Labour Law Changes


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Kelly Group - Labour Law Changes August V2

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Labour Law Changes

  2. 2. Index1. Introduction2. A-typical Employment3. Dispute Resolution4. Collective Bargaining5. Compliance and Enforcement6. Way forward
  3. 3. Introduction
  4. 4. The Bills• Following negotiations in NEDLAC during 2009 and 2010 on the Department of Labour’s (DOL) various proposals to amend the labour laws, the DOL drafted the Labour Relations Amendment Bill, 2010, the Basic Conditions of Employment Amendment Bill, 2010, the Employment Equity Amendment Bill 2010 as well as the Employment Services Bill, 2010.• The DOL thereafter submitted these Bills to Cabinet who requested a Regulatory Impact Assessment (RIA) to be conducted on the proposed Bills. The Employment Promotion programme (EPP) subsequently commissioned a multi-disciplinary team to conduct the RIA.• The completed RIA was submitted to the DOL and the Presidency on 9 September 2010.
  5. 5. Process in NEDLACThe Nedlac 6-a-side Task Team, (six from Business, six from Unions and sixfrom Government) also referred to as the Plenary, was established early in2010.At its first meeting, held on 20 January 2011, Government presented theBills to the social partners for engagement.Business rejected the Bills as being unconstitutional and against therecommendation in Government’s own Regulatory Impact Assessmentstudy
  6. 6. Process in NEDLACIt was agreed that the process of engagements would be conducted undersix broad themes, in the following order of engagement,Theme 1: A-typical Employment RelationshipsTheme 2: Dispute ResolutionTheme 3: Collective BargainingTheme 4: Compliance and EnforcementTheme 5: Employment EquityTheme 6: Access to EmploymentOnly the first four themes have been debated. Negotiations at NEDLAC havenot started on themes 5 and 6.
  7. 7. Appointment of the Legal Drafting TeamNedlac appointed three Labour Law experts to serve in the capacity as thelegal drafting team as follows:• Prof Paul Benjamin for Government;• Mr Anton Roskam for Labour; and• Mr Chris Todd for Business.Over 40 meetings were held in 2011.Large disagreement between the parties exists. Enclosed are Government’sfinal proposed amendments under each theme.
  8. 8. A-Typical Employment
  9. 9. Temporary Employment Services1. S 198(1)(b)(i) and s198(2)(b)(ii) - 6 month threshold on labour broker employment after which employee is deemed to be employee of the client and the labour broker. Comment - The 6 month period should be longer, and joint and several liability should apply rather than the deeming provision. Deemed is referred to in the same manner as in the current Employment Equity Act. The Labour Broker may continue as normal after six months. You the client would need to look at indemnities with Broker specifically in regard to dismissal after 6 months.2. S198(2) Application of Labour Broker provisions of deeming to the entire LRA, rather than Chapter 8 only. This will deem the employee of the labour broker to be an employee of the client and the labour broker for the purpose of organisational rights, strike action and dismissal. Comment – Against a deeming position. The rights should only be Chapter 8 (Dismissal of the LRA). Joint and several liability is from day one on breaches of bargaining council agreements, sectoral determination and collective agreements. The problem only will occur in dismissals. See comments as above. No huge risk to the business if you are using legitimate labour brokers.
  10. 10. Temporary Employment Services3. S198 (4F) Temporary employment service (TES) employee must be treated on the whole not less favourably than an equivalent employee of the client (after 6 months). Comment - The whole absurd concept of equal pay for equal treatment is problematic. In theme 5 it will reappear in relation to all employees. This has not worked anywhere in the world. In most cases there will be differentiating factors and therefore unless there is an exact full time comparative, you do not face high risk.4. Justifiable reasons for different treatment would be: • The employees seniority, experience or length of service • Merit criteria • Quantity or quality of work performance or • Any other relevant criteria that is not prohibited in terms of section 6 of the Employment Equity Act.
  11. 11. Temporary Employment Services5. S21(8)(v) A person determining (eg. an arbitrator) whether a trade union is representative must take into account the extent to which employees are from TES, part time and fixed term employees. Comment - This will make it easier for the union to gain organisational rights at lower thresholds of representivity. Practically no effect. Atypical workers difficult to organise as a rule.6. Threshold of R183000 per annum generally agreed. It is only employees earning less than R183000 per annum after 6 months that get the extra protection.
  12. 12. Current Statutes & Liability Appropriation – Using a TES Statute Client Joint & Several TES Liability Liable Liability Severally SeverallyLabour Relations Act Yes - pending YesEmployment Equity Act Unfair Yes DiscriminationSkills Development Act YesSkills Development Levies Act YesBasic Conditions of Employment Act/ Yes YesBargaining Councils/ SD’sUnemployment Insurance Fund YesCompensation for Occupational YesInjuries and DiseasesOHSA Yes Yes
  13. 13. Legal Drafters’ Interpretation1. Benjamin’s presentation acknowledged that the proposed amendments were designed to provide additional protection for employees earning below R183 000 a year and aimed to ensure that “atypical” employees had the right to be treated “on the whole not less favourably” than “standard” employees after six months.2. Benjamin argued that the proposed legislation would see “the structure and effect” of the existing legislation largely remaining in place. The TES, not the client, would remain the employer. However, the employee would have additional protection including the ability to institute proceedings against either the TES or the client, and the Labour Court can determine whether the employee’s contract complies with the obligations of the law.
