Labour Broking Versus Temporary Employment Services

March 2012 has been an interesting Month on the Labour Broking front with Cosatu protesting on the 7th of March 2012 calling for the ban thereof. I thought of sharing the definitions of Labour Broker and Temporary Employment Service (TES) as they are currently contained in the South African Legislation

Definition of Labour Broker in the INCOME TAX ACT, NO. 58 OF 1962 (the Act)

The definition of “labour broker” has been changed so that it includes only natural persons. This is effective from 1 March 2009. The new definition reads as follows:

“Labour broker” means any natural person who conducts or carries on any business whereby such person for reward provides a client of such business with other persons to render a service or perform work for such client, or procures such other persons for the client, for which services or work such other persons are remunerated by such person.
SOURCE: SARS Income Tax Act

Keyword for me in this definition are the words “natural person” meaning a Labour broker is an individual not a company

Definition of Temporary Employment Service in the Labour Relations Act

Section 198 Chapter IX. Temporary Employment Services

(1) In this section, “temporary employment service” means any person who, for reward, procures for or provides to a client other persons-

(a) who render services to, or perform work for, the client; and

(b) who are remunerated by the temporary employment service.

(2) For the purposes of this Act, a person whose services have been procured for or provided to a client by a temporary employment service is the employee of that temporary employment service, and the temporary employment service is that person’s employer.

(3) Despite subsections (1) and (2), a person who is an independent contractor is not an employee of a temporary employment service, nor is the temporary employment service the employer of that person.

(4) The temporary employment service and the client are jointly and severally liable if the temporary employment service, in respect of any of its employees, contravenes-

(a) a collective agreement concluded in a bargaining council that regulates terms and conditions of employment;

(b) a binding arbitration award that regulates terms and conditions of employment;

(c) the Basic Conditions o Employment Act; or

(d) a determination made in terms of the Wage Act.

SOURCE: Labour Relations Act Section 198. Chapter IX

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