- INTRODUCTION:
Numerous questions arise regarding the amendments which are not limited to:
- The Labour Relations Amendment Act drastically impacts on the status of temporary employees.
- The effect of the current definition of temporary service on the employment relationship between a TES(Temporary Employment Service) and their employees.
- The interpretation of the word “deemed”.
In order to answer these questions the provisions of the relevant sections in the Amendment Act needs to be interpreted taking into account the Memorandum of Objects published by the legislature as this gives a framework of the intention of the legislature with the amendments, the wording of all the sections in the current Amendment Act, the Labour Relations Act, the Common Law and all other labour legislation.
- THE AMMENDMENT ACT:According to The Free Dictionary by Farlex, the word “deemed” means: “regard or consider in a specified way.The section further states that should the temporary service not meet any of these requirements, the employees rendering the service will be deemed to be the employee of that client and the client is deemed to be the employer.
- It is imperative to determine the meaning of the word “deemed “and its effect on the employment relationship.
- Section 198 A (1) (a) defines a ‘temporary service’ by the time period for which an employee works for a client. The nature of the service is irrelevant. Subsection (b) defines a ‘temporary service’ by the purpose for which the service is rendered to the client.
- Section 198A(1) sets the criteria for employment by a TES. Should these criteria not be met subsection (3)(b) will apply and the employees will then be “deemed” to be employed by the client. If the statutory requirements are met, the employee is employed by the temporary employment service.
In S v ROSENTHAL 1980 (1) SA 65 (A) on p. 75 to 79 Trollip JA, Muller JA and Diemont JA stated as follows with regards to the interpretation of the word “deemed “ :
“The words “shall be deemed” (“word geag” in the signed, Afrikaans text) are a familiar and useful expression often used in legislation in order to predicate that a certain subject-matter, e.g. a person, thing, situation, or matter, shall be regarded or accepted for the purposes of the statute in question as being of a particular, specified kind whether or not the subject-matter is ordinarily of that kind. The expression has no technical or uniform connotation. Its precise meaning, and especially its effect, must be ascertained from its context and the ordinary canons of construction. Some of the usual meanings and effect it can have are the following. That which is deemed shall be regarded or accepted (i) as being exhaustive of the subject-matter in question and thus excluding what would or might otherwise have been included therein but for the deeming, or (ii) in contradistinction thereto, as being merely supplementary, i.e., extending and not curtailing what the subject-matter includes, or (iii) as being conclusive or irrebuttable, or (iv) contrarily thereto, as being merely prima facie or rebuttable. I should add that, in the absence of any indication in the statute to the contrary, a deeming that is exhaustive is also usually conclusive, and one which is merely prima facie or rebuttable is likely to be supplementary and not exhaustive.
… ‘It is difficult to extract any principle from these (English) cases, except the well-known one that the Court must examine the aim, scope and object of the legislative enactment in order to determine the sense of its provisions. …..Hence, Haffejee’s case is sound authority for the proposition that the words “shall be deemed” in the appropriate above, namely, that the deeming is merely prima facie or rebuttable, even in the absence of any express qualification to that effect.
A more likely explanation is that the Legislature intended the deeming provision – the crux of the problem – to have a meaning and effect that avoids any such anomalies. Indeed, in such a situation, the ordinary well known rule of construction applies, ie that, if the language used permits that construction should be adopted which avoids such anomalies (see Steyn Die Uitleg van Wette 4th ed at 108).” (OWN EMPHASIS ADDED)
The MEMORANDUM OF OBJECTS LABOUR RELATIONS AMENDMENT BILL, 2012 states as follows with regards to the general aim of the amendments:
“The proposed amendments to the Acts can be grouped under the following themes –
(a) responses to the increased informalisation of labour to ensure that vulnerable categories of workers receive adequate protection and are employed in conditions of decent work;
(c) ensuring that labour legislation gives effect to fundamental Constitutional rights including the right to fair labour practices, to engage in collective bargaining and right to equality and protection from discrimination; (OWN EMPHASIS ADDED)
Insertion of section 198A of Act 66 of 1995
“The new section 198A introduces key additional protections for more vulnerable workers….. Employees in this category are employees of the TES for the purposes of the LRA only if they are employed to perform genuinely temporary work, defined in the new section as “temporary services”. If they are not employed to perform temporary services, they are deemed for the purposes of the LRA 2(sic) to be employees of the client and not the TES. ………. .” (OWN EMPHASIS ADDED)
Applying these principals in the interpretation of the relevant section one needs to look at its context and the ordinary canons of construction. The legislature clearly had not one single criterion in mind with regards to the provisions of Sections 198A(1) and B(1). It provided for different scenarios dealing with the practical day to day needs in the workplace. The criteria used by the legislature in these two sections when dealing with the definitions of “temporary service “and “fixed term contracts“ are however essentially the same.
