WORKSHOP 1

WORKSHOP ON THE PROPOSED AMENDMENTS TO THE LABOUR RELATIONS ACT, THE BASIC CONDITIONS OF EMPLOYMENT ACT, THE EMPLOYMENT EQUITY ACT AND THE INTRODUCTION OF THE EMPLOYMENT SERVICES BILL

Cost R2 000,00 (Includes Manual, Lunch & teas)

1.        INTRODUCTION

In this course we are looking at four bills, three of which are proposing amendments to current labour legislation namely The Labour Relations Act, The Basic Conditions of Employment Act and the Employment Equity Act.  The fourth bill is a new bill called The Employment Services Bill.  Thus, the four bills to be discussed are:-

·         Labour Relations Amendment Bill (LRA Bill)

·         Employment Services Bill (ES Bill)

·         Basic Conditions of Employment Amendment Bill (BCEA Bill)

·         Employment Equity Amendment Bill (EEA Bill)

Currently in our labour legislation or employment law, we have a number of acts:-

·         Unemployment Insurance Act 30 of 1966

·         Occupational Health and Safety Act 85 of 1993

·         Mine Health and Safety Act 26 of 1996

·         Compensation for Occupational Injuries and diseases Act 130 1993

·         Employment Equity Act 55 of 1998

·         Labour Relations Act 65 of 1995

·         Basic Conditions of Employment Act 75 of 1997

·         Skills Development Act 97 of 1998 and the Skills Levies Act 9 of 1999  – If the amendment to the Basic Conditions of Employment act is passed, this act will be assigned to another minister instead of the Minister of Labour.

1.        UNDERSTANDING THE DIFFERENT EMPLOYMENT SYSTEMS – THE DIFFERENCE BETWEEN FIXED TERM EMPLOYEES, PERMANENT EMPLOYEES AND INDEPENDENT CONTRACTORS

1.1        Fixed term or limited duration contracts hire employees for a fixed or limited period of time be it three months or three years.  Usually employees are hired to do a specific task such as work on a specific project or cover for an employee who is on maternity leave.  Thus, the nature of the particular task or job to be done determines the length of the contract.

1.2        Permanent employment contracts  (unlimited duration or time) mean the employee is providing an ongoing service and the nature of the service is not limited by time. Thus, a teacher, secretary or receptionist is hired to perform an ongoing service and their service is the focus of the contract

1.3        Independent contractor is an independent person or company who or which is not under the control or supervision of an employer.  Thus, an independent contractor does not usually have the benefits of an employee such as sick leave, annual leave or UIF  Their focus is to do a specific job and it is their business how they do that job.  Thus, an independent contractor does their work as part of their business or services that they offer and they usually have a number of clients.  A consultant, an attorney, a building contractor or a financial advisor would all be examples of independent contractors. 

1.4        Employers have often used fixed term contracts as a means to avoid the responsibilities of an employer.  Thus, the employer could simply state your contract has expired without having to go through dismissal procedures and issues of substantive and procedural fairness.  Many employers used a three month fixed term contract as a form of probation.  Further, many employers differentiated between what they call their “temp staff” on fixed term contracts and their ”permanent staff”.  Thus, the temps on fixed term contracts did not have benefits such as medical aid or pension while the permanent staff had all these benefits.

1.5        The proposed amendments, as per section 19 of the Labour Relations Amendment Bill inserting section 200 B, states that an employee must be employed permanently unless the employer can establish a justification for the fixed term contract.

1.6        Further, section 2 of the Employment Equity Bill inserts a clause that a difference in terms and conditions of employment between employees of the same employer performing the same or substantially the same work of equivalent value is a form of unfair discrimination.

1.7        Also section 2 of the Basic Conditions of Employment Amendment Bill inserts a clause that employers must contribute benefits of similar or equivalent value to employees on a fixed term contract as the benefits afforded to permanent employees.

1.8        In addition, sections 18 of the LRA Bill covers the presumption as to whom is an employee “until the contrary is proved, for the purposes of this act and any employment law, a person, who works for or renders services to, any other person, is presumes, regardless of the form of the contact, to be an employee, if any one or more of the following factors are present.”

(a)     The manner in which the person works is subject to the control or direction of another person;

(b)     The person’s hours of work are subject to the control or direction of another person;

(c)     In the case of a person who works for an organization, the person forms part of that organization;

(a)     the person has worked for that other person for an average of at least 40 hours per month over the last three months;

(b)     The person is economically dependent on the other person for whom he or she works or renders services.

(c)     The person is provided with tools of trade or work equipment by the other person; or

(d)     The person only works or renders services to one person

1.1        Further, section 23 of the LRA Bill inserts or amends various definitions:-

'contract of employment' means—

(a)     a common law contract of employment; or

(b)     any other agreement or arrangement under which a person agrees to work for an employer but excluding a contract for work as an independent contractor;";

 employee’ means any person employed by or working for an employer, who receives or is entitled to receive any remuneration, reward or benefit and works under the direction or supervision of an employer;”;

 ’employer’ means any person, institution, organisation, or organ of state who employs or provides work to an employee or any other person and directly supervises, remunerates or tacitly or expressly undertakes to remunerate or reward such employee for services rendered;”;

'employment law' includes this Act, any other Act the administration of which has been assigned to the Minister, and any of the following Acts:

(a)     the Unemployment Insurance Act, [1966 (Act No. 30 of 1966)] 2001 (Act No. 63 of 2001);

(b)     [the Skills Development Act, 1998 (Act No. 97 of 1998];

(c)     the Employment Equity Act, 1998 (Act No. 55 of 1998);

(d)     the Occupational Health and Safety Act, 1993 (Act No. 85 of 1993); [and]

(e)     the Compensation for Occupational Injuries and Diseases Act, 1993 (Act No. 130 of 1993); and

(f)      the Basic Condition of Employment Act, 1997 (Act No. 75 of 1997);"

"'independent contractor' means a person who works for or supplies services to a client or customer as part of the person’s business, undertaking or professional practice;”; and

:

"'serve' means to send by registered post, telegram, telex, telefax or to deliver by hand and:

(a)       in respect of the Labour Courts, any other method of service specified in the Rules of the Labour Court;

(b)       in respect of the Commission, any other method of service specified in the Rules of the Commission;”.

