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[1]  This application for leave to appeal against a judgment of the Labour Appeal Court enjoins this Court to finally determine the correct interpretation of section 198A(3)(b) of the Labour Relations Act[1] (LRA).  Section 198A(3)(b) provides that an employee who earns less than the stipulated threshold and is contracted through a temporary employment service (TES) to a client for more than three months is deemed to be employed by that client.[2]  The issue before us is what happens to the employment relationship under the LRA between the placed employee and the TES once this deeming provision kicks in.  In particular, does section 198A(3)(b) give rise to a dual employment relationship where a placed employee is deemed to be employed by both the TES and the client?  Or does it create a sole employment relationship between the employee and the client for the purposes of the LRA?

[2]  Statistics South Africa reports that the unemployment rate is 26.7% and that figure excludes more than two million discouraged work-seekers.[3]  Behind this number lies the legacy of systematic deprivation of opportunities for black South Africans and within it is the undeniable skew of racial inequality.  This dire state of affairs is coupled with a history of very poor working conditions and pay for black employees.

[3]  The Legislature has stopped short of banning labour broking but it has enacted several amendments to the LRA to give security to marginalised workers and to regulate the industry.  Section 198A is one such amendment.  The dispute we are called upon to resolve is which interpretation of section 198A(3)(b) is correct.