The interpretation of the "deeming provision" in terms of section 198A (3)(b) of the Labour Relations Act 66 of 1995: who is the employer?

Abstract

The utilisation of temporary employment services (TES), or Labour Brokers as they are commonly referred to, has been a controversial issue precisely because of the inherent exploitation of provided employees by TES' clients. Provided employees have historically been denied the enjoyment of their full complement of rights contained in the Labour Relations Act 66 of 1995 (1995 LRA) because the party who had control over them and enjoyed the fruits of their labour, the client of the TES, was not regarded as their employer. This anomaly meant that provided employees struggled to enforce their rights against the client as the 1995 LRA or its predecessors hardly imposed any liability on it. One of the 1995 LRA’s stated purposes as contained in section 1(a) thereof is to democratise the workplace by giving effect to the Constitution of the Republic of South Africa, 1996 (the Constitution). Section 23(1) of the Constitution guarantees everyone, including TES’s, their clients and provided employees, the right to fair labour practices. However, the failure of the 1995 LRA to strike a balance in its giving effect to the constitutional right left provided employees vulnerable to exploitation as the Act did not adequately regulate their relationship with the clients of TES’s. Because provided employees have historically been regarded as employees of TES’s as opposed to those of their clients, and because the duration of these relationships seemed unlimited, clients have been able to exploit provided employees with impunity. Amongst the amendments introduced to the 1995 LRA in 2014 were those to section 198 of the 1995 LRA which included the insertion of section 198A. The iridescent drafting of section 198A(3)(b)(i) of the 1995 LRA left academics and courts tussling about the actual interpretation of the section. The section read with section 198A(1)(a) of the 1995 LRA states that after three months of placement with a client, that client will be deemed to be the employer of that provided employee. Courts and academics tussled about whether, after the effluxion of the initial three months period of employment by a TES and placement with a client, the client becomes the sole employer or both the TES and the client become dual employers. This study addresses the question of the employer’s identity between the TES and its client for the purpose of ensuring that provided employees know against whom to enforce their labour rights. The differing academic views are dispassionately presented in this regard. An analysis of both the Labour Court’s and Labour Appeal Court’s decisions is presented before the study submits that a dual employment relationship commences and that the Constitutional Court in Assign Services (Pty) Limited v National Union of Metalworkers of South Africa and Others (2018) 39 ILJ 1911 (CC) respectfully decided the matter incorrectly by preferring the sole employer interpretation. Ultimately the study proposes that an amendment to section 198A(3)(b)(i) of the 1995 LRA be effected to eliminate the ambiguity inherent in the section.