
[103] Another obvious consequence of the single employer model is that employees will be left more vulnerable in the event of a client’s liquidation. The employee will, in that event, not be able to look to the TES to be protected from the consequences of a loss of employment.
[104] These adverse consequences of the sole employer interpretation are all antithetical to the primary purpose of the enactment of section 198A(3)(b), which is to give protection to vulnerable employees, in addition to the protection already enjoyed as employees of the TES. Instead, the sole employer interpretation unavoidably places vulnerable employees in an even weaker position in some instances. Neither NUMSA, nor the amicus curiae, who support the sole employer interpretation, have advanced cogent reasons to demonstrate that their interpretation grants additional or better protection than the dual employer interpretation. The sole employer interpretation is therefore clearly wrong.
[105] This conclusion is fortified by the fact that there are no transitional provisions that cater for the transfer of the employee from the employ of the TES to the client in section 198A. Nor is there any language in the section saying that the workers are deemed to be transferred to the client after three months. The unavoidable inference is that the section does not envisage a transfer. The lawmaker intended both employment relationships to continue in tandem. It did not enact any transitional arrangements because none were necessary.
Alignment with the BCEA
[106] It is apparent that the lawmaker has aligned the provisions of the LRA and the BCEA so that they work together. Section 1 of the BCEA defines an “employee” and a “temporary employment service” in the same terms as the LRA. Section 82(1) of the BCEA is identical to section 198(2) of the LRA. The two statutes are therefore perfectly aligned to reflect that the TES is “employer” of its employees placed with the client. The dual employment interpretation is consistent with this alignment. When the deeming provision is triggered, the TES remains the employer under both the BCEA and the LRA, except for the limited purpose of section 198A(3)(b) of the LRA, where the client is also deemed to be the employer of the employee.
[107] The sole employer interpretation disturbs this alignment. Once the deeming provision is triggered, the client is the only employer for purposes of the LRA while the TES remains the employer for purposes of the BCEA. The sole employer interpretation thus offends the principle that where statutes cover the same terrain, they should, unless the difference is clear and unambiguous, be construed in a manner that is consistent.[57] The Labour Appeal Court has endorsed this principle.[58] It has also applied the rule specifically to interpret the BCEA and the LRA harmoniously.[59]
Constitutional implications
[108] Having badysed the purpose, language and context of the deeming provision, and having also considered its alignment with the relevant sections in the BCEA, there is no room for any ambiguity – the dual employer interpretation is the only interpretation that can reasonably be ascribed to it. But to the extent that the section is arguably reasonably open to the alternative sole employer interpretation, this is also inconsistent with the Constitution. It forces the employees into a new relationship without their consent and on terms of employment to which they have not agreed. This brings the deeming provision into conflict with the employees’ rights to fair labour practices in section 23(1) and to choose their trade, occupation or profession freely in section 22 of the Constitution. And, as this Court has made clear, where a statute is capable of being reasonably read in a manner that is consistent or not in conflict with the Constitution, that is the interpretation that must be given.[60] The sole employer interpretation therefore falls to be rejected for this reason as well.
Conclusion
[109] For all these reasons I conclude that the dual employer interpretation is the correct one. The deeming provision creates a statutory employment relationship between the employee and the client. But it does so in addition to the existing employment relationship between the employee and the TES and not in substitution thereof. I would accordingly uphold the appeal.
For the Applicant: W Trengove SC, A Myburgh SC and R Itzkin instructed by Kirchmanns Inc.
For the First Respondent: H van der Riet SC, H Barnes, G Phajane and L Monnakgotla instructed by Ruth Edmonds Attorneys Inc.
For the Amicus Curiae: S Harvey and T Ngcukaitobi instructed by Lawyers for Human Rights.
Source: www.saflii.org
[1] 66 of 1995.
[2] Section 198A(3)(b) provides:
“For the purposes of this Act, an employee—
. . .
(b) not performing such temporary service for the client is—
(i) deemed to be the employee of the client and the client is deemed to be the employer; and
(ii) subject to the provision of section 198B, employed on an indefinite basis by the client.”
[3] Statistics South Africa Statistical Release P0211, Quarterly Labour Force Survey Q4: 2017 (13 February 2018).
[4] Labour Relations Amendment Act 2 of 1983.
[5] 28 of 1956. See Theron “Intermediary or Employer? Labour Brokers and the Triangular Employment Relationship” (2005) 26 ILJ 618 at 623.
[6] Labour Relations Amendment Act 6 of 2014 (2014 Amendments).
[7] Section 198A(1)(a) of the LRA.
[8] Section 198D(1) states:
“Any dispute arising from the interpretation or application of sections 198A, 198B and 198C may be referred to the [CCMA] or a bargaining council with jurisdiction for conciliation and, if not resolved, to arbitration.”
[9] Assign Services (Pty) Ltd v Commission for Conciliation, Mediation & Arbitration (2015) 36 ILJ 2853 (LC) (Labour Court judgment).
[10] Id at para 17.
[11] Id at para 11.
[12] National Union of Metalworkers of SA v Assign Services [2017] ZALAC 44; (2017) ILJ 1978 (LAC) (Labour Appeal Court judgment) at para 25.
[13] 75 of 1997.
[14] Section 82(1) of the BCEA.
[15] Labour Appeal Court judgment above n 12 at para 36.
[16] In terms of the deeming provision in section 198 of the LRA.
[17] Pursuant to section 198A(5).
[18] See National Union of Metalworkers of SA v Intervalve (Pty) Ltd [2014] ZACC 35; (2015) 36 ILJ 363 (CC); 2015 (2) BCLR 182 (CC) at para 25; Food and Allied Workers Union v Ngcobo N.O. [2013] ZACC 36; 2014 (1) SA 32 (CC); 2013 (12) BCLR 1343 (CC) at para 24; and National Education Health and Allied Workers Union v University of Cape Town [2002] ZACC 27; 2003 (3) SA 1 (CC); 2003 (2) BCLR 154 (CC) (NEHAWU) at para 14.
