south african labour law amendments 2012

Labour Law Amendments, 2012

For the SABPP

Presentation by Dr Linda Meyer CIMAP www.cimap.co.za October 2012

http://www.cimap.co.za/

Labour Law Amendments 2012

Labour Relations Amendment Bill, 2012 Basic Conditions Of Employment

Amendment Bill, 2012 Employment Services Bill, – Still to be

presented to Parliament Employment Equity Amendment Bill, – Still

to be presented to Parliament

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Freedom Charter 1955 Key elements of worker rights are succinctly enshrined in the Freedom Charter, providing: "All who work shall be free to form trade unions, to elect

their officers and to make wage agreements with their employers; there shall be a forty-hour working week,

a national minimum wage, paid annual leave, and sick leave for all workers, and maternity leave on full pay for all working mothers; miners, domestic workers, farm workers and civil servants shall have the same rights as all others who work; child labour, compound labour, the tot system and contract labour shall be abolished".


Background 2009 ANC Election Manifesto

Avoid exploitation of workers;

Ensure decent work for all workers;

Protect the employment relationship;

Introduce laws to regulate contract work;

Subcontracting and out- sourcing;

Address the problem of labour broking and

prohibit certain abusive practices.


Facilitate unionisation of workers and conclusion of sectoral collective agreements ;

To cover vulnerable workers in these different legal relationships;

Ensure the right to permanent employment for affected workers;

Procurement policies and public incentives will include requirements to promote decent work."


Background 2009 ANC Election Manifesto

BCEA & LRA

The NEDLAC negotiations concluded on amendments to the LRA and the BCEA in January 2012;

Revised Bills were submitted to Cabinet in April 2012 and they were approved for submission to the National Assembly;

Public Hearings and submissions are now complete and submissions have been made to the Office of the Chief State Law Adviser.


Unemployment & Competiveness

6.4 million unemployed South Africans: Predominantly youth Mostly prevalent in previously disadvantaged communities Typically not previously employed SA 133rd out of 139 in WEF Competitiveness Report Average wage settlements 2010 – 8.2% (2009 – 9.3%)* The number of working days lost due to strike action rose

from 2.9m days in 2009 to 14.6m day in 2010* The lower level civil servants in South Africa are of the best

paid employees for unskilled and semiskilled in the world today – Mike Schüssler (Economist.co.za)

Unemployment % Education

One’s salary nearly doubles between grade 11 and Matric.

After completing a bachelors degree, your salary rises by over 350% when compared to that of a Matriculant

Over a normal lifespan a person with a degree gets a 308% higher return than a person with just matric. Mike Schüssler (Economist.co.za)

Labour Relations Amendment Bill, 2012


Collective Bargaining and Organisational Rights - Section 21 Commissioner may determine Representativity- the

composition of the work-force 21(8)(b)(v), which states that where there is a dispute regarding whether the trade union is representative or not, a Commissioner must consider:

"the composition of the work-force ....taking into account the extent to which there are employees assigned to work by temporary employment services, employees engaged in fixed term contracts, part-time employees or employees in other categories of non-standard employment".


LRA Amendments

Collective Bargaining and Organisational Rights - Section 21- 1(b) to insert new subsections 21(8A) -(8D). Commissioner allowed in arbitration to grant a trade union,

that is not a majority union, the rights under sections 14 and 16 - the rights to elect representatives at the workplace and to disclosure of information.

Commissioner may grant 1 or more unions acting jointly rights under sections 12 (access to the workplace), 13 (deduction of union fees by employer) and 15 (leave for trade union activities), provided the union)s) represent a significant interest or a substantial number of employees (do not have to represent a majority of employees at the workplace).


LRA Amendments

LRA Amendments Strikes and Lock-outs - Chapter IV of the LRA Amendments to sections 64; 67 and 69. To require the holding of ballots by trade unions and

employers’ organisations prior to calling a strike or lock-out; (must have a majority).

A certificate must be issued by the CCMA, bargaining council or accredited agency showing compliance with balloting requirements. (See section 6 of the LRAB, which amends section 64(1) of the LRA.)


Procedure Strike or Lock Out (S 64)

Refer dispute 30 Days elapses

/ certificate Ballot Strike or

Lock Out

Compliance Certificate issued by

(CCMA/BC/Acr Agency

Notice of strike / lock out

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LRA Amendments Strikes and Lock-outs S 69 To strengthen the status of picketing rules and agreements

and to clarify the powers of the Labour Court in respect of breaches of picketing rules or agreements;

“(6) The rules established by the Commission may provide for picketing by employees :

(d) in a place contemplated by section 69(2)(a) which is owned or controlled by a person other than the employer, if that person has had an opportunity to make representations to the Commission before the rules are established;


New probationary type clause -

“Provision for a new probationary type clause that would effectively allow employers to hire and fire employees during the first six months of employment, during which time the employee would have no recourse to challenge an unfair dismissal either on substantive or procedural grounds of fairness”. (Patrick Craven; COSATU)


LRA Amendments

Essential Services Section 13 of the LRAB introduces a new section 71A, which

provides for a new category of essential services workers under the category of "public officials exercising authority in the name of the State".

