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Can I still Hire A Labour Broker?

The busiest shopping season of 2020 is here, crazy as the year has been! As an employer in retail, manufacturing, tourism, warehousing, e-commerce or any of the labour-intensive sectors, you are likely going to need extra hands to help you cope with the increased shopping demand.

In light of the economic impact of COVID-19, the question at the fore of your mind, may, no doubt be: what’s the most effective way to go about meeting this need?

The allure of peace of mind is real. You like many employers, want the extra set of hands without the extra headaches that can often accompany the practice of being responsible for more bodies. That is why temporary employment services (TES) are so attractive. By some estimates, as an industry, it has grown by 30% since 2015. Furthermore, TES’s economic contribution cannot be overlooked. This sub-sector accounted for close to 1.3 million jobs out of an overall 2 million.

Controversy surrounds this industry, as I’m sure you are aware. Trade unions are adamant that TES or labour brokers as routinely called, do more harm than good as far as the welfare of employees is concerned. They argue that labour brokering denies employees the protections they would have under normal employment conditions, such as unfair dismissals, wage protection, etc. The fierce debates around the ethics of TES have even led to the Constitutional Court stepping in with a decision last year (in 2019)!

So, what does this all mean? Can you still hire a labour broker in South Africa? Is it legal and/or ethical to do so? Let’s take a closer look.

Is It Legal?

Prior to the 2014 amendment, the Labour Relations Act (LRA) stipulated that the labour broker (the deemed employer) and the client are jointly and severally liable in respect of contraventions of conditions of service, the minimum and maximum standards as set out in the Basic Conditions of Employment Act 1997 (BCEA), and arbitration awards that regulate the terms and conditions of service. The pre-amendment LRA failed to articulate provisions that expressly protect temporary workers from unfair labour practices, such as unfair dismissals. It is the latter vulnerability that had trade unions up in arms.

Last year, the Constitutional Court ruled, however, that the deeming provision does not mean a transfer to a new employment relationship, but rather “a change in the statutory attribution of responsibility…” (see paragraph 75 of the judgment) . It is therefore not a requirement that employment relationships and statutes as such be changed with specific reference to the popular (but incorrect) view that permanent employment must follow the result of the Constitutional Court outcome.  A TES provider’s client attracts liability in terms of the LRA, which liability can in any event be mitigated by indemnities provided by the TES in this regard. This means, it is completely legal to use labour brokers in line with the Deeming provisions (Section 198 A of the Labour Relations Act). Moreover, professional labour brokers with in-house legal expertise can really de-risk you as a client, meaning, they can protect both yourself and your employees in terms of potential legal contraventions.

Now onto ethics. Is it ethical to use labour brokers?

Is it Ethical?

The use of labour brokers remains a critical positive contributor for companies that require seasonal, large-scale, temporary staff or that run an event that demands short-term staff. Such seasonal and periodic employment offers financial relief to poverty-stricken youth, albeit temporary, without elevating recruitment and administration burdens for end users. You can get specialised skills in your workplace that you never had before; and you can have greater flexibility in terms of fluctuating staff requirements.

There are a good number of reputable and professional labour brokers in South Africa whose work speaks for itself. Qunu Staffing is one such.

As a preferred staffing solutions partner, Qunu Staffing is committed to providing compliant and practical staffing solutions that make business sense and ensures that you can focus on the efficiency and growth of your core business without the strain of having to negotiate the complexities of labour legislation compliance, recruitment, vetting, payroll and related queries, as well as performance and discipline management.

But before you go ahead and use a labour broker, it’s worth understanding exactly how the relationship between the two of you works. Because by doing so, you will not only be able to use them effectively, but you’ll also ensure legal compliance, and avoid any unnecessary liability on your part.

So to help you, here are 10 key rules you must know when using labour brokers.

10 Helpful Rules to Know When Using A Labour Broker

RULE #1:
When a labour broker employs a worker who provides a temporary service for you, he is the labour broker’s employee and not yours.

RULE #2:
The temporary service can only be for a period of 3 months, unless you can provide solid reasons for the period being longer.

RULE #3:
Your labour broker must not unfairly dismiss an employee or subject them to unfair labour practices.

IMPORTANT: You must report any misconduct the employee commits and ask the labour broker to deal with it.

RULE #4:
You must ensure that the labour broker doesn’t pay below the minimum wage. He must also give the workers minimum conditions of employment.

CAUTION: If he doesn’t, you’ll both be liable!

RULE #5:
You must sign a contract with the labour broker before using him. Include a clause in the contract stating that the labour broker will carry out his legal duties and that you are indemnified against any harm if he doesn’t.

IMPORTANT: Doing this will ensure you’re protected from the very beginning.

RULE #6:
Never tell your labour broker to do anything that will amount to unfair discrimination. If you do, you can be held liable.

RULE #7:
If the labour broker provides services for you for longer than 3 months, then the worker will be considered an employee of yours – unless you can justify why he’s not your employee.

RULE #8:
If the labour broker’s employee works for you for longer than 3 months, and you decide to end his employment, this will be seen as a termination of employment which, in essence, constitutes a dismissal.

RULE #9:
If a labour broker’s employee works for you for less than 3 months, for example as a substitute for one of your temporarily absent employees, then she’s performing a temporary service for you, and the labour broker will be the employer in this situation, not you.

NOTE: In the above-mentioned situation, whereby a temporary service is provided, the contract must clearly provide for a definite, and limited, period of service. This will prevent temporary workers from working for clients for indefinite and extended periods of time – which presents the risk of them becoming considered employees of yours.

RULE #10:
The work that labour brokers’ employees provide is regarded as a ‘temporary service’. And this is according to collective bargaining agreements which are made in sectoral determinations, bargaining councils or notices from the Minister of Labour.

IMPORTANT NOTE: If there is any contradiction between the three, then the collective agreements will take precedence.

Now you are armed to take advantage of the many services professional labour brokers have to offer. If you need a highly professional, efficient and ethical labour broker, click here to request your FREE preliminary consultation.  Get your peace of mind!


Gwala, S. 2016. “Labour Broking and Outsourcing”.

Money Penny, https://mpenny.co.za/the-10-rules-you-must-know-when-using-labour-brokers/

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