[19] See Botes “Answer to the Questions? A Critical Analysis of the Amendments to the Labour Relations Act 66 of 1995 with Regard to Labour Brokers” (2014) SA Merc LJ 110 at 113, which states that the use of TESs benefits the South African labour market because it provides some relief to the unemployment crisis in the country. Furthermore, the temporary nature of the particular employment allows a measure of flexibility in the labour market, which could benefit the South African economy as a whole.
[20] NEHAWU above n 18 at para 41.
[21] Section 23(1) and (2) of the Constitution provides:
“(1) Everyone has the right to fair labour practices.
(2) Every worker has the right—
(a) to form and join a trade union;
(b) to participate in the activities and programmes of a trade union; and
(c) to strike.”
[22] See fn 2 above for the full text of the subsection.
[23] Section 1(3)(a) of the 1956 LRA as amended reads:
“For the purposes of any provision of this Act or any applicable agreement . . . the [TES] concerned shall be deemed to be the employer of such workers, any service rendered to the client or work performed for him shall be deemed to have been rendered to or performed for the [TES]and the workers concerned shall be deemed in respect of such service or work to be the employees of the [TES].”
[24] 85 of 1993.
[25] Section 1 of the OHSA reads:
“‘[E]mployer’ means . . . any person who employs or provides work for any person and remunerates that person or expressly or tacitly undertakes to remunerate him, but excludes a labour broker as defined in section 1(1) of the Labour Relations Act, 1956 (Act No. 28 of 1956).”
[26] Section 82(1) and (3) of the BCEA reads:
“(1) For the purposes of this Act, a person whose services have been procured for, or provided to, a client by a temporary employment service is the employee of that temporary employment service, and the temporary employment service is that person’s employer.
. . .
(3) The temporary employment service and the client are jointly and severally liable if the temporary employment service, in respect of any employee who provides services to that client, does not comply with this Act or a sectoral determination.”
[27] R v County Council of Norfolk (1891) 65 LT 222.
[28] S v Rosenthal 1980 (1) SA 65 (A).
[29] S v Haffejee 1945 AD 345.
[30] Id at 352-3.
[31] Section 198A(1).
[32] Section 198A(2).
[33] See Botes above n 19 at 129-30 for a discussion on section 198A(4) of the LRA.
[34] Benjamin “Decent Work and Non-Standard Employees: Options for Legislative Reform in South Africa” (2010) 32 ILJ 845 at 850.
[35] Craven “COSATU’s response to FMF and DA on labour brokers” COSATU Press Statements (7 June 2013) available at http://www.cosatu.org.za/show.php?ID=7428.
[36] Preamble to the 2014 Amendments.
[37] Which would become the 2014 Amendments.
[38] See Department of Labour “Memorandum of Objects/Labour Relations Amendment Bill, 2012” (2012) available at http://www.labour.gov.za/DOL/downloads/legislation/bills/proposed-amendment- bills/memoofobjectslra.pdf.
[39] Section 198A focuses on labour broker employees of the TES. Section 198B provides for employees involved in fixed-term contracts. Section 198C protects part-time employees. Section 198D contains general provisions applicable to sections 198A-C.
[40] See Botes above n 19 at 129-30, which provides:
“It has come to light that clients have been exploiting TESs in an attempt to avoid restrictive labour laws by keeping labour broker employees on their staff for years at a time, performing work of permanent nature but with terms less favourable than permanent employees. It was a way to cut costs and to sidestep various employer responsibilities.”
[41] See Botes above n 19 at 120.
[42] Id.
[43] Lad Brokers (Pty) Ltd v Mandla [2001] ZALAC 9; (2002) 6 SA 43 (LAC) (Lad Brokers).
[44] Interestingly, the same is true of the common law in the United Kingdom. See Benjamin “Restructuring Triangular Employment: The Interpretation of Section 198A of the Labour Relations Act” (2016) 327 ILJ 28 at 37.
[45] Id at 33.
[46] Theron above n 5 at 626 goes so far as to say:
“[T]here is much anecdotal and other evidence to support the proposition that labour broking, along with other forms of externalization, is motivated by a desire to avoid labour legislation. . . . [And] to avoid unfair dismissal proceedings, coupled with a desire to reduce wage levels for workers performing non-core functions, or lesser-skilled workers.”
[47] Id at 629.
[48] Id at 630 and 641.
[49] See fn 21 above.
[50] See [55] and [21].
[51] At [54]:
“If the legislature intended the client to become a joint or co-employer together with the TES, it could easily have provided for the client to ‘also’ be the employer.”
[52] See [57].
[53] See [57]-[61].
[54] See [58].
[55] Section 198(4A)(c) of the LRA.
[56] See [60].
[57] Petz Products v Commercial Electrical Contractors 1990 (4) SA 196 (C); [1990] 3 All SA 452 (C) at 204H quoted with approval in Arse v Minister of Home Affairs [2010] ZASCA 9; 2012 (4) SA 544 (SCA) at para 19.
[58] Amcu v Buffalo Coal Dundee [2016] ZALAC 18; (2016) 37 ILJ 2035 (LAC) at para 43.
[59] Ekurhuleni Metropolitan Municipality v SAMWU [2014] ZALAC 61; (2015) 36 ILJ 624 (LAC) at para 30.
[60] University of Stellenbosch Legal Aid Clinic v Minister of Justice and Correctional Services [2016] ZACC 32; 2016 (6) SA 596 (CC); 2016 (12) BCLR 1535 (CC) at para 135.
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