What does the assign services versus numsa judgment mean to the temporary employment services sector, employees and their clients

What does the assign services versus numsa judgment mean to the temporary employment services sector, employees and their clients?

There is much confusion about this Judgment and what it means for Temporary employment service providers “TES”, clients and employees.

The Assign services case was only required to determine one thing namely, what is meaning of the deeming provision in terms of the client being “deemed” to be the employer of the employee after three months in respect of employees earning below the threshold of R205 433 per annum.

This Judgment determined that the deeming provisions means that both the client and the TES are liable for any breaches of the Labour Relations Act after a period of three months. All other legislation pertaining to TES remains unchanged and applicable.

So in a nutshell this judgment determines that employees can take action against the client or the TES for breaches of the LRA after a period of three months.

What we already know which was not part of the assign services judgment

  1. Equal work for equal pay. Employees earning below R205 433 per annum who are employed through TES for a period longer than three months are entitled to the same pay and treatment as any other employee in a comparable positions unless certain justifications for differential treatment exist such as inter alia
  • The employees seniority, experience or length of service
  • Merit criteria
  • Quantity or quality of work performance 
  1. Justification for fixed term contracts beyond three months: The law does not require that the employee becomes permanent or employed by the client after a three month period but it does require a justification for fixed term contacts longer than three months in respect of employees earning below R205 433 per annum. Justifications include: 
  • replacing another employee who is temporarily absent from work;
  • temporary increase in the volume of work which is not expected to endure beyond 12 months;
  • a student or recent graduate who is employed for the purpose of being trained or gaining work experience in order to enter a job or profession;
  • engagement to work exclusively on a specific project that has a limited or defined duration;
  • engagement for a trial period of no longer than three months for the purpose of determining the employee’s suitability for employment;
  • non-citizen who has been granted a work permit for a defined period;
  • Engagement to perform seasonal work

What do these changes mean for the TES Industry?

Fixed term contracts extending beyond three months through a TES are still permissible provided there is a justification for this and employees are treated equally. In the case of breaches of the LRA the employee can take action against the client and the TES.

It is important to note that these changes merely regulate the TES industry to create a triangular relationship between the TES, employee and client after a three month period. Employees are not automatically permanently appointed beyond three months.

The importance of temporary employment

Clients will always need to align their labor costs to revenue cycles. If an organization only has fixed costs in respect of permanent staff this can have devastating consequences for organisations during times of decreased revenues. Many organisations have increase and dips in revenue for a variety of reasons and their staff compliment need to be aligned in accordance with this.

Fusion Recruitment is committed to facilitating employment by enabling a flexible workforce for organisations while simultaneously ensuring the protection of workers’ rights.