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I disagree with the notion that the labour broker continues to be an “employer” in any capacity after its employee is deemed to be an employee of its client after three months of employment. If this were the case, the labour broker would effectively continue to be a “co-employer” or “dual employer” with the client after deeming.This would perpetuate the traditional triangular relationship, albeit in a more limited way, after deeming. It was precisely this relationship which the ConCourt rejected in the Assign judgement in so far as it applies to employees below the threshold.
In doing so, it cut the broker out of the triangular relationship which exists between the broker, the employee and the client after deeming. In my opinion, the supposed retention of the dual employer relationship despite the “sole employer” ruling after deeming on the basis of the court’s reference “for the purposes of the LRA” is unsustainable.
The labour courts have a well established tradition of interpreting and applying the labour laws in a “purposive” way. The idea is to cut through the technical legal arguments and the range of possible interpretations to identify and apply the real purpose for which the particular the law was intended.
In the Assign judgement, the court identified the real purpose of the deeming provision is to provide a measure of job security for vulnerable employees below the BCEA minimum threshold. It applied this purpose by ruling that the client becomes the “sole employer” after deeming.
If it had intended to limit the scope of the deemed employment relationship only to the LRA and to thus retain the broker in the triangle for the purposes other than for the LRA – for the BCEA etc – it would have said so. The fact that it did not, does not sustain the argument that the dual employment relationship continues alongside the sole employment relationship which the court ruled is the real purpose of the deeming provision.
Apart from the legal considerations, the retention of the employee’s “limited dual relationship” with the broker simultaneously with his or her “full sole employer” relationship with the deemed employer would be impractical to manage and would inevitably lead to a range of new disputes.
The deemed employer could retain a relationship with the broker after deeming – not as a dual employer – but as an outsourced contractor to provide payroll and other admin services for the deemed employees. In this sense, although the Assign judgement cuts the broker out as an employer of deemed employees below the threshold, brokers are free to adapt their relationships from employer to service providers.
In this way, they can continue their relationships with their clients in commercial relationships. They can also continue as labour brokers for employees below the threshold if the jobs are genuinely temporary – and if the employees earn more than the threshold. To this extent, I agree that the Assign ruling certainly does not “ban” labour brokers – but it does exclude their continued role as an employer in the triangular relationship where vulnerable employees below the threshold are concerned.
I think it’s “good”. Free market instincts incline me to simply allow the forces of supply and demand to determine the price of labour. But this Darwinian “survival of the fittest approach” only works in more or less equal societies. They exist in both a successful socialist countries system, like Sweden and Norway, and in successful free market countries like the US and the UK.
SA is neither of these – it’s a bit of both. We have enclaves of seriously successful businesses operating on free market principles in a massive sea of unemployed and desperate people. There’s a dangerous tipping point in this equation which we dare not push too far. If not quick fix solutions, there must at least be buffers to manage the discontent lest it tip us into chaos.
The NMW provides a modest buffer. It’s significant, not just for its money value – but also because it signals a message that society cares. A caring society offers hope – which feeds endeavour. And it’s a small handbrake on the “race to the bottom” in which the price of labour is driven to exploitative poverty levels by the oversupply of labour. We all strive for personal progress – and we all value our personal dignity. The NMW signals a small step to realise these basic human needs. .
Patrick Deale
