Adcorp drops almost 10% on labour broking ruling
The labour broker struggled after the Constitutional Court dismissed its appeal against dual employment, on Thursday
Labour broker Adcorp’s share price fell as much as 10% on Friday morning, after being dealt a major blow on Thursday in the Constitutional Court. The employment services group said in a statement that the judgement would not "negate" the role of labour brokers, noting that it would not mean a complete end of a triangular relationship between employees, clients and labour brokers. On Thursday, the Constitutional Court ruled that labour brokers were not considered dual employers when their clients absorbed contracted workers as permanent staff The Labour Relations Act (LRA) requires clients of labour brokers to hire contractors who earn below a certain threshold after three months, unless the job can be demonstrated to be temporary in nature. The Court ruled that clients of labour brokers were sole employers, and the language in section 198A of the LRA was clear enough, a ruling described by some unions as presaging the "extinction" of the labour broking sector. Adcorp said on Friday ...
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