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SASLAW SEMINAR 27 October 2014. Suzanna Harvey and Craig Bosch Amendments to the LRA: their interpretation and practical effect. Style. Hosting a discussion (towards harnessing our collective curiosity).

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27 October 2014

Suzanna Harvey and Craig Bosch

Amendments to the LRA: their interpretation and practical effect


Author and Date

Hosting a discussion

(towards harnessing our collective curiosity)

chapter ix of act 66 of 1995 regulation of non standard employment and general provisions



Author and Date

strong views
Strong views


“Our position on labour [broking] is that it treats workers as commodities, who can be traded to generate a profit. That is why we make no apology for calling it human trafficking and a modern form of slavery."


“Cosatu’s call for a total ban on labour brokers is a clear sign of an organisation that is delusional to its core ... the country would actually come to a standstill if labour brokers were banned.”

value of employment security
Value of Employment Security

Non-standard employment arrangements limit employment security

Employment security a core purpose of the LRA and s23 of the Constitution: Nehawu v UCT & Others 2003 (3) SA 1 (CC)

old s198 of the lra
Old s198 of the LRA
  • Labour broker employees
    • Arbitrary dismissals – often at instance of clients

Nape v INTCS Corporate Solutions (Pty) Ltd (2010) 31 ILJ 2120 (LC)

Dyokhwe v de Kock NO and others (2012) 33 ILJ 2401 (LC)

    • Primary remedy of reinstatement not available
  • SA workers vulnerable:
    • lack accumulated resources/savings
    • often responsible for entire extended families
  • ILO’s Decent Work Agenda
lraa strikes the balance
LRAA Strikes the Balance

Author and Date

  • Employers’ genuine, objective need for efficiency requires reasonable flexibility
  • Workers need jobs AND protection from opportunistic rights violations leading to insecurity
  • LRAA protects
    • low earners
    • working > 3 months
  • Mainly by requiring objective justification for temporary, fixed term or part-time work

Employee earns

≤ R205 433.30 pa (~ R 17k pm)

section 198 mainly unchanged
Section 198 – mainly unchanged

Author and Date

(1) A TES: any person who, for reward, procures for or provides to a client other persons

a) who perform work for the client; and

b) who are remunerated by the TES.

(2) For the purposes of this Act, a person whose services have been procured for or provided to a client by a TES is the employee of that TES, and the TES is that person’s employer

s198 changes to joint liability
S198 changes to joint liability

Author and Date

Old 198(4) joint and several liability if the TES contravenes a CA, arbitration award, BCEA or SD regulating terms and conditions of employment.

New s198(4)A: If Client and TES are jointly/severally liable or Client is deemed e/r, then

a labour inspector may enforce compliance

an employee may institute proceedings

an order or award made be enforced

against either or both

section 198 new protections in ss4a 4f
Section 198New protections in ss4A-4F

TESs must comply with regulated employment conditions in the CLIENT’s industry

An arbitrator or the LC may determine whether provisions in TES-Client contracts, as well as in employment contracts, comply with SD/CA – and make an appropriate order


Protects low-earning labour broker workersNo exclusion for small employersIf they started before the LRAA commenced, ss3-5 apply after 3 months

section 198a temporary service defined
Section 198A ‘Temporary Service’ Defined
  • New definition of a Temporary Service (TS):
    • lasts less than 3 months OR
    • replacing absent employee OR
    • a category of work which is a defined TS in a Ministerial Notice, SD or CA

Distinguish a Temporary Employment Service

from a Temporary Service

s198a 3
s198A (3)

Restricts employment through labour brokers to genuinely temporary work.

“ For the purposes of this Act, an employee

  • performing a TS .. for the client is the employee of the TES in terms of s198(2); or
  • not performing such TS for the client is-
    • deemed to be the employee of that client and the client is deemed to be the employer; and
    • subject to the provisions of s198B, employed on an indefinite basis by the client.”
effect of s198a 3 deeming
Effect of s198A(3) deeming

When the TES’s client is deemed to be the worker’s employer:


Does the contract of employment transfer to the client, terminating the employment relationship between the worker and the TES?

