United Chemical Industries Mining Electrical State Health and Aligned Workers Unions obo Mbombo / Primeserv and another (2017) 25 NBCRFLI 7.1.1 / [2017] 2 BALR 135 (NBCRFLI)

Principle:

If the TES employee is not performing a genuine 'temporary service' as defined, the TES client is deemed the employer. "Deeming" should be interpreted as an augmentation rather than as a substitution. The TES therefore retains the employment contract and the client is viewed as the parallel employer for purposes of the LRA.

Facts:

The employee was employed by a TES and placed with its client, a courier service company, as a driver. He started work on 2 May 2012 and was employed there for over 3 years. His contract of employment was terminated on 5 December 2015 and he claimed that other employees were employed in his place. He referred an unfair dismissal dispute to the National Bargaining Council for the Road Freight and Logistics Industry under s191(5)(a)(iii) of the LRA, submitting that he did not know the reason for his dismissal. The TES' client, the courier service company, was correctly joined as a party to the unfair dismissal dispute but failed to attend the proceedings, which proceeded in their absence.

The arbitrator found that the employee had been employed by the TES on a fixed term contract but that as he was earning below the BCEA threshold of R205 443 per annum, sections 198A and B applied. The arbitrator also found that his employment, being for over 3 years and not as a substitute for a temporarily absent employee, did not fall within the definition of a temporary service under s198A(1), and accordingly he had rights to be deemed an employee of the courier service company (the TES client) under s198A(3)(b).

Having regard to the fixed term contract, the arbitrator referred to s198B(3) that states an employer may only employ someone on a fixed term contract of more than 3 months if the nature of the work is of limited or definite duration or if there is some other 'justifiable reason' for fixing the term of the contract. S198B(4) lists examples of such justifiable reasons for fixed term contracts, and the onus of proof is on the employer to prove the justifiable reason. If no such reason is established, s198B(5) provides that the employment shall be deemed to be of indefinite duration.

The arbitrator found that, whilst the contract may have qualified under s198B(1) as a fixed term contract "terminating on the occurrence of a specified event", namely once the specified work was completed, the employer had not proved there was a justifiable reason for the fixed term contract being more than 3 months. The arbitrator accordingly found the employee to be deemed to be employed on an indefinite basis.

Having regard to the LC judgment in Assign Services (Pty) Ltd v CCMA and Others (JR1230/15) [2015] ZALCJHB 283 (8 September 2015), the arbitrator made the following award:

  • the employee's dismissal was both procedurally and substantively unfair;
  • the TES and the courier service company were both ordered to reinstate the employee retrospectively to his date of dismissal, on the same terms and conditions he enjoyed at that time.

Extract from the award:

(N Paulsen - arbitrator)

[43]   I have considered the Labour Relations Amendment Act 6 of 2014, especially section 198A and section 198B thereof, which is applicable in this matter. The said Act was published under Notice 629 in the Government Gazette 37921 on 18 August 2014 and became effective on 1 January 2015 and protects amongst others employees placed by temporary employment services as well as employees employed under limited duration contracts. I have considered whether the service rendered by the applicant in this matter is a genuine temporary service and whether the nature of the work performed by the applicant is of a limited or definite duration and whether the respondents had a justifiable reason for fixing the term of the contract.

[44]   The applicant commenced employment with the first respondent on 2 May 2012 as a truck driver until his contract came to and end on 12 December 2015. Section 198A(1) states that a "temporary service" means work for a client (a) for a period not exceeding three months; (b) as a substitute for an employee of a client who is temporarily absent; or (c) in a category of work and for any period of time which is determined to be a temporary service by a collective agreement concluded in a bargaining council, a sectoral determination or a notice published by the Minister in terms of section 6(3) of the Basic Conditions of Employment Act 75 of 1997("the BCEA"). In light of the above I am of the view that the applicant was not rendering a temporary service.

[45]   The applicant earns less than the threshold prescribed by the Minister in terms of section 6(3) of the BCEA, which is currently R205 443,30 per annum. In terms of section 198A(2) this section would apply to the applicant.

