Amendments to the LRA and the BCEA: Werksmans Labour & Employment

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Amendments to the LRA and the BCEA: Werksmans Labour & Employment

  1. 1. IntroductionAnastasia Vatalidis
  2. 2. INTRODUCTION In December 2010, the Minister of Labour published the following draft legislation for comment - Labour Relations Amendment Bill, 2010 Basic Conditions of Employment Amendment Bill, 2010 Employment Equity Amendment Bill, 2010; Employment Services Bill, 2010. The draft legislation met with opposition from all stakeholders The draft legislation was withdrawn and submitted to NEDLAC for reconsideration. The NEDLAC process commenced in January 2011 and was concluded in January 2012.
  3. 3. INTRODUCTION (CONTINUED) In February 2012 the revised draft LRA and BCEA Amendment Bills were published for public comment On 14 March 2012 the Minister of Labour submitted amendment Bills for the LRA and the BCEA to Cabinet Committee On 20 March 212 the Cabinet approved the submission of these Bills to Parliament to be considered by the Portfolio Committee on Labour If accepted by the Portfolio Committee the Bills will be submitted to the National Assembly and the National Council of Provinces for adoption Public briefings were held in relation to the Bills on 4 and 5 April 2012
  4. 4. INTRODUCTION (CONTINUED) According to a press statement released by the Minister of Labour these bills aim to- protect vulnerable employees ensure compliance with international labour standards ensure that labour legislation gives effect to fundamental constitutional rights enhance the effectiveness of labour institutions such as the Labour Court and the CCMA rectify historical anomalies and clarify uncertainties that have arisen from the application of these statutes.
  5. 5. THANK YOU Anastasia Vatalidis Nothing in this presentation should be construed as formal legaladvice from any lawyer or this firm. Readers are advised to consult professional legal advisors for guidance on legislation which may affect their businesses.© 2012 Werksmans Incorporated trading as Werksmans Attorneys. All rights reserved.
  6. 6. The Labour RelationsAmendment Bill Sandile July
  7. 7. PURPOSE Protect vulnerable employees Align employment laws to ensure decent work by regulating sub-contracting, contract work and outsourcing Extend the jurisdiction of the Labour Court Prohibit certain abusive practices Amend the section dealing with temporary employment services
  8. 8. ORGANISATIONAL RIGHTS Trade unions could be awarded the right to elect shop stewards even if the union does not represent the majority of the employees in the workplace When determining organisation rights a CCMA commissioner must take into account non-standard employees when determining whether a trade union is a representative trade union Arbitration awards dealing with organisational rights will be binding, not only on the employer of the effected employees, but also on the clients of labour brokers who are bound by such awards as well as on any other party who controls a workplace where affected employees work
  9. 9. ORGANISATIONAL RIGHTS Trade unions representing employees of a temporary employment service may enforce organisational rights at the workplace of the temporary employment service or at the workplace of its clients
  10. 10. THE RIGHT TO STRIKE Strike ballots are re-introduced as a pre-strike requirement in an effort to reduce violence in circumstances where a strike only enjoys minor support The majority of the trade union’s members in good standing must vote (ordinary or special votes?) in favour of a strike A certificate of compliance issued by the CCMA, Bargaining Council or Accredited Agency will serve as proof that a ballot has taken place The failure by a trade union to comply with a provision in its constitution to conduct a strike ballot may not give rise to, or constitute a ground for any litigation that will affect the legality, or the protection conferred by the LRA, on the strike
  11. 11. RIGHT TO LOCK OUT An employer’s organisation will also have to conduct a ballot of its members entitled to participate in industrial action calling upon such members to vote on the implementation of a lock-out The ballot requirements in respect of lock-out requirements are similar to those applicable to strikes
  12. 12. PICKETINGPicketing rules established by the CCMA may allow forpicketing to take place at a location owned by a personother than the employer, provided that such person hashad an opportunity to make representations to theCCMAPrior to a picket third parties must be informed of thepossible effect that the picket could have on themThe term “supporters” has been removed from thegroup of persons entitled to participate in a picketConduct in material breach of a picketing agreement orpicketing rules does not enjoy protection against civillegal proceedings
