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Employment Industry appeals Labour Appeal Court finding

Last modified on 7/20/2017 9:43 AM

Employment Industry appeals Labour Appeal Court finding on Labour Court judgement, lodges matter in Constitutional Court

Johannesburg, 19 July, 2017 – Adcorp and employment industry stakeholders associated with the Confederation of Associations in the Private Employment Sector (CAPES) will lodge an appeal to the Constitutional Court on findings handed down by the Labour Appeal Court on the Assign Services matter. The court case addressed the interpretation of the "deeming clause" which applies where clients use the services of Temporary Employment Services (TES) for assignees who are placed for longer than three months and who earn below an annual threshold. After that period the employee provided by the TES is "deemed" to be an employee of the client company who is then the sole employer.

On 10 July this year, the Labour Appeal Court set aside a judgement taken by the Labour Court in this matter.

The Labour Court found that after three months (in respect of temporary assignees who are assigned to clients by TES), the TES remains the primary employer and the client becomes a complementary employer only if the TES contravenes its legal obligations (known as the dual employer relationship. However, the recent Labour Appeal Court decision found the client of the TES to be the sole statutory employer, although the TES could still administer the relationship of employment.

TES are one of the service offerings of Adcorp, a JSE-listed global company that offers various workforce solutions models across a number of industries.

Filing a notice to appeal to the Constitutional Court effectively suspends the judgement taken by the Labour Appeal Court and upholds the initial judgement taken by the Labour Court until the matter is heard by the Constitutional Court.

The TES industry is responsible for placing around 1 million temporary assignees across all sectors and industries per day and if the Constitutional Court upholds the Labour Appeal Court judgement it would have a material and detrimental impact on unemployment levels and job creation, a critical socio-economic developmental objective for South Africa.  The impact of the Labour Relations Act amendments in 2015 were far reaching and contributed to current unemployment increases in South Africa.


"The reality is that the world is moving away from traditional, permanent employment towards flexible contracting, outcomes-based and digital solutions models.  To move back into fixed cost, legacy employment work models is not responsible nor sustainable," says John Botha



One of the grounds for appeal is that the Labour Appeal Court didn't deal with a fundamental point - that the Labour Appeal Court has, itself, ruled that the Basic Conditions of Employment Act and Labour Relations Act must be interpreted in a manner that means they are not in conflict with another.  They must be interpreted as being in harmony with each other. 

Despite the arguments placed before the Labour Appeal Court as to why the single employer argument would result in disharmony this issue was not dealt with by the Labour Appeal Court.  We believe that if this issue was dealt with by the Labour Appeal Court, the result could have been different. 

Another significant aspect not addressed by the court is that one of the primary objectives of the amendments was affording TES employees extra protection.  While much of the argument in both the Labour Appeal Court and Labour Court addressed this issue, the Labour Appeal Court Judgment does not address this issue.  We believe if the TES remains involved with the employee this will give them added protection.

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