1.             WHAT DOES THE LABOUR RELATIONS ACT CURRENTLY COVER

The LRA covers issues which affect the employment relationship such as the right to freedom of association.  For example employees can join and participate in trade unions and employers can form employers’ organizations.  The LRA also regulates the organizational rights of trade unions, promotes and facilitates collective bargaining, regulates rights to strikes and lock outs, provides for employees joining in the decision making process via work place forums, provides simple procedures for resolution of disputes through the CCMA and establishes the Labour Court and Labour Appeal court.  Disputes at the CCMA would include unfair dismissals or retrenchments, unfair labour practices and BCEA contraventions can now be included.  The LRA also provides for the registration of trade unions. 

2.        THE PURPOSE OF THE AMENDMENTS TO THE LABOUR RELATIONS ACT

When a legislator introduces a new bill or act it is not always easy to think of all contingencies or problems that may occur.  Thus, an act is usually refined through case law interpretations and if necessary by later amendments.  Many of the amendments to the LRA and the BCEA relate to problems that occurred at the CCMA such as the employer trying to avoid the employment relationship via third parties or via ongoing fixed term contracts, or delays caused through technicalities raised by attorneys, lengthy litigations due to attorneys being present, employers being unable to enforce awards due to cost factors, delays caused by objections to the con-arb process, employers failing to arrive at conciliation proceedings and, thus, preventing any type of settlement.

3.             WHAT ARE THE AMENDMENTS TO THE LABOUR RELATIONS ACT AND HOW DO THEY IMPACT ON THE EMPLOYER AND EMPLOYEE

The Department of Labour is submitting the Labour Relations Amendment Bills for approval. This is the fifth amendment since the promulgation of the Labour Relations Act in 1995.

This Bill seeks to address concerns regarding preventing exploitation of workers. It aims to protect the employment relationship, introduce laws to regulate contract work, subcontracting and out- sourcing, addresses the problem of labour broking and prohibits certain abusive practices.” It aims to enhance the effectiveness of the the Labour Court, the COMA and the Department’s inspectorates; and to rectify the anomalies and clarifying uncertainties that have arisen from the interpretation and application of the three statutes.

THE AMENDMENTS

1.             Section 1- Amends section 43(3) of the LRA-statutory councils and collective bargaining

The Act provides for statutory councils to be established in sectors in which employers’ organizations and trade unions are unable to agree on the establishment of a bargaining council. Presently, statutory councils can ask the Minister to extend collective agreements concerning certain specified topics to all parties within their sector. It is proposed to amend section 43(1) to allow a statutory council to make such a request in respect of any collective agreement that it has concluded.

2.      Section 2 - Amends section 51(9)-Bargaining councils

The amendment of section 51(9) allows a bargaining council to establish dispute resolution procedures for its sector by collective agreement. Section 51(9) is amended to clarify that such a collective agreement may provide for a dispute resolution levy as well as for the council to charge a fee for dispute resolution services. A fee may only be charged if the CCMA charges a fee for that service and may not exceed the fee charged by the CCMA.

3.      Section 3 - Limitation on rights to strike and lock-out.

No person may participate in a strike or lock-out or any conduct to further a strike or lock-out if the issue in dispute is one that a party has the right to refer to arbitration or Labour Court in terms of the LRA or any other employment law

4.      Section 4 – Amends section 115 (2) and (2A) which covers the functions of the Commission (CCMA)

A range of amendments are made to the provisions dealing with the operation of the CCMA to facilitate the resolution of disputes and enhance the efficiency of the CCMA’s operation.

4.1    A number of amendments are proposed to the provisions empowering the Governing Body of the CCMA to make rules - the Governing Body is required to consider the adequacy of its rules at least every two years.

4.2    It is proposed that the CCMA should, on request, be able to assist a party to proceedings to serve documents on other parties and to enforce an arbitration award, if requested by a party to assist. These proposed functions will facilitate the operation of the CCMA. Presently, parties are obliged to serve documents themselves. There is evidence that employees are unable to serve documents or, where they have done so, they are unable to prove that there has been service. In these circumstances, it is appropriate that the CCMA should be able to utilize its resources to ensure that proper notification is given to parties so that they have the opportunity to decide whether to participate in proceedings and to prevent claims of non-service being used to frustrate dispute resolution.

4.3    Many employees are unable to enforce awards in their favour because the practice of the Deputy Sheriffs is to require the payment of deposits before executing awards .

4.4    The amendment of subsection “2A (k)” empowers the CCMA to make rules regarding representation, whether to allow or prohibit representation in any conciliation or arbitration proceedings. By doing that it gives the CCMA discretion whether to allow or prohibit representation by looking at the complexity of the matter.

4.5    The insertion of section (k A) under paragraph (2A) provides for the Commission to make rules regarding the consequences of parties failing to attend a conciliation or arbitration.

The CCMA’s function of providing training and assistance to stakeholders is extended to all employment legislation.

Thus, to sum up

·  The governing body of the CCMA has an added power to review any rules made in terms of this section at least every two years.

·       The CCMA if asked can assist a party with service.

·       The CCMA if asked can assist with the enforcement of an arbitration award that has been certified under section 143 (3)

·       The CCMA can make rules re representation and so has a discretion in this regard which it does not have now.

·       The CCMA is empowered to make rules regarding the consequences for any party not attending conciliation or arbitration proceedings.

·       The CCMA will be able to provide training on all employment legislation

5.      Section 5 - Amends section 136-Appointment of Commissioner to resolve dispute through Arbitration

          If the LRA requires a dispute to be resolved through arbitration, the Commission must appoint a commissioner to arbitrate if a commissioner has issued a certificate stating that that dispute remains unresolved or the thirty day period or any further period agreed between the parties has ended and the dispute remains unresolved.  Thus, the Commission is given the authority to appoint a Commissioner to arbitrate over matters that remain unresolved between the parties for 30 days or any further agreed period in order to facilitate speedy resolution of matters..

6.      Section 6 - Changes the status of arbitration awards (section 143)

Proposed changes to section 143 would change the status of CCMA arbitration awards. The purpose of this is to facilitate the enforcement of awards by removing the need for a writ to be issued by the Labour Court before an award can be executed. In addition, if an award is executed for an amount of compensation that is within the Magistrate’s Court jurisdiction, the fees for execution will be at the Magistrate’s Court tariff rather than the High Court tariff. This will assist in the speedy resolution without taking the route of lengthy litigation. If you have an award you can have the writ issued immediately without making an application to the Labour Court if the employer fails to comply with the order.

