[Press Release] CAPES encourages labour brokers to disregard key judgement

Recently, Lawyers for Human Rights (LHR) has fought against labour broking, representing the Casual Workers Advice Office (CWAO) in the case NUMSA v Assign Services and 3 Others. On 10 July 2017,  the Labour Appeal Court (LAC) held that precarious workers must be able to access the protections enacted for their benefit in the amended Labour Relations Act.

The Confederation of Associations in the Private Employment Sector (CAPES), a lobby group representing the interests of labour brokers, is encouraging its members to disregard this key judgment of the Labour Appeal Court. In doing so, CAPES is defying not only the will of the court, but also of the Parliament.   In 2014, Parliament amended the Labour Relations Act in order to clarify that employers must fulfil obligations to all workers, including those engaged through a labour broker.  The key amendment at the crux of this fight is section 198A of the Labour Relations Act.

In last month’s decision, the Labour Appeal Court confirmed that, unless the work being performed is a genuine temporary service as defined (less than 3 months, or replacing an absent worker) a worker placed at a client by a labour broker is deemed to be the client’s employee, and not an employee of the labour broker. This overturned a Labour Court judgment that held that the broker and the client were joint employers.

In a press release dated 14 July 2017, CAPES reassured employers, writing: ‘…too many people have read too much in the LAC judgment and have failed to appreciate the consequences of the pending appeal’.  CAPES asserted that ‘nothing will change’ and ‘it is business as usual’ because CAPES is applying for leave to appeal to the Constitutional Court. The Confederation states as a fact that the appeal to the Constitutional Court suspends the LAC’s judgment.  This, according to CAPES, means that the status quo remains.  The status quo they are referring to is one in which employers unlawfully flout the clear provisions of the amended LRA, assured of fierce legal protection from the country’s top law firms, including Edward Nathan Sonnenbergs and Cliffe Dekker.

Section 18(1) of the Superior Courts Act provides that the ‘operation and execution’ of a decision is suspended when a party applies for leave to appeal, ‘unless the court under exceptional circumstances orders otherwise’.  Section 18(3) of the Superior Courts Act provides that a party requesting the court to ‘order otherwise’ must show that unless the order is granted it will suffer ‘irreparable harm’. We contend that this situation represents qualifies as both an ‘exceptional circumstance’ and a case where ‘irreparable harm’ would ensue if the judgment is suspended.

If CAPES’ advice to its members is correct and the recent judgment is suspended, it would mean that there is no valid judicial decision guiding the contested interpretation of section 198A of the LRA. Suspension during appeal would affect all prior judgments, not just the recent LAC ruling. The only ruling that would be unaffected is a nonbinding CCMA decision from years ago. 

These are ‘exceptional circumstances’ that should justify an order that the LAC decision not be suspended pending the Constitutional Court’s decision.

In the absence of any binding authority regarding the proper interpretation of section 198A, every Commissioner and every Judge in South Africa would come to her own conclusion regarding the meaning of section 198A.  This will result in a variety of different interpretations and conflicting decisions in the different employment law tribunals around the country. 

This chaos of conflicting interpretations would cause irreparable harm not only to employers and employees, but also to the administration of justice.

However, the ‘exceptional circumstances’ and ‘irreparable harm’ do not arise if the LAC decision is only partially suspended. If the LAC’s interpretation of section 198A is allowed to stand, there is no possibility of confusion. The ‘operation and execution’ as it relates to the financial logistics of the two main parties (Assign and NUMSA) may be suspended pending the decision of the Constitutional Court without causing chaos.  This method of suspension would have the following effects:

a)     Numsa members employed at Krost through Assign still have no final decision on whether they have two employers, or only one; but

b)     CCMA Commissioners, bargaining council panellists and Labour Court judges are nevertheless bound by the LAC’s interpretation of section 198A in general: all other workers in South Africa who are deemed employees of their labour broker employers’ clients now have only one employer: the client.

LHR will be writing to CAPES to demand that it retract its public statements inciting employers to flout the law.  Should CAPES not correct itself, LHR will consider its options of how best to protect labour broker workers, including an approach to the Courts.

For more information contact:

Wayne Ncube, Attorney: Strategic Litigation Programme on 071 850 3434


Carol Mohlala, Media and Communications Manager on 079 238 9826