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Historic court victory against labour brokers celebrated – SAFTU

Federation congratulates its affiliate NUMSA on the successful conclusion of its long court battle

SAFTU hails historic court victory against labour brokers

26 July 2018

The South African Federation of Trade Unions is celebrating the historic, ground-breaking judgement of the Constitutional Court that the correct interpretation of the Labour Relations Act means that a worker placed by a labour broker at a company, becomes that company’s employee after three months - in a sole employment relationship.

The Court has dealt a deadly blow against labour brokers and is the biggest victory for workers in recent times.

The federation congratulates its affiliate NUMSA on the successful conclusion of its long court battle against labour brokers.

The case revolved around the interpretation of a section of the Labour Relations Act (LRA) on the question of whether a worker was in a sole employment by the employer he or she was actually working for, or a dual employment relationship with the labour broker.

The providers of Temporary Employment Services, as labour brokers are officially defined, argued that the employee would hold a dual employment relationship, with both the broker and the company where the worker had been placed.

But the ConCourt has ruled that the law must be interpreted within the context of the right to fair labour practices, and that the language in section 198A of the LRA was clear enough: clients of labour brokers are sole employers and that a worker who earns below R205,433 a year who is placed by a labour broker at a company becomes that company’s employee after three months - in a sole employment relationship.

SAFTU has consistently held that employers have been using labour brokers to avoid having to comply with laws which safeguard workers’ rights and minimum conditions of employment. It has led to a form of human trafficking under which labour brokers hire out workers to their client companies, with no job security, lower wages and worse conditions.

The ConCourt has upheld a 2017 ruling by the Labour Appeal Court that found in favour of the NUMSA, which represented workers in the employ of Assign Services, the company which took the case to the ConCourt, who challenged the dual-employer interpretation. 

Labour brokers now will not have any legal standing in the employment terms of contract workers‚ nor be involved any further in the equation with regards to the LRA.

SAFTU warns however that labour brokers will try to reinvent themselves in a way which complies with the ConCourt ruling. 

The attorney for Assign has told Business Day that labour brokers “would continue to perform other functions in terms of the contract of employment and income tax law, among other legislation. No matter what this court rules, the labour brokers are not falling out of the picture completely as the unions have said”.

Unions must therefore be vigilant to ensure that this historic ruling is rigorously enforced and that labour brokers cannot find any way through the back door to continue exploiting workers.

Issued by Patrick Craven, SAFTU Acting Spokesperson, 26 July 2018