TES Joint Liability Rules

Understanding TES Joint Liability Rules in South Africa

Temporary employment services (TES), commonly called “labour brokers,” place workers at a client for reward. TES Joint Liability Rules refer to the statutory framework in sections 198 and 198A of the Labour Relations Act 66 of 1995 (LRA) that makes both the TES and its client responsible—sometimes concurrently—for labour-law obligations toward placed employees. Properly grasping the rules is crucial for employers, HR practitioners, and labour-broker agencies alike.

Section 198 LRA: Temporary Employment Services Framework

Section 198 establishes when a service provider qualifies as a TES, the contractual relationship between TES, client, and employee, and the principle that both TES and client are jointly and severally liable for contraventions of bargaining-council agreements, sectoral determinations, the Basic Conditions of Employment Act (BCEA), and the LRA itself. While TES remains the employer on paper, the client cannot escape accountability for statutory infringements—a cornerstone of labour broker joint liability South Africa jurisprudence.

Section 198A LRA: Deemed Employment and TES Joint Liability Rules After 3 Months

Inserted by the 2014 amendments, section 198A targets vulnerable workers earning below the BCEA earnings threshold. Once the worker renders services to the same client for more than three consecutive months, the worker is “deemed” to be the employee of the client for purposes of the LRA—hence the popular tag “section 198A deemed employment.” From that point the client bears primary obligations for fair labour practices, dismissal procedures and remuneration parity, supplementing the existing joint liability under section 198. The 3-month threshold labour law trigger has reshaped staffing models across industries.

Scope of TES Joint Liability Rules: Who Is Liable for What?

Under the combined force of sections 198 and 198A:

• Statutory compliance – TES and client are jointly and severally liable for minimum wages, working hours, leave, UIF, compensation-fund contributions, and adherence to collective agreements.

• Unfair labour practices & dismissals – After the three-month mark the client is deemed the employer; before that date both parties can be cited jointly.

• Discrimination & equal treatment – Clients must provide placed employees with terms “not less favourable” than comparable permanent staff.

• Health & safety – Occupational Health and Safety Act duties rest primarily with the client, but a TES may share culpability where its negligence contributes to harm.

Failure to observe TES Joint Liability Rules can trigger enforcement by the CCMA, Bargaining Councils, labour inspectors, and courts—including retrospective liability for under-payments.

The 3-Month Threshold Explained: Practical Calculations

The 3-month trigger counts calendar months, not 90 days. Intervals of less than one-week between assignments are ignored. A placement restarted after a break of longer than one week resets the clock only if genuinely new; sham rotations breach temporary employment services compliance duties and may be struck down (§198A(3)(b)). HR should maintain assignment schedules demonstrating lawful rotations.

Client Obligations to TES Workers: Compliance Checklist

1. Written contract with TES aligning with TES Joint Liability Rules.

2. Due-diligence audit of TES registration, COIDA, UIF and PAYE status.

3. Equal-treatment analysis for pay, benefits, hours, and leave.

4. Health-and-safety induction identical to permanent workforce.

5. Performance-management protocol consistent with client policies.

6. Record-keeping: timesheets, payslips, leave forms retained 5 years.

7. Exit interview process to manage potential unfair-dismissal claims.

Enforcement & Dispute Resolution of TES Joint Liability Rules

Disputes flow to the CCMA or bargaining council. Assign Services (Pty) Ltd v NUMSA confirmed the constitutionality of section 198A’s deeming effect. Remedies include reinstatement, equalised remuneration orders, penalties, and compliance orders against both TES and client.

Managing Risk: Drafting Contracts that Reflect TES Joint Liability Rules

Service-level agreements should—

• Allocate costs of statutory breaches,

• Require TES wage-parity audits,

• Provide indemnities for penalties, and

• Include termination for non-compliance.

Proper drafting won’t oust statutory liability but can apportion financial risk and encourage genuine temporary employment services compliance.

HR Best Practices for Sustainable Staffing

Adopt a blended workforce policy, capping TES deployment to seasonal peaks. Train line managers on client obligations TES workers and embed a 90-day review to convert eligible workers to permanent status.

Case-Law Spotlight: How Courts Apply TES Joint Liability Rules

• Assign Services v NUMSA (2018 CC) – confirmed constitutionality and exclusivity of deeming provision.

• NUMSA v Bumatech (2020 LC) – client ordered to equalise wages retrospectively.

• Siyaya Skills Institute CC v CCMA (2023 LAC) – found rotation scheme artificial, deeming rule applied despite contractual “breaks.”

These cases underscore the judiciary’s readiness to pierce form for substance in enforcing labour broker joint liability South Africa.

FAQ – TES Joint Liability Rules Explained

1. What are TES Joint Liability Rules?
   They are statutory provisions making both a labour broker (TES) and its client responsible for labour-law compliance toward placed employees.

2. When does section 198A deemed employment arise?
   After a worker earns below the BCEA threshold and works for the same client longer than three consecutive months.

3. Does joint liability end after 3 months?
   No; section 198 liability continues, while the client also becomes the sole deemed employer for LRA purposes.

4. Can high-income employees rely on deeming?
   No, but they still benefit from section 198 joint liability for statutory minima.

5. Are TES and client both cited in CCMA disputes?
   Yes, especially where employment duration is disputed.

6. How does the 3-month threshold labour law affect fixed-term contracts?
   Deemed employment may override fixed-term labels if the worker remains placed.

7. What penalties apply for wage underpayment?
   Compliance orders, fines, retrospective parity awards, and potential unfair-dismissal compensation.

8. Do TES Joint Liability Rules cover Occupational Health & Safety?
   Health-and-safety duties primarily rest with the client, but TES can share responsibility.

9. Can a rotation scheme avoid deeming?
   Only if breaks exceed one week and the work is genuinely non-continuous; sham schemes are invalid.

10. How can HR ensure temporary employment services compliance?
    Perform due-diligence audits, equality assessments, and convert qualifying workers at 3 months.

References

Useful Links

• Department of Employment and Labour – Labour Relations Act – Full text of the LRA for direct statutory reference.

• CCMA – Guide to Deemed Employment – Practical overview from the dispute-resolution body.

• SAFLII – Assign Services v NUMSA Judgment – Free public-domain access to the leading Constitutional Court decision.

If you would like to learn more about employment contracts, click here.

If you would like to know more about employment rights, click here.

If your concerns relate remuneration please click here.

If you would like to learn about employee rights in the entertainment industry click here. 

If you would like to learn more about in absentia dismissals click here.

If you would like to know how to enforce a ccma award click here.

If you would like to know what is required for the removal of a director click here. 

If you would like to know more about the difference between misconduct and incapacity clcik here.

If you would like to know more about what does and what does not constitute a protected disclosure click here.

If your query relates to how UIF is claimed click here.

If your query relates to a matter where the employee in question is a domestic worker click here

If your query relates to whether or not someone is an employee click here.

If you would like to know more about interns and their rights click here.

If you would like to know more about the retrenchment process click here.

If you would like to know more about procedural fairness in disciplinary matters click here.

If you would like to know more about unfair labour practices in general click here.

If you would like to know more about employees rights during probation click here.

Would you like to know more about employees rights during dismissal click here.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for errors, omissions, loss, or damage arising from reliance upon any information herein. Don’t hesitate to contact Meyer and Partners Attorneys Incorporated if you require further information or specific and detailed advice. Errors and omissions excepted (E & OE).

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