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Labour brokers have been dealt a major blow after the Constitutional Court ruled on Thursday that they were not dual employers when their clients absorb contract workers as permanent staff. The landmark ruling will change the nature of labour broking in SA. Recent amendments to the Labour Relations Act (LRA) dictate that clients of labour brokers have to hire contractors who earn below R205,433 annually after three months. The Constitutional Court ruled that clients of labour brokers were sole employers and the language in Section 198A of the LRA was clear enough. A protracted battle over the right interpretation of the section has seen unions and labour brokers battling it out in several courts.

The ruling means temporary employment services (TES) will not have any legal standing in the employment terms of contract workers, nor be involved any further in the equation with regards to the LRA. TES companies have complained that the ruling will have adverse effects on their prof...

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