7.      Section 7 – Extends rescission and variation to include certificates as well as arbitration awards and rulings (section 144)


The power of Commissioners to rescind or vary erroneous or improperly obtained rulings and awards is extended to cover the issue of certificates at the conclusion of conciliation and not only the arbitration awards. The grounds on which certificates, rulings and arbitration awards can be varied or rescinded are extended to include good cause”. (Si 44(d)) This is consistent with the jurisprudence of the Labour Court on this issue.

8.      Section 8 – Amends section 147 (6) regarding agreements in respect of private arbitration

The CCMA provides employees with access to expedite dispute resolution without any charge. However, there has been a practice by certain employers to seek to avoid these provisions by, for instance, requiring employees in their contracts of employment to agree to share the costs of arbitrations. While these clauses are not enforceable and the COMA is entitled to hear these disputes, a new sub section (6A) is inserted to clarify that the COMA must deal with such a dispute if a private dispute resolution procedure either requires the employee to pay the costs of the arbitration or the arbitrator is not independent of the employer.

9.      Section 9 – Substitution of section 150 of the LRA - Intervention in disputes in the public interest

The Commission may appoint a commissioner to resolve a dispute through conciliation irrespective of whether that dispute was referred to the Commission or a Bargaining Council.  This can happen if it is at the request of the parties to the dispute or if the Director of the CCMA believes it is in the public interest.

These amendments are proposed to extend the power of the CCMA to intervene to resolve disputes in the public interest. Presently, this can only be done with the consent of both parties and it is proposed that this could be done in other disputes after the Director of the COMA has consulted with the parties. This power has been used to provide conciliation in high profile disputes which have given rise to industrial action or the threat of industrial action. The appointment of a commissioner in terms of this section suspends the right of an employee to strike or an employer to lock out.

LABOUR COURT

10.    Sections 10 & 11 – Substitutes sections 157 and 158 of the LRA and covers the jurisdiction and powers of the Labour Court  

10.1       The jurisdiction of the Labour Court is clarified and expanded. The Labour Court’s exclusive jurisdiction is extended to the interpretation of all employment laws, all matters concerning the termination of contracts, constitutional matters arising from employment or labour relations and reviews of administrative actions in terms of any employment law. It is also clarified that, in line with the jurisprudence of the Constitutional Court, the Labour Court will have exclusive jurisdiction for issues of labour law in the public service. These changes will prevent ‘Iorum shopping” by parties as well as prevent the emergence of conflicting jurisprudence in the specialist Labour Court and the High Court. (s. 157(1))

10.2       Provisions dealing with the jurisdiction of the Labour Court which were initially included in section 158 (which deals with the court’s powers) are to be moved to section 157. In addition, the review powers of the Labour Court are adjusted to be consistent with The Promotion of Administration Justice Act (PAJA) (s 158(1) (g)) This applies to reviews other than those dealing with arbitration awards. Similar amendments are made to other labour legislation.

10.3       Decisions made during conciliation and arbitration hearings may only be reviewed after the conclusion of the arbitration. (s 158(1) (b)) This provision is introduced to prevent the obstructive use of piece-meal reviews to delay dispute resolution in the CCMA(s 158 (1 B)). This amendment is justified by the need to ensure that the CCMA is able to resolve disputes in an expeditious manner.

10.4                   The Labour Court Rules Board is required to review the Labour Court rules at least once every two years.

 

Thus, as per section 10, subject to the Constitution the Labour Court has exclusive jurisdiction in respect of—

(a)       a matter that is required to be determined by the Labour Court in terms of this Act or any other  employment law;

(b)       the interpretation or application of any employment law;

(c)        a dispute concerning the termination of a contract of employment;

(d)       a constitutional matter arising from employment or labour relations;

(e)       subject to section 145, review any administrative action taken in terms of this Act or any employment law;

(f)        a dispute between a trade union or an employers organisation and a member or applicant for membership of the union or organisation, as the case may be, about an alleged non-compliance with the constitution of the union or organisation or section 25(5)(b);

(g)       hear and determine any appeal in terms of section 35 of the Occupational Health and Safety Act, 1993 (Act No. 85 of 1993); and

(h)       any other matter arising from employment or labour relations.

                        (2)       If the CCMA or a bargaining council has exclusive jurisdiction in a particular matter, no party may refer such matter to the Labour Court before finalisation by the CCMA or a bargaining council. 

                        (3)       If proceedings concerning any matter contemplated in terms of subsection (1) are instituted in a court or tribunal that does not have jurisdiction in respect of that matter, that court or tribunal may at any stage refer those proceedings to the Labour Court for determination.".

DISMISSAL

12.    Section 12- Changes in dismissal law (sections 186)

Amendments are proposed to clarify aspects of the law on unfair dismissal. These are —

The basis on which an employee engaged on a fixed term contract
can allege unfair dismissal is extended to cover cases in which the employee alleges a reasonable expectation that the employer would offer him or her indefinite employment- section186(b) (ii) This is to regulate  and overcome problems with contract work.

(b)        an employee engaged under a fixed term contract of employment reasonably expected the employer

(i)      to renew a fixed term contract of employment on the same or similar terms but the employer offered to renew it on less favourable terms, or did not renew it; or

(ii)        to offer the employee an indefinite contract of employment on the same or similar terms but the employer offered it on less favourable terms, or did not offer it, where there was reasonable expectation;”; and

The meaning of unfair labour practice is extended in section 186 (2) to include the liability of a client company as well as the employer.   Thus, unfair labour practice means any unfair act or omission that arises between an employer and client company in sub-contracting cases and an employee involving unfair conduct re promotion, demotion, probation, training, unfair suspension or disciplinary action, a failure or refusal to reinstate and an occupational detriment other than dismissal in contravention of the protected disclosures act 2000.