  13. 13. ESSENTIAL SERVICES The Bill deals with the composition of the essential services committee that will decide on the ambit of essential services The committee will be composed of 8 persons, including an independent chairperson, deputy chairperson and representatives nominated by government, labour and business The committee’s powers will be extended to the essential services, minimum services in a service designated as an essential service and maintenance services Arbitration awards in relation to essential services disputes will be binding on government unless a vote from Parliament is acquired to make it non binding on government
  14. 14. DISPUTE RESOLUTION Extension of the functions of the CCMA to include Providing administrative assistance in respective of service of documents and notices for employees who earn less than the threshold prescribed in the BCEA (presently R172 000 per annum) The right of any party to be represented by any person in any conciliation or arbitration proceedings including the limitation of the right to representation to those proceedings Providing employees, employers, registered employers organisations, registered trade unions and its federations advice or training relating to the primary objects of the LRA or any other employment law
  15. 15. EFFECT OF ARBITRATION AWARDS An arbitration award issued by a commissioner; is final and binding; may be enforced as if it were an order of the Labour Court in respect of which a writ has been issued; and equally applicable to certified arbitration awards issued by Bargaining Councils. Non compliance with an arbitration award for an act other than the payment of money may be enforced by contempt proceedings instituted in the Labour Court. If an arbitration award is for the payment of money, that award for purposes of enforcement of execution must be treated as an order of the Magistrates Court.
  16. 16. VARIATION AND RESCISSION The Bill introduces the following new ground upon which Commissioners may vary or rescind a certificate, arbitration award or ruling- If good cause is shown Currently Commissioners may vary or rescind a certificate, arbitration award or ruling if the certificate, award or ruling is- Erroneously sought or made in the absence of any party affected by the award is ambiguous or has an obvious error or omission; Granted as a result of a mistake common to the parties to the proceedings.
  17. 17. REVIEW OF ARBITRATION AWARDS A party will not be entitled to launch review proceedings until the dispute has been finally determined An applicant in review proceedings will have to apply to the Labour Court for a date to hear the review within six months of delivery of the review application The Labour Court ruling on the review must be handed down by the judge within six weeks after the hearing An application to set aside an arbitration award interrupts the running of prescription in respect to that award
  18. 18. REVIEW OF ARBITRATION AWARDS(CONTINUED) Review proceedings will not suspend the operation of the award, unless the applicant provides security to the satisfaction of the Labour Court or shows that it is in the interest of justice that security should not be tendered Unless otherwise provided by the Labour Court the following security will be payable- reinstatement awards - 24 months remuneration Compensation awards - the equivalent of the compensation awarded
  19. 19. CONCILIATE IN THE PUBLIC INTEREST Commissioners may be appointed to conciliate in public interest matters whether or not the dispute has been referred to the Commission or a Bargaining Council. This is done to secure resolution of the dispute which is in interest of the public The appointment of the commissioner in such cases does not affect any entitlement to strike and lock-out
  20. 20. DISMISSAL OF HIGH INCOME EARNERS In the case of employees earning more than the threshold to be prescribed by the Minister (R1 000 000 per annum?)- A dismissal will be deemed to be for a fair reason and effected in accordance with a fair procedure if the employer gives the employee notice Notice must be in writing and equal to 3 months remuneration (or longer if the employee’s contract of employment contemplated a longer notice period Exception - Automatically unfair dismissals
  21. 21. TEMPORARY EMPLOYMENT SERVICES Definition Any person who, for reward, procures for or provides to a client other persons who perform work for the client and who are remunerated by the temporary employment service The Bill requires the registration of all temporary employment services with an as yet to be established body Once registered the TES and its client will be jointly and severally liable in the event that the TES contravenes- a collective agreement concluded in a Bargaining Council that regulate terms and conditions of employment a binding arbitration award that regulates terms and conditions of employment the BCEA any determination made in terms of the BCEA
