Labour court ruling on deeming provision goes to appeal

The judgement handed down by the Labour Appeal Court (LAC) on the ‘deeming provision’ contained in s198 of the Labour Relations Act, has caused uncertainty.

This is according to Nritika Singh, CEO of Isilumko Staffing (IS) & Activate, a national recruitment company, which offers temporary, flexible and permanent staff.

However the industry is confident that the Constitutional Court will recognize the retention of the staffing company as employer after three months, with LRA responsibilities lying with both the staffing company and client.  

Singh explains that in the original submission, the Labour Court was tasked with determining the interpretation of the “deeming provision” contained in section 198A of the LRA. This was taken on appeal, with the Labour Appeal Court’s finding that for the purposes of the LRA, only the Client is the employer of the temporary employees after the 3 month period. “We believe this is the wrong interpretation. As a result the matter has been taken on appeal to the Constitutional Court for a final decision,” adds Singh.

The TES staffing companies have been represented by APSO and umbrella body CAPES. Singh says that, reacting to the LAC judgment, CAPES issued the following statement. “CAPES has read, with a degree of frustration and disappointment, several reports about the Judgment which seem to fail to appreciate some important aspects of the Judgment.

More importantly, these fail to appreciate the fact that all involved in the matter have known, since the challenge was originally made to the CCMA in 2015, that the matter would, in all likelihood, go from the CCMA, to the Labour Court, to the Labour Appeal Court and ultimately to the Constitutional Court.

“It is now a matter of public knowledge that the legal team has been instructed to file an application for leave to appeal to the Constitutional Court. This has been done within the three-week period contemplated in the rules. In terms of s18(1) of the Superior Courts Act, the noting of an application for leave to appeal has the effect of suspending the decision which forms the subject matter of that application. Accordingly, the noting of the appeal will have the effect of the status quo remaining until the Constitutional Court finally determines the matter.”

Leave to appeal has been granted and the matter has been set down to be heard by the Constitutional Court in February 2018. It follows that should the Constitutional Court dismiss the appeal, the Labour Appeal Court Judgment will continue to allow labour brokers to play an important role, servicing clients in much the same way as they do now.

Isilumko Staffing two “It is not anticipated that anything will change, and if it does, that will only be after the Constitutional Court ruling. In our view, it is business as usual for the industry and all should await the outcome of the Constitutional Court ruling before forming views about the future. Our clients need to be reassured in the meantime that the original LRA ruling stands,” advises Singh.

Singh concludes, “A positive outcome from the highest court in the land will put us in a much stronger position to serve our clients and employees. Isilumko also believes that the original Amendments provide an opportunity for businesses to revise their staffing models and if implemented correctly, will result in better performance and more cost effective outcomes.”

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