1. SUBMITTED TO:
THE HONOURABLE MS. L.E. YENGENI
CHAIRPERSON OF THE PORTFOLIO COMMITTEE ON LABOUR
TITLE
WRITTEN SUBMISSION ON LABOUR BROKERING IN SOUTH AFRICA1
SUB-TITLE
A BRIEF INTERNATIONAL OVERVIEW OF THE REGULATION OF LABOUR BROKERING AND
PROPOSED CHANGES TO SOUTH AFRICAN REGULATION – ADV. A.J. NEL2
1
Disclaimer: The closing date for submissions came to the knowledge of the author on 20 August 2009 and as such
these submissions are “rushed” in nature and would require further and more in depth examination, explanation and
clarification from the author.
2
B.Com (Law)(UP)(cum laude), LL.B (UP)(cum laude); Advocate of the High Court of South Africa; Member of
S.A.S.L.A.W.
© 2009 Adv. A.J. Nel ( (011) 504-2152;  ajnel@ajnel.co.za)

2. 2
TERMINOLOGY
This paper solely seeks to address the tripartite relationship known as “labour brokering” as defined in terms of
section 189 of the Labour Relations Act3. The term “labour brokering” finds correlation in various terms used in
external constituencies and include terms such as “labour hire”; “temporary agency work”; “labour leasing”;
“contingent labour”; “on-call contracts”; “dispatched work(ers)”; “outwork” and “people leasing”. Likewise
“temporary employment services” as defined in the mentioned section finds some correlation in terms such as
“private employment agencies”; “temporary help agencies” and “worker dispatching services”.
COMPARITIVE BACKGROUND
The current trend in accepting the need for labour brokering commenced with the International Labour
Organisation4 doing a one hundred and eighty degree about turn on the “Employment Service Convention”5
and adopting the “Private Employment Agencies Convention”6 with effect 5 October 2000. Likewise the
European Union on 19 November 2008 introduced the Directive on temporary agency work7 which provided
statutory protection and regulation of temporary employment services.
3
Act 66 of 1995 (as amended).
4
(“ILO”).
5
Convention C 88, adopted 9 July 1948.
6
Convention C 181, adopted 19 June 1997.
7
Directive 2008/104/EC of the European Parliament and of the Council.
© 2009 Adv. A.J. Nel ( (011) 504-2152;  ajnel@ajnel.co.za)

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This is in stark contrast to the position in Namibia where labour brokering was outlawed as from 1 November
20088 and even described as akin to slavery in recent dicta.9
Degrees of Statutory Regulation of Labour Brokering and the Status of Temporary Workers
Indirect Regulation
Under this regime, little or no specific legislation regulating temporary employment services exist as
temporary workers by definition enjoy the same protection as any other employee.
As an example, the position in the Netherlands is characterised by the liberalization of control and disclosure
regulation of temporary employment services whilst providing express regulation of the relationship between
the temporary employment service, its client and the temporary employee.
In this regard the licensing of temporary employment services was abolished in 1998 with the introduction of
the “Wet Allocatie Arbeidskrachten door Intermediairs”.10
The Civil Code specifies that a contract for temporary work is an employment contract with the temporary
employment service11 and further stipulates that temporary workers are entitled to a permanent contract after
three years or after three consecutive fixed-term contracts.12 Interestingly the Works Councils Act stipulates
8
Section 128 of the Labour Act, Act 11 of 2007.
9
African Personnel Services v Government of Namibia and Others (Case No.: A 4/2008) where Parker held that “Labour
hire has no legal basis in Namibian law in terms of the common law, statute law or the ILO Constitution and
consequently it is not lawful; and so labour hire is not a business or trade protected by Article 21 (1)of the Namibian
Constitution”, this directly contrary to the “Private Employment Agencies Convention” which appears to have been
overlooked.
10
1998 “(“WAADI”).
11
Book 7 articles 690 and 691.
12
Book 7: Article 668a.
© 2009 Adv. A.J. Nel ( (011) 504-2152;  ajnel@ajnel.co.za)

4. 4
that agency workers have the right to information, consultation and representation in the temporary
employment service’s client after having worked 24 months in the same client. 13 Additionally, the temporary
employment service is obliged to inform the temporary worker at the beginning of a job about the risks and
demands of the new workplace14 and the temporary employment service’s client is obliged to provide the
temporary employment agency with information about specific working conditions.15
In certain Australian states legal regulation is solely limited to defining the relationship between the temporary
employment service and the temporary worker as employment. In this regard Queensland defines an
employee to include an “outworker” and employer to include someone who employs an outworker 16 and New
South Wales (Australia) includes persons working “under a contract of labour only” as employees.17
Liberal Legislation
In this category legislation fails to expressly define a temporary worker as an employee of either the
temporary employment service or of the client and further fails to provide statutory protection for such worker.
This system is in conformity with the locus classicus of the Australian Federal Court in Building Workers
Industrial Union & Ors v Odco Pty Ltd 18 were it ruled that workers under labour hire are neither employees of
the Labour Broker or of the principle employer.19
13
Article 1 of the WAADI.
14
Article 11 of the WAADI.
15
Article 5 of the WAADI.
16
Sections 5(1)(g) and 6(1)(g) of the Industrial Relations Act of 1999
17
Section 5(2) of the Industrial Relations Act, Act 17 of 1996.
18
(1991) AILR 129.
19
A principle which still finds application in certain Australia states (excluding New South Wales, Queensland and
Victoria).
© 2009 Adv. A.J. Nel ( (011) 504-2152;  ajnel@ajnel.co.za)

