Employers often use service providers to perform certain functions or duties within a workplace, which the employer may not be able to do or perform itself. As per South African legislation, these providers are generally referred to as "labour brokers"; however, the correct term is "Temporary Employment Service" (TES).
Section 198 of the Labour Relations Act (LRA) defines a Temporary Employment Service (TES) as:
"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 temporary employment service."
The LRA further defines a temporary service as work for a client by an employee:
- “for a period not exceeding three months;
- as a substitute for an employee of the client who is temporarily absent; or
- in a category of work and for any period of time which is determined to be a temporary service by a collective agreement concluded in a bargaining council, a sectoral determination or a notice published by the Minister.”
Often, disputes arise where it needs to be established who the employer is and where there is a "client" and a "TES" relationship. It must be noted that in terms of the above legislation, an employee may be employed by a TES and placed at a client of the TES, but once three months have passed where the employee works at the client's premises, that client becomes the deemed employer of the employee.
The implication of becoming the deemed employer is that the client will have to deal with all disciplinary proceedings regarding the employees and could be held liable for any disputes referred to the CCMA.
This is referred to as the "deeming provision".
In Assign Services (Pty) Limited v National Union of Metalworkers of South Africa and Others (CCT194/17) [2018] ZACC 22, the deeming provision was explained as follows:
The TES is considered to be the employer of the placed employee. If the TES employee is not employed to perform a temporary service, the employee becomes the client's employee and is no longer an employee of the TES.
In General, Industrial Workers Union of South Africa obo Hlophe/Little Green Beverages (Pty) Ltd t/a The Beverage
Company and another [2020] 3 BALR 248, the Court further elaborated as follows:
The employee was dismissed by the TES and not the client. The CCMA commissioner found that the Constitutional Court has adopted the interpretation that the triggering of the deeming provision resulted in "a change in the statutory attribution of responsibility which will now fall on the client as an employer within the triangular relationship". Therefore, the fact that the TES still paid the employee's salary merely indicated that the TES was to act as a payroll administrator on behalf of the client and not as an employer. The commissioner found that the client should have disciplined the employee, not the TES.
Employers who use TES services are encouraged to contact CEO for advice when faced with a dispute of this nature, as they may be deemed to be the employer of a TES employee placed at their workplace.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.