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Is it the end for labour brokers?

Tata Mokwayi
August 2018

“For a few years now, I’ve been using cleaning and gardening workers
provided by a labour broker. It has worked well for me as the labour broker has
been responsible to manage the workers. I’m concerned though about recent
media reports that appear to imply that these workers will now be deemed to
be my employees. Is this true?”
You are correct in that a recent Constitutional Court judgment has confirmed
that any employee earning below R205 433.30 annually and who has been
placed by a Labour Broker for a period of more than three months with a client
may be deemed to be an employee of such client.

This decision comes after a number of years of widespread calls against labour
broking, particularly from trade unions. The history of this debate goes back
to 2014 when the Labour Relations Act (“LRA”) was amended to introduce Labour
protection for employees in precarious employment positions and earning low
wages. A new section 198A was introduced to align the LRA and the right to fair
labour practices in section 23 of the Constitution.
The Constitutional Court held that the labour broker is merely a third party
that delivers the employee to a client. The employee does not contribute to
the business of the labour broker except as a commodity. The Constitutional
Court also concluded that the language used in section 198A supports a ‘sole
employer’ interpretation, meaning that employees who have been placed by
a labour broker for a period of more than three months and earn below the
statutory threshold will be deemed to be permanent employees of the labour
broker’s client.
This judgment will have a dramatic impact on the labour broking business
and will also affect many clients that utilise labour broking employees as many
of these employees may now be deemed to be employees of the client and
entitled to rights as an employee. It would accordingly be prudent to consult
with your attorney or a labour specialist to assist you to correctly deal with these
labour broker workers in light of this important judgment.

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