1. PRESENTED BY PROF HUGO PIENAAR
CLIFFE DEKKER HOFMEYR INC

2. DO
NOT
PANIC!! DO
NOT
PANIC!!

3. 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

4. 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)

5. 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

6. 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

7. 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

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

9. 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

10. UNITED KINGDOM
Note: HUNGARY 183 days
NETHERLANDS 26 weeks

11. 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)

12. 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.”

13. 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.

14. 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

15. 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

16. 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

17. 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

18. 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

19. 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.

20. 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

21. 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

22. 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

23. 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

24. 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

25. 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?

26. 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

27. 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?

28. 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

29. 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