[46]   Section 198A(3)(b) states that for purposes of this Act, an employee not performing such temporary service for the client is: (i) deemed to be the employee of that client and the client is deemed to be the employer; and (ii) subject to the provisions of section 198B, employed on an indefinite basis by the client. In light of the applicant in this matter not performing a genuine "temporary service" I conclude that the client, DHLPE, is the applicant's employer.

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[53]   In the matter at hand there is a limited duration contract of employment between the applicant and the first respondent. Paragraph 5 states that "the contract of employment is entered into and shall commence 'as directed' and endure until completion of the 'specified work' described in one or more of the below listed conditions ..."

[54]   In the matter at hand the applicant has been employed at DHLPE for more than three years as a code 10 driver. The client apparently did not have any problems with the performance of the applicant apart from an incident for which the applicant received a written warning. It was confirmed that two other employees were placed at DHLPE by the first respondent.

[55]   I do not see that the nature of the work for which the applicant was employed was of a limited or definite duration. The first respondent did not supply or demonstrate any justifiable reason for fixing the term of the applicant's contract. The first respondent simply refers to "specified work" commencing "as directed" until the specified work is completed. This is not in line with the requirements as set out in section 198B(3). In terms of section 198B(5) the applicant's employment is deemed to be of an indefinite duration.

[56]   Paragraphs 5.2 and 6.2 state that the contract would terminate automatically once the "specified work" has been completed. It is also stated that such termination "shall not be construed as being a retrenchment, nor redundancy, but shall be the completion of the contract". Paragraph 5.3 states that "it is an express condition of this contract that by its nature it is of limited duration and therefore, fair termination of service will occur once the expressed duration of the contract has materialised". These terms historically formed part of fixed term contracts before the promulgation of the LRAA, but does not comply with the requirements of the LRAA, which has been promulgated specifically to protect employees employed under such contracts.

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[58]   In this matter the respondent did not dispute that the termination occurred at the behest of the client. I concluded in light of all the circumstances in this matter that the applicant's services were indeed terminated to avoid the provisions of section 198A(3)(b). In terms of section 198A(4) the applicant was dismissed. In terms of section 198B(5) the applicant's contract of employment is indefinite.

[59]   In Assign Services v CCMA and others (JR1230/15) [2015]; ZALCJHB 283 [also reported at [2015]; 11 BLLR 1160 (LC) Ed], the Court stated that "deeming" should be interpreted as an augmentation rather than a substitution. The TES therefore retains the employment contract after three months and the client is viewed as the parallel employer for purposes of the LRA, however no substantial order was made in this regard. This judgment set aside the award issued in the Assign Services (Pty) Ltd / Krost Shelving and Racking (Pty) Ltd CCMA ECEL165215 [also reported at [2015]; 9 BALR 940 (CCMA Ed], where the Commissioner found that the deeming provision is to be interpreted that the client becomes the sole employer after three months when the necessary requirements are met. (NUMSA lodged an appeal against the judgment.)

[60]   It is clear that the applicant believed from the start that the termination of his contract was unfair. It did not come as an afterthought. He initially referred the matter wrongfully to the CCMA on 10 January 2016. The date of the termination of his contract was on 12 December 2015. It is clear that the applicant never abandoned this matter. In making this award the applicant must be restored to the position he would have been in had the termination of his contract not occurred.

Award

[61]   The dismissal of the applicant, Mr Mzukiso C Mbombo, was both procedurally and substantively unfair.

[62]   The applicant, Mr Mzukiso C Mbombo, is employed indefinitely by both the first and second respondent.

[63]   The first and second respondents, are ordered to reinstate the applicant, Mr Mzukiso C Mbombo, by no later than Monday, 19 September 2016, on the same terms and conditions as he enjoyed at the time of his dismissal.

[64]   The reinstatement shall operate retrospectively to the date of his dismissal and the first and second respondents shall by no later than Friday, 30 September 2016, pay the applicant, Mr Mzukiso C Mbombo, the amount of R58 267.92 (fifty eight thousand two hundred and sixty seven rand and ninety two cents) ie the remuneration he would have received had he not been dismissed: (R7 283,49 x 8).

[65]   I make no order as to costs.