  22. 22. TEMPORARY EMPLOYMENT SERVICES(CONTINUED) TES employees must be employed on terms set out in a sectoral determination or bargaining council or collective agreement if the client is subject to a such determination or agreement The Bill distinguishes between TES employees earning above and below the BCEA threshold as well as TES employees performing “temporary services” The Bill defines “Temporary Services” work as work for a client by a TES employee- For a period not exceeding 6 months; as a substitute for an employee of the client who is temporarily absent; work determined to be temporary by a collective agreement concluded in a bargaining council, sectoral determination or notice published by the Minister
  23. 23. TEMPORARY EMPLOYMENT SERVICES(CONTINUED) TES employees earning below the BCEA threshold and not performing “temporary services” work- will be deemed for purposes of the LRA to be the employees of that client (including for purposes of dismissal claims) may not be treated less favorably than employees of that client who perform same or similar work, unless the distinction is justifiable The Minister must invite representations on the type of work to be deeded as “temporary service”
  24. 24. FIXED TERM EMPLOYMENT Fixed term contract: Employment that terminates on- the occurrence of a specified event on the completion of a specified task or project a fixed term date, other than an employee’s normal or agreed retirement age. Employees may not be employed on a fixed term contract for longer than six months unless – The nature of the work is of a limited or definite duration The employer can demonstrate any other justifiable reason for fixing the term of the contract
  25. 25. FIXED TERM EMPLOYMENT (CONTINUED) The prohibition against employing employees on fixed term contracts longer than 6 months does not apply- If the employers employs- Fewer than 10 employees Fewer than 50 employees if its business has been in operation for less than 2 years Unless the employer conducts more than one business or the business was formed by division or dissolution The employee earns in excess of the BCEA threshold; The fixed term contract is permitted by- Law; Sectoral determination Collective agreement
  26. 26. FIXED TERM EMPLOYMENT (CONTINUED) Employees employed for more than 6 months must be treated on the whole no less favourably than indefinite duration employees, unless there is a justifiable reason Fixed term employees must be given the same opportunities to apply for vacancies as the indefinite duration employees
  27. 27. FIXED TERM EMPLOYMENT Renewal or extension of a fixed term contract must be done in writing and must state justifiable reasons for the renewal Fixed term employees employed for more than 24 months are entitled to a severance package (at least one week’s remuneration for each completed year of service) The severance package shall be forfeited is the employee unreasonably refuses offer of employment
  28. 28. PART-TIME EMPLOYMENT Part-time employee: Is an employee who is remunerated wholly or partly by reference to the time that the employee works and who work less hours than a comparable full-time employee. Comparable full-time employee: Employee who is remunerated wholly or partly by reference to the time that the employee works and who is identifiable as a full–time employee in terms of customs and practice of the employer of that employee Does not include a full-time employee whose hours have been reduced by agreement due to operational requirements
  29. 29. PART-TIME EMPLOYMENT (CONTINUED) An employer must- Treat a part-time employee on the whole no less favourably than a comparable full-time employee, unless there is a justifiable reason Provide part-time employees with access to training, skills development on the whole no less favourably than a comparable full-time employee Provide part-time employees the same opportunities to apply for vacancies as comparable full-time employee
  30. 30. PART-TIME EMPLOYMENT (CONTINUED) The provisions regulating part-time employees don’t apply if: Employees earning in excess of the BCEA threshold If the employers employs: Fewer than 10 employees Fewer than 50 employees if its business has been in operation for less than 2 years Unless the employer conducts more than one business or the business was formed by division or dissolution Employee works less than 24 hours in a month During the first 6 months of employment
  31. 31. THANK YOU Sandile July Nothing in this presentation should be construed as formal legaladvice from any lawyer or this firm. Readers are advised to consult professional legal advisors for guidance on legislation which may affect their businesses.© 2012 Werksmans Incorporated trading as Werksmans Attorneys. All rights reserved.
