Labour Brokers and the “Assign Services Case”

The Assign Services case on the “deeming” provision in the Labour Relations Act is apparently due to be heard in February by the Constitutional Court with a judgement expected in April 2018. This ruling has a material impact on all employers who use employees through a labour broker.

As a reminder, the original ruling in the Labour Appeal Court (now being appealed in the Constitutional Court) held that employees deemed to be employees of the employer under the Labour Relations Act were solely the employers of the end client and not employers of the Labour Broker (or other party) with whom they were contracted. This ruling created an odd situation where employees held a contract with one party and were managed by that party, but were actually employers only of another party with whom they had no contract of employment.

When and how can one recover a debt from an employee?

It often happens that employees borrow and owe money to employers. While the recovery can often be done amicably there are occasions when it becomes more difficult.

Section 34(1) of the Basic Conditions of Employment Act allows an employer to deduct an amount from an employee’s remuneration only if the employee has consented thereto in writing or the deduction is permitted in terms of a law, collective agreement, court order or arbitration award.

Section 34(2) of the BCEA allows for deductions from remuneration where the employer has suffered losses or damage on account of the employee and a specific process is provided for prior to the deduction of monies:

  • The loss/damage occurred due to the employee’s fault during the course of his/her employment;
  • A fair procedure has been followed, including giving the employee an opportunity to give reasons why the loss/damage should not be deducted;
  • The deduction does not exceed the cost of the loss/damage;
  • The deductions do not exceed a quarter of an employee’s monthly salary.

As employees are required to consent in writing to the deduction of monies from their remuneration it is advisable to obtain such consent from all employees prior to any damages or losses being suffered. This may be done through the incorporation of a clause to such effect in their contracts of employment. Thereafter should the position arise where monies need to be recovered they should only be recovered after a fair process has been followed. Deductions must be made within the prescribed limit of a quarter of an employee’s monthly remuneration.

Essential Services Ruling

Essential Services Ruling – Social Work, ResCare, Protective Workshops and Day Care

All Social Work Services and services to ResCare, Protective Workshops and Day Care have been legislated as essential services. This means individuals employed in these industries are not permitted to strike!

Section 23(2) of the Constitution of the Republic of South Africa, 1996 (“the Constitution”) states that… “Every worker has the right… (c) to strike.”

Section 65 (1) (d) (i) of the LRA states that… “No person may take part in a strike… if that person is engaged… in an essential service”.

An ‘essential service’ is defined in section 213 of the Act as:
I. a service the interruption of which endangers the life, personal safety or health of the whole or any part of the population; the Parliamentary service; the South African Police Service.

Having considered the written and oral submissions of the parties, as well as the applicable law referred to above, the Panel were of the view that the following services should be designated as essential:

  • Mental health care
  • Diagnostic assessments of new referrals in respect of people with intellectual and psychiatric disabilities
  • Psychological assessments
  • Therapeutic counselling services or any other counselling services
  • Mental health crisis management
  • Court preparation and assistance for victims who fall within the category of “users”
  • Rehabilitation services
  • Treatment (including assistance with adherence to medication)
  • Training (only to the extent that it is offered to the mental health users)

Disclosure of Conditions of Employment

Disclosure by employees of their conditions of employment to other employees.

Is an employee entitled to discuss the conditions of their employment with other employees?

This question comes up regularly from clients who are concerned that employees freely discuss their conditions of employment with others.

The Basic Conditions of Employment includes provision for this under 78.(1) (b) as follows:

Protection of Employees Against Discrimination

Rights of Employees

78. (1) Every employee has the right to:

  1. Make a complaint to a trade union representative, a trade union official or a labour inspector concerning any alleged failure or refusal by an employer to comply with this Act;
  2. Discuss his or her conditions of employment with his or her fellow employees, his or her employer or any other person;
  3. Refuse to comply with an instruction that is contrary to this Act or any sectoral determination;
  4. Refuse to agree to any term or condition of employment that is contrary to this Act or any sectoral determination;
  5. Inspect any record kept in terms of this Act that relates to the employment of that employee;
  6. Participate in proceedings in terms of this Act;
  7. Request a trade union representative or a labour inspector to inspect any record kept in terms of this Act and that relates to the employment of that employee.

(2) Every trade union representative has the right, at the request of an employee, to inspect any record kept in terms of this Act that relates to the employment of that employee.

The Act is therefore clear in giving employees the right to communicate with others about their conditions of employment.

Increases in Wages – Domestic Workers

The Minister of Labour, Mildred Oliphant, had the pleasure of announcing that: “wages for the vulnerable workers in the Domestic Worker Sector will be adjusted with effect from 1 January 2018”.

In terms of Sectoral Determination 7: The minimum wages will be adjusted upwards for employees.

  • This means that an employee that works more than 27 hours in Area A (largely urban areas) should be paid not less than an hourly rate of R13.05.
  • Secondly, for an employee that works less than 27 hours in Area A should be paid not less than an hourly rate of R15.28.
  • Thirdly, for an employee that works more than 27 hours in Area B (largely rural areas) should be paid not less than an hourly rate of R11.89.
  • Fourthly, for an employee that works less than 27 hours in Area B should be paid not less than an hourly rate of R14.03.

