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Temporary employment services (TES), otherwise known as labour brokers, are a common practice that has been a topic of discussion for quite some time. Temporary employment services are, according to the Labour Relations Act 66 of 1995 (LRA) as amended in 2015 section 198, employees that work for a client on a temporary basis and are paid by the temporary employment service.

These services are only valid when:

  • The employee earns less than the threshold, currently R205 433,30;
  • A TES employee is assigned to a client for a period of less than three months;
  • ATES employee is assigned to a client as a substitute for an employee who is temporarily absent from work;
  • ATES employee is assigned to a client to perform a category of work which is determined to be a temporary service by a collective agreement concluded in a bargaining council, a sectoral determination or a notice published in the Government Gazette by the Minister of Labour.

These requirements were put in place to discourage companies from using TES on a long-term basis. When the employment of the TES employees falls outside the parameters as stated above, the questions has been raised whether the employment relationship becomes one of dual employment by the client and the TES or if the client becomes the sole employer of these employees.

This question was answered in the Labour Appeals Court (LAC) judgement handed down on 10 July 2017 in the matter NUMSA v ASSIGN SERVICES. In this matter, a TES supplied employees to a client and the employees wanted to be absorbed into the employment of the client because of the amended provisions of the LRA.

The matter was sent to the CCMA, Labour Court and finally to the LAC where the court held that if the employees fall outside the parameter as set out in the LRA, as stated above, an employment relationship between the employees and the client comes into existence and the client will become the sole employer of the TES employees, thus removing the TES from the employment relationship.

Companies using temporary employment services or temporary employment must ensure that the employees are employed solely for temporary work and that the agreement complies with the requirement as set out in the LRA. When these parameters are not abided by the employees will be deemed employees of the company on a permanent and indefinite basis.