BUSA communique re Con Court judgement on TES – 27 July 2018

 

SocPol Update (For Information Only): Constitutional Court Judgment : Assign Services v NUMSA & Others
Topic Constitutional Court Judgment : Assign Services v NUMSA & Others
Response Date N/A
Queries Send to: Joseph Mtolo, Coordinator: Social Policy, BUSA (joseph.mtolo@busa.org.za)

Dear Members

As most of you are aware, the Constitutional Court delivered judgment in the Assign Services v NUMSA & Others case on 26 July 2018.  The Court delivered a majority and minority judgment, a copy of the judgment is attached.

The case concerned the interpretation of s 198A (3) (b) (i) of the Labour Relations Act, 1995 (“LRA”) in circumstances in which an employee placed by a TES provider to work for a client no longer performs a temporary service as defined.

When considering the judgment, the following is important to take note of:

  1. Section 198A of the LRA does not apply to TES employees who earn in excess of the earnings threshold (currently R205 433.30 per annum).

 

  1. The deeming provision contained in s 198A (3) (b) (i) of the LRA is only triggered if the TES employee is not performing a temporary service.  A temporary service means work for a client by an employee:
  • For a period not exceeding 3 months;
  • As a substitute for an employee of a client who is temporarily absent; or
  • In a category of work for any period of time which is determined to be a temporary service by a collective agreement concluded in a bargaining council, a sectoral determination or a notice published by the Minister.

 

  1. If a placed employee is performing a temporary service (as defined above),  the TES will, for as long as the placed employee performs a temporary service, remain the employer in terms of the LRA.

 

  1. The deeming provision provided for in s 198A (3) (b) (i) of the LRA is limited  to the LRA only.  If the s 198A deeming provision is triggered, it does not mean, by way of example, that the client also becomes the employer for the purposes of the BCEA, SDL and COIDA.

 

  1. If a placed employee is deemed to be an employee of the client, he/she must be treated on the whole not less favourably than an employee of the client performing the same or similar work, unless there is a justifiable reason for different treatment (this has been in place since 1 January 2015).

What are key findings of the Constitutional Court?

 

  1. If s 198A(3) (b) (i) of the LRA is triggered, the client of the TES becomes the sole employer of the placed employee.  This is for the purposes of the LRA only.

 

  1. According to the Constitutional Court, there will be what is referred to as a triangular relationship.  There is no “transfer to a new employment relationship but rather a change in the statutory attribution of responsibility as employer within the same triangular employment relationship. The triangular relationship then continues for as long as the commercial contract between the TES and the client remains in force and requires the TES to remunerate the workers.”

 

  1. Even with the sole employer interpretation, “a placed employee will retain the right to claim against a TES through section 198(4A) to the extent that they are still remunerated by the TES. The employee is largely protected against the TES regardless of whether the claim is made against an employer. But this liability relates only to claims brought by the employee. The protections afforded by the sole employer interpretation go beyond this. They give employees certainty and security of employment.”

Please note that the above does not constitute legal advice.

Natalie