Clarity on 'deeming provision' in respect of temporary workers

Lawrence Diamond

The judgement states that workers who earn under the annual earnings threshold of R205 433.30, as set out in the Basic Conditions of Employment Act, and who are placed by a TES, do not automatically become employees of the TES's client. Rather, they remain as employees of the TES by whom they are legally employed, although the client is bound in parallel by the remaining elements of the Labour Relations Act.

The TES remains the employer of the worker, and, despite the consequences of the deeming provisions, the TES still remains responsible for all functions described by the Act, including organisational rights, remuneration negotiation, disciplinary hearings, suspensions and dismissals.

This means that, in the unlikely event that an unfair dismissal case should arise, the worker's claim would be against the TES, and not against its client. The worker therefore benefits from added protection, as both the TES and client are bound by the protections offered by the Act.

The Labour Court's decision is a far-reaching one that will effectively address the unintended consequence of temporary workers losing their jobs and subsequently their income and livelihood, once they have been in a temporary placement for longer than three months. Many sectors have fluctuating staffing needs and simply cannot afford to maintain the maximum potential workforce on a consistent and indefinite basis. If they employ workers in a permanent capacity, they are then compelled to retrench employees in quieter times, incurring those business expenses and affecting their ability to maintain a core permanent workforce.

These sectors include private and public organisations within agriculture, construction, mining, manufacturing, hospitality and healthcare.

There are also cyclical systems and processes in the operations of many companies, and it does not make sense for them to retain staff all year round. Many firms also lack the necessary resources, capabilities and capacity that they need to manage staff - and TES can provide these support services.

TES also offer an added layer of protection to temporary workers whose skills meet the needs of these cyclical systems and processes, as specialist TES operators have the client base, the experience, and the knowledge of each worker to make it easier for them to be placed in a new position, should their role end due to operational issues.

It is also true that there are many workers, who do not want to be tied to one employer, and prefer the flexibility of short to medium term contracts, or want to take on assignments as and when their schedules allow. This could include workers who want to earn additional income to that brought in by their permanent jobs, such as nursing staff, or mothers returning to the workplace and need to work around their childcare commitments, as examples.
At Workforce Holdings, our various companies offer employment solutions for people wanting to get into the formal labour sector, and for people whose professions are more conducive to contract employment rather than permanent placement. Our view is that we hold the contracts and relationships with the workers we place with our clients, and as such, we invest in training them to improve their skills. We also provide access to lifestyle and healthcare benefits, and we support them with financial and psychological counselling. We make it possible for more people to earn a living by working with companies to meet their flexible staffing needs.

While there may well be unscrupulous labour brokers and their equally unscrupulous clients out there in the marketplace, there is no doubt that there is a place, and demand, for temporary employment services that provide employment for South Africans who want to work. The Labour Court's ruling means that we can continue to make that possible by doing what we do best.