CWAO STATEMENT ON NUMSA CONCOURT VICTORY IN THE ‘ASSIGN SERVICES’ CASE


2018-07-26

 The Casual Workers Advice Office (CWAO) welcomes the judgment in favour of a ‘sole employment’ interpretation, handed down today by the Constitutional Court in the matter of Assign Services (Pty) Limited v National Union of Metalworkers of South Africa and others. The case has been making its way through the court system for three and a half years. CWAO has been active in the case as Amicus Curiae (friend of the Court), because it vitally affects the labour-brokered workers we work with.

Where does the issue of ‘sole versus dual employer’ come from?

In 2015 amendments to the Labour Relations Act gave a set of new rights to low-paid workers who either work part-time, or on fixed term contracts, or through labour brokers. One of the important rights was for labour-brokered workers who perform ongoing work (as opposed to genuinely temporary work of less than 3 months) to become the permanent employees of the client companies where they physically work. Importantly, the law stipulated that these workers had to be treated no less favourably than other permanent workers doing the same or similar work. If employers failed or refused to give effect to the Act, the workers could refer a dispute to the CCMA.

This created a big risk for the bosses of labour broking. They have long used labour broking as a tactic to enable them to treat workers who do permanent work as temporary employees with less wages, benefits and job security. The vast majority of labour-brokered workers therefore were employed for longer than three months, doing routine, ongoing work, which was objectively permanent. As a result, the full implementation of this part of the LRA threatened to do away with labour broking as we know it – with millions of rands going to workers in extra wages and benefits, instead of to labour broker bosses as extra profits.

The bosses, of both the labour brokers and their client companies, were determined to stop this. They fought (and are fighting) back in many ways. The Assign Services case is one of them. Assign Services placed 22 labour-brokered workers at Krost Shelving and Racking, and some of these workers worked for longer than three months.  The labour broker, Assign, chose this workplace as a test.  Assign asked the CCMA to confirm its interpretation of section 198A(3) of the LRA: that even though the workers were placed in ongoing work, after three months they did not become Krost employees, but Krost merely became an additional employer, together with the labour broker. The workers would become the employees of both the labour broker and the client company. The CCMA commissioner rejected this argument and found in favour of NUMSA’s argument that after 3 months the client company became the ‘sole’ employer. Assign successfully challenged the CCMA award at the Labour Court.  NUMSA appealed to the Labour Appeal Court, and CWAO then applied to join as amicus curiae. When the Labour Appeal Court upheld the ‘sole employer’ interpretation, Assign applied to the Constitutional Court for leave to appeal against the Labour Appeal Court judgment, which is this current case, in which the Constitutional Court has now confirmed the ruling of the Labour Appeal Court and dismissed the appeal by Assign with costs.

The dividing lines were clear. For the workers, having two employers will to a large degree perpetuate the present situation where labour-brokered workers are effectively without rights. They cannot claim their rights from the labour brokers (who say the client will cancel the commercial contract), and they cannot claim them from client companies (because they say they are not the employers). A continuing of the ‘dual employer’ situation would seriously undermine the rights labour-brokered workers acquired in 2015. For the bosses, the ‘sole employer’ interpretation massively reduces the role and profits of labour brokers. As we noted above, the overwhelming majority of workers employed through labour brokers actually do permanent work, so the bosses are fighting for the future of their industry.

What is the likely impact of this judgment?

Losing this case is a massive setback for the bosses. But its true impact will depend on worker mobilisation. If all or the majority of labour-brokered workers claim the new rights and become permanent employees of client companies only, it will be the end of labour broking as we know it. For that to happen, workers need to mobilise and organise.

At the moment, we believe that the majority of labour-brokered workers are not aware of these rights. The trade unions generally have shied away from organising labour-brokered workers and campaigning for their rights. Small organisations such as CWAO had to carry most of the responsibility.

CWAO’s work in this regard has showed beyond doubt that labour-brokered workers are ready for struggle and mobilisation. The workers we assisted have initiated their own association called the Simunye Workers Forum (Simunye), which by the standards of today’s labour movement is positively thriving. It is no coincidence that the forty Simunye members who sang and toyi-toyied outside the ConCourt today were the only workers there. More than 200 workers have been meeting every second Saturday for more than two and a half years in the Simunye general meeting, which they have used as a platform to organise at hundreds of companies resulting in more than 9 000 labour-brokered workers being made permanent.

Despite the successes of CWAO and Simunye, the overall situation looks negative. There is a need for a thousand Simunyes all over the country. The next period is going to be a test for the labour movement. This court victory needs to be backed up with massive organising efforts in order to realise its full impact for labour-brokered workers.

END

For comment or more information contact:

Ighsaan Schroeder 0798882229 (CWAO)

Bhavna Ramji 0815983673 (CWAO)

Khongelani Hlungwani 0737339162 (Simunye Workers Forum)

 

Ronald

CASUAL WORKERS ADVICE OFFICE

 

 

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