  32. 32. The Basic Conditions of Employment Amendment BillBradley Workman-Davies
  33. 33. DEFINITIONS Sector An industry or a service or part of an industry or service and in respect of a sectoral determination and means the employers and employees covered by that determination Serve To send by registered post, telegram, electronic mail, telefax or deliver by hand or any prescribed method of service
  34. 34. PROHIBITED CONDUCT In terms of section 33A an employer is prohibited from- requiring or accepting any payment from an employee or potential employee in respect of employment or allocation to employment requiring an employee to purchase goods from the employer or a business or a person nominated by the employer This does not apply to schemes in terms of which the employee receives a financial benefit through the purchase of goods, products or services at a fair and reasonable price and the purchase is not prohibited by any other statute.
  35. 35. PROHIBITION OF EMPLOYMENT OFCHILDREN AND FORCED LABOUR The existing prohibition on the employment of children is extended to include all work by children and not only work done by children as employees This prohibition is included to: ensure full compliance with international labour standards is achieved create consistency with the Constitution and other legislation protecting the rights of children enable the Minister to make any regulations that are necessary for any international law instrument dealing with child labour
  36. 36. SECTORAL DETERMINATIONSThe Minister may issue an umbrella sectoraldetermination that will cover employers and employeesnot covered by any other sectoral determination or by aBargaining Council collective agreement
  37. 37. SECTORAL DETERMINATIONS (CONTINUED) Sectoral determinations may: Prescribe minimum increases in remuneration Prohibit or regulate the subcontracting of work Prescribe a threshold of representation for registered trade unions to have organisational rights Specify methods for determining the value of a labour tenant’s rights to occupy or use a farm for purposes of land reform for the agriculture sector
  38. 38. CONSOLIDATION OF PROCEEDINGS The jurisdiction of the Labour Court and the CCMA is extended to include any claim by the employee under the BCEA that has not prescribed Once the matter is determined, a non compliance order or other proceedings cannot be continued or brought in respect of the claim This amendment is aim at avoiding the splitting of claims and prevent unnecessary duplication of proceedings between employers and employees
  39. 39. JURISDICTION OF LABOUR COURT The Labour Court has jurisdiction to grant civil remedies in respect of matters which are criminal offences
  40. 40. ENFORCEMENT DOL inspectors are no longer obliged to secure written undertakings to comply from defaulting employers Employers no longer have the right to- Lodge objections to the Director-General of the DOL against compliance orders issued by the DOL; Appeal against the findings of the D-G to the Labour Court D-G may, without further notice to the employer, approach the Labour Court for the compliance order to be made an order of the Labour Court if a compliance order has not been complied with
  41. 41. OFFENCES AND PENALTIES The maximum term of imprisonment for an offence involving child labour or forced labour is increased from three years to six years The maximum term of imprisonment for requiring or accepting payment from an employee or potential employee in respect of employment or allocation thereof is set at three years Maximum permissible fine not involving underpayment is increased by 200%
  42. 42. THANK YOU Bradley Workman-Davies Nothing in this presentation should be construed as formal legaladvice from any lawyer or this firm. Readers are advised to consult professional legal advisors for guidance on legislation which may affect their businesses.© 2012 Werksmans Incorporated trading as Werksmans Attorneys. All rights reserved.
