Did the Constitutional Court decision in Assign Services (Pty) Limited v National Union of Metalworkers of South Africa and Others(CCT194/17) [2018] ZACC 22 do away with the TES practice in South Africa?
This paper is on the impact of the Labour Relations Amendment Act 6 of 2014(LRAA) on the Temporary Employment Services(TES) in South Africa. The TES practice involves a triangular relationship where the TES places workers/employees with a client to provide labour for the benefit of the client. Over the years, there has been an outcry from organised labour for the ban of the TES practice on the basis that it encouraged the exploitation of workers and undermined job security. Other issues associated with the practice were low wages and inferior conditions of service of the placed workers compared to employees employed by the client doing same or similar work. Initially, the TES practice was regulated in a limited way by the Labour Relations Act of 1956 as well as the Labour Relations Act 66 of 1995 (LRA). The LRA initially only regulated the TES practice in so far as it recognised that the TES is the employer of placed workers and it created provisions for joint and several liability for the client and the TES under certain limited circumstances. Despite these attempts to regulate the practice, organised labour felt it was still not good enough as the same problems continued to persist, as a result they continued to challenge the constitutionality of this practice and called for it to be completely banned. In response, the legislature introduced the Labour Relations Amendment Act No 6 of 2014 (LRAA) in an effort to close the loopholes identified. Section 198A(3)(b)(the deeming provision) introduced by the LRAA stipulates that after a period of three months of placement of workers by a TES with a client, the client is deemed the employer of those workers. It is the interpretation of this deeming provision that has sparked a legal debate in South Africa, resulting in two views on how the deeming provision should be interpreted. The first view is the ‘dual employment' interpretation which suggests that after the three months placement has lapsed, both the TES and the client become employers of the placed workers. The second view is the ‘sole employment' interpretation and it proposes that after the three months has lapsed, the client becomes the sole employer of the placed employees. This legal debate was eventually settled by the Constitutional Court(CC) in 2018 in the Assign Services (Pty) Limited v National Union of Metalworkers of South Africa and Others(CCT194/17) [2018] ZACC 22(Assign Services). The majority view in the CC ruled that the sole employment interpretation is the correct interpretation to be ascribed to the deeming provision, whilst the minority view favoured the dual employment interpretation. This dissertation will critically analyse the legal jurisprudence involved in this debate as well as the implications of the CC decision on the operations of the TES practice in South Africa.
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