 

13.    Section 13 Inserts section 187 A which limits the application of Chapter VIII (unfair dismissals and unfair labour practice)

          The amendment seeks to exclude employees earning more than the prescribed threshold from referring their labour disputes to the CCMA. This will ensure that vulnerable employees are not prejudiced because of the delays caused by the volume of complaints from employees who can afford to approach the courts.  Thus, an employee earning over the threshold may not refer labour disputes with regard to sections 185,186, 188, 189, 189A and 197 to the CCMA

14.    Section 14 Enquiry by arbitrator (section 188A amendment)

14.1       The concept of the “pre-dismissal arbitration” introduced in 2002 is renamed as an enquiry by an arbitrator. While this procedure in terms of which an arbitrator chairs an internal enquiry into allegations about an employee’s conduct or capacity offers considerable potential savings to employers and employees by avoiding a duplication of  internal enquiries and arbitration hearings, little use has been made of it. In order to facilitate more extensive use, it is proposed that collective agreements should be able to provide for inquiries by an arbitrator. This will allow employers and trade unions to agree on using this form of enquiry in disciplinary codes that are established by collective agreement.

14.2       In addition, an enquiry of this type is made mandatory on the request of either the employer or the employee in two cases. The first is if the employee alleges that the dismissal would be automatically unfair because the employee is seeking to dismiss the employee for exercising a protected right under section 5 of the LRA. The second is “whistle-blower cases in which the employee alleges that an employer is seeking dismissal in response to a protected disclosure under the Protected Disclosures Act. The latter type of case can give rise to protracted litigation over whether the employer is entitled to conduct an enquiry. This can be abused by persons other than genuine “whistle-blowers” to delay legitimate disciplinary processes. An enquiry by an arbitrator will ensure that there is an immediate investigation into the substance of the allegations and will lead to a very much quicker resolution of these disputes.

15.      Section 15 Conciliation through arbitration (Con-arb) proceedings (section 191 (5A amendment))

15.1    There are usually two phases in a CCMA matter.  First, there is conciliation which is an attempt to settle or conciliate the dispute.  Second, there is arbitration where evidence is presented by both parties in the form of witnesses and documents followed by legal argument. 

The “con-arb” process allows arbitration proceedings to commence immediately after the end of conciliation phase. This change, which was introduced in 2002, has contributed to a significant reduction of the period taken to resolve disputes. However, in terms of section 191(5), either party may object to a dispute being dealt with in terms of the “con-art” process. CCMA statistics show that objections to “con-arb” are lodged in roughly 30% of cases significantly delaying the resolution of disputes. It is proposed that all disputes should be dealt with by “con-arb” unless the commissioner and all the parties agree that “con-arb” is not appropriate or the commissioner concludes that it is unreasonable. This will ensure that an increasing proportion of cases are dealt with through “con-arb” while more complex cases can be postponed to allow the parties to prepare.

            15.2    Section 15 also substitutes section 191 12

            Individual dismissals for operational requirements (section 191 (12))

            An employee dismissed for operational requirements can choose to refer the dispute to arbitration or labour court under two circumstances:-

a)     The consultation process applied to that employee only and the dismissal for operation requirements applied to that employee only.  OR

b)     The employer employs less than 10 employees

Thus , the right of dismissed employees to refer an “individual” operational requirements dismissal to arbitration is clarified. This is necessitated by conflicting Labour Court decisions on the matter. In addition, employees of employers with less than 10 employees will be able to refer retrenchments to the CCMA for arbitration.

16.      Section 16 - Transfers of businesses as a going concern (section 197)

The application of section 197 to “second generation” transfers in which work that has been previously outsourced is transferred from one service provider to another is clarified.

17.      Section 17 - Temporary Employment Services -repeal of section 198

17.1    Section 198 of the RLA on temporary employment service is repealed by section 17 of the LRA Bill.

            A temporary employment service means a person who for reward, procures or provides to a client other people who render a service or perform work and who are paid by the temporary employment service.  Thus, temporary employment services are essentially labour brokers.  ]

17.3    There were many problems at the CCMA regarding labour brokers as often there was confusion as to the identity of the true employer.  Often the client company would want an “employee” dismissed and tell the labour broker to remove the employee.  This resulted in unfair dismissals with neither party wanting to accept responsibility for the dismissal.  The labour broker would blame the dismissal on the client company and the client company would argue that it is the labour broker’s problem.  Due to this confusion and many technical points (points in limine) being raised regarding the employment relationship, the legislator has repealed this section.

17.4    Unlike Namibia, which did ban agency work under section 128 of their Labour Act, our legislator has not expressly prohibited labour brokers.  Instead section 9 of the BCEA Bill amends section 55 of the BCEA by inserting a clause stating that the Minister of Labour may make sectorial determinations regarding prohibiting or regulating task based work, piece work, homework, the placement of employees by temporary employment services, sub-contracting and contract work.  Thus, the Minister of Labour can at any time prohibit or limit the role of labour brokers.

            However, in the Namibian appeal case of Africa Personnel Service versus the Government of Namibia, the applicant challenged the constitutionality of section 128 of the Labour Act prohibiting agency work.  The court held that one has to balance various freedoms such as the right to contract with the need to protect people.  Thus, the court held that this section should be overturned as it limited people’s freedom in terms of their right to contract.  The court further held that the legislature could balance the need for freedom with the need for protection by replacing restrictions or limitations on agency or temp work for unskilled labourers as opposed to skilled labourers who should have the capacity to be aware of any pitfalls in the system.  Thus, the removal of the right to contract was regarded as too onerous when weighed against the need for protection by a certain group or class of person.  Accordingly, our legislature is currently debating the issues regarding labour broking and will certainly look at the Namibian case as a reference point.  It remains to be seen whether there will be an express prohibition on labour broking per se.

PROVISIONS PROTECTING VULNERABLE EMPLOYEES

18.       Section 18 Amends section 200A - Presumption of who is an employee

            This section broadens the presumption of who is an employee to apply to just not the labour relations act, but any employment law

19.       Section 19 Inserts section 200B - Declaring Temporary Employment to be permanent

19.1    The Bill proposes a declaration of indefinite employment. In other words, an employer that engages employees on a fixed-term basis will have to demonstrate a justification for doing so. Such a justification will be present if the employee was engaged to work on a specific task (eg: the building of a particular building, replacing a person who is on maternity, ect.) or on a task that lasts for a specific period. The purpose of this clause is to prevent the use of “fixed term” contract as a basis for depriving employees who are engaged for work of indefinite duration of security of employment. It is proposed that the clause should only apply to employees who are earning below a threshold set by the Minister of Labour (section 200B). As a result, the presumption will not impact on the use of fixed term contracts in respect of managerial and other senior employees.

