First interpretations of the LRA Amendments

Transcription

1 First interpretations of the LRA Amendments Murray Alexander, Brian Denny & Siphokazi Bosi Norton Rose Fulbright South Africa Inc 4 August 2015

2 Temporary employment services ( labour brokers ) The purpose of this amendment is to: Prevent and/or discourage employers from using labour brokers to employ persons other than in genuine temporary positions These provisions are only applicable to employees under the earnings threshold, which is currently R per annum 2

3 Definition of a TES section 198(1) any person who, for reward, procures for or provides to a client other persons: who perform work for, the client; and who are remunerated by the TES. 3

4 Who is the employer? section 198(2) For the purposes of this Act, a person whose services have been procured for or provided to a client by a TES is the employee of the TES, and the TES is that person s employer. 4

5 Joint and several liability section 198(4) An employer and a labour broker are jointly and severally liable if the labour broker contravenes: (a) (b) (c) (d) A collective agreement concluded in a Bargaining Council that regulates terms and conditions of employment; A binding Arbitration Award that regulates the terms and conditions of employment; The Basic Conditions of Employment Act; or A determination made in terms of the Basic Conditions of Employment Act. 5

6 Temporary services section 198A(3)(a) The crux of the amendments affecting labour brokers Temporary services means work for a client by an employee: for a period not exceeding 3 months; as a substitute for an employee of the client who is temporarily absent; or in a category or work and for any period of time which is determined to be temporary services by a Collective Agreement concluded in a Bargaining Council, a Sectoral Determination or a Notice published by the Minister. 6

7 Deemed employer section 198A(3)(b) An employee not performing a temporary service for the client is- Deemed to be the employee of the client and the client is deemed to be the employer; and Employed on an indefinite basis by the client unless employed on a fixed term contract 7

8 No less favourable section 198A(5) An employee deemed to be an employee of the labour broker s client 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 the different treatment 8

9 Different Treatment section 198D(2) An employer may justifiably treat employees differently taking into account the following: a) seniority; b) experience; or length of service; c) merit; d) the quality and quantity of work performed; e) any other criteria of a similar nature not prohibited by section 6(1) of the Employment Equity Act of

10 Avoiding the deeming provision section 198A(4) The termination by the labour broker of an employee s assignment with a client for the purpose of avoiding the labour broker s employee from being deemed to be an employee of the client constitutes a dismissal 10

11 Joint and several liability section 198(4A) Permits an employee to institute proceedings against either the labour broker or the employer or both the labour broker and the employer where the employer is deemed to be jointly and severally liable in terms of section 198(4) and 198A(3)(b) 11

12 Mphirime v Value Logistics and BDM Staffing Value Truck Rental - Client Mphirime - Employee - TES BDM Staffing 12

13 Mphirime v Value Logistics and BDM Staffing Facts: Mphirime employed by BDM Staffing on FTC from 30 June 2014 to 30 June 2015 FTC terminated by BDM Staffing on 2 April 2015 Mphirime referred unfair dismissal dispute to CCMA against BDM Staffing CCMA transferred dispute to Bargaining Council Commissioner wished to join Value Logistics opposed by BDM Staffing 13

14 Mphirime v Value Logistics and BDM Staffing Who is liable for an unfair dismissal claim? Dual relationship? Transfer ito section 197 of LRA? End of triangular relationship? 14

15 Mphirime v Value Logistics and BDM Staffing Section 198(1) any person who, for reward, procures for or provides to a client other persons: who render services to, or perform work for, the client; and who are remunerated by the TES 15

16 Mphirime v Value Logistics and BDM Staffing Section 198(2) A person placed with a client by a TES is the employee of the TES and the TES is that person s employer 16

17 Mphirime v Value Logistics and BDM Staffing Section 198(4) An employer and a labour broker are jointly and severally liable if the TES contravenes: A Collective Agreement concluded in a Bargaining Council that regulates terms and conditions of employment A binding Arbitration Award that regulates terms and conditions of employment The BCEA A determination made in terms of the Wage Act 17

18 Mphirime v Value Logistics and BDM Staffing Section 198A(3)(b) For purpose of LRA an employee not performing a temporary service is Deemed to be an employee of client and client is deemed to be the employer Employed on an indefinite basis by client 18

