South African Labour Law Amendments 2012


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South African Labour Law Amendments 2012

  1. 1. Labour Law Amendments, 2012 For the SABPPPresentation by Dr Linda MeyerCIMAP 2012
  2. 2. 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 Parliament11/17/2012 2
  3. 3. Freedom Charter 1955Key elements of worker rights are succinctly enshrined in theFreedom 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".11/17/2012 3
  4. 4. 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.11/17/2012 4
  5. 5. Background 2009 ANC Election Manifesto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."11/17/2012 5
  6. 6. 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.11/17/2012 6
  7. 7. 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 (
  8. 8. 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 (
  9. 9. Labour Relations Amendment Bill, 201211/17/2012 10
  10. 10. LRA AmendmentsCollective 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".11/17/2012 11
  11. 11. LRA AmendmentsCollective 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).11/17/2012 12
  12. 12. LRA AmendmentsStrikes and Lock-outs - Chapter IV of the LRAAmendments 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.)11/17/2012 13
  13. 13. Procedure Strike or Lock Out (S 64) Compliance Certificate 30 Days elapses Ballot Strike or Notice of strike Refer dispute issued by / certificate Lock Out / lock out (CCMA/BC/Acr Agency11/17/2012 14
  14. 14. LRA AmendmentsStrikes 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;11/17/2012 15
  15. 15. LRA AmendmentsNew 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)11/17/2012 16
  16. 16. LRA AmendmentsEssential 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.11/17/2012 17
  17. 17. LRA AmendmentsDispute 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.11/17/2012 18
  18. 18. 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.11/17/2012 19
  19. 19. 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.11/17/2012 20
  20. 20. 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.11/17/2012 21
  21. 21. LRA AmendmentsDate 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.11/17/2012 22
  22. 22. 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".11/17/2012 23
  23. 23. LRA AmendmentsTemporary 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.11/17/2012 24
  24. 24. LRA AmendmentsON 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..11/17/2012 25
  25. 25. 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.11/17/2012 26
  26. 26. LRA AmendmentsFIXED 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 27
  27. 27. 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. 11/17/2012 28
  28. 28. LRA AmendmentsON 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.11/17/2012 29
  29. 29. 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.11/17/2012 30
  30. 30. LRA AmendmentsS 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.11/17/2012 31
  31. 31. 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.11/17/2012 32
  32. 32. LRA AmendmentsLiability for Employers 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 to defeat the purposes of the Act or any other employment law".11/17/2012 33
  33. 33. LRA AmendmentsReview of arbitration awards and rulings(7) The institution of review proceedings does not suspend theoperation of an arbitration award, unless the applicant furnishessecurity to the satisfaction of the Court in accordance withsubsection (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;11/17/2012 34
  34. 34. LRA AmendmentsReview of arbitration awards and rulings (b) in the case of an order of compensation, be equivalent tothe amount of compensation awarded. (9) An application to set aside an arbitration award in terms ofthis section interrupts the running of prescription in terms of thePrescription Act (Act No.68 of 1969) in respect of that award.”11/17/2012 35
  35. 35. Basic Conditions Of Employment Amendment Bill, 201211/17/2012 36
  36. 36. 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;11/17/2012 37
  37. 37. BCEA Amendments 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.11/17/2012 38
  38. 38. 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 Africas international law obligations in terms of the International Labour Organisation Convention (No. 182) on the Worst Forms of Child Labour.11/17/2012 39
  39. 39. 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. 11/17/2012 40
  40. 40. BCEA Amendments" contract of employment means—(a) a common law contract of employment; or(b) any other agreement or arrangement underwhich a person agrees to work for an employer butexcluding a contract for work as an independentcontractor;“11/17/2012 41
  41. 41. Employment Services Bill –11/17/2012 42
  42. 42. 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;11/17/2012 43
  43. 43. Employment Services Bill  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.11/17/2012 44
  44. 44. Employment Services Bill 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.11/17/2012 45
  45. 45. Employment Equity Amendment Bill-11/17/2012 46
  46. 46. 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.11/17/2012 47
  47. 47. 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.11/17/2012 48
  48. 48. 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 employer11/17/2012 49
  49. 49. EEABurden 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.11/17/2012 50
  50. 50. EEABurden 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).11/17/2012 51
  51. 51. EEAPsychometric 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.11/17/2012 52
  52. 52. EEASanctions 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.11/17/2012 53
  53. 53. EEAReporting, 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.11/17/2012 54
  54. 54. 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.11/17/2012 55
  55. 55. EEAEnforcement 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 56
  56. 56. EEANational 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.11/17/2012 57
  57. 57. EEAReasonable “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.11/17/2012 58
  58. 58. EEAReview 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. 11/17/2012 59
  59. 59. EEAPositive 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. 11/17/2012 60
  60. 60. EEA Labour BrokersThe section dealing with labour brokers has beenrepealed. SchedulesSchedule 1 is amended by substantively increasing fines.Section 27 is added and contravention of various of thesections of the EEA will attract fines of between 2 to 10%of turnover of the employer. The turnover threshold ofdesignated employers, schedule 4, is also amended byincreasing agriculture from 2 million to 5 million.11/17/2012 61
  61. 61. EEA 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.11/17/2012 62
  62. 62. Thank you11/17/2012 63