South African labour law is all about fairness, and internal company processes have to measure up. However, when fairness and operational demands clash, good intentions tend to go out the door.

It has been a familiar drum beat in the South African business environment that the cost and effort imposed by the country’s labour laws in respect of employee-issues, have become prohibitive to conducting business. Many a clever scheme have emerged in an attempt by companies to divest themselves of these responsibilities - usually involving a third party such as a labour broker or a service provider.

Although there has been a big clamp down on labour brokers (temporary employment services) in terms of the recent amendments to labour legislation, the practice of ‘contracting in’ labour is still rife and open to abuse. Particularly so under the guise of service level agreements between client companies and service providers – and impacting as much on skilled and professional employees as on the more vulnerable lower earners.

The dilemma is this: the client company

contracts for a service, which requires employees of the service provider to work permanently at the client’s premises (think IT; telecommunications; quality control services, technicians, facility management, etc.). The service provider as the employer has certain obligations towards its employees in relation to working hours, safety considerations, fair procedures and the like. The client overrules all of this by making continuous demands of the service provider which it cannot fulfil within the parameters of fair treatment of its employees. For example: the client demands that an employee it does not ‘like’ is taken of site and replaced by someone else, however it is not willing to participate in any type of disciplinary or performance process that the service provider would be obliged to follow to address the issue. Or the client insists on long working hours for those employees, not willing to budget for additional employees so that there can be regular rotation in the interests of health and safety.

The service provider is in an untenable situation – should it refuse to adhere to these demands, it is likely to lose the contract. Regardless of having the law on its side and possible contractual remedies against the client, the reality is that the client holds all the cards and is usually a big player in the industry. The service provider is likely to find its services much less in demand, should it gain a reputation for being troublesome and a stickler for the rules.
The poor employees are usually the losers in all this, and instead of doing what it knows is fair, the service provider just budgets for challenges at the CCMA as part of the ‘cost of doing business’. The new statutory provisions around labour broking are dodged by the client saying that it is paying for a “service” – but then still insists on dictating to the service provider which individuals must perform this service and how. It would be interesting to see litigation around this going forward – but for now it seems that most service providers are too intimidated by the prospect of losing work to challenge this practice.

Another situation that raises its head regularly, is when employers delay taking timeous action against a non-performing or misbehaving employee – because they need them operationally. Even in cases of serious misconduct, an employer might put the transgression on the back burner because the employee is essential to completion of a project or other operational situation. Inevitably, when things quiet down and the employer gets around to dealing with the misconduct, he calls for a summary dismissal based on lack of trust - totally ignoring the fact that he had happily allowed the employee to continue working normally despite this supposed lack of trust. Regardless of the fact that the misconduct might well have been serious enough to dismiss, justifying (delayed) dismissal to the CCMA under these circumstances might prove a challenge.

Employers should think carefully if confronted with such a situation. Throwing money at a problem is not always going to save the day. An order for reinstatement of an unfairly dismissed employee (as opposed to ordering compensation) can be costly in more ways than just money and put the employer back to square one in terms of dealing with a troublesome employee.

Judith Griessel
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