19 Mphirime v Value Logistics and BDM Staffing Section 198(4A) If client is jointly and severally liable ito section 198(4) or deemed to be employer ito section 198A(3)(b) Employee may institute proceedings against TES or client or both Labour inspector may enforce compliance against TES or client or both Any order or award made against TES or client may be enforced against each other 19

20 Mphirime v Value Logistics and BDM Staffing Who is liable for an unfair dismissal claim? Dual relationship? No Transfer ito section 197? No End of triangular relationship? No 20

21 Mphirime v Value Logistics and BDM Staffing Commissioner: The key question to be answered is not what happens to the triangular relationship and whether or not there is a transfer of an employee. The crux of the interpretation lies in the question as to who is responsible for the duties and obligations in terms of the LRA. The wording in the LRA in this regard is clear and unambiguous. Once the employee is not performing such temporary service anymore, the client is deemed to be the employer in terms of the LRA. The client therefore bears the responsibility to ensure that duties and obligations towards the employee in terms of the LRA are met. 21

22 Assign Services v Krost Shelving and NUMSA Krost Shelving - Client NUMSA - Employee - TES Assign Services 22

23 Assign Services v Krost Shelving and NUMSA Facts: Assign (TES) places 22 to 40 employees with Krost (client) 22 of employees more than three months and below threshold Assign disciplines placed employees 23

24 Assign Services v Krost Shelving and NUMSA Section198A(3)(b) For purpose of LRA an employee not performing a temporary service is Deemed to be employee of the client and client is deemed to be the employer Employed on an indefinite basis by client Arguments: Krost / Assign: dual employment NUMSA: sole employment by client 24

25 Assign Services v Krost Shelving and NUMSA Section 198(4A) If client is jointly and severally liable ito section 198(4) or deemed to be employer ito section 198A(3)(b) Employee may institute proceedings against TES or client or both Labour inspector may enforce compliance against TES or client or both Any order or award made against TES or client may be enforced against each other 25

26 Assign Services v Krost Shelving and NUMSA Meaning of deemed ito section 198A(3)(b) Krost / Assign: Not legislature s intention to ban TES Nor to terminate commercial agreement between TES and client Joint and several liability in section 198(4) meaningless if not dual employment Section 198(4A) allows actions against TES and client for section 198(4) and section 198A(3)(b) Dual employment offers greater protection 26

27 Assign Services v Krost Shelving and NUMSA Meaning of deemed ito Section 198A(3)(b) NUMSA: Joint and several liability only for section 198(4) Not joint and several liability for section 198A(3)(b)(i) Dual employment creates confusion 27

28 Assign Services v Krost Shelving and NUMSA Meaning of deemed ito Section 198A(3)(b) Commissioner s ruling: No dual employment because section 198(4A) does not provide for joint and several liability ito S198A(3)(b)(i) only for section 198(4) Client sole employer after three months and employees earning below threshold 28

29 Assign Services v Krost Shelving and NUMSA Meaning of deemed employee of the client Discussion 29

30 The review The correct interpretation Dual employment by TES and client 30

31 The deeming provision section 198A (3)(b)(i) For the purposes of this act an employee not performing such temporary services (3 months) for the client is deemed to be the employee of that client and the client is deemed to be the employer 31

32 TES position The TES position is that the employees remain the employees of the TES and are also deemed to be employees of client 32

33 NUMSA s position NUMSA s position is that after the 3 month period the client is the sole employer 33

34 Grounds of review The CCMA relied on the following sentence in the memorandum of objects which did not appear in the final version of the memorandum of objects: If they are not employed to perform temporary services, they are deemed for the purposes of the LRA to be employees of the client and not the TES. 34

35 Grounds of review The amendments achieve their purpose with dual employment: Limitation of temporary employment Wage discrimination Action against TES and client 35

36 Grounds of review Dual employment is recognised by our law 36

37 Grounds of review If legislature had intended to make client the exclusive employer it would have said so unambiguously and would have provided for a transfer of employment 37

38 Grounds of review If client is the exclusive employer employees would lose all accrued rights with TES The dual employer test avoids these unfair consequences 38

39 Grounds of review TES is and remains the employer of all placed workers under other labour statues including the BCEA and COIDA Section 82(1) of BCEA provides that a person whose services have been procured for, or provided to, a client by a TES is the employee of that TES and that TES is that person s employer Section 1 of COIDA defines an employer as including a TES 39

40 Grounds of review The provision only deems the client to be the employer but does not stipulate that the client steps into the shoes of the TES in respect of a contract of employment 40

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