ONE & ONLY EMPLOYER: Appeal Court rules deemed employees have only one employer after 3 months – not two dual employers. But it’s not final yet …
The sole vs. dual employer debate moved closer to finality with in a July 2017 judgement of the Labour Appeal Court (LAC).
Employees in the three-way relationship between Krost (the client) & Assign (the labour broker or TES) claimed they had become permanent Krost employees after working 3 months for them under contract via Assign.
The Labour Court previously ruled that a dual relationship was created between Krost and Assign after deeming. This was because Krost and Assign were still jointly and severally liable to the deemed employees in terms of s198 (4) (a) of the LRA.
The following extracts of the new judgement explain the LAC’s thinking clearly –
Summary: The plain language of s198A(3)(b) of the LRA, interpreted in context unambiguously supports the sole employer interpretation and is in line with the purpose of the amendment, the primary object of the LRA and protects the rights of placed workers.
 The protection against unfair dismissal and unfair discrimination in the context of s198A of the LRA should not be interpreted to support the contention that the deemed employees are employed by both the TES and the client.
The judgement is not final. It will now go to the Constitutional Court as CAPES, the Confederation of Associations in the Private Employment Sector, has since noted in a media statement. They also point out that all parties involved in the Krost case have known since it started in the CCMA back in 2015 that it would ultimately go all the way to the Constitutional Court for a final decision. Such is the importance of the case to the employment community.
TIP: The three-way relationship between the client, the labour broker and the employee remains a dual relationship pending the final decision of the Constitutional Court. This could happen within in the next 12 months. Until then, its business as usual in client-labour broker relationships. And a reminder that whatever the final outcome – it will still only apply to employees who earn less than the BCEA threshold of R205 000 per year.
1 Assign Services & Others (case no JA96/15) – Labour Appeal Court