The labour appeal court recently ruled that employees hired by labour brokers and who remain employed for more than three months should be hired permanently by the client company.
Judge Pule Tlaletsi ruled that, after three months, the labour suppliers cede the workforce to the client company.
This verdict overturns a 2015 judgment that labour brokers and their clients are dual employers. The judgment follows a case involving the National Union of Metalworkers of SA (Numsa), Assign Services and Krost Shelving and Racking at the CCMA.
“Numsa has consistently been opposed to labour brokers. Ultimately, we want them to be banned because they regulate slave labour. Workers who are employed by labour brokers often earn less than permanent staff and are denied basic benefits,” said Phakamile Hlubi, Numsa spokesperson.
Hlubi expressed a concern that the ruling would be not be “properly be complied with as we know that employers often circumvent the labour law for their own selfish reasons”.
Numsa referenced the case of Transnet in Richards Bay “where more than 50 workers had their contracts terminated in order to circumvent the application of this law”.
The Congress of SA Trade Unions (Cosatu) made its position clear in the run-up to the negations to the 2014 amendments of the Labour Relations Act (LRA), that labour broking is “akin to slavery“ and it must be “banned“.
Labour law firm Hogan Lovells traces the legal controversy back to early 2015 with the promulgation of amendments to the LRA. The legal arguments at the time pertained to who becomes the employer of the placed worker after three months of employment.
The labour appeal court’s ruling, in Hogan Lovells’ view, sought to discourage labour brokers from being involved in the administrative arrangements regarding employees placed with a client for a period in excess of three months.
“This is essentially a ban on labour broking,” according to Imraan Mohamed, labour law specialist at the firm.