19.2    Section 19 also inserts section 200C which provides for the liability of a client company in sub-contracting, where there is an unfair labour practice.  Thus, proposed section 200C addresses the issue of employees to have recourse against client companies in cases of unfair labour practices in sub-contracting.

 20.     Section 20 deletes section 201 (3) of the LRA as the penalties have changed.  The deletion seeks to align with the table provided in the new section 209 which deals with offences and penalties. There is no need for these provisions as they are addressed in the table.

21.       Section 21 amends section 203 of the LRA - NEDLAC and Codes of Good Practice

The Minister may place proposals before NEDLAC for new codes of good practice or to revise existing codes. If the NEDLAC stakeholders are unable to reach consensus on a code of good practice after six months of consultations, the Minister will be empowered to issue a code of good practice. This provision seeks to ensure that codes of good practice are updated and balances the importance of stakeholder consultation with the requirements of good governance.


22.       Section 22 inserts section 209A - Offences and Penalties  

The amendment seeks to strengthen compliance of Labour Relations Act and enforcement by Labour inspectors. The new provision will also empower inspectors to issue fines and lay criminal charges to that employer who contravenes section 201 and 205 of this Act. It also gives time frames in order to expedite the process.

 

23.       Section 23 adds new definitions to section 213

23.1    'contract of employment' means—

(a)       a common law contract of employment; or

(b)       any other agreement or arrangement under which a person agrees to work for an employer but excluding a contract for work as an independent contractor;";

23.2    “employee’ means any person employed by or working for an employer, who receives or is entitled to receive any remuneration, reward or benefit and works under the direction or supervision of an employer;”;

 23.3      “’employer’ means any person, institution, organisation, or organ of state who employs or provides work to an employee or any other person and directly supervises, remunerates or tacitly or expressly undertakes to remunerate or reward such employee for services rendered;”;

23.4    "'employment law' includes this Act, any other Act the administration of which has been assigned to the Minister, and any of the following Acts:

(a)       the Unemployment Insurance Act, [1966 (Act No. 30 of 1966)] 2001 (Act No. 63 of 2001);

(b)       [the Skills Development Act, 1998 (Act No. 97 of 1998];

(c)       the Employment Equity Act, 1998 (Act No. 55 of 1998);

(d)       the Occupational Health and Safety Act, 1993 (Act No. 85 of 1993); [and]

(e)       the Compensation for Occupational Injuries and Diseases Act, 1993 (Act No. 130 of 1993); and

(f)        the Basic Condition of Employment Act, 1997 (Act No. 75 of 1997);";

23.5    A new definition of the term “contract of employment” clarifies that any contract or arrangement in terms of which an employee agrees to work for an employer, as defined in the LRA, is a contract of employment. This clarifies an uncertainty that has arisen from the fact that the statutory definition of an employee is broader than the equivalent common law concept. The need for this has been identified in several Labour Court decisions as well as by the SA Law Commission. At the same time, a new definition of an “independent contractor” is inserted to ensure that the fraudulent “independent contracting” is not used to disguise employment relationships.
In addition, the definition of an “employment law” addresses the reference to the old Labour Relations Act, and adds the Basic  Conditions of Employment as one of the legislations administered by the Minister of Labour and to remove the Skills Development Act as it is no longer assigned to the Minister of Labour.
the term “serve” (serving of documents and notices) is made consistent with other employment laws.

Other definitions that were amended are: Employee, employer, and the workplace are defined for alignment with other employment laws as defined in Occupational Health and Safety Act, to extend the definition to address the new developments in the labour market.


24.       Section 24 - Transitional provisions

A transitional provision requires the Minister to invite representations three months before the repealed section 198 comes into effect on categories of temporary work in which placement by temporary employment services to address those temporary placements that are already in place should be permitted is proposed. In addition, provisions to phase in the revised jurisdiction of the Labour Court are included.

 

1.                  UNDERSTANDING THE EMPLOYMENT SERVICES BILL AND ITS IMPACT ON EMPLOYERS AND EMPLOYEES

INTRODUCTION

The bill aims to reduce unemployment, improve job creation and promote employment growth and productivity.  This will be achieved through a number of vehicles such as:-

a)        Public employment services which provides free services to citizens such as:-

·                     registration of job seekers

·                     registering of placements opportunities

·                     matching services

·                     referrals to training

·                     careers’ information.

b)            Registration and licensing of private employment agencies

c)            Establishment of Employment Services Board

d)            Establishment of Productivity South Africa

1.1         The role of public employment services (PES)

6.1.1   Clause 5 lists the services that should be provided by the PES.  These include inta allia:-

·                     Matching work seekers with available work opportunities

·                     Registering work seekers

·                     Registering job vacancies and other placement opportunities

·                     Facilitating placement of work seekers with employers

·                     Advising workers on access to social security benefits

·                     Providing specialized services assisting specific categories of work seekers such as the youth, entrants into the job market, disabled people and rural people

·                     Facilitating information exchange amongst employers, workers, work seekers, private agencies, SETA and other training authorities

·                     Also perform any other function in terms of an employment law

·                     The Department of Labour can also provide services such as career counselling , work seekers assessments and life skills to secure employment

6.1.2    Clause 6 empowers the Minister to establish work schemes for the employment of unemployed youth

6.1.3    Clause 7 deals with promoting of employment of people with disabilities

            This section provides for the establishment of sheltered employment factories. The Service Product Factories established in 1948, are given legal status and established anew as Sheltered Employment Factories.  People with disabilities should be given on the job training to promote their access to formal and self - employment.

6.1.4    In Clause 8 the minister is empowered after consultation with Nedlac to establish employment promotions schemes in response to economic recession and company closures and pending retrenchments or lay-offs  

1.2         The implications of employing foreign workers

1.2.1      Clause 9 of the Employment Services Bill deals with the issue of employing foreign workers.  Employing a foreign worker must not compromise a South African citizen’s opportunity for employment.  An employer can only employ a foreign national if the foreign national produces a valid work permit issued in terms of the Immigrations Act.  The minister can publish categories of work within which foreign nationals may be employed.  There are various steps an employer must follow before hiring foreign nationals:-

·               Make use of public employment services

·               Give reasons to the Director General (within fourteen days of employment of foreigner) while the employer cannot employ other people referred to them by the department

·               Provide proof of testing local labour market via recruitment campaigns

·               Provide a detailed skills transfer plan if the foreigner falls into the scare skill category. 

