Labour Brokers Not A Cure All For Legal Restrictions



Employers commonly opt for alternative and temporary resources, such as staff provided by labour brokers, to avoid direct employment of workers. This practice is known as labor brokering or outsourcing, and it has become a common trend in the modern job market. 



It is common for employers to try to avoid employing employees directly and often prefer to use alternative and temporary resources such as staff provided by labour brokers. The reasons for this include: 

  • Permanent employees are away on annual leave, sick leave, maternity leave or other leave and the remaining staff cannot cope with all the work
  • Work volumes have increased temporarily and more staff are needed
  • The agency or labour broker employs staff with specialised skills that the employer needs
  • Avoidance of having to deal with trade unions, discipline, grievances and other labour problems
  • The mistaken belief that, where there are problems relating to pay, benefits and working hours the agency/broker employee will take the blame and the company or organisation requiring the agency/broker staff will not be legally liable.

Temporary employment agencies and labour brokers are referred to in the Labour Relation Act (LRA) as “temporary employment services” (TES) 

The TES takes on many labour law responsibilities in return for a fee from its client where the employees are placed.

Trade unions, who find this arrangement to be a thorn in their sides, call it ‘Atypical Employment’ and have succeeded in a campaign to oppose it. The resulting legislation introduced to prevent misuse of labour brokers and temp. contracts is being bolstered by CCMA and Labour Court decisions made against labour brokers and against their clients.

For example, in the case of Sibiya & others vs HBL Services cc (2003 7 BALR 796) the employees were employed by a labour broker to provide work to a client. The employees refused to change to a new shift system introduced by the client. When the employees arrived for work the next day to render services under the old shift system the broker’s client locked them out and they referred an unfair dismissal dispute.

The arbitrator found that the employees had been dismissed for refusing to work under the new shift system. As the employees were entitled to refuse the change and as no proper dismissal procedures had been implemented the arbitrator ordered the broker to reinstate the employees with full back pay. 

In the case of NUMSA obo Mahlangu & others vs Abansedisi Labour Services and Another (2006 1 BALR 29) the employees were employed by a labour broker to render services to a client. The employees were fired by the labour broker because the client no longer required their services due to their poor performance. The arbitrator found that:

  • The broker was not entitled merely to take its client’s word that the employees were performing their work badly
  • The dismissal was unfair and the broker was required to pay the employees compensation.

In the case of Springbok Trading (Pty) Ltd vs Zondani and Others (2004 9  BLLR 864) the company wanted to transfer a number of its own employees into the employment of a labour broker. Those employees who refused to take the transfer were retrenched.

The Labour Court found the dismissal to be unfair so the employer took the decision on appeal to the Labour Appeal Court. The Court found that:

  • The employer’s stated reason for wanting to implement the transfer was not good enough to justify the retrenchment of those employees who refused the transfer. That is, the employer’s alleged wish to avoid the burden of payroll administration did not justify the loss of employees’ jobs.
  • It was unlikely that the trade union would have agreed to the retrenchment of its members.
  • Consultations on the retrenchments were neither completed nor properly conducted.
  • The retrenchments were unfair.

The employer’s appeal was therefore dismissed with costs.

The above makes it clear that all employers and the smaller ones in particular, need to learn, with the help of reputable labour law experts, how to continue to run profitable businesses despite the ever increasingly restrictive labour legislation.

To access our experts debating thorny labour law topics please go to and click on the labour law debate icon in the main menu.

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