  14. 14. Fixed Term Contracts1. S200B(3) Fixed term contracts in excess of 6 months have numerous restrictions for employees earning below the threshold (R183000 per annum). Comment - Is the period should be longer (12 months). Practical implication is that the onus then is placed on the employer beyond 6 months.2. S200B(7) Fixed term contract employees over 6 months to be treated equally to indefinite employees. Comment - Again like 3 above. Same comment – little risk if no full time comparatives.3. S(10) One week remuneration per year of service to be paid to employees engaged in a fixed term contract for a genuine project. After 24 months. Comment - This just adds to the cost of doing business. You will have to budget for this.
  15. 15. Part Time EmployeesPart time employees earning under the earnings threshold and after 6months of employment are to be treated equally to full time employees.Same as above.Comment - This is absurd and has not worked anywhere else in the world,all you do is raise expectations. Can part time employees survive? We donot believe this to be a major problem in your industry.
  16. 16. Dispute Resolution
  17. 17. Dispute Resolution1. S145 24 months security required to be paid by an employer pending review of a matter. All reviews now you will have to lodge security with the Court. Comment - Especially small business an absurd additional cost.2. S187 Restriction on retrenchments for operational requirements by expanding the grounds for automatically unfair dismissals. Comment - Implication on cases like Fry’s Metal in changing conditions of employment. • Amendment to Section 187 (1)(c) (c)[to compel the] a refusal by employees to accept a demand in respect of any matter of mutual interest between them and their employer [and employee];” The brackets are the deletions. The underlined is the additions.
  18. 18. Dispute Resolution Potentially far reaching implications for the Supreme Court of Appeals decision of Fry’s Metal and the ability to retrench in order to change conditions of employment.3. S189A More onerous provisions in relation to large retrenchments. No party, in a large scale retrenchment, may unreasonably refuse an extension beyond the 60 day period. A licence given to a facilitator to extend the 60 day consultation period. You can budget for a 90 day period plus notice.
  19. 19. Collective Bargaining
  20. 20. Collective Bargaining1. S21 Easier access to previously majority trade union rights under s21 on trade union official, leave and access to information. Comment - This is a problem messing with the principle of a majority union situation. Workplace Example of 1000 employees ie union might get majority trade union rights with say 400 members. Not like in the past 501.. Cosatu now also has a problem with this clause.2. S32(5A) When the Minister considers extension of Bargaining Council minority agreements, the Minister can take into account the extent to which employees are employed by labour brokers, on fixed term or part time contracts. Comment Sufficiently representative is already a problem.
  21. 21. Collective Bargaining3. S43(3) Providing that any matter, including negotiation of wages and terms conditions of employment, can now be agreed upon by a Statutory Council and extended by the Minister. Comment Could be of major impact for instance in the building industry who have battled to extend statutory council agreements.4. S55(1)(4)(b) of BCEA Sectoral determinations may provide for minimum increases on actual rates of pay. Comment - This will result in much higher wage costs where employees are paid above the minimum prescribed rate.
  22. 22. Collective Bargaining5. Watered down provisions by Government that fail to restrain strike violence adequately. Comment – Government rejected a proposal that dismissal of workers in essential services who go on strike should be automatically fair. Unrestrained strike violence will be a continued deterrent to employment and direct foreign investment.6. S69(6)(a) Picketing rules may apply to third parties who are not employers. Comment - For instance mall owners. Not applicable to your sector.
  23. 23. Compliance & Enforcement
  24. 24. Compliance & Enforcement1. S69 BCEA Removal of compulsory undertakings and removal of employers’ right to object and engage upon compliance orders. Comment - Inspectors now have a discretion. This could open the way for bribery and corruption.2. Schedule 2, table 1 of BCEA. Increase to fines for administrative non- compliance. Proposed 200%. Comment - Increased cost of employment for administrative obligations.3. S55(o) of BCEA Provides for the ECC can set thresholds in a sector for organisational rights of access and subscriptions in a sector, regardless of the agreement in the workplace. Comment – Undermines the Labour Relations Act but not relevant to your industry.
  25. 25. Way Forward Employment EquityAccess to Employment Still to be negotiated
  26. 26. Way ForwardBusiness has consistently argued during the NEDLAC negotiations that allproposed amendments should be tested against the RIA report mentionedin clause (1) above in order to determine whether the amendments wouldnot jeopardise job creation or even lead to job losses.The 6-a-side Task Team started discussions on the Employment Equity andAccess to Employment Themes in April 2012. We as Business however hadpre-conditions to this engagement.Latest Government’s position: Cabinet approved in on 22 March 2012 tobe submitted to Parliament.Bills will now be subject to the Parliamentary process of parliamentaryhearings.Expect the Bills to be law this year (2012). We are of the opinion thatGovernment will push forward with their amendments.