Steps an employer should not follow:

·               Employ a foreigner to work for a third party

·               Require a foreigner to do work outside the sphere of the permit

·               Dismiss a South African citizen to employ a foreigner

·               Threaten or force a foreigner to do work against his or her will

1.3                  Clause 10 of the PES provides for the reporting and registration of existing or new vacancies by employers with the Public Employment Services and  the employment of people referred by the Public Employment Services.

1.4                              Clause 11 provides for the type of statistical information that the Department may collect to inform policy makers regarding developments in the Labour Market.

1.5                  Clause 12 provides for the kind of information that the Public Employment Services may collect from skills development and education and training institutions in order to assist in the referral of work seekers for further learning.

1.6                  Clause 13 provides for sources of funding that could be utilized to mobilise resources to create employment; to promote re-integration of retrenchees or workers who lost their employment as a result of injuries or illness; and to preserve employment.


OBLIGATIONS AND DUTIES OF PRIVATE EMPLOYMENT AGENCIES

·              Clause 14: provides for the registration and licensing of any person or body who wants to operate as a private employment agency and the consequences for operating a business in this area without a licence.

·              Clause 15: provides functions that Private Employment agencies are to be licensed for.  Thus, private employment agencies functions are limited to:

a)     Matching work seekers

b)     Referring workers to employers

c)      Career information including vocational assessments and other related life skills

·                      Private agencies may not provide false employment services information, operate without a lawful licence, transfer or counterfeit the licence of another private agency or keep the ID documents or qualification certificates of work seekers.

·                      Clause 16: prohibits Private Employment Agencies from charging work seekers any fee for services rendered.

·                      Clauses17 and 18 provide for safeguarding of work seekers information and prohibits the abuse of such information.  Thus, a private agency must keep an up to date electronic and manual register showing work seekers registered with them, work seekers placed in employment and employer particulars of placed workers.  These records must be kept for five years.

Clauses 19 and 20 provides powers and conditions under which the registrar of Public Employment Services can withdraw a private employment agent’s licence and the appeal process in case of dissatisfaction with

THE ROLE OF THE EMPLOYMENT SERVICES’ BOARD

6.7.1   Clauses 21 and 22: provide for the establishment of the Employment Services Board, the advisory functions to the Minister that they must render and bodies that they can liaise with in order to fulfill their functions.

6.7.2   Clause 23: describes the functions of the board which are to advise the Minister on employment services strategy, employment trends and statistics, employment schemes and opportunities, regulations to be made or any matter related to employment services.  In addition, the board must liaise with the department and other bodies regarding employment services.

6.7.3   Clause 24 provides for the composition of the Board, the nomination process of Board members and the constitution of the Board to govern its business.

6.7.4   Clauses 23 and 24:provides for the composition of the Board, the nomination process of Board members and the constitution of the Board to govern its business.

6.7.5   Clauses 25 and 26 provides for the administrative support to be provided by the Department to assist the Board to fulfill its functions and the remuneration of Board members.

 

 

 

6.8       THE ROLE OF PRODUCTIVITY SOUTH AFRICA

6.8.1   Productivity South Africa is established as a juristic person to promote employment growth and productivity

6.8.2   Clauses 28 and 29 provide the functions and composition of Productivity South Africa Board.

6.8.3   Clause 30 provides areas that the constitution of the Board of Productivity South Africa must address to govern its procedures and business.

6.8.4   Clause 31 provides for remuneration of members of Productivity South Africa Board.

6.8.5   Clause 32 provides for the financing of Productivity South Africa through state grants, self -funding and donations.


6.9       LABOUR COURT JURISDICTION AND GENERAL PROVISIONS

6.9.1   Clause 33 provides for the Labour Court to have overall jurisdiction in so far as settling disputes that may arise in the implementation of this Act.

6.9.2   Clause 34 provides for the monitoring and enforcement of the provisions of the Act in accordance with Schedule two of the Basic Conditions of Employment Act.

6.9.3   Clauses 35 and 36: provides for contraventions of the Act and applicable penalties.

6.9.4   Clause 37 provides procedures that the Minister and the Director General must follow when delegating officials in the department to perform functions outlined in the Act on their behalf

6.9.5   Clause 38provides areas in which the Minister may make regulations to achieve the purpose of the Act.

 

1.                  WHAT ARE THE AMENDMENTS TO THE BASIC CONDITIONS OF EMPLOYMENT ACT AND WHAT IS THEIR PRACTICAL EFFECT ON THE EMPLOYER AND EMPLOYEE

1.1               INTRODUCTION AND PURPOSE
This Bill is the second amendment since the promulgation of the Basic Conditions of Employment Act, 1997 (Act No. 75 of 1997). The aim of the bill is inter allia to provide benefits for contract workers, to provide for the prohibition of work by children as employees or independent contractors, to introduce laws to regulate contract work, to address the problem of labour broking,  to delete or repeal certain obsolete provisions  

1.2             Clause 1 outlines various definitions such as the contract of employment and independent contactor.  These definitions are the same as those in the amendment to the Labour Relations Act and, thus, bring the definition into alignment with other employment law.

1.3               Fixed term employees must have the same benefits as permanent employees Clause 2 of the Bill provides that employers must contribute benefits of equal or similar value to fixed term contract workers as the benefits afforded to its permanent employees

1.4               Employer cannot charge an employee or accepts benefits from an employee for employment

7.4.1      Clause 3 of the Bill seeks to prohibit employers from seeking, requiring or accepting any benefit or payment from an employee or a prospective employee in respect of their employment or the allocation of work to the employee. There are examples where employees working for a company operating parking meters for a Council were required to make a payment to the employer in order to secure employment for the day.

7.4.2   Employers are also prevented from requiring an employee or a prospective employee to purchase any goods from a business that the employer operates or from any other business or person nominated by the employer. Clauses preventing this potentially exploitative practice are found in many bargaining council collective agreements.

