Section 198 of the LRA deals with temporary employment services (“TES”). TES are defined as any person who provides for a reward, to a client, other persons who render services to, or perform work for, the client and who are remunerated by the TES. The LRA deems these persons to be employees of the temporary employment service. Independent contractors are not employees of the TES.

The TES and the client will be jointly and severally liable if the TES contravenes a collective agreement, an arbitration award, the BCEA or a determination in terms of the Wage Act.

Section 37 of the Amendment Act adds that where the client of the TES is deemed to be an employer:

  • The employee may institute proceedings against the TES, the client or both;
  • A labour inspector acting in terms of the BCEA may enforce compliance against the TES, the client or both; and
  • Any order or award made in terms of this subsection may be enforced against either or both.

198A(1) ‘temporary service’ means work for a client by an employee—

  • for a period not exceeding three months;
  • as a substitute for an employee of the client who is temporarily absent; and
  • in a category of work and for any period of time which is determined to be a temporary service by a collective agreement concluded in a bargaining council, a sectoral determination or a notice published by the Minister.

This section does not apply to employees earning in excess of the threshold prescribed by the Minister in terms of section 6(3) of the Basic Conditions of Employment Act.

For the purposes of this Act, an employee—

  • performing a temporary service as contemplated in subsection (1) for the client is the employee of the temporary employment services in terms of section 198(2); or
  • not performing such temporary service for the client is—
    • (i) deemed to be the employee of that client and the client is deemed to be the employer; and
    • (ii) subject to the provisions of section 198B, employed on an indefinite basis by the client.

The termination by the temporary employment services of an employee’s service with a client, whether at the instance of the temporary employment service or the client, for the purpose of avoiding the operation of subsection (3) or because the employee exercised a right in terms of this Act, is defined as a dismissal.

An employee deemed to be an employee of the client in terms of subsection (3) must be treated on the whole not less favourably than an employee of the client performing the same or similar work, unless there is a justifiable reason for different treatment.

 

Brassey AJ judgment in Assign v CCMA 2015:

Pivotal to the innovations, which were introduced by ss 37 and 38 the Labour Relations Amendment Act 6 of 2014 and are located in ss 198 and 198A-D of the main Act (the LRA), is a deeming provision that, speaking broadly, makes a worker an employee of the client three months after placement. The issue that arises is whether the TES continues to have a relationship with the worker and, if so, whether the relationship remains one of employment and by reason of this fact, is concurrently vested with the statutory rights/obligations and powers/duties that the Act generates. I see no reason why this should not be so. There seems no reason, in principle or practice, why the TES should be relieved of its statutory rights and obligations towards the worker because the client has acquired a parallel set of such rights and obligations. The worker, in contracting with the TES, became entitled to the statutory protections that automatically resulted from his or her engagement and there seem to be no public policy considerations, such as pertain under the LRA’s transfer of business provisions (s 197), why he or she should be expected to sacrifice them on the fact that the TES has found a placement with a client, especially when (as is normally so) the designation of the client is within the sole discretion of the TES.