In terms of Section 198A(3)(b)(i) of the Labour Relations Act (LRA), an employee performing a temporary service and earning below the threshold is deemed to be the employee of that client and that client is deemed to be the employer. The threshold currently is R205 433.30 per annum. This has been a hotly debated issue and the interpretation of this has led to two main approaches namely the Sole Employer Approach and the Dual Employment Approach.
In terms of the Sole Employer Approach, temporary employment services (TESs) employees who are not performing temporary services for the client becomes the employees of the client. The client is therefore their only employer. The TES is no longer involved and has been removed from the employment relationship completely.
According to the Dual Employment Approach, employees have two employers – the TES and the client. This dual relationship exist for the purposes of instituting legal proceedings and executing these legal proceedings. For instance, should an employee be unfairly dismissed, both the temporary employment services and the client may be held dually and solely liable should the employee refer the matter to the CCMA.
In Assign Services (Pty) Ltd v Krost Services and Racking (Pty) Ltd and another Commissioner A.C. Osman has come to the conclusion that the Sole Employer Approach must be followed and that the client will therefore be deemed as the sole employer. This ruling was subjected to scrutiny due to the fact that the TES is removed from the employment relationship, infringing on their constitutional right to choose their profession freely. Nothing in the amendments of the LRA suggest a ban on temporary employment services.
The award has been taken on review to the Labour Court and Judge Brassey came to the conclusion that Commissioner A.C. Osman award must be set aside and that TESs remain the employer, and that for the purpose of instating legal proceeding and executing these proceedings both the TES and the client will be held responsible. The reason for this is that there is no reason why the TES should not be vested with the statutory rights/obligations and powers/duties the Act generates just because the client has acquired a parallel set of such rights and obligations. He further states that:
“Nothing in this deeming provision can be taken to invalidate the contract of employment between TES and worker or to derogate from its terms”.
A practical example of this will be that the TES will not be able just to terminate the employee’s contract without following proper procedure just because the client does not want them on site anymore. This ruling have been appealed against and it has been dismissed.
This has led to the fact that currently both the TES and the client will be deemed responsible for these workers.
ABOUT THE AUTHOR
Irma Strydom obtained her BCom Law Degree from the University of Pretoria. She joined SEESA Labour in 2009 and worked as a legal advisor on the road as well as in the call centre. She was promoted to a senior legal advisor in 2015 and now handles all council and CCMA matters.