The Constitutional Court in session. Picture: GCIS
The Constitutional Court in session. Picture: GCIS

On Thursday, the ANC, union federation Cosatu and the South African Federation of Trade Unions (Saftu) were among groups that welcomed the Constitutional Court ruling on the status of labour brokers.

On Thursday, the court ruled that labour brokers cease to be employers when their clients absorb contract employees as permanent in line with the 2014 amendments to the Labour Relations Act (LRA).

The ANC said the ruling confirmed the "correctness" of its determination that a worker placed by labour brokers in their clients’ companies become a company’s employee after three months. The ANC resolved to address the regulation of labour brokers following calls from labour unions, including Cosatu, to ban the trade, describing it as slavery.

"This ruling clarifies once and for all what is denoted by an employee and an employer. It does away with the practice that we have always maintained was unfair and exploitative, while it guarantees protection and equal treatment of all workers," the ANC said in a statement.

Meanwhile, Cosatu, which led the fight for the complete banning of labour brokers for more than a decade, called on employers to abide by the court ruling. The federation said the law that dictates temporary workers earning below R205,433 a year should be hired permanently would protect workers from labour brokers who "get rich at the expense of workers by employing them on short contracts".

Cosatu spokesperson Sizwe Pamla said it was unfortunate that Section 198 of the LRA still "justified" the existence of labour brokers. "Labour brokers are trading in workers by placing them with employers at a fee. This fee is deducted from the worker’s salary and reduces the employee’s take-home pay. In law, labour brokers are called temporary employment services (TES)."

Saftu, whose affiliate, the National Union of Metalworkers of SA (Numsa) pursued the battle on behalf of workers following disputes over the interpretation of the law described the judgment as "groundbreaking".

"Saftu has consistently held that employers have been using labour brokers to avoid having to comply with laws that safeguard workers’ rights and minimum conditions of employment. It has led to a form of human trafficking under which labour brokers hire out workers to their client companies, with no job security, lower wages and worse conditions," said spokesperson Patrick Craven.

Meanwhile, the Confederation of Associations in the Private Employment Sector, an umbrella body representing labour-broking firms, emphasised that labour brokers still had an important role to play in the country’s labour market. The body said the judgment’s assertion that the labour broker and client relationship continues beyond the three months, except in terms of the LRA, would ensure their continued involvement in line with the law.