Are there perhaps still two employers? IF SO what are the implications? Organisational rights, strikes, dismissals, administration of leave, salary, benefits, s189 consultations, s197 transfers

Client becomes the duty-bearer(of duties/remedies assigned to employer under LRA – not affected by TES continuing admin function.

e e placed by tes at client
E/e placed by TES at client

Who is the employer?

Does e/e earn above threshold?



s198 applies

Both ss 198 and 198A apply

TES is e/r

(Client has limited j/s liability)

Is it a TS?


TES is e/r


Client is e/r

section 198a consequences when client deemed
Section 198AConsequences when client ‘deemed’

The audi principle may require CCMA/BC/Commissioners to consider joining the client meromotu at an early stage.

If client is the deemed employer, the worker must be

Considered to be employed indefinitely (unless a valid FTC – see s198B) – implications for remedy if dismissed

treated on the whole not less favourably than the client’s comparable workers (unless justifiable reasons s198D)

section 198a 4 termination to avoid deeming
Section 198A (4)Termination to avoid deeming

If the worker’s services for the client are terminated (at the instance of the client or the TES) in order to avoid deeming, this is adismissal.

Query: If the TES removes the worker from the client and places her elsewhere in order to avoid her being deemed the client’s employee:

is she nevertheless dismissed whilst continuing to be employed, and entitled to a remedy if the dismissal was unfair?

what might an appropriate remedy be?

section 198b 2 exclusions
Section 198B (2)Exclusions

s198B in its entirety does NOT apply if:

Employee earns above threshold

Employer is small/new (less than 2 years unless formed by division/dissolution)

Overridden by CA ‘permitting’ (regulating?) FTCs

‘permitting’ is ambiguous - FTCs already permitted - memo suggests it means permitting unregulated FTCs longer than 3m

section 198b
Section 198B
  • FTC defined as one that terminates on
    • the occurrence of specified event
    • the completion of specified task or project
    • a fixed date other than retirement age
  • Offers must be in writing and state the reason for fixing the term
  • S186(b) extends dismissal definition to include reasonable expectation of renewal or indefinite retention
  • All FTCWs to have equal opportunity to apply for vacancies
  • Fixed term contract work lasting > 3m
    • requires an objective justification for fixing the term, and
    • treat FTCWs no less favourably than permanent employee
    • ‘end of term payment’ if specified project lasts >2years
section 198b 4 justifiable reasons for fixing contract term
Section 198B (4) Justifiable reasons for fixing contract term

Non- exhaustive list of justifiable reasons for fixing the term :

  • Replace absent employee;
  • temporary increase in work, not longer than 12 months;
  • student to gain experience;
  • specified limited-duration project;
  • non-citizen with work permit;
  • seasonal work;
  • official public works or job creation scheme;
  • Project with limited external funding; and
  • beyond retirement age.
section 198b where requirements not met
Section 198Bwhere requirements not met
  • FTC >3m without objective justification, the contract of employment is deemed to be of indefinite duration
    • the provision fixing the term in the contract is statutorily invalid (LRA overrides the contract, despite intention of the parties)
    • If unfairly dismissed, the employee may be reinstated into indefinite employment OR awarded compensation up to 12 months (regardless of the remaining term of the contract)
    • If the reason for dismissal was operational, s189 applies
  • Employer bears onus to show that
    • the reason for fixing the term was objectively justified; and that
    • the term was agreed upon
sections 198c 1 2 definition application interpretation
Sections 198C (1) & (2)Definition, application & interpretation
  • Definition: part-timer works fewer hours than comparable full-timer (a factual enquiry)
  • Application: This section protects workers who:
    • work less than full-timers, but more than 24hours per month
    • are low earners
    • work for large employers
    • have worked for more than 3 months
  • Interpretation: with reference to ILO Convention 175 (facilitate access to productive and freely-chosen part-time work which meets the needs of employers and workers)
section 198c 3 treatment of part timers
Section 198C (3)Treatment of part-timers

