South Africa’s latest ConCourt ruling – how does it affect you?

labour brokers south africa contractors

28th August 2018

Regular readers of our blogs will know that we have written about why the continent of Africa is such a fantastic place for international contractors to work, and there’s no doubt that each of its 54 countries presents unique experiences and a raft of opportunities. However, as global tax and compliance is ever changing, contingent professionals need to bear in mind that changing rules may directly affect them. The latest ruling from South Africa’s Constitutional Court (ConCourt), for example, is certainly one key development to be aware of.

A new rule for workers using ‘labour brokers’

The new law affects workers who have used a labour broker – an agency which supplies temporary workers to companies – to find a role and who earn less than the Basic Conditions of Employment Act threshold (currently R205,433 per annum). Once these professionals have been in a workplace for a period of longer than three months, then this organisation will be deemed to be the individual’s employer.

Other key points for contractors to consider

Under these new rules, if you were originally paid by one of these agencies and are then deemed to have an employer, there will need to be an agreement as to who pays this going forward: the labour broker or the end hirer.

You can probably expect your existing contract of employment to remain the same as you’ll automatically become employed by the business by operation of law after three months. However, some organisations may ask contractors to sign new direct employment contracts.

There are also other specific legal implications which will reassure contractors. For example, businesses and agencies can’t terminate your contract just to avoid this new rule as, if they do so, it will be deemed to be a dismissal and you’ll be able to take action under South African labour law. And, if you find yourself involved in any other kind of work-related dispute, you will have the choice of beginning legal proceedings against either the agency or your employer.

With contractors facing ever-changing legislation and the rules varying widely from country to country across the continent of Africa, contingent workers in the destination need to be sure of how changes will affect them. We strongly advise that professionals seek expert advice so that they have peace of mind. Contact the team today to find out how we can help you.


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