Without entering into too much detail I would like to highlight a couple of the stand out issues discussed by Andrew Levy who is well known as the country’s leading Labour Law Expert and authority on all issues regarding Labour Relations.

The most important case of the year

Andrew Levy is firmly convinced that the following case; Nape v INTCS Corporate Solutions (Pty) Ltd (2010) 19 LC 7.1.2, has to be viewed as the most important case of the year. This case has far reaching consequences for all employers in the country and according to Andrew Levy it spells the ultimate demise of South Africa’s last opportunity to achieve labour flexibility via what has previously been a legal stratagem in terms of the LRA.

He contends that this case has its roots in sections 23 of the Constitution where the so-called labour rights are dealt with, and more specifically where it states that every person has the right to fair labour practice. He states the following: “By using the word ‘person’ and not ‘employee’ the constitution makes it clear that fair labour practice does not depend on there being a valid and enforceable employment contract in place”.

The above issue has been challenged in court on a few occasions, with specific reference to the Kylie and Discovery Health cases. According to Levy it was only a matter of time before the issue of fairness in the employment relationship would be tested in the labour broking environment where the contract of employment was not central in the dispute but rather the issue of fair labour practice in terms of a person’s constitutional rights. Finally such a case came along.

Nape v INTCS Corporate Solutions (Pty) Ltd (2010) 19 LC 7.1.2

The facts in this case are briefly the following: INTCS is a labour broker whose major client is Nissan South Africa. The applicant in this case was Nape, an employee of INTCS. Nape was found to be sending objectionable material on the company’s e-mail system and Nissan took exception to this. The labour broker was instructed to remove Nape and “that he was not allowed to darken their doorsteps again”.

The broker placed Nape on suspension with full pay and had a disciplinary enquiry in which it was determined that the offence did not warrant dismissal and the employee subsequently received a final written warning and the employee was sent back to Nissan to resume duty.

“Nissan, like Pharaoh of old, hardened its heart and declined to take the errant employee back into its arms.” At this stage, as is normally the case, the labour broker had very few options available in this regard and had to retrench the employee.

Levy then highlighted the fact that the court, in reaching its conclusion quoted the important Namibian case, African Personnel Services (Pty) Ltd. vs. Government of the Republic of Namibia & others. In this case the court found the legislative banning of labour broking was unconstitutional and that it infringed on the company’s constitutional right of free trade as well as the employers right to flexibility. It also held that the total ban infringed the principle of freedom of contract.

Levy stated quite importantly that the court therefore left the door on labour broking open.

In his analysis he then stated that our Labour Court began by dealing with the question of the constitutional rights to fair labour practices as dealt with in the African Personnel Services case. “It held that in the light of this, even though the client of the Labour Broker was not the employer, it should not do anything which might undermine the employee’s rights not to be unfairly dismissed, such as by entering into a contract with the Labour Broker which allowed it to be in breach of the fundamental rights to fair labour practices as set out in the Constitution”.

“The court however went further, and said that this same principle applies to the broker’s client making an illegal demand on the broker which would lead to a dismissal for operational reasons. This was seen to be a disguise for the true reason for the dismissal – which was that irrespective of the outcome of the disciplinary hearing, Nissan never want to see the applicant again”.

“The court also found that the insistence on dismissal was as a result of Nissan’s own policies with regard to e-mail usage. The court frowned upon this, and could in fact have approached the court to interdict the client from compelling it to concede to an unlawful demand to dismiss the employee”.

“The impact of this case is that every single employer that uses Labour Brokers ought to sit down and very seriously consider the impact of this decision and determine a way forward. It is clear that the previously enjoyed freedom to dismiss at will and on a whim is now over”.

Similar views in respect to this particular case have been dealt with by Aadil Patel, Director and Practice Head: Employment at Cliffe Decker Hofmeyr Attorneys.

On face value the prospect of dealing with the consequences of this particular case may seem daunting to any employer. It is however important to note that none of the employer’s basic rights and the purpose for using Labour Brokers have been effected as a result of this case. Employers still have the right to flexibility which is one of the primary objectives with the employment of Labour Brokers in any business. In this regard Labour Brokers will still play a very significant and integral role in the operational function of the client.

The actual result of this case is that the principal of joint and several liabilities has now crossed the barrier of basic conditions of employment, which it was previously limited to, into the arena of the tangible employment relationship.

As in rugby where rules change all the time; teams, coaches, players, referees, administrators and supporters have to adjust to the rules of the day in order to play the game successfully and to enjoy it whilst doing so.

It is therefore important that Labour Brokers and their Clients give this matter urgent attention and consideration to map out the path for the way forward in order to secure a mutually beneficial and sustainable relationship.

Written by: Riaan Helberg