Amendments to Labour Legislation – Temporary Employees
By Jan Du Toit
As most employers are aware by now, the Department of Labour published proposed amendments to labour legislation and the introduction of the Public Employment Service Bill in December 2010. This undoubtedly resulted in some sleepless nights over the festive season for both Temporary Employment Services providers (also referred to as Labour Brokers) and their clients. The proposed amendments, if enacted, would effectively “ban” Labour Brokers and will have far reaching implications for employers whether they make use of temporary employees provided by a Labour Broker or not.
The first proposed amendment to consider is the definition of an employer in the Labour Relations Act. An employer will be defined in section 213 of the Act as “any person, institution, organisation, or organ of state who employs or provides work to an employee or any other person and directly supervises, remunerates or tacitly or expressly undertakes to remunerate or reward such employee for services rendered”. An employee will be defined as “any person employed by or working for an employer, who receives or is entitled to receive any remuneration, reward or benefit and works under the direction or supervision of an employer;”
From these definitions it is clear that any person or institution that provides work to another person and directly supervises such a person is considered to be the employer. The client of a Labour Broker would therefore be considered to be the employer and not the Labour Broker or a third party. Section 198 of the Labour Relations Act will be repealed meaning that Temporary Employment Service providers are not longer recognized in the Act. Clients of a Labour Broker would therefore not be able to rely on section 198 (2) of the Act stating that “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”.
In addition to the above it is proposed that a new section be inserted in the Act stating that “an employee must be employed permanently, unless the employer can establish a justification for employment on a fixed term.” Employing staff temporarily instead of using a Labour Broker will therefore also not be an option.