Any employer making use of labour brokers, fixed term contracts of employment or part-time employees should review their policies and the documents and forms which they use for these purposes.

The Labour Relations Amendment Act, 2014 came into effect on 1 January 2015. The amendments reflect the government’s determination, in deference to COSATU’s demands, to regulate more closely, though not ban, the use of the most common forms of a-typical or non-standard employment: labour brokers, fixed term employment contracts and part-time employment. Since the amendments are now in force, employers are well advised to review, without delay, their policies and the documents and forms they use in support of these practices.

In this series of notes, we will consider the most important aspects of the amendments as they affect the use of labour brokers, fixed term contracts and part-time employment. We start in this note with some general provisions and concepts which are important to an understanding of the amendments as a whole. We then deal with the use of labour brokers, then with the use of fixed term contracts, and finally with part-time employment. The notes do not purport to be a detailed or complete explanation of the amendments or their significance. They must not therefore be read as constituting legal advice but rather as a means for employers to identify and respond to the most obvious risk areas. We deal in this first note with some general provisions and concepts which are important to an understanding of the amendments as a whole. In respect of some of the amendments, there is an effective three month grace period before the full consequences will apply.

First, although neither explicit nor defined, the amendments refer to ‘non-standard employment’, or what is often referred to as the “casualization of labour”. This is a world-wide trend but fiercely resisted in South Africa. Effectively, any employee who is employed on any basis other than a full-time, permanent or indefinite period contract is employed on a non-standard basis. In other words, the amendments will affect how an employer deals with workers provided by labour brokers, employees on fixed contracts and part-time employees.

Second, and as may be expected, there are provisions dealing with the consequences of trying to avoid or defeat the purposes of the Labour Relations Act, 1995. In the present context of considering forms of non-standard employment, the most important consequence is to make all the parties co-operating in such avoidance to be the employer, with responsibility for terms and conditions of employment and dismissal even if not, on the face of it, the employer.

Third, there is introduced the concept of a ‘justifiable reason’. This is a reason which may justify the different treatment of employees in non-standard employment. It does not directly inform issues of unfair discrimination under the Employment Equity Act, 1997 but probably spells out factors which would be relevant in that context as well.

A ‘justifiable reason’ will be one where the different treatment is the result of the application of a system that takes into account:

  • Seniority, experience or length of service;
  • Merit;
  • The quality or quantity of work performed; or
  • Any other criteria of a similar nature.

What should be noted is that this is not an exclusive list so it is possible to find other justifiable reasons. Also, there is an emphasis on a system that takes these factors into account. For example, using merit as a justification for different treatment on an ad hoc basis may not meet the standard for justification. But if it is part of a deliberate, explicit and applied policy it would meet the requirements for justifiable differentiation.

Finally, when determining, for the purpose of the entitlement to organizational rights, whether a trade union is representative or is sufficiently representative of employees employed by an employer in a workplace, the extent to which there are workers assigned there by a labour broker, employees employed on fixed term contracts, part-time employees or employees in other categories of non-standard employment must be taken into account. This appears to mean that members of the union who are employed on fixed term, part-time or other non-standard contracts must be counted for this purpose, even if the fixed term contract is of a short duration or the part-time employment is ‘very part-time’. In the case of labour broker employees, it appears to mean that members of the union who are employed by the labour broker must nevertheless be counted for this purpose as employees of the client.

In our next note, we will consider how the amendments affect the use of labour brokers.