Non-standard Employment in South Africa

With all the recent controversy surrounding the amendments to the Labour Relations Act it may be prudent to provide a short overview containing the most contentious amendments, being the regulation of non-standard employment.

The reason why these amendments were introduced is to ensure that vulnerable employees are no longer exploited. Its further aim is to restrict the services of Labour Brokers who do not act as temporary employment services as the Labour Relations Act intended.

The section in the Labour Relations Act which deals with non-standard employment is section 198.

It deals with three specific categories of non-standard employment, namely:

• Section 198 A – Employees employed by labour brokers (Temporary Employment Services);
• Section 198 B – Employees employed on fixed term contracts;
• Section 198 C – Part-time Employees.

When considering non-standard employment, it is important to firstly determine to whom these sections will apply. These sections will apply to:

• Employees earning less than the threshold (currently R 205 433.30 per annum as determined in 2014); and
• Employees that are employed for longer than three months.

Section 198 A

This section specifically relates to Temporary Employment Services, also known as “TES”. When an employee is employed at the client of the TES for a period not exceeding three (3) months, it will be deemed to be a Temporary Employment Service. The appointment of the employee can also substitute the employment as an employee who is temporarily absent and who will return to work at a later stage. A classic example would be an employee who is on maternity leave but will return to work after the maternity leave has expired. It also refers to an employee working in a category of work that has been determined to be a temporary service – this could be determined in the form of a bargaining council agreement or sectoral determination. The work, for which the employee is employed, can be for any period of time and is not subject to the three month period.

In terms of Section 198A, “deemed employment” relates to employees working longer than three months and earn below the threshold. These employees are considered to be employees of the client of the TES. The TES and the client are jointly and severable liable for these employees.

Section 198 B

This section provides for fixed term contracts. A fixed term contract is one that expires on:

• A fixed date;
• With the occurrence of a specific event;
• Completion of a specific task.

Section 198 B only applies to employees who earn less than the threshold. This section will not be applicable on the employer if the employer:

• Employs less than ten employees;
• Employs less than fifty employees and whose business has been in operation for less than two years.

This, however, does not mean that an employer cannot employ an employee on a fixed term contract that exceeds three months. The employer may engage an employee on a fixed term contract for longer than three months, if:

• The nature of the work is of a limited or definite duration; or
• A justifiable reason exists that necessitates the fixing of the term.

The question of what would be considered a justifiable reason now arises. At a recent workshop hosted by the Commission for Conciliation, Mediation and Arbitration, it was stated that the following is a summarised list of non-exhaustive justifiable reasons:

• Replacing another employee who is temporarily absent;
• Temporary increase in work, not longer than 12 months;
• A student to gain experience;
• Employee engaged for specific limited duration project;
• Non-citizen with a work permit;
• Seasonal work;
• Public work scheme;
• External funding; and
• An employee reaching retirement.

It is imperative to ensure that an employee who is employed on a fixed term contract is not treated less favourably than permanent employees performing the same or similar work. Should there be circumstances where employees are treated differently an employer should ensure that a justifiable reason for the different treatment exists.

Seniority; length of service; the nature of the work that is performed and merit are all considered examples of a justifiable reason.

This section also now makes provision for the payment of severance pay should the employee have worked on a fixed term contract for longer than 24 months.

Section 198 C

This section was specifically introduced to regulate part-time employees who are categorised as vulnerable by introducing the ILO Convention 175, 1994.

A part-time Employee is defined as:

“…an employee who works shorter hours than a comparable full-time employee; and who is paid in according to the time worked.”

Section 198 C does not apply when the employee:

• Earns more than the threshold;
• Works less than twenty-four hours;
• During the first three months of continuous employment.

Section 198 C does not apply to the employer if:

• It employs less than ten employees;
• Employs less than fifty employees and whose business has been in operation for less than the years.

This section also determines that part-time employees may not be treated less favourably than full time employees, unless justified.

Once again, the differentiation in treatment can be justified on the grounds listed above.

Dispute Resolution

Should there be any dispute relating to the interpretation of the above sections, such a dispute may be referred to the CCMA or the relevant bargaining council with applicable jurisdiction within six months.

Unfair dismissal disputes and unfair labour practice disputes should also be referred within the allocated time frame, being thirty days and ninety days respectively.

In conclusion, whilst the new changes created uncertainty to an extent, employers should act proactive and, by constantly ensuring that the company adheres to the new amendments and act in accordance with the Labour Relations Act, there is no reason to fear their implications.

It is clear that the objective of the introduction of the amendments was to ensure more protection for vulnerable employees falling into a specific category, rather to punish employers. It will depend on all role players to ensure that such objective is achieved.