The Constitutional Court held that the labour broker is merely a third party that delivers the employee to a client. The employee does not contribute to the business of the labour broker except as a commodity. The Constitutional Court also concluded that the language used in section 198A supports a ‘sole employer’ interpretation, meaning that employees who have been placed by a labour broker for a period of more than three months and earn below the statutory threshold will be deemed to be permanent employees of the labour broker’s client.
This judgment will have a dramatic impact on the labour broking business and will also affect many clients that utilise labour broking employees as many of these employees may now be deemed to be employees of the client and entitled to rights as an employee. It would accordingly be prudent to consult with your attorney or a labour specialist to assist you to correctly deal with these labour broker workers in light of this important judgment.