Protected part-timers are entitled to:

on the whole not less favourable

treatment (unless justifiable reasons for different treatment);

access to training and skills development


the same

access to opportunities to apply for vacancies.

section 198c remedies
Section 198C Remedies?
  • Prospective relief
  • Damages
section 198d overview
Section 198DOverview

Deals with two matters:

  • Justifiable reasons for different treatment of:
      • Deemed TES employees
      • FTCWs who work for over 3 months
      • Part-timers
  • Disputes over interpretation and application ofsections 198A, B and C.
section 198d 2 justifiable reasons
Section 198D (2)Justifiable Reasons

Justifiable reasonsfor treating persons differently include applying a system that takes into account:

  • seniority, experience, length of service;
  • merit;
  • quality or quantity of work; or
  • other similar criteria (not prohibited under EEA)

What is a system?


Policy? Custom? Communicated?

section 198d dispute procedure
Section 198DDispute Procedure

CCMA and BCs with jurisdiction empowered to interpret and apply sections 198A-C

(this excludes dismissals, to be dealt with in usual manner)

Dispute Procedure:

Refer within 6 months of act/omission

Conciliation (no time specified)

Refer for Arbitration within 90 days of failed conciliation

strong views1
Strong views

Free Market Foundation

“Some voices in the government alliance have called for the total abolition of labour brokers. Or lately, for a regime where the client of a labour broker is deemed to be the employer, burdened with all the labour-law obligations that that entails. These calls on the part of the trade unions, are not only self-serving, but will lead SA to greater unemployment.”

thank you
Thank you

Author and Date

collective bargaining
Collective Bargaining

Author and Date

s21(8): in determining whether a registered union is sufficiently representative a commissioner must also consider the composition of the work-force in the workplace taking into account the extent to which there are employees assigned to work by temporary employment services, employees employed on fixed term contracts, part-time employees or employees in other categories of non-standard employment


collective bargaining1
Collective Bargaining

Author and Date

s22(8A) and (8B): most representative, sufficiently representative union entitled to rights in s14 if no other union has been granted that right

Most representative, sufficiently representative union entitled to rights in s14 may also be granted the rights contained in s16 provided no other union has been granted that right

These rights are forfeit as soon as the union is no longer the most representative

collective bargaining2
Collective Bargaining

Author and Date

Retreating from majoritarianism (s21(8C)):

Subject to subsection (8), a registered trade union/sthat does not meet thresholds of representativeness established by a collective agreement in terms of section 18 may be granted the rights in s12, 13 and 15 if it represents a significant interest, or a substantial number of employeesin the workplace.

What does this mean and what of the tension with s21(8)?

collective bargaining3
Collective Bargaining

Author and Date

s21(12): trade unionseeking to exercise organisational rights in respect of TES employeesmay seek to do so in a workplace of either the TES or one or more clients of the TES.

To that end: An arbitration award granting organisational rights may be made binding on the employer and a client of the TES for whom an employeecovered by the award is assigned to work if given an opportunity to participate in the arbitration proceedings.

collective bargaining4
Collective Bargaining

Author and Date

s65(1)(c) no protected strike if the issue in dispute is one that a party has the right to refer to arbitration or to the Labour Court in terms of the LRAor any other employment law

s70D(1), s72 and s73: Essential services committee may determine the minimum services required to be maintained in the service that is designated as an essential service.

dispute resolution
Dispute Resolution

Author and Date

Getting finality faster:

s143: A certified arbitration award may be enforced as if it were an order of the Labour Court in respect of which a writ has been issued

If a party fails to comply with a certified arbitration award that orders the performance of an act, other than the payment of an amount of money it may be enforced by way of contempt proceedings instituted in the Labour Court.

