For a variety of reasons, some homeowners elect to engage domestic workers through so-called ‘employment services’ which provide domestic workers for a monthly fee and remunerate those domestic workers independently of the homeowner. These domestic workers are not independent contractors in a true sense as they are subject to the direction and control of the homeowner and not the employment service.
The previous advantage of this arrangement was that the homeowner avoided becoming the employer of the domestic worker and therefore escaped liability for unfair dismissal in terms of the Labour Relations Act. In practice, when a homeowner no longer required the services of a domestic worker supplied by an employment service, he/she could simply notify the employment service that the domestic worker was no longer required, and the domestic worker would cease to be placed at the household.
However, due to the amendment of the Labour Relations Act in 2015 and a recent judgment of the Constitutional Court[i], the law has changed in respect of employment services. Consequently, after the domestic worker has been supplied by an employment service for more than three calendar months then he/she may ‘become’ the employee of the homeowner for the purposes of the Labour Relations Act. This occurs irrespective of who continues to remunerate the domestic worker.[ii]
This, in turn, begs the question whether paying an employment service a monthly fee (which necessarily exceeds the wage paid to the domestic worker) provides any value to the homeowner in circumstances where the homeowner will be responsible for the obligations of an employer in terms of the Labour Relations Act including in respect of fairly dismissing the domestic worker.
Employers who have domestic workers that have been placed at their home for long periods of time could therefore consider terminating their commercial relationship with the employment service and employing the domestic worker directly through the conclusion of a contract of employment .[iii]
This approach gives effect to the purpose of the amendment of the Labour Relations Act which is to restrict employment services to providing employees to clients on a genuinely temporary basis.
Notwithstanding the above, employers are under no obligation to terminate their commercial relationships with employment services should they not wish to do so (i.e. homeowners may wish to continue having the employment service handle matters such as payroll and UIF). Homeowners should be aware, however, that they will not be able to dismiss domestic workers by simply cancelling the commercial agreement with the employment service and are also jointly and severally liable, together with the employment services, for any breach of the sectoral determination or the Basic Conditions of Employment Act.[iv]
Employment services can still be utilized to provide genuine temporary
domestic workers without those domestic workers becoming the employee of the
homeowner (i.e. where a usual domestic worker is on maternity leave, long
leave, for once-off short projects, etc.).[v]
[i] Assign Services (Pty) Limited v National Union of Metalworkers of South Africa and Others (2018) 39 ILJ 1911 (CC)
[ii] There is some debate as to whether domestic workers are exempt from the amendment to the Labour Relations Act given the exception contained in section 198A(1)(c) of the LRA, but the crux of the Constitutional Court Judgment in Assign Services supra is that temporary employment must be genuinely ‘temporary’ and therefore where a domestic worker is not placed in a genuinely temporary role that he/she will likely be entitled to the new protections by being ‘deemed’ the employee of the home owner. This position will have to be tested by the Courts in due course
[iii] Should an employer elect to employ the domestic worker directly, regard must be had to the commercial agreement between him/her and the employment service which may provide for a ‘placement fee’ if the domestic worker is employed by the employer directly
[iv] See section 29(2) of Sectoral Determination 7
[v] In terms of section 29(1) of the sectoral determination the employment service and the home-owner will be jointly and severally liable for any breach of the Basic Conditions of Employment Act or the Sectoral Determination (i.e. the domestic worker can sue either the employment service or the home owner).
