The debate surrounding the interpretation of section 198A(3)(b) of the Labour Relations Act (LRA), particularly dealing with the dual or deemed employment relationship between a client of a temporary employment service provider (TES) and the TES employee, was settled by the Constitutional Court in Assign Services (Pty) Ltd v NUMSA and others (2018) 9 BLLR 837 (CC) (Assign Services).
The court in Assign Services held that in situations where an employee, earning less than the stipulated threshold (presently ZAR 205 433.00 per annum), is contracted through an agency or TES to a client for more than three months, the client is deemed to be the sole employer of the employee.
What happens, however, where a TES employee, deemed to be an employee of the client, earns less than his "new" fellow employees?
A practical application of the court's position recently came before the statutory employment tribunal, the Commission for Conciliation, Mediation and Arbitration (CCMA). In the matter of GIWUSA obo Moedezi and Others v Swissport SA (Pty) Ltd and Others, the CCMA was tasked with determining whether TES employees, earning less than the stipulated threshold and contracted to a client for more than three months, had the right to:
- be transferred "onto the books" of the client; and
- receive the same benefits as employees of the client performing the same or similar work.
In casu, the TES employees were employed as forklift drivers by Workforce Group, and rendered such services at the client's premises between 2014 and 2017. It was undisputed that the client, Swissport, was the employer of the TES employees for purposes of the LRA, following the Assign Services decision. However, the TES employees were still "on the books" of Workforce Group, and received benefits as employees of Workforce Group.
Swissport employees received benefits such as pension fund contributions, medical insurance, discretionary bonuses and shift allowances that were not afforded to the deemed TES employees.
In terms of section 198A(5) of the LRA, a deemed employee must be treated on the whole not less favourably as compared to an employee of the client who performs the same or similar work (unless there is a justifiable reason for differential treatment).
In order for the TES employees to succeed with their claim to receive these additional benefits in terms of section 198A(5) of the LRA, the TES employees had to demonstrate that they performed the same or similar work to Swissport's employees.
The difficulty facing the deemed employees was that there was no comparator, as Swissport did not employ any forklift drivers themselves - the forklift drivers were only supplied by the TES. The TES employees therefore argued that the position of cargo controllers was sufficiently similar to the position of forklift drivers for the purposes of section 198A(5) of the LRA.
The CCMA examined the roles and functions of both forklift drivers and cargo controllers, and found that whilst some of the duties did overlap, the two positions were different in a number of respects. Specifically, cargo controllers have more responsibility and additional tasks to forklift drivers. The additional responsibility of cargo controllers was highlighted by the fact that when forklift drivers do perform some of the responsibilities of controllers, which is only occasionally, this is done under the supervision of cargo controllers. The CCMA therefore concluded that the two positions were not the same or sufficiently similar to invoke section 198A(5) of the LRA. As a result, the TES employees did not have to be treated on the whole not less favourably than cargo controllers, and were not entitled to the additional benefits available to Swissport's employees.
In summary, TES employees will only be able to bring a successful claim in terms of section 198A(5) of the LRA if they can demonstrate that their position is the same or sufficiently similar to that of a permanent employee. Further, there is no requirement for TES employees to be transferred "to the books" of the client. This was made clear in Assign Services where the court held that it is not required for TES employees to be transferred to the new employment relationship. All that is required is for the TES employees to be indefinitely employed by the client for the purposes of the LRA.
While Swissport managed to dodge the proverbial bullet with this decision, employers are cautioned to ensure that where TES employees are deemed permanent employees of the employer/client, such employees must receive the same benefits as employees of the employer/client who perform the same or similar work (if such employees exist).
By Julia Olley, candidate attorney, and Tiisetso Rabolao, associate, overseen by Tracy Robbins, associate, Employment & Compensation Practice, Johannesburg