JOHANNNESBURG - Labour broker Adcorp’s share price slid 1.7percent on Friday in a week that saw the Constitutional Court provide clarity on the way ahead for labour brokers in South Africa.
Adcorp said the judgment did not negate the role that Temporary Employment Services would continue to play in workforce management and enabling skills development and employment in the economy.
“Our preliminary view of the judgment is as follows: We believe that the interpretation gives more clarity than the Labour Appeal Court judgment about a limited interpretation of whether there are two employers or one, for the purposes of the Labour Relations Act (LRA) only. Affected employees are those who earn below the Basic Conditions of Employment Act threshold (currently R205433 per annum) and who are placed for longer than three-months,” said Adcorp.
It said: "We believe that our industry will continue to play a major part in the success of the SA economy and labour market in managing the demands of globalisation, competitiveness, the 4th Industrial Revolution and the effective transition of individuals into employment.”
The court ruled that if labour brokers’ clients remained the sole employers after three months of the worker being placed within a company by a labour broker, they became full-time employees and could enjoy the full benefits as permanent employees.
Ian Cruickshanks, the chief economist at the South African Institute of Race Relations, said on Friday that the labour broker industry was of declining importance and action had been taken in the meantime.
Cruickshanks said in the past couple of years there had been a floating pool of workers from which labour brokers could pick and choose.
“I don’t actually foresee a strong change in their attitudes towards the companies. Adjustments to the manuals have been taking place in the meantime,” he said.
Baker McKenzie analysts said: "It is important to remember that the deemed transfer of employment from the agency to the client only applies to workers who are not on temporary assignments and earn less than the prescribed statutory earnings threshold. However, to the extent that employers still need to structure operations to give effect to the risks associated with using agency workers, time is running out before the floodgates open and agency workers and trade unions lodge claims against clients.”
Lemias Mashile, the chairperson of the Portfolio Committee on Labour, said the Constitutional Court ruling had given a clear interpretation of the Labour Relations Act.
Mashile said the committee was of the view that the ruling is a victory for workers and will improve the conditions of service of the majority of workers.
“The ruling is a major step towards eliminating the exploitative relationship between workers and labour brokers. The committee has long advanced an environment in the workplace that considers the rights of workers and protects them, as envisioned in the Constitution, he said.