Labour brokers are pretty much in vogue nowadays and although the concept has advantages for all parties involved, it can be like the proverbial cat among pigeons when disputes arise.
It is imperative to observe the difference between an employment agency and a labour brokerage. An employment agency usually gets paid a once-off fee by its client to source possible candidates to be employed directly by them.
Unlike with employment agencies, which merely screen applicants on behalf of their clients, job seekers can actually register themselves with a labour broker to be put onto their database.
The labour broker then attempts to secure temporary work for its members and may place the same person in various jobs from time to time.
The labour broker scenario can be seen as a triangle – with the employee, broker and the client the three opposing sides. In this instance, the employee enters into a contract with the broker and the broker concludes a contract with the client.
In the contract between the broker and the client, the broker makes the employee’s services available to the client at a fee. The client pays the broker and the broker in turn pays the employee.
While it is plain sailing, this arrangement can be bliss, but, when any of the three parties rocks the boat, it could lead to a whirlpool of problems.
If so, the first port of call would be to establish the position of the employee in terms of the Labour Relations Act (LRA). Two main questions will naturally arise.
Firstly: Is the employee in fact an employee or rather an independent contractor? Secondly: Is the labour broker or the labour broker’s client the employer?
In a related case, a man with a criminal record for taking company money some twenty years ago – a fact which he voluntarily disclosed – registered himself with a labour broker.
The labour broker informed his client of the employee’s criminal record. The client had no problem with this and the employee excelled at his job, even winning numerous awards over a period of more than six years.
The company was so impressed by the employee’s standard of work – as well as by all the other workers supplied – that they wanted to “buy” all the employees from the labour brokerage so that they could become permanent employees.
At this point, the man’s criminal record surfaced again and the labour broker’s client suddenly refused to appoint the man permanently or to even have him work for them through the brokerage.
Ultimately the labour broker was unable to find him another position and had to retrench him. The man accepted the offered retrenchment package and the matter was settled.
However, if the man decided to contest the matter, who would he have been up against? Would it have been the labour broker, the broker’s client or both?
When coming undone, the labour broker triangle could result in a three-way tug of war. It is therefore of the utmost importance that people in disputes of this nature should immediately seek an attorney’s advice.
Send your labour and other workplace related questions to firstname.lastname@example.org.
Wikus van Rensburg is a well-respected labour law attorney in Port Elizabeth in Nelson Mandela Bay.
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