PRESENTED BY PROF HUGO PIENAAR CLIFFE DEKKER HOFMEYR INC

DO NOT PANIC!! DO NOT PANIC!!

Total Employment Effects Post LRA amendments Briefing note: Haroon Bhorat, Sibahle Maggadla, and Francois Steenkamp Source: CAPES 2015 Total Employment Effects Post LRA amendments Briefing note: Haroon Bhorat, Sibahle Maggadla, and Francois Steenkamp Source: CAPES 2015

EUROPEAN DIRECTIVE ON TEMPORARY AGENCY WORK (2008/104/EC) Application To working conditions of Temporary workers in the European Union General framework Ensures confidence in temporary work sector, includes protection of workers and giving greater flexibility to companies Improve protection and lays down principles of non-discrimination Equal treatment No recruitment fees Access to training and amenities Allonby v Accrington & Rossendale College C-256/01 (application of Article 141 of the European Community Treaty)

Convention 158 (termination at instance of employer) Exclusions ILO :TERMINATION OF EMPLOYMENT CONVENTION 1992/ NO 198 & RECOMMENDATION NO. 166 Convention 158 (termination at instance of employer) Exclusions Specific periods Specific tasks But special protection Recommendation No. 166 supplements Convention No. 158 Protection where there are renewals of fixed term contracts

Private Employment Agencies Convention, 1997 (No. 181) Recognises private employment agencies and protection of workers Measures to ensure freedom of association and right to collective bargaining No fees to be charged to workers Licences / authentication Whole range of protection Limits availability during strikes

SOME AFRICAN COUNTRIES GHANA – TEMPORARY EMPLOYEES Treated as a permanent worker after six (6) months NAMIBIA Section 128(1) of Labour Act 2007 – Prohibition of TES 2012 – Set Aside Amendment to Act to Regulate: Equal treatment Collective bargaining rights

BRAZIL Precedent 331 of the Superior Appeal Labour Court forbids outsourcing of core business

UNITED KINGDOM Agency Workers Regulation 2010 Day One Rights Access to facilities Vacancies Day Twelve Rights No less favourable Pay, nightwork, restwork, holiday etc No claim from hires (client) Unfair dismissal Minimum notice Redundancy pay Impact: 50 percent reduced agency worker usage

UNITED KINGDOM Note: HUNGARY 183 days NETHERLANDS 26 weeks

EXTRACTS - 198 Note: Definition of an employee excludes independent contractors 198(1) In this sections `temporary employment service' means any person who, for reward, procures for or provides to a client other persons – (a) who perform work for the client; and (b) who are remunerated by the temporary employment service. 198(2) For the purposes of this Act, a person whose services have been procured for or provided to a client by a temporary employment service is the employee of that temporary employment service, and the temporary employment service is that person's employer. 198(3) Despite subsections (1) and (2), a person who is an independent contractor is not an employee of a temporary employment service, nor is the temporary employment service the employer of that person. 198(4) Joint and several liability (Limited)

EXTRACTS - 198 198(4A) “If the client of a temporary employment service is jointly and severally liable in terms of section 198(4) or is deemed to be the employer of an employee in terms of section 198A(3)(b) – (a) the employee may institute proceedings against either the temporary employment service or the client or both the temporary employment service and the client; (b) a labour inspector acting in terms of the Basic Conditions of Employment Act may secure and enforce compliance against the temporary employment service or the client as if it were the employer, or both; and (c) any order or award made against a temporary employment service or client in terms of this subsection may be enforced against either.”

EXTRACTS – 198A 198A(3) For the purpose of this Act, an employee – (b) not performing such temporary service for the client is – (i) deemed to be the employee of that client and the client is deemed to be the employer (ii) subject to the provisions of 198B, employed on an indefinite basis by the client 198A(5) An employee deemed to be an employee of the client in terms of subsection (3)(b) 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.

MAIN PURPOSE To protect vulnerable employees by – Joint and Several Liability Equal Treatment (subject to section 198D) Indefinite Employment (subject to 198B) Deeming Clause Vulnerable Employees Employed longer than 3 months Earning below threshold

SOLE OR DUAL RELATIONSHIP Meaning of a Deeming Clause Transfer Clause? Value of Joint and Severable Liability sections Reinstatement? Constitutional test of Joint and Several Liability Need for equal treatment clause? Provisions of Basic Conditions of Employment Act – same as 198(2) Other employment legislation National Development Plan Etc