 

 Prohibition of work by children

7.5.1   Clause 4 of the Bill seeks to prohibit and regulate the exploitation of children. Clause 4 prohibits work by children as an employee or independent contractor if the child is under the minimum school leaving age or the age of 15 years. This amendment is required to achieve full compliance with South Africa’s obligations under the relevant International Labour Standards as well as to create consistency with the Constitution and other legislation protecting the rights of children. In addition, the maximum prison term for breach of child labour provision is increased from three to six years.

7.5.2   Clauses 5, 6, 7 and 8 which correspond to amendments in chronological order of sections 44, 45 46 and 47 of the BCEA also relate to the regulation of working of children

7.5.3   Breach of this proposed provision is a criminal offence.

7.6         The scope of sectorial determinations including the prohibiting of placement of employees by temporary employment services, sub-contracting and contact work

7.6.1   Section 9 amends section 55 with regard to the powers of the minister and the employment conditions commission to make sectorial determinations. Thus, the powers of the Minister and the Employment Conditions Commission in respect of sectorial determinations are clarified and adjusted. Clause 9 proposed the following changes—

 (a)      the Minister may issue an “umbrella” sectorial determination covering employees not covered by any other sectorial determination or by a bargaining council collective agreement;

(b)     a sectorial determination may apply to bargaining councils in respect of matters not dealt with by collective agreements concluded by the bargaining council;

(c)     A sectorial determination may prescribe minimum rates or increases in remuneration.  Also the minister may prohibit or regulate task-based work, piecework, homework, the placement of employees by temporary employment services, sub-contracting and contract work.

(d)     A sectorial determination, subject to the LRA, may prescribe a threshold of representativeness for a registered trade union to have the organisational rights of access to employer premises and deduction of trade union subscriptions in respect of workplaces covered by the sectorial determination. Currently only a bargaining council agreement can include such a provision.

7.7      Functions of Labour Inspectors

            Clause 10 of the Bill amends the functions of the labour inspector by deleting the provision that provides for a labour inspector to secure undertakings and issue compliance orders when endeavoring to ensure compliance with an employment law. This is aligned with other employment laws.

7.8      Powers of Entry

Clause 11 of the Bill seeks to provide for an interpreter, a member of the South African Police or any other assistant to accompany the labour inspector when performing his or her functions under this Act. The need for labour inspectors to be accompanied by members of the Police stems from certain incidents where the inspectors were threatened and physically assaulted and refused entry to premises to execute their mandate. In ensuring good communication between labour inspectors and employers during inspections, there is a need for interpreters to accompany the inspectors to overcome language barriers.

7.9      Clause 13 repeals sections 68; 69; 70; 71; 72 and 73
Clause 12 of the Bill seeks to repeal certain sections of the Act to address the delay caused by issuing of undertakings and compliance orders by inspectors. It has been identified that the employers are abusing these provisions and use them as delaying tactics.  Thus, it deletes the references to obtaining undertakings and issuing compliance orders


7.10    Clause 14 provides for Joinder of BCEA claims with unfair dismissal cases

The jurisdiction of the Labour Court and the CCMA to adjudicate on matter arising from the provisions of the Act in the course of hearing an unfair dismissal case is extended to cover a claim for an amount owing to the employee under the Act if that claim has not prescribed. Once the Court or arbitrator has determined the matter, no compliance order or other proceedings can be continued or brought in respect of the claim. This will avoid the need for extra claims and prevent the unnecessary duplication of proceedings and will also ensure the effective use of the resources of the Labour Court, CCMA and the Department.

7.11    Jurisdiction of Labour Court
Clause 15 amends section 77(1) and 77(3) of the BCEA so that the Labour Court has exclusive jurisdiction with regard to all claims in terms of this act.  Thus, this prevents forum shopping.

7.12    Jurisdiction of Labour Court
Clause 16 of the Bill deletes provisions regarding compliance orders and the varying of setting aside of compliance orders. Thus, certain aspects of the jurisdiction of the Labour Court are repealed as the provisions relating to the Court’s jurisdiction are to be consolidated in amendments to section 157 of the Labour Relations Act. The jurisdiction of the Labour Court to review administrative actions in terms of the Act is aligned with the Promotion of Administrative Justice Act, 2000 (Act No.3 of 2000).

7.13    Penalties
Clause 18 seeks to impose heavy penalties for offences and contravention of the provisions of this Act.


7.14    Repeal of section 95

Clause 18 seeks to repeal the transitional provisions in the Act which are no longer relevant.



 

 

 

 

1.                  WHAT ARE THE AMENDMENTS TO THE EMPLOYMENT EQUITY ACT

 

INTRODUCTION AND PURPOSE OF BILL

The aim of the bill is to prohibit a difference in the terms and conditions of employees for the same employer performing substantially the same work, to provide for the certification of psychometric testing, to provide for certain employees to refer unresolved disputes to the CCMA and to empower the Director General to impose fines.

8.1       Clause 1 of the bill provides definitions

8.1.1   Clause 1 seeks to amend the definition of “designated group” to ensure that the beneficiaries of affirmative action in terms of Chapter Ill of the Employment Equity Act are limited to persons who were citizens of the Republic of South Africa before the democratic era or would have been entitled to citizenship but because of policies of Apartheid those people arid their descendants were not allowed citizenship. The proposed definition seeks to provide that the employment of persons from the “designated groups” who are foreign nationals or became citizens subsequent to April 1994 will assist employers to meet their affirmative action targets.

8.1.2   Clause 1 also seeks to amend the definition of “labour inspector to correct the cross reference to section 65 instead of section 63 of the Ad.

8.1.3   Clause 1 seeks to insert new definitions and amend certain definitions to provide clarity and to align the Act with other legislation.  Thus, clause 1 also defines turnover, serve and independent contractor


8.2 Clause 2: Equal pay for work of equal value

8.2.1   Clause 2 amends section 6 of the Act by adding subsection (4) which deals explicitly with unfair discrimination by an employer in respect of the terms and conditions of employment of employees doing the same work, similar work or work of equal value. A differentiation based on a prohibited ground listed in subsection (1)  amounts to unfair discrimination unless the employer can show that difference in wages or conditions of employment is in fact based on fair criteria such as experience, skill, responsibility and qualifications.  The Minister may issue a code of good practice regarding the criteria and methodology for assessing work of equal value.