In so doing it lists "customs officials, immigration officers, judicial officers and officials working in the administration of justice" under this category and deems them to be an essential service.


LRA Amendments

Dispute Resolution and Dismissals in the Public Interest Section 26 of the LRAB replaces the current section 150. The Commission may "offer" to resolve a dispute that has

not been referred to it, if this would be in the public interest.

Both parties in this case would need to agree to the appointment of the Commissioner.

The amendment removes the voluntary nature of the provision since neither party needs to consent.


LRA Amendments

LRA Amendments Dismissal of High Earning Employees 188B into the LRA, which states that an employee who

earns over an amount to be determined by the Minister and whose dismissal is not automatically unfair will be deemed to fairly dismissed and in accordance with a fair procedure.

Provided three months’ notice or three months compensation was paid.

A longer period can be set out in a contract of employment.


LRA Amendments

Dismissal of High Earning Employees

The Minister must consult NEDLAC as to the amount in this section. This section will initially only apply to new contracts of employment but after two years will apply to contracts concluded prior to the commencement of the LRAB.


LRA Amendments

Dismissals Based on Operational Requirements S189 and 189A of the LRA, with the latter being

applicable to employers employing more than 50 employees.

Section 39 of the LRAB amends this by inserting a new paragraph 189A(2)(d), which provides that a "consulting party should not unreasonably refuse to extend the period of consultation" this would ensure meaningful consultation.


Date of Dismissal Section 190 of the LRA regulates the issue of determining

the date of a dismissal. Section 40 of the LRAB inserts a new paragraph 190(2)(d), which clarifies the date of a dismissal if an employee is dismissed on notice.

The effective date will now be the date on which the notice expires unless "all outstanding salary" is paid on an "earlier" date, in which case this earlier date will be the date of dismissal.


LRA Amendments

Distinction is drawn between workers who provide "temporary services" and those who do not.

Those considered to be providing temporary services will be subject to the principle of joint and several liability - similar to section 198.

In other cases the true employer (client) will be deemed to be the employer.

Workers earning less than the BCEA threshold of R172 000, are only considered employees of a labour broker if this involves "temporary services".


LRA Amendments

Temporary services entail the following: Work not exceeding a six month period; Substituting for an employee who is away temporarily,

although the period is undefined; and Categories of work as defined either through a bargaining

council agreement or sectoral determination.


LRA Amendments

ON FIXED TERM CONTRACTS - S186(1)( b) Separate amendment to which addresses rights around

dismissals for employees subject to fixed term contracts (See section 35 of the LRAB), which inserts a new paragraph 186(1)(b)(ii).

Under the existing provision it constitutes a dismissal where a fixed contract employee reasonably expected a renewal of the contract on the same or similar conditions and the employer failed to renew the contract or offered a renewal on less favourable terms. - Now..


LRA Amendments

FIXED TERM CONTRACTS Amendment - dismissal where the employee

reasonably expected to be offered an indefinite contract, and either no such offer was made or it was offered on less favourable terms.

Courts have tended to make findings that such employees only have an expectation of another limited duration contract – will no longer be the case.


LRA Amendments

FIXED TERM CONTRACTS An employee may only be engaged on a fixed term

contract for a period longer than 6 months only if the nature of the work entailed is of a limited duration and there is a justifiable reason for fixing the contract.

Fixed term contract employees employed for longer than six months must not be treated less favourably than those employed on a permanent basis.

Justifiable reasons for engaging workers on a fixed terms beyond six months are contained under section 198B(4) of the LRAB and include variously substituting for another worker, being engaged through a public works scheme, the performance of seasonal work. 11/17/2012 www.cimap.co.za 27

LRA Amendments

LRA Amendments

FIXED TERM CONTRACTS The new restrictions on fixed-term contracts will not

apply to small businesses or start-ups. Terminating employment before the end of the six-

month period to avoid having to treat them the same as a full-time employee will be regarded as a dismissal.


ON PART TIME CONTRACTS Benefits for part time workers under section 198C entail : Their treatment may on the whole not be less favourable

than conditions for a comparable full-time employee; Access to training and skills development should on the

whole not be less than favourable than those applicable to a comparable full-time employee; and

The same access should afforded to apply for vacancies as would be applicable to full-time employees.


