Labour broker wings clipped
The Constitutional Court does not ban labour broking in its entirety, but aims to ensure that the provision of temporary services is truly temporary and after three months is classed as permanent under the LRA
Labour brokers are apprehensive after a Constitutional Court ruling last week that went to the heart of their operations. The court ruled that brokers cease to be co-employers once the temporary workers they place with client companies become permanent after three months with the client company. Labour brokers account for close to 14% of all employment in SA and the majority of the staff they provide are considered vulnerable. Close to half of all workers in SA earn below R3,500 a month. The impact of the ruling was seen on Friday when JSE-listed labour-broking firm Adcorp’s share price fell as much as 10%. Some of the sector’s major companies had predicted they would feel the impact if the court ruled as it did. Workforce Holdings in its 2017 annual report described the case, driven by the National Union of Metalworkers of SA (Numsa), as a "significant external factor affecting our staffing and outsourcing segment". The Constitutional Court ruling means companies that use labour br...
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