8.2.2   The lack of a provision dealing expressly with wage discrimination on the basis of race and gender has been criticised by the International Labour Organisation. The failure to apply the principle of  equal pay for equal work is classified as an unfair labour practice in the Promotion of Equality and Prevention of Unfair Discrimination Act, which infringes the right to equality as provided for in section 9 of the Constitution and the right to fair labour practices as provided for in section 23 of the Constitution. The proposed amendment seeks to provide a basis for equal pay claims for same or similar work. Clause 2 also seeks to provide for the Minister of Labour, after consultation with the Commission, to issue a code of good practice setting out the criteria and the methodology for assessing work of equal value.

8.3      Clause 3: Psychometric testing
Clause 3 amends section 8 of the Act to provide that only psychometric tests that have been certified by the Health Professions Council of South Africa may be used in tests and assessments of an employee. This will ensure that that the testing used is scientifically valid, reliable and objective and cannot be used to unfairly discriminate and unfairly disadvantage a certain employee or a certain group of employees.

8.4      Clause 4: Disputes concerning discrimination
Clause 4 amends section 10 of the Act to provide for lower paid employees (those earning less than the earnings threshold prescribed under section 6(3) of the Basic Conditions of Employment Act, 1997 (Act No. 75 of 1997)) to refer a dispute based on discrimination (including equal pay claims) to the CCMA for arbitration. This will assist lower income employees in having their disputes adjudicated in a more cost effective manner.   Thus, this section protects potentially vulnerable and powerless employees in the low income bracket. 

8.5       The presumptions and onuses regarding unfair discrimination

8.5.1   Clause 5 seeks to substitute section 11 of the Act to align the burden of proof in
respect of a claim of unfair discrimination in the workplace with the Promotion of
Equality and Prevention of Unfair Discrimination Act.

8.5.2  The onus of proof is as follows:-

(1)       If the employee makes out a prima facie case of unfair discrimination, the respondent must prove that—

(a)       the discrimination did not take place as alleged; or

(b)       the conduct is not based on one or more of the prohibited grounds listed in section 6(1). (Section 6.1 lists the following as prohibited grounds for discrimination, namely race, gender, sex, pregnancy, marital status, family responsibility, ethnic or social origin, colou, sexual orientation, age, disability, religion, HIV status, conscience, belief, political opinion, culture, language and birth)

(2)       Discrimination is unfair, unless the respondent proves that the discrimination is fair, if the discrimination did take place—

(a)       on a prohibited ground listed in section 6(1);

(b)       on a ground not listed in section 6(1), and the discrimination—

(i)         causes or perpetuates systematic disadvantage in the workplace;

(ii)        undermines human dignity; or

(iii)             adversely affects the equal enjoyment of a person's right and freedom in a manner that is comparable to discrimination on a ground listed in section 6(1).

                        (3)       For the purposes of this section, a respondent includes an employer of the employee or any other person contemplated in section 6(1).".

 

8.6      Clause 6: Employment equity plan
Clause 6 amends section 20 of the Act to empower the Director-General to apply to the Labour Court to impose a fine when an employer fails to prepare or implement an employment equity plan in accordance with the provisions of this Act.


8.7       Clause 7: Report

8.7.1   Clause 7 amends section 21 of the Act to provide for all designated employers to submit annual reports on the implementation of their Affirmative Action Plans. Presently, employers with between 50 and 150 employees are only required to report every second year. Reporting can be done online and will not impose undue obligations on designated employers.

8.7.2   The proposed amendment seeks to empower the Director-General of Labour to apply to the Labour Court to impose a fine on an employer, who without a valid reason, fails to file its annual report. This seeks to ensure that designated employees adhere to the provisions of the Act.

8.8      Clause 8: Income differentials and discrimination

Clause 8 amends section 27 of the Act and provides that a designated employer must take measures to reduce disproportionate income differentials or unfair discrimination in terms of the conditions of employment. This is aimed at preventing end eliminating unfair discrimination in the workplace.

8.9      Clause 9: Undertaking to Comply
Clause 9 repeals section 36 of the Act because the process of obtaining a written undertaking from a designated employer to comply with section 36 delays the employer to comply with the provisions of the Act.


8.10    Clauses 10-13: Enforcement provisions


Clauses 10-13 amends sections 37, 39, 40, 42 and 45 of the Act to eliminate certain mandatory steps and criteria that must be taken into account in determining whether a designated employer is implementing employment equity in compliance with the Act. These proposed amendments aim to promote effective enforcement and prevent the use of reviews as a mechanism to delay the enforcement process. The proposed amendments do not prevent employers who are aggrieved by decisions from challenging these decisions at an appropriate juncture. The Director- General may apply to the Labour Court to impose a fine on an employer that does not comply with a request made during a review of the employer’s compliance with the Act or a recommendation made as a result of such a review.

8.11    Clause 14: Powers of Labour Court

Clause 14 amends section 50(1)(h) of the Act to empower the Labour Court to review administration actions in terms of the Employment Equity Act. This amendment aligns this Act with the Promotion of Administrative Justice Act.


8.12    Clause 15: Regulations

Clause 15 seeks to effect a grammatical correction to section 55 of the Act by empowering the Minister to make “regulations” instead of “a regulation”.

8.13    Clause 16: Delegations
Clause 16 seeks to abolish the limitation imposed on the power of  the Minister to delegate in terms of this Act. This clause seeks to empower the Minister to delegate the power to issue certificates of compliance with the Act.

8.14    Clause 17: Temporary employment service
Clause 17 repeals section 57 of the Act to align the Act with the Labour Relations
Act, 1995 (Act No. 66 of 1995).

8.15    Clauses 18: Schedule 1: Maximum permissible fines that may be imposed for contravening this act


Clause 18 seeks to repeal the Schedule 1 of the Act, which aims to increase the penalties for contravention of the provisions of this Act by imposing penalties that are linked to the annual turnover of the employer.


8.16    Clause 19: Turnover threshold applicable to business employers

Clause 19 seeks to amend Schedule 4 to the Act by increasing the total annual turnover that an employer must exceed to be classified as a designated employer. Thus, the turnover in agriculture changed from R 2 million to R 5 million.