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HR 101 – Labour Broker Employees – Part 3

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Please note that this pertains to South African Labour Law and Best Practice requirements.

Following on from last time, today we will look at some of the other requirements pertaining to Labour Brokers, particularly with regards to the CCMA.

To put it bluntly, the CCMA does not want to see employees employed by labour brokers. It has recognised these employees as ‘defined’, which pretty much means that their rights are the same as other employees and as such the labour broker as well as whomever the employee works for also have obligations towards the employer. If you have any doubts about where you stand, have a look at the articles on ‘What is an Employee’ in this blog series.

You see the cost of hiring staff and staff benefits is ever rising. Dealing with Trade Unions is time consuming and often a pain in the rear end and then having to deal with the CCMA, well quite frankly, the less said about that the better. Enter the Labour Broker and herein lies the problem.

Originally the Labour Broker was referred to as “temporary employment services (TES). As you can see this is where the whole thing has gone pear shaped as clearly this has fallen by the wayside and many companies no longer use Labour Brokers or employment agencies for the supply of their ‘temporary’ requirements and now many companies use the services of Labour Brokers for their entire permanent work force. So now who owns the employee problem in terms of the law – the labour broker or the company who uses the labour broker.

Often the line becomes badly blurred, the client will perhaps dismiss a staff member (although strictly speaking the staff member does not work for them but works for the labour broker) and then the labour broker carries the responsibility.

Then there are situations where the client no longer requires the services of an employee and the broker dismisses the staff member based on that. This then is in direct contravention of the Labour Relations Act and the Basic Conditions of Employment Act.

Clients themselves, are often unaware of how they blur the lines as well. I have a client who uses the services of a Labour Broker, but who asked me how they should ‘measure’ the performance of the staff in order for them to calculate end of year bonuses. I was confused and asked them why they are paying bonuses for staff who are someone else’s employees. These same clients perform their own disciplinaries as well. In my opinion the transgression should be reported to the labour broker who then is responsible for all disciplinary action that takes place.

My advice to companies who need to invest in employees – unless you are 100% sure of the definition of a labour broker and equally sure of what an employee is and 100% sure of your requirements and/or responsibilities in terms of those employees, don’t use a Labour Broker as engaging their services may end up far more costly and aggravating, than you actually managing the staff yourselves.

Next time we will move onto a new topic.