BACKGROUND
| Pick ‘n Pay Retailers (Pty) Ltd (“PNP”) operates in-store bakeries to produce baked goods at certain of their stores. As part of an empowerment initiative, PNP decided to use these bakeries to train previously disadvantaged persons to operate self-standing bakeries, capable of operating independently of PNP. |
PNP contracted with Assist Bakery 115 CC (“AB”), one of the empowerment entities, for the acquisition and mixing of baking ingredients that would then be supplied to the store.
| The Appellants were employed by AB as bakery assistants and their function was to pick ingredients from stores and deliver them to AB’s workplace, where AB’s other employees would mix the ingredients. |
| The Appellant’s referred a dispute to the CCMA, citing PNP and AB as the ‘other party’ with whom they were in dispute. They sought to be deemed permanent employees of PNP, and for PNP to pay them the same salary as its permanent employees. |
Commission for Conciliation, Mediation and Arbitration (“CCMA”):
The Commissioner found that, based on the various contracts regulating the relationship between PNP and AB, a close association had been established and section 200B of the Labour Relations Act (“LRA”) applied. Thus, PNP and AB were joint or co-employees of the Appellants.
| Pick ‘n Pay Retailers (Pty) Ltd (“PNP”) operates in-store bakeries to produce baked goods at certain of their stores. As part of an empowerment initiative, PNP decided to use these bakeries to train previously disadvantaged persons to operate self-standing bakeries, capable of operating independently of PNP. PNP contracted with Assist Bakery 115 CC (“AB”), one of the empowerment entities, for the acquisition and mixing of baking ingredients that would then be supplied to the store. The Appellants were employed by AB as bakery assistants and their function was to pick ingredients from stores and deliver them to AB’s workplace, where AB’s other employees would mix the ingredients. The Appellant’s referred a dispute to the CCMA, citing PNP and AB as the ‘other party’ with whom they were in dispute. They sought to be deemed permanent employees of PNP, and for PNP to pay them the same salary as its permanent employees. Labour Court (“LC”): The LC held that the invocation, by the Commissioner, of section 200B was misguided and an irregularity. On this basis, the LC reviewed and set aside the award. Labour Appeal Court (“LAC”): On appeal, the LAC held that: “the effect of section 200B, while crucial, is merely to fix or extend the liability that would ordinarily be that of the employer, as per the traditional tests, to another or others, who carry on as an associated or related activity or business by or through an employer.” The section, effectively, contains a deeming provision. While it contemplates that a single person may be the employer, it doesn’t provide criteria for determining what makes that one person the employer. Section 200B seeks to prevent simulated arrangements or corporate structures that are intended to defeat the purposes of the LRA. Its function is to provide for joint and several liability on the part of persons found to be employers for any failures to comply with an employer’s obligations under the LRA or any employment law. |
HELD
| The LAC concluded that there was no credible averment that PNP and AB engaged in subterfuge by utilising an empowerment scheme for deceitful purposes. More particularly, that PNP was using the scheme and AB as a sham to avoid its legal obligations toward its employees. It was consistent with the workings of a genuine employment scheme that AB carried on business in PNP’s premises and that PNP supplied AB with equipment and tools. The LAC upheld the LC’s judgment. |
VALUE
Section 200B can’t be used generally to determine who the true employer of an employee is. However, it can be utilised to scrutinise any conceivable relationship or arrangement for purposes of liability, provided that a case for such scrutiny has been made out, and it is done fairly.
Written by Jordan Dias and Pierre van der Merwe