In terms of section 198(4) the temporary employment service and the client are jointly and severally liable if and only if the temporary employment service, contravenes one or more of four scenarios.
Section 198(4A) states that: “If the client of a temporary employment service is jointly and severally liable in terms of section 198(4) or is deemed to be the employer of an employee in terms of section 198A(3)(b) -….” (OWN EMPHASIS ADDED)
With the insertion of subsection 4A the liability of the client and the TES is now extended to cover the scenarios dealt with in section 198A(4)(a) to (c). The purpose of the deemed provision in
It is clear that it was the intention of the legislature to hold the TES liable also in situations where the employees are “deemed “to be the employees of the client. If the “deemed “provision were to mean that they are the employees of the client, the effect would be that the TES is out of the picture and if so there would be no reason at all to extend liability to include the TES . The only logical reason why this could have been done was if the legislature intended the TES to be still part of equation.
Should it not be possible for a TES to employ employees for longer than a three month period it will mean that a TES as an employer has less rights compared to other employers in so far as its rights would be restricted to employ people. This is unfair and unreasonable and without doubt impacts on the Constitutional right to fair labour practices.
- CONCLUSION: If the deemed provision were conclusive, a TES employer would be precluded from establishing any reason or motivation for employing employees for a period beyond the three month period. It is submitted that this would amount to an unreasonable and unjustifiable anomaly and an unreasonable result which, should be avoided. The words of Section 198 A can be given a reasonable meaning which does not lead to such unreasonable result.
If the intention was that the deeming provision should have the decisive importance of an exhaustive and conclusive provision, the legislature would probably have casted the provision in clear and unequivocal language, as a negative deeming provision, which is usually exhaustive and conclusive if it was its intention.
It is therefore submitted that the deeming provision should be interpreted in such a way that its effect is not conclusive but merely prima facie and rebuttable. The preferred construction does avoid the above-mentioned anomalies and meets the objectives of the legislature.
Protection for employees working for the TES will in no way be less than if the employee was working for the client.
There is no need for the equality provision in sections 198A(5) if the “deemed” employees are the employees of the client as the normal rules of law would cover them.
The definition of “temporary service” in section 198A is limited to this section of the LRA only and strengthens the argument that the legislature didn’t intend an automatic transfer of employment after three months, if it was, there would have been no need for both the parity and “deemed” provisions.
Should Section 198A be interpreted to mean that an employee can be employed by a TES for more than three months on a fixed term contract if and when the requirements in Section 198B are met, the following results can be attained:
- The TES industry can continue operations thereby preventing certain job losses.
- The TES industry will be regulated and the CCMA, Bargaining Councils and Labour Court will be able to decide on the question whether or not a valid reason for employing an employee for a period longer than three months exists through the application of the criteria set out in the Act.
iii. It would make the insertion of subsection (4)A to section 198 meaningful by extending the protection to vulnerable employees.
- It will further keep the LRA in line with the whole legal foundation on which employment law is based namely the contract of employment.
The object of the amendments was the protection of vulnerable employees against exploitation due to certain labour practices. It is trite law that if the effect or result of a particular interpretation is unreasonable or leads to anomalies such an interpretation should be avoided and an interpretation should be followed that leads to reasonable effects and results.
According to Section 198B(1) there are three forms of fixed term contracts. Such fixed term contracts can even cover periods exceeding three months as referred to in Section 198A(1).
Subsection(4) provides 9 possibilities for the justification of the conclusion of a fixed term contract. The subsection however goes further in stating that it should not be interpreted as limiting the generality of subsection(3).
Section 198A(3)(b)(ii) states that deeming to be employed by the client is subject to the provisions of section 198B which deals with different forms of fixed term contracts.
Based on the wording of the Act in general and specifically that of Section 198A(b)(ii) read with 198B it is clear that any employee working for a TES can only be employed for a period and/or reason stipulated in Section 198A(1), where after they are deemed to be the employee of the client. The “deemed “in this regard relates to the additional protection offered to them as discussed above. If there is no limited duration contract in place as defined by Section 198B between the TES and the employee, THEN AND THEN ONLY will the employee be deemed to be the employee of the client for an indefinite period.
The deeming in Section 198A(3)(b)(i) clearly extends protection to employees as they will be able to hold the client liable in more situations. The legislature’s extended the rights/protection of employees working through a TES to seven scenarios instead of the previous four. The second deeming provision in Section 198A(3)(b)(ii) deals with the status of employees after being employed for more than three months in the absence of fixed terms contracts i.t.o. Section 198B.
Really great article .
Nice.