ARTICLE · 11 JULY 2011

Using Labour Broking Does Not Avoid Dismissal Obligations

Norton Rose Fulbright South Africa

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The Labour Court has confirmed the principle that clauses in a contract of employment that provide for the automatic termination of an employee's employment if the labour broker's client no longer requires the services of the employee, are invalid.

South AfricaEmployment and HR

Murray Alexander

The Labour Court has confirmed the principle that clauses in a contract of employment that provide for the automatic termination of an employee's employment if the labour broker's client no longer requires the services of the employee, are invalid.

In the past businesses have avoided having to comply with the dismissal provisions in the Labour Relations Act by using labour brokers to provide employees. The labour brokers have in turn built in automatic termination provisions in their contracts of employment to avoid unfair dismissal claims by their employees.

The facts

In Mahlamu v CCMA and others (unreported) the respondent labour broker employed the applicant as a security officer with a provision in his contract that the employment contract would automatically terminate:

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