Constitutional Court File picture: Tiro Ramatlhatse

Johannesburg - Labour unions are celebrating the outcome of a Constitutional Court judgment that has ruled in their favour regarding the status of labour brokers in employment contracts.

The case involved the interpretation of section 198A(3)(b) of the Labour Relations Act (LRA) and if the section stipulates a “dual employment relationship” between an employee, the company and the labour broker or a “sole employment relationship” between the worker and the company after the period of three months had expired.

The Constitutional Court ruled that for the first three months the labour broker is the employer and after that period the company, where the employee was placed by the labour broker, becomes the “sole employer”. This means companies are obligated to provide former temporal employees with permanent contracts after the three-month period lapses.

The court said the legislation should be interpreted in the context of fair labour practices as stated in the Constitution and the ultimate purpose of the LRA. 

The case was brought to the Constitutional Court by Assign Services and respondents to the case included the National Union of Metalworkers SA (Numsa).

The union argued that the 22 workers that were placed at Assign Services’ client, Krost Shelving and Racking, for longer the three months must be made permanent employees. The Commission for Conciliation, Mediation and Arbitration agreed with Numsa. But the Labour Court later overturned that ruling and gave a judgment in favour of the Assign Services. 

The Labour Appeal Court ruled in an appeal by Numsa that the “sole employment relationship” was the best interpretation of the LRA. 

Numsa has long stated the scrapping of the labour brokers, argued that sole employer interpretation of LRA was the correct and that it worked to the advantage of workers and weakened their exploitation.

Zwelinzima Vavi, the general secretary of the SA Federation of Trade Unions (Saftu), called the ruling a victory for workers.