LRA Amendments

LRA Amendments

Regulating contract work - Amendment aims to stop the practice of repeated

contracting for short-term periods. The onus will be on employers to justify the use of short-

term or fixed term contracts, in place of contracting employees on a permanent basis.

DOL is introducing a new Employment Services Bill which will address both Private and Public Employment Services.


LRA Amendments S 198A now reads: “An employee deemed to be an employee of the

client in terms of subsection (3)(b) must be treated on the whole not less favourably than an employee of the client performing the same or similar work, unless there is a justifiable reason for different treatment.” (After 6 months).

Does not apply to employees who work less than 24 hours a month.


LRA Amendments

Section 198A: Temporary employment services can only be engaged for up to six months by businesses that employ more than 10 people or businesses that employ less than 50 people but have been in existence for less than two years.

Section 198B: Contract work is limited to six months unless an employer can prove the need for longer term contracted employment.

Section 198C: Temporary workers should be treated, on the whole, no differently to permanently employed workers.


Liability for Employer's Obligations Section 46 of the LARB inserts a new section 200B into the

LRA, which broadens the definition of "employer" to include:

"persons who carry on associated or related activity or business by or through an employer if the intent or effect ....is to defeat the purposes of the Act or any other employment law".


LRA Amendments

Review of arbitration awards and rulings (7) The institution of review proceedings does not suspend the operation of an arbitration award, unless the applicant furnishes security to the satisfaction of the Court in accordance with subsection (8). (8) Unless the Court directs otherwise, the security must – (a) in the case of an order of reinstatement or re-employment, be equivalent to 24 months remuneration;


LRA Amendments

Review of arbitration awards and rulings (b) in the case of an order of compensation, be equivalent to the amount of compensation awarded. (9) An application to set aside an arbitration award in terms of this section interrupts the running of prescription in terms of the Prescription Act (Act No.68 of 1969) in respect of that award.”


LRA Amendments

Basic Conditions Of Employment

Amendment Bill, 2012


BCEA Amendments

To prohibit employers requiring employees to make payments to secure employment and requiring employees to purchase goods, services or products in certain circumstances;

To extend the prohibition on work by children to children engaged to work as independent contractors S43;

To adjust the powers of the Minister of Labour in respect of making sectoral determinations;


To revise and streamline the system for enforcement by labour inspectors;

To increase the penalties that can be imposed for offences involving child labour or forced labour;

To adjust that maximum fines that can be imposed for breaches of the Act not involving underpayments.

BCEA Amendments


A proposed enabling provision in the Basic Conditions of Employment Act will provide the Minister with the power to determine the conditions of labour tenants.

Child labour - Amendments are proposed to align the Basic Conditions of Employment Act with South Africa's international law obligations in terms of the International Labour Organisation Convention (No. 182) on the Worst Forms of Child Labour.

BCEA Amendments


Strengthening the power of the inspectorate - Contraventions of certain provisions in monitoring and enforcement of the Act are criminalised which will enhance the effectiveness of the inspectorate.

The Bill further seeks to impose heavy penalties for offences and contraventions of the provisions of the Act as well as increased prison terms for employers that do not comply.

BCEA Amendments


" '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;“

BCEA Amendments


Employment Services Bill –


Employment Services Bill

Employment Services Bill - legal framework that it provides for the operation of employment services;

Transfer of the skills development functions to the Department of Higher Education and Training;

Previously, the employment services were provided for in the Skills Development Act which is now the mandate of the Department of Higher Education and Training;


Relevance to labour broking as it makes provision for the regulation of temporary employment services by government;

The Bill seeks to provide a legal status for Employment Services after the transfer of the Skills Development functions to the Department of Higher Education and Training (DHET);

The Bill also provides a legal status for the Sheltered Employment Factories administered by the Department and Productivity SA.



The Bill defines the role and core functions of public employment services including governance arrangements via an Employment Services Board.

Decent work schemes to promote youth employment; Promotion of employment of people with disabilities; Employment promotion schemes to respond to economic

recession, company closures and pending retrenchments or lay-offs;

Regulation of employment of foreign workers; Private Employment Agencies - provision is made for the

registration and licensing of Private Employment Agencies for placement and their regulation by the department.



Employment Equity Amendment Bill-


EEA

To amend the EEA to comply with ILO standards; Promote equity and equality; Increase fines; and Align the EEA with other pieces of legislation.


EEA Designated employees All citizens are included - even if born after 1994

in South Africa. Citizens by way of naturalisation before 27 April

1994; Foreign nationals who were not entitled to

citizenship by 27 April 1994 are still excluded. Independent contractor - now defined as a person

who works for another or supplies a service to another as part of his/her business, undertaking or professional practice.


