This article was written by Stephan May, an associate at Norton Rose Fulbright South Africa

Instead of completely banning temporary employment services (more commonly known as labour brokers) as was strongly advocated by labour unions and others in 2010, the amendments to the Labour Relations Act rather seeks to provide temporary employees with greater protection against the abusive practices associated with labour brokers.  Examples of such abusive practices, amongst others, include:

  • Labour Brokers rolling over contracts of temporary employees effectively making them “permanent temporary employees”;
  • Temporary employees being paid less than permanent employees performing the same job;
  • Temporary employees not being able to take up their dismissal cases with the Commission for Conciliation, Mediation and Arbitration (CCMA); and
  • Temporary employees often not having access to benefits enjoyed by permanent employees such as retirement funds.

To combat these abuses, section 198 of the LRA has been significantly extended and now provides that temporary employees that work for a labour broker’s client for longer than a period of three months will, for certain purposes of the LRA, be deemed to be the client’s employees and their terms and conditions of employment must not be less favourable than those of the client’s own employees.  To prevent abuse of this three month period, a labour broker may not terminate the assignment of an employee with a client before completion of the three month period merely to avoid the consequences of deemed employment.  Any such termination will be regarded as a dismissal and the employee may approach the CCMA.

The consequences for employers that utilise the services provided by labour brokers are extensive.  The President recently assented to the amended LRA and we are waiting for the commencement date to be proclaimed.  There is accordingly still a window of opportunity for employers to assess their staffing needs and to conduct the necessary due diligence exercises.

Please speak to your Norton Rose Fulbright contact if you require any further information or assistance.