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Temporary employment services are further only marginally controlled by statute (e.g. legislation which
prohibits the charging of a recruitment fee in the UK20).
Express Regulation
These countries developed restrictive legislation applicable to temporary employment services and regard
workers of temporary employment services as the employees of such services.
Labour Brokering is denoted as a separate category of employment and requires licensing and reporting.
In Germany statutory regulation21 provides for the definition of “temporary employees” and various regulations
applicable to temporary employment agencies, including the prohibition of hiring out of workers to companies
in the construction industry for the purpose of performing work usually carried out by blue collar workers,
notifying the Federal Employment Agency of each brokering contract with a client and provide it with biannual
statistics on the number and specific characteristics of hired out workers, the number of user enterprises
served and the number of placements per sector.
Spain is highly regulated and requires temporary employment services to conform to various administrative
and financial standards.22 Again temporary employees are required to be remunerated at the same level than
employees directly employed by the client.
Hybrid Regulation
This entails a combination of indirect- and express regulation such as in Austria.
20
Employment Agencies Act of 1973 and the Conduct of Employment Agencies and Employment Business Regulations
Act of 2003.
21
Arbeitnehmerüberlassungsgesetz of 1972.
22
Law 14 of 1994 and Law 29 of 1999.
© 2009 Adv. A.J. Nel ( (011) 504-2152;  ajnel@ajnel.co.za)

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Austria adopted a specific legislation on labour brokering23 providing for temporary employees as a special
class of employee. In various regards these employees are to be treated the same as normal employees of
the client (e.g. remuneration and working hours). It further requires the temporary employment service to be
licensed and detail of the work environment existing at the client to be provided to the temporary employment
service and its employees.24
PROPOSED REGULATORY CHANGES
South Africa does regard worker under a labour brokering contract to be the employees of the temporary
employment service. As such the employees are entitled to the same legal protection afforded to any other
employee. Section 198 of the Labour Relations Act further provides statutory protection of temporary
employees regarding the payment of statutory dues and section 24 of the Skills Development Act 25 which
requires the registration of temporary employment services with the Department of Labour and compliance
with regulations issued by the Minister of Labour.
Defining “employers” to exclude “simulated” employment and introducing statutory guidelines to this effect
Both the Private Employment Agencies Convention and the Directive on temporary agency work propose
national legislation which prevents simulated labour hire. Turkey enacted regulations which provides a non-
exhaustive guideline to instances where simulation will be presume, i.e.: -
(a) where part of the work relating to the production of goods and services which does not require
proficiency (expertise) is assigned to a temporary employment service;
23
The “Arbeitskräfteüberlassungsgesetz” of 1988.
24
Gewerbeordnung of1994.
25
Act 97 of 1998 (as amended).
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7. 7
(b) where a temporary employment relationship is established with an employee (as temporary employee)
who previously worked in the workplace;
(c) where employees of the principal employer are recruited as employees of the temporary employment
service with restricted rights; and
(d) where an agreement is executed by the employer for the purpose of disguising its actual intention
(e.g., avoiding public liabilities or restricting or eliminating employees' rights arising from their
employment contracts, collective labour agreements or labour legislation).
Though certain of these guidelines might be out of place in the South African legal context it is submitted the
inclusion in the Labour Relations Act of a clause similar to section 200A, creating a presumption as to
simulated employment using guidelines similar to the Turkish model would address the problem of sham
temporary employment services.
Providing for probation and length of service on singular or selective take-over.
Under Section 4 of the recently amended Finnish Employment Contract Act26, where company decides to hire
a temporary agency worker permanently, his previous work with the company is taken into account in respect
of his probationary period. This deduction should only be applied if the work is the same or similar as that
carried out during their time as a temporary agency worker. It is submitted that legislation should enact this
principle and expand the same for purposes of calculation of length of service. Cognisance is taken of the fact
that section 197 of the Labour Relations Act provides for instances of mass transfer but neglects the selective
take-on of employees or the staggered take on of employees. Presumably such amendment would lie under
section 197 of the current Labour Relations Act.
Replacing the term “private employment services agency” with “temporary employment service”.
26
Act 55 of 2001 (as amended).
© 2009 Adv. A.J. Nel ( (011) 504-2152;  ajnel@ajnel.co.za)

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It is trite that section 24 of the Skills Development Act has not been the subject of consideration by our Courts.
It is however submitted that in its current form it creates the impression to cover entities over than temporary
employment service. In this regard it might be argued that “pure recruiters” could be included under this
section. If regard is however had to the draft Rules under consideration relating to “private employment
services agencies” it is clear that the intention was to solely regulate temporary employment services.
This amendment should release valuable time, inspection personnel and administrative resources to the
Department of Labour as currently large numbers of recruiters (including the industry voluntary control body
“APSO”) holds the view that all recruiters are to comply with section 24 of the Skills Development Act.
CONCLUSION
These submissions deal solely with statutory amendments. It shows clearly that the current position regarding
temporary employment services in South Africa is fully compliant with both the “Private Employment Agencies
Convention” and “the Directive on temporary agency work”.
It is submitted that there exist little need to amend statute or introduce new statute to deal with the relationship
between the temporary employment service and the temporary employee (small aspects such as a provision
akin to Section 4 of Finnish Employment Contract Act, being the exception) as temporary employees enjoy the
same statutory protection as any other employee.
By creating a statutory presumption which excludes “sham” temporary employment services as employers
(with the client of such service thus becoming the employer), self-regulation will be improved.
© 2009 Adv. A.J. Nel ( (011) 504-2152;  ajnel@ajnel.co.za)

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Further than this any regulation of temporary employment services can be achieved by introducing regulations
under section 24 of the Skills Development Act. The content or nature of such regulation falls outside the
ambit hereof as it would not require the introduction or amendment of a statute.
AJ NEL
Bedfordview
21 August 2009
© 2009 Adv. A.J. Nel ( (011) 504-2152;  ajnel@ajnel.co.za)