Sonja Vorster
In July 2017, Labour Buzz, promised to provide feedback on a case that will have a significant effect on companies using the services of “Employment Service Providers – “TES”.
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Many of the companies are used by many of our larger factories in Estcourt and some smaller businesses. In short, a company will retrench workers due to operational requirements and ‘outsource’ the labour to an “Employment Services Provider” hereafter referred to as “TES”. These workers are then employed on a temporary basis and they NEVER become permanent, they sign either a new contract normally every three months. This practice carried on for years, until now!
The workers worked for “TES” under less favourable conditions in many instances than what they enjoyed when they were employed with the company and now client of “TES”. No job security, as they did not know what the future would hold once the three months are over. What many of the companies using the services of TES did not take into consideration, is the stress and insecurity they created with TES hired employees. Many breadwinners lived in fear of doing anything wrong and not being signed up again after three months.
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In my opinion, this creates a very unproductive, unmotivated employment environment.
This all changed on July 26, 2018, when the Constitutional Court finally handed down its judgment in Assign Services (Pty) Ltd v National Union of Metalworkers of South Africa and Others: CCT194/17.
Section 198A of the Act and the Constitutional Court judgement are only applicable to employees earning less than the prescribed threshold that is currently set at R205, 433.30 per year which calculates to gross salary of R17, 119-44 per month.
Section 198A of the Labour Relations Act created a lot of confusion surrounding the “deemed to be” provision. In terms of the aforementioned section of the Act, an employee placed by a Temporary Employment Service Provider (“TES”) with a client, is deemed to be an employee of the client if that temporary employee has worked for the client for a period exceeding three months. And this has now been confirmed.
After three months of employment by an employee with TES providing service to a client, the temporary employee of TES will automatically, in terms of legislation, become a permanent employee of the client, TES was providing a temporary employee for. The employment relationship that existed between the TES and its temporary employee will come to an end.
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The court considered the provisions of sections 198 and 198A on the whole and held that the “joint and several liability” provision, found in section 198, is intended to deter TES from any further involvement in the employment relationship between the “new” employer and the (no longer temporary) employee of the client of TES. It was further held that the “equal pay for equal work” provision is “to ensure that the deemed employees are fully integrated into the company/client as employees of the client.”
It was also held that:
• Section 197 of the Act would not apply under the aforementioned circumstances;
• The termination of employment by the TES would not prevent the operation of section 198A; and
• The continued involvement of the TES in the employment relationship in an administrative capacity does not reinstate the TES as the employer.
To clarify for many “temporary employees” working for “labour brokers” – also called “temporary employment service (TES)”, “outsourced temporary workers”, or whatever terms that were being used previously. Examples of such companies that provides workers on a temporary basis such Kelly Girls temp services, Pronel Temp Employment services, Statostaff (Pty) Ltd and Workforce South Africa, to mention only a few companies servicing clients in Estcourt.
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If you obtain employment at a TES company and that company hires your services out to a company for longer than three months you AUTOMATICALLY become a permanent employee of that company and must receive equal pay and equal benefits and be signed up as a permanent employee of the company.
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