The new determination will be effective until the end of December 2018 (following which a new determination will be issued).

Sectoral determination covers the protection of workers in vulnerable sectors/areas of work. The determination sets minimum working hours, minimum wages, number of leave days and termination rules.

Alcohol in the Workplace

The year is coming to an end and with this comes the celebrations and functions that are either held at the employer’s premises or off site. Either way the question often arises as to what, if any, the employer’s obligations are when providing alcohol at these functions.

In terms of the OHS Act General Safety Regulation 2A. Intoxication.

  1. An employer or a user, as the case may be, shall not permit any person who is or who appears to be under the influence of intoxicating liquor or drugs, to enter or remain at a workplace.
  2. No person at a workplace shall be under the influence of or have in his or her possession or partake of or offer any other person intoxicating liquor or drugs.

Employee ‘intoxication’ is a major concern and you will note that the OHS Act has placed upon employers the duty of prohibiting persons to enter or remain at a workplace who appear to be under the influence of intoxicating liquor or drugs.

These restrictions, together with COIDA and the implications of a possible injury on duty, have legal implications for employers and you should ensure that not only is it vital that these provisions be communicated to all employees, but that you keep a record of these communications. Employers should be in a position to demonstrate that they have made an effort to try and manage employees’ conduct around alcohol consumption, or preventing them from driving when over the legal limit or in an intoxicated state during these functions.

At social functions on the employer’s premises, the employer should ensure that employees have ‘signed off duty’ prior to commencement of the function. This will avoid any possible claims of ‘injuries on duty’, and consider the following steps to reduce possible liability:

  • Advise employees regarding the desired behaviour during work functions. This could include the employer limiting the number of drinks for the duration of the function.
  • Providing access to breathalyser tests.
  • Place a disclaimer in the area or pub.

Whilst year-end functions should be occasions to unwind and relax with colleagues outside of the normal working environment, both employers and employees still have certain responsibilities around their conduct, and would be expected to consider that both interests are not negatively affected.

Final Reminder – COIDA Annual Return of Earnings

The Compensation Commissioner has issued a final reminder for the submission of outstanding Return of Earnings for 2017.

An estimated return based on estimate earnings can now be submitted before the 31 October 2017.

On or before the 30th April 2017 (as extended by the recent notice) you are required to submit your Return of Earnings (ROE) submission to the Department of Labour, as is legislated under the Compensation For Occupational Injuries And Diseases Act (No. 30 of 1993). Each registered business must submit a separate return.

This Act replaces the Workmen’s Compensation Act and provides for compensation for disablement caused by occupational injuries or diseases sustained or contracted by employees in the course of their employment, and for death resulting from injuries and diseases. The benefits are paid from the Compensation Fund, which gets its money from compulsory contributions paid by employers. All employers carrying out business within the Republic of South Africa are required to register.

If you have not requested this service from us in the past and require us to complete and submit this return on your behalf, please contact us on If we have submitted for you in the past then we will complete your return and send you the figures before submission. The cost for this service is R702.00 per return (excl. VAT).

Metal & Engineering Industry Bargaining Council (MEIBC) – Notice

Metal & Engineering Industry Bargaining Council (MEIBC) – Notice by MEIBC on dispute resolution collective agreement.

This notice is replicated from a circular by the MEIBC dated 24 July 2017.

On 21 July 2017 a Special MANCO of the MEIBC resolved to amend and extend the period of operation of the Dispute Resolution Agreement which provides for the dispute resolution procedures in the industry as well as a dispute levy, for a further period ending 31 March 2020.

Parties have also resolved that an application be made to the Minister of Labour to extend this agreement to non-parties.


Per Week Per Fortnight Per Month
R0.71 R1.42 R3.07

The employer pays a matching contribution per employee – thus total contributions per month per employee:

Dispute Resolution Levy Total: R6.14 per month

Note that the dispute resolution levy is also payable by administration staff.

Temporary Workers Ruling – Assign Case – Impact of Appeal on Employers

In our July edition, we talked about the recent Assign Case in which the Labour Appeals Court concluded labour broker supplied temporary workers who worked for an employer (and earned below the BCEA threshold) were effectively employees of that employer and not dual employed with their labour broker.

The case has been appealed to the Constitutional Court.

The implication for employers is that the practical situation reverts back to the treatment of these temporary workers as being “dual” employees of the labour broker and the client until the Constitutional Court rules on the matter.

Labour Brokerage Workers to Become Full Employees after Three Months

In a big blow to labour brokers the Labour Court on appeal ruled on the 10 July that labour brokerage workers are entitled to become full employees after three months (NUMSA v Assign Services and Others (JA96/15) [2017] ZALAC 45 (10 July)). 

This ruling was contrary to a previous ruling which deemed the employees to be in dual employment between the labour broker and employer.

The net impact of the ruling is to place all of the risk on the employer in relation to engaging labour broker workers. While there should previously have been no practical cost advantage of engaging labour broker workers, the practice may have been justified on the basis the employer was not able to manage the workers effectively. This may still be the case but the employer is now running a massive risk that a third party is effectively in charge of their obligations without any recourse.