Labour brokers have been dealt a major blow after the Constitutional Court ruled on Thursday that they were not dual employers when their clients absorbed 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 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.

This means the Temporary Employment Services (TES) would 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 the ruling would have adverse effects on their profitability and potentially destabilise the labour market.

The section that was in contestation leading to the now dismissed appeal application by Assign Services has been the cause of confusion in the industry‚ with the qualifying workers left in the lurch.

The Constitutional Court has upheld a 2017 ruling by the Labour Appeal Court that found in favour of the National Union of Metalworkers of SA (Numsa) which represented workers in the employ of Assign Services who challenged the dual-employer interpretation.

The case was originally heard at the Commission for Conciliation‚ Mediation and Arbitration when the company’s employees‚ represented by Numsa‚ challenged the dual-employer interpretation.

Numsa spokeswoman Phakamile Hlubi-Majola said the judgment would change the lives of the country’s lowest paid workers who were exploited due to lack of clarity about their rightful employers.

Article by BusinessLIVE.