SASLAW SEMINAR 10 DECEMBER 2015 Chris Haralambous – Cox Yeats Employment Law Assign Services – Labour Court Decision

Assign Services (Pty) Ltd [TES / Broker] v Krost Shelving & Racking (Pty) Ltd [Client] & National Union Of Metalworkers Of SA [NUMSA]

 The award entertained a Stated Case advancing: ◦ “Dual employment”; versus ◦ “Sole employment”  Ostensibly referred in terms of Section 198D(1) of the LRA, which states: “Any dispute arising from the interpretation or application of sections 198A, 198B and 198C may be referred to the Commission or a bargaining council with jurisdiction for conciliation and, if not resolved, to arbitration.”

 Commissioner’s opinion on interpreting Section 198A(3)(b) (at paragraph 5.12 of Award): “…should be interpreted akin to how the law deals with the concept of ‘adoption’…a legal fiction is also created…adoptive parent is regarded as the parent of the adopted child…”  Therefore: “…for purposes of the LRA the client is deemed to be the sole employer after the three months period had elapsed”

Assign Services (Pty) Ltd v CCMA & Others [JR 1230 / 15] ◦ Delivered : 8 September 2015 ◦ Per Brassey AJ

 The crux of the Labour Court’s interpretation: ◦ Client is the employer for the purposes of the LRA and for no other purpose; ◦ Cannot invalidate the TES’s employment contract or to construe any derogation from its terms; and ◦ The only issue (on the stated case) is whether the TES continues to be the employer

 Atparagraph 12: “There seems no reason, in principle or practice, why the TES should be relieved of its statutory rights and obligations towards the worker because the client has acquired a parallel set of rights and obligations.” Comment: Is that not a form of dual employment?  In considering the deeming provision, the Labour Court further held that: “…it serves to create an augmentation, not a substitution…” (at paragraph 14)

 Brassey AJ declares: “No man can serve two masters, says the Bible, and with this the law concurs … TES becomes the source of control and … retains this power … that originally vested, and ultimately continues to vest, in the TES.”  Comment : What consequence is there if the power to control is in fact transferred to the client? or  Comment : What if control is shared?

 Question : Has the Labour Court effectively construed the deeming provision to amount to a form of hybrid secondment, where the “lending employer” (TES) never relinquishes its overriding control to the “borrowing employer” (client)?  Note : The extended liability of the client, as employer, created by Section 198(4)(A) of the LRA: “…or is deemed to be the employer…employee may institute proceedings against either…or both … labour inspector…may secure and enforce compliance against the TES or the client as if it were the employer, or both; and any order or award…enforced against either.”

See : Rodrigues v Alves 1978 (4) SA 834 (A)  The power or right to control the employee See : Midway Two Engineering And Construction Services v Transnet Bpk 1998 (3) SA17 (SCA)  Test formulated for determining vicarious liability within a secondment context

See : Footwear Trading CC v Mdlalose BLLR 452 (LAC)  “Co-employers” defined by LRA as person who received services  Liability attributed to another company (as employer) for compliance with Award, where common shareholders / directors effectively managed an alter-ego for the first company. Note : Section 200B of the Labour Relations Amendment Act of 2014