MICHAEL MAESO The consequences of a breach of the amendment that provides for the use of labour brokers is yet to be definitively determined
A more mature attitude towards collective bargaining, more prudent use of strikes and greater flexibility for employers to manage their workforce according to demand would likely lead to a greater appetite for employment in South Africa, says legal services provider Shepstone & Wylie Attorneys employment law head Michael Maeso.
He stresses that a major challenge in South Africa is attempting to meet the expectations of the employed while increasing employment, pointing out that the country needs to achieve a better balance between protecting rights and setting minimum rates of pay, and the need to increase the number of jobs available.
“South Africa is viewed by many foreign investors as having very rigid employment laws that do not encourage start-up businesses that are labour intensive. The number of strikes in South Africa, and the violence associated with them, is also of serious concern to investors and employers.”
Maeso adds that, while South Africa is trying to ensure that the majority of labour disputes are arbitrated is laudable in principle, in practice it is difficult to provide the best result owing to understaffing.
He highlights that most international legislative frameworks are less prescriptive and allow for greater flexibility when dealing with employees, especially when restructuring companies. Several international jurisdictions require employees to be employed for a certain period before they acquire certain rights, he adds.
Meanwhile, in South Africa, recent amendments to labour laws have centred predominantly on trying to limit the use of labour brokers and temporary or fixed-term employment. Although trade unions have tried to ban the use of labour brokers entirely, a compromise has been reached, allowing for the use of such brokers in certain instances and for limited periods, Maeso notes.
Subsequently, the problem now is that the consequence of a breach of the amendments is still to be determined definitively, he says.
“The idea was that, in the event of a breach, the employee provided by the labour broker would become employed by the labour broker’s client, thus, limiting any abuse of the use of labour brokers. Unfortunately, however, the wording of the amendment has created much confusion.”
He highlights that the interpretation has also caused debate because the labour broker employs the employee and then contracts with the client for the employee to work for the client, thus producing a triangular relationship.
In a dispute involving the Road Freight Bargaining Council, the commissioner ruled that, when Section 198A is given its normal grammatical meaning, the client is the employer for the purposes of the Labour Relations Act (LRA) in terms of upholding the workplace rights of the employee. The section neither implies that an employee has been transferred to the client nor indicates that the previously triangular relationship, involving the temporary-service employees, has automatically dissolved, however.
The commissioner concluded that the wording in the section is clear and that the client is deemed to be the employer and, therefore, bears the responsibility to ensure that duties and obligations towards the employee in terms of the LRA are met.
“Unfortunately, when confronted with this problem, however, the Labour Court failed to deal with the matter definitively. As things stand, the client will also be the employer of a labour broking employee for the purposes of the LRA. Where this starts and ends remains anyone’s guess.”
Maeso notes that the amendments did move in the right direction when they allowed employment on a fixed-term contract or successive fixed-term contracts for longer than three months of employment when the nature of the work is of a limited, of definite duration or the employer can demonstrate another justifiable reason for fixing the term of the contract. This includes, for example, the employee replacing another employee who is temporarily absent from work.