Assign Services (Pty) Ltd v CCMA and Others (JR1230/15) [2015] ZALCJHB 298 (8 September 2015)
- The deeming provisions in section 198A(3) of the LRA make the client of a TES the employer of a placed employee for the purposes of the Act. But nothing in this deeming provision invalidates the employment contract between the TES and worker, which remains in place. There is also no reason why the TES is not concurrently vested with the statutory rights and obligations of an employer under the LRA.
- A court will decline to deal with a matter that entails no concrete dispute between the parties. It is not the function of a court to dispense legal advice.
An alleged dispute between a labour broker, Assign Services, and NUMSA in respect of Assign Services' employees placed with its client (Krost Shelving and Racking), was referred to the CCMA. The CCMA was asked to pronounce on a proper interpretation of the 'deeming' provisions contained in sections 198 and 198A in relation to these employees. Section 198A(3) effectively provides that a labour broker's employee earning less than the BCEA earning threshold and placed with a client in work that is not a 'temporary service' as defined (ie not exceeding 3 months or as a substitute for a temporary absent employee), is deemed to be the client's employee.
NUMSA argued that the client should be regarded as the sole employer of the affected employees for the purposes of the LRA, whereas the labour broker argued that the placed employees continued to be employed by it and that a dual employment relationship involving the client was established by the deeming provisions. The CCMA arbitration in Assign Services (Pty) Ltd v Krost Shelving and Racking (Pty) Ltd and National Union of Metal Workers of South Africa (NUMSA) (2015) ECEL 1652-15 (Unreported) resulted in a finding that the client was the sole employer of these employees. This award was taken on review in the Labour Court.
The LC found that the CCMA commissioner had erred in law by making the above finding and overturned the award, but did not substitute the award with any other ruling. The LC's reasoning included that the deeming provisions did not interfere with rights and obligations arising out of the employment contract between the labour broker and the employee, which remained in force even after the employee was deemed the client's employee for statutory purposes under the LRA. The client is only made the employer for the purposes of the LRA, and is not drawn into the network of rights and obligations created by the employment contract between the labour broker and the employee. In that sense, the LC confirmed that a dual employment relationship involving both the labour broker and the client, continued to exist.
In addition, the LC found that the CCMA should in fact never have dealt with this matter as no concrete dispute was referred to it - merely a stated case for determination, and it was not for the CCMA to be giving advice to the parties in the form of an award.
Extract from the judgment:
(BRASSEY, AJ)
[11] Above I have rehearsed the stances of the parties and, in particular, the concessions they have made. The first concession, I repeat, is that the provision makes the client the employer for the purposes of the Act and for no other purpose; in particular, the client is not drawn into the network of rights and obligations created by the contract between TES and worker. This concession is uncontroversial and was correctly made. The second is that the section does not serve to make the client the employer for any purpose other than the operation of the LRA. If this is equally uncontroversial between the parties, their respective concessions are properly made. Nothing in this deeming provision can be taken to invalidate the contract of employment between TES and worker or to derogate from its terms. They remain firmly in place. If the TES has, as sometimes happens, undertaken to provide the placed worker with training, it must provide the training; if, less plausibly, the TES has contractually accepted that the worker need not report for work before 9 am, he or she cannot be forced to arrive at the client's clock-in time of eight; if the worker has agreed to a covenant in restraint of trade, then the covenant must (subject to the usual scrutiny for unlawfulness) be observed; and so on.
[12] So (and once again I repeat) the only issue, on the stated case at any rate, is whether the TES continues to be an employer of the worker and, by reason of this fact, is concurrently vested with the statutory rights/obligations and powers/duties that the Act generates. I see no reason why this should not be so. There seems no reason, in principle or practice, why the TES should be relieved of its statutory rights and obligations towards the worker because the client has acquired a parallel set of such rights and obligations. The worker, in contracting with the TES, became entitled to the statutory protections that automatically resulted from his or her engagement and there seem to be no public policy considerations, such as pertain under the LRA's transfer of business provisions (s 197), why he or she should be expected to sacrifice them on the fact that the TES has found a placement with a client, especially when (as is normally so) the designation of the client is within the sole discretion of the TES.
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[19] .................... The general rule is that a court will decline to entertain a suit that entails no concrete dispute between the parties. It is of little or no moment that one or both sides have a keen interest in the determination and would like to regulate their dealings by reference to it. The principle, which is deeply embedded in our jurisprudence, was expressed thus by Innes CJ in Geldenhuys and Neethling v Beuthin 1918 AD 426:
'After all, Courts of Law exist for the settlement of concrete controversies and actual infringements of rights, not to pronounce upon abstract questions, or to advise upon differing contentions, however important. And I think we shall do well to adhere to the principle laid down by a long line of South African decisions, namely that a declaratory order cannot be claimed merely because the rights of the claimant have been disputed, but that such a claim must be founded upon an actual infringement.'........................................................
[21] The rule is a salutary one, not just because it is not the function of a court to dispense legal advice, but also because making decisions on abstract questions of law is a task of considerable complexity that is pregnant with the potential for error. If this issue was being entertained by this court sitting as a court of first instance, its proper response would, I believe, have been to decline to consider it. The CCMA commissioner should, in my view, have responded in the same way. State time and money should not have been expended in a process that really entails the giving of legal advice. Be this as it may, I refrain from making this a basis for reviewing the commissioner's award, however, since the point, being raised only by me, is not one he has been invited to deal with. This is a deficiency that, I appreciate, might have been cured by referring the question back to him for consideration, but I have been discouraged from taking this step and countenancing the concomitant delay by the fact that this matter comes before me as a matter of urgency.
[22] In the referral, the commissioner held that Krost, the client, was deemed to be the 'sole employer' of the placed employees. In coming to this conclusion I have found that he erred.