Labour Brokers considered by the Constitutional Court

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    A temporary employment service, also known as a labour broker, is a service that, for reward, procures for or provides to a client, workers who perform work for that client. Even though the worker works for the client, the labour broker will still be the employer and will remunerate the worker.

    However, a worker who is placed by a labour broker at a client and who earns below the statutory earnings threshold (currently R205 433.30 per annum), will be deemed to be employed by the client and the client will be deemed to be the employer of that worker if that worker is not performing a genuine temporary service. In this regard, a temporary service means work not exceeding three months or as a substitute for an employee of the client who is temporarily absent.

    The question that arises is what happens to the relationship between the worker and the labour broker after the worker is deemed to be the employee of the client, i.e. after three months?The Constitutional Court in Assign Services (Pty) Ltd v National Union of Metalworkers of South Africa decided that after the deeming provision takes effect, there is only one employer: the client.

    The effect of the decision is that the worker automatically becomes the employee of the client after the deeming has taken place. The Constitutional Court noted that the contractual relationship between the client and the placed employee does not come into existence through negotiated agreement or through the normal recruitment processes used by the client. Instead, the employee automatically becomes employed by the client and 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.