EXTRACTS FROM LAC* JUDGMENT - PURPOSE OF AMENDMENTS The main thrust of the amendments is to restrict the employment of more vulnerable, lower- paid workers by a TES to situations of genuine and relevant “temporary work”, and to introduce various further measures to protect workers employed in this way. The purpose of the amendment was to have the temporary employment service restricted to one of “true temporary service” as defined in s198A of the LRA, the intention must have been to upgrade the temporary service to the standard employment and free the vulnerable worker from atypical employment by the TES The purpose of these protections in the context of s198A is to ensure that the deemed employees are fully integrated into the enterprise as employees of the client NUMSA v Assign Services and Others (JA96/15) [2017] ZALAC 44

EXTRACTS cont TRANSFER OF EMPLOYEES It would make no sense to retain the TES in the employment equation for an indefinite period if the client has assumed all the responsibilities that the TES had before the expiration of the three-month period The purpose of the deeming provision is not to transfer the contract of employment between the TES and the placed worker to the client, but to create a statutory employment relationship between the client and the placed worker There is no provision to the effect that the client steps into the shoes of the TES after the three-month period

EXTRACTS cont TRANSFER OF EMPLOYEES It is important to appreciate that the employment relationship between the placed worker and the client arises by operation of law, independent of the terms of any contract between the placed worker and the TES. The dismissal of the worker by the TES has no bearing on the employment relationship created by operation of law between the placed worker and the client The employment relationship is created by a statutory deeming clause Hence the placed workers become employed by the client for an indefinite period and the same terms and conditions to the employees of the client performing the same or similar work

EXTRACTS cont OBLIGATIONS OF TES The TES remains the employer of the placed employee until the employee is deemed the employee of the client The TES will be responsible for its statutory obligations regarding the placed workers for as long as the deeming provisions has not kicked in Callout One Callout Two. Callout Three.

JOINT AND SEVERAL LIABILITY EXTRACTS cont JOINT AND SEVERAL LIABILITY The protection against unfair dismissal and unfair discrimination in the context of s198A of the LRA should not be interpreted to support the contention that the deemed employees are employed by both the TES and client The protection is a measure to ensure that these employees are not treated differently from the employees employed directly by the client. The purpose of these protections in the context of s198A is to ensure that the deemed employees are fully integrated into the enterprise as employees of the client The joint and several liability provisions have the potential to discourage the TESs from being further involved in the administrative arrangements regarding employees placed with a client for a period in excess of three months Callout Box

EXTRACTS cont BANNING OF TES The sole employer interpretation does not, in my view, ban the TESs. It, however, regulates the TESs by restricting the TESs to genuine temporary employment arrangements in line with the purpose of the amendments to the LRA

EXTRACTS cont CONCLUSION The plain language of s198A(3)(b) of the LRA, interpreted in context unambiguously supports the sole employer interpretation and is in line with the purpose of the amendment, the primary object of the LRA and protects the rights of placed workers The dual or parallel employer interpretation is therefore no consonant with the contact of the S198A and the purpose of the amendments

SOLE/DUAL EMPLOYER: STRIKES Client Employees Employees may strike TES Employees below threshold and more than three months Employees may strike TES Employees above threshold Only sympathy strikes

SOLE/DUAL EMPLOYER: RETRENCHMENTS (189) Client Employees Notice of retrenchment to all its employees TES Employees below threshold and more than three months Notice of retrenchment by client/TES(?) to employees TES Employees above threshold TES to give notice of termination or retrenchment

TRANSFER OF BUSINESS (197) SOLE/DUAL EMPLOYER: TRANSFER OF BUSINESS (197) Client Employees Employees transferred to new Owner TES Employees below threshold and more than three months Employees transferred to new Owner TES Employees above threshold Not transferred Commercial Transaction?

EMPLOYMENT EQUITY AND S198D SOLE/DUAL EMPLOYER: EMPLOYMENT EQUITY AND S198D Client Employees Equal Pay Claims TES Employees below threshold and more than three months Equal Pay Claims 198D Claims for Equal Treatment TES Employees above threshold No Equal Pay Claim against Client No 198D Claims for Equal Treatment against Client

JOINT AND SEVERAL LIABILITY SOLE/DUAL EMPLOYER: JOINT AND SEVERAL LIABILITY Client Employees TES Employees below threshold and more than three months Claim against client and TES TES Employees above threshold Limited recourse to client?

New Constitutional Challenges Implications on other legislation CONSIDERATIONS Appeal suspends the judgment of the LAC(?) Concourt Intervening parties New Constitutional Challenges Implications on other legislation Consideration Subcontracting S200B Alternative Models Political environment

TES and other Service Providers ALTERNATIVE MODEL TES MSP Client Shoprite MSP – Adfusion (Client) TES Employees TES and other Service Providers Employees Pretoria CCMA GATW 7869-15