  43. 43. Aviation Union of South Africa v SA Airways (Pty)Limited and Others2012 (2) BCLR 117 (CC)Anastasia Vatalidis
  44. 44. THE FACTS SAA outsourced its facilities management operations to LGM SAA employees were transferred to LGM in terms of section 197 of the LRA SAA paid LGM a fee for the services rendered by LGM LGM purchased assets and inventory relating to the services from SAA On termination of the agreement SAA would be entitled to repurchase the assets sold to LGM All services could be transferred back to SAA or to a third party
  45. 45. THE FACTS (CONTINUED) In 2007 SAA cancelled the agreement with LGM LGM commenced a retrenchment procedure Aviation Union inquiring from SAA as to the status of the LGM employees SAA denied that is had a legally obliged to take the employees back Aviation Union and SATAWU approached the Labour Court for urgent relief
  46. 46. THE FACTS (CONTINUED) Before the Labour Court Aviation Union and SATAWU argued that: The termination of the agreement between SAA and LGM constitutes a transfer of a business Section 197 of the LRA should apply to second generation outsourcing arrangements The LGM employees associated with the facilities management operations should be transferred either to SAA or to the entity awarded the tender
  47. 47. SECTION 197 In terms of section 197(2) of the LRA if the whole or part of any business, trade, undertaking or service is transferred then, unless otherwise agreed: the new employer is automatically substituted in the place of the old employer in respect of all contracts of employment in existence immediately before the date of transfer all the rights and obligations between the old employer and an employee at the time of the transfer continue in force as if they had been rights and obligations between the new employer and the employee
  48. 48. SECTION 197 (CONTINUED) anything done before the transfer by or in relation to the old employer, including the dismissal of an employee or the commission of an unfair labour practice or act of unfair discrimination, is considered to have been done by or in relation to the new employer
  49. 49. LABOUR COURT The Labour Court held that section 197 was not applicable to a second or subsequent outsourcing agreement (second generation transfers) for the following reasons- The SAA agreement does not involve a transfer by an old employer to a new employer A section 197 transfer is defined as the transfer of a business by one employer to another employer and not from one employer to another The Labour Court therefore took a literal approach to the term ‘transfer as a going concern’ as used in section 197 of LRA
  50. 50. LABOUR APPEAL COURT Not satisfied with the Labour Court decision Aviation Union and SATAWU appealed to the LAC The LAC reversed the Labour Court decision taken and held that: section 197 should be interpreted purposively and not literally in order to advance job protection The word by had to be read as if it had been replaced with the word from in the definition of transfer The transferor need not be active in bring the transfer to fruition Second generation outsourcing is subject to section 197
  51. 51. SUPREME COURT OF APPEAL Not satisfied with the LAC it was the turn SAA to appeal to the SCA The SAC overturned the LAC decision and held- The LAC had distorted the plain meaning of the word by to mean from The LAC has erred in finding that a transfer of services had occurred A transfer of a business as a going concern had not occurred Minority judgment
  52. 52. CONSTITUTIONAL COURT Aviation Union and SATAWU appealed to the Constitutional Court The Constitutional Court was unanimous that the appeal should succeed The Constitutional Court Judges were split 6: 5 on the basis upon which the appeal should succeed The CC consideration the following- The correct interpretation of section 197 Was there a transfer of services
  53. 53. CONSTITUTIONAL COURT (CONTINUED) The majority of the CC judges found that- when SAA outsourced a portion of its business the intention was never to outsource that business permanently and the ownership of that business remained with SAA LGM merely acquired the right to conduct the outsourced business for a period of time LGM had the right to use certain of SAAs facilities when performing the outsourced services if the outsourcing institution from the outset never offered the service, the service cannot be said to part of that institutions business. The cancellation of the contract in these circumstances would also not give rise to a transfer of a business in terms of section 197
  54. 54. CONSTITUTIONAL COURT (CONTINUED) The SCA judgment erred in holding that section 197 does not apply to second generation outsourcing agreements It did not matter whether LGM transferred the business to SAA and SAA thereafter transferred the business to a third part or whether LGM transferred the business directly to a third party There is a transfer of a business from an old employer to a new employer and the employees should have followed the business
  55. 55. CONSTITUTIONAL COURT (CONTINUED) The cancellation clause of the agreement contemplated a transfer of a business as a going concern As long as a there is a transferor the identity of that entity or person is of no material significance Rather, what matters is determining whether the business is being transferred
  56. 56. THE FUTURE AFTER AVIATION UNION Service level agreements Outsourcing services Protection for the outsourcing entity Enforcement of indemnities?
  57. 57. THANK YOU Anastasia Vatalidis Nothing in this presentation should be construed as formal legaladvice from any lawyer or this firm. Readers are advised to consult professional legal advisors for guidance on legislation which may affect their businesses.© 2012 Werksmans Incorporated trading as Werksmans Attorneys. All rights reserved.

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