dispute resolution1
Dispute Resolution

Author and Date

s143: An arbitration award in terms of which a party is required to pay an amount of money must be treated for the purpose of enforcing or executing that award as if it were an order of the Magistrate’s Court.

s145: Applicant for review must apply for a date for the matter to be heard within six months of delivery of the application

Operation of award not suspended unless security furnished in terms of s145(8)

dispute resolution2
Dispute Resolution

Author and Date

Application to set aside an arbitration award in terms of s145 interrupts the running of prescription in terms of the Prescription Act in respect of that award.

Judgment in an application brought under s145 must be handed down as soon as reasonably possible.

LC may not review any decision or ruling made during conciliation or arbitration proceedings before the issue in dispute has been finally determined, unless just and equitable to review before conclusion


Author and Date

  • s187(1)(c) a dismissal is automatically unfair is the reason for the dismissal is a refusal by employees to accept a demand in respect of any matter of mutual interest between them and their employer
  • An employee may go to arbitration regarding an allegedly unfair retrenchment if:
    • the employer followed a consultation procedure that applied to that employee only
    • the employer’s operational requirements lead to the dismissal of that employee only; or
    • the employer employs less than ten employees, irrespective of the number of employees who are dismissed.
employment equity act
Employment Equity Act

s6(1) No person may unfairly discriminate, directly or indirectly, against an employee, in any employment policy or practice, on one or more grounds, including race, gender, sex, pregnancy, marital status, family responsibility, ethnic or social origin, colour, sexual orientation, age, disability, religion, HIV status, conscience, belief, political opinion, culture, language, [and] birth or on any other arbitrary ground.

employment equity act1
Employment Equity Act

Author and Date

Burden of proof

11. (1) If unfair discrimination is alleged on a ground listed in section 6(1), the employer against whom the allegation is made must prove, on a balance of probabilities, that such discrimination—

(a) did not take place as alleged; or

(b) is rational and not unfair, or is otherwise justifiable.

employment equity act2
Employment Equity Act

Author and Date

(2) If unfair discrimination is alleged on an arbitrary ground, the complainant must prove, on a balance of probabilities, that—

(a) the conduct complained of is not rational;

(b) the conduct complained of amounts to discrimination; and

(c) the discrimination is unfair.

arbitrary ground
‘Arbitrary ground’

Author and Date

Suggest that this be taken to refer to analogous grounds – test based on impact on employee’s dignity

See New Way Motor & Diesel Engineering (Pty) Ltd v Marsland (JA 15/2007) [2009] ZALAC 27 (13 August 2009) – applying s187(1)(f)

Contra du Toit ‘Protection against Unfair Discrimination: Cleaning up the Act?’ (2014) 35 ILJ 2623

equal pay for work of equal value
Equal pay for work of equal value

Author and Date

s6(4) A difference in terms and conditions of employment between employees of the same employer performing the same or substantially the same work or work of equal value that is directly or indirectly based on any one or more of the grounds listed in subsection (1), is unfair discrimination.

= nothing new here

employment equity act3
Employment Equity Act

Author and Date


Disputes relating to sexual harassment to conciliation and then arbitration by the CCMA

All other discrimination disputes to CCMA arbitration if the applicant earns less than the prescribed threshold.

S10(8) – awards issued in terms of 10(6)(aA) may be appealed to the LC within 14 days

some issues to consider
Some issues to consider

Author and Date

What is the practical effect of deeming the client to be the employer of a labour broker worker?

Can a worker be dismissed (to avoid deeming, attracting a remedy) whilst remaining employed (at a different client)?

What effect will changing TESs have on union representivity?

Will the amendments relating to dispute resolution reduce the number of review applications?

When is a dismissal contrary to s187(1)(c) as opposed to being for operational reasons?

What is the effect of the changes to s6 and s11 of the EEA?