Procure and Provide
01 February 2013Business Brief
Mr Dyokwe commenced employment with Mondi Packaging in 2000. In 2003, he was told by his manager to go to an office in Tyger Valley "to sign a form". This was the office of a labour broker, where he had to sign a contract with the labour broker, Adecco Recruitment Services. He signed the contract and returned to the Mondi factory, where he continued to do the same work under the same manager. Mr Dyokwe was illiterate. His rate was reduced from R12.56 to R10.00 per hour.
In January 2009, he was told by Mondi that his name was on a list of employees whose services had been terminated. When he went to the labour broker he was told that he was too old to be placed in another job.
The CCMA found that he was an employee of the labour broker and not an employee of Mondi. This conclusion was reached primarily because the CCMA Commissioner found that the Labour Relations Act shields the client (of a broker) from unfair dismissal claims.
On review, the Labour Court found that Mr Dyokwe remained an employee of Mondi and that Adecco was at no stage his employer. This finding was made principally because Adecco did not "provide or procure" Mr Dyokwe to Mondi.
Section 198 provides that for a person to be an employee of the labour broker, the labour broker must "provide or procure" the services of the individual to the client. On the facts of this case, the reality was that Mondi had referred Mr Dyokwe to Adecco. Mondi accordingly remained the employer. This was despite an agreement with Adecco to the contrary.
This judgment sends a strong sign to labour brokers and their clients to ensure that their relationships are properly ordered in terms of the law. If not, the client will face unfair dismissal and other forms of employment related liability.
Companies that routinely inform individuals that, in order to render services, they are required to "contract" through a labour broker must be wary.
The CCMA will now be required to question the circumstances giving rise to the written agreement between the labour broker and employee in order to ascertain which entity is the real employer.