EEA

Unfair treatment Equal pay for work of equal value; Equal pay for equal value; Prohibits unfair discrimination and harassment; Unfair for an employer to differentiate between

employees remuneration where those employees provide work of the same or substantially the same or equal value – burden on employer


EEA Burden of proof The burden of proof will be on the employer to show

that the differentiation is in fact based on fair reasons: i.e. experience, skill, responsibility and qualifications. - The bill does not prohibit differentiation. It must be based on an unfair discriminatory reason before it can be sanctioned under the bill.

The burden of proof in the Promotion of Equality and Prevention of Unfair Discrimination Act.


EEA

Burden of proof An employee must only make out a prima facie case of

unfair discrimination. The employer must then prove that no discrimination

took place or if discrimination did take place that it was not on one of the prohibited grounds of section 6(1).


EEA

Psychometric testing & Dispute Resolution Only psychometric tests that have been certified by

the Health Professions Council can be used in assessment tests.

Dispute resolution Employees earning below the threshold of section

6(3) of the BCEA to refer a dispute to arbitration in the CCMA after conciliation.


EEA

Sanctions The sanctions in the bill have been simplified -easier

for the Director General to impose sanctions on the employer for not following the EEA.

Section 20 dealing with the EE plan is amended by adding a clause allowing the DG to apply to the Labour Court to impose a fine on an employer who fails to prepare and implement an EE plan.


EEA Reporting, Monitoring and enforcement – S 21 No longer a distinction between employers with 150

employees and less - all designated employers must now submit its first report within 12 months of becoming a designated employer and thereafter submit annually.

Reports must contain the prescribed information and signed by the CEO.

A new clause is added to require employers who cannot submit to inform the DG by end of August if the employer cannot submit a report in a particular year.

If the employer fails to submit or the DG does not accept the reasons it can apply to the Labour Court to impose a fine on the employer.


EEA

FINES Reporting to the ECC on occupational categories

has been deleted - employers must only report on the occupational levels.

Failure to comply with section 27 can result in a fine of between 2 and 10% of annual turnover.

Section 36 dealing with the undertaking of the employer to comply with a labour inspector’s request has been deleted.


Enforcement Simplifies the enforcement process. Labour inspectors can still enter, question and inspect

the employment equity actions of employers – no need for an undertaking any more.

Labour inspectors immediately issue a compliance order in terms of the new section 37(1) if the employer failed or refused to consult, conduct an analysis, publish a summary of its report, assign responsibility to a senior manager, inform its employees of the EEA, maintain records and prepare and implement an EE Plan.

EEA


EEA National and regional demographics Employers cannot choose between national and

regional demographics any more. Sub section 42(a) (1) has been changed to “demographic profile of the economic active population”.

Part of the assessment also now includes reasonable steps by employers to train suitably qualified people from designated groups.


EEA Reasonable “efforts” Reasonable “efforts” has also now been substituted

with “steps” making it stricter as efforts seems not to be acceptable any more. The accessible pool, economic factors of the industry and the employer and the progress of other employers has been deleted.

It seems that this clause is becoming stricter as several of the reasons accessible to employers as to why they are not complying, have now been deleted.


EEA

Review process The review process of section 43 and 44 mainly

remains the same, however if the employer fails to comply with a request or recommendation by the DG, the DG may apply to the Labour Court for an order to comply or a fine.

Any challenge to the validity of the DG’s request or recommendation may only be made by the employer in the process instituted by the DG in the Labour Court.


EEA

Positive obligation In terms of the current EEA, a designated employer has

a positive obligation to find and eradicate unfair discrimination.

In terms of the new sub section 27(2) another positive obligation has been added to take measures to progressively reduce any disproportionate income differentials subject to guidance by the Minister on reducing income differentials.


EEA Labour Brokers The section dealing with labour brokers has been repealed. Schedules Schedule 1 is amended by substantively increasing fines. Section 27 is added and contravention of various of the sections of the EEA will attract fines of between 2 to 10% of turnover of the employer. The turnover threshold of designated employers, schedule 4, is also amended by increasing agriculture from 2 million to 5 million.


Summary - EEA The these amendments aim at reducing income

differentials; Places an obligation on the employer to investigate

and eradicate disproportionate income differentials and move towards equal pay for work of equal value;

Employers who do not comply with this can be fined by the DG and the Labour Court anything between 2 and 10% of its annual turnover.

EEA


Thank you


south african labour law amendments 2012

Business

skills development

probationary

fixed term

private employment

temporary

employment

temporary

employment