Labouring to clear confusion
‘Package’ of amended legislation sees provisions for child labour, minimum wages and temporary workers
MUCH has been said about the labour law amendment process, but unfortunately a number of sources have proven to be inaccurate. This has led to confusion in the labour market.
The Basic Conditions of Employment Act was recently gazetted and at this stage has no effective date. The most significant amendments proposed to the Basic Conditions of Employment Act are to bring the provisions regarding child labour in line with international standards and to improve the mechanisms of enforcement of the basic conditions of employment, including minimum wages.
Employers are to be prohibited from requiring or accepting payment from an employee or a potential employee, in respect of their employment or in allocating work to that employee. This prevents employees from being required to purchase goods from the employer or a business or person nominated by the employer. However, this restriction does not apply to schemes to which employees receive a financial benefit through the purchase of goods, products or services at a fair and reasonable price.
There is a criminalisation of certain offences, which in terms of section 93 include the maximum jail sentence for breach of child labour offences of six years. The conditions of the basic conditions dealing with child labour are extended to include all work and not only children as employees. The concern is that the Department of Labour is attaching ridiculous interpretations of “work”, for example chores.
Another concern is Labour Minister Mildred Oliphant may issue an “umbrella” sectorial determination.
There is a big push on enforcement with a substantial increase in fines. The fines are to increase by 200%. The substantial increase needs to be contextualised by the fact that there has been no increase since the inception of the Basic Conditions of Employment Act in 1997. Together with this increase, discretion is now provided to inspectors to request the undertaking and there is also a removal of the appeal process to the director-general.
Inevitably this removal of the appeal process and discretion for undertakings will put pressure on the labour courts, as this would force parties to litigate on issues that normally would be resolved outside of the corridors of justice. There are also other developments outside of the bills that are interesting to note in the context of the new legislation. These include the discussion at the Employment Conditions Commission of a number of new sectorial determinations, and the legislative prerogative for a minimum wage.
Labour Relations Amendment Bill: By far the most controversial bill is the Labour Relations Amendment Bill. This bill has not yet been gazetted but it is imminent. The bill has made a number of proposed amendments, significantly impacting the workplace.
The most controversial aspect of the Labour Relations Bill is the limitation of utilisation of temporary employment service employees currently to three months, that is introduced by section 198 (1)(b) i and section 198 (2)(b)ii.
What is important to bear in mind is that the three-month limitation is not applicable to genuine replacement employees, such as maternity cover. The three-month limitation, or the socalled “deeming clause”, applies to situations where the employee is earning less than the threshold, currently set at R193,805 per annum, and where they are placed with the client for a period exceeding three months. In terms of the amendments the employee, in essence, gets extra protections. The extra protections have led to the confusion in the labour market.
There is no transfer of an employee after three months. And because the employees do not become “permanent” there is no need to get rid of the temporary employment service provider.
It is important that we scrutinise how employers utilise temporary employment service providers, most especially that they work with providers who are properly registered and compliant, and to make certain that business models are designed to be effective and are implemented to retain costs and flexibility. The three-month limitation and extra protection does not only apply to the temporary employment service providers though. Section 200B (3) places limitations and restricts the utilisation of fixed-term contract employees and the equal treatment provision is brought in on the fixed-term contracts front by section 200B (7), meaning that even those employees who work directly with the employer will be affected.
And what about fixed-term/parttime employees?
Section 200B (10) places an even greater burden on employers as employees employed on a fixed-term contract for longer than 24 months need to be paid one week severance for every year service. No actual retrenchment process needs to be engaged on, however the severance pay needs to be
Probably the biggest challenge is the increase in fines where fines ranging from R1.5m to 2% of your turnover for a first offence are currently gazetted
paid. Part-time employees are also not excluded from the three-month clause and equal treatment shall apply to these categories of workers as well.
It should be noted though that small businesses that either have less than 10 employees or who have less than 50 employees and have been in business less than two years are not limited by the fixed-term contract provisions.
On the dispute resolution front, security equivalent to 24 months’ salary needs to be paid in terms of section 145 in order to proceed with a review application and section 187 brings in unnecessary limitations to operational dismissals.
There is a new addition to picketing in that picketing rules may have an impact on third parties. For example, a third party who is a landlord to a business whose employees are about to strike may have picketing rules imposed on them, restricting their right to free trade. Unfortunately the inevitable strike violence is likely to continue as there has been no attempt made to curb violence in strikes.
The Labour Relations Bill is currently back at the National Assembly after proposed changes were suggested by the National Council of Provinces to remove urgent interim relief for trade unions and employers and to also allow supporters to participate in strike action.
Employment Equity Act: The Employment Equity Act has been gazetted and currently finds itself with no effective date as yet. One suspects that this, together with the Basic Con-
This removal of the appeal process and discretion for undertakings will put pressure on the labour courts, as this would force parties to litigate on issues that normally would be resolved outside of the corridors of justice
ditions of Employment Act, will be implemented as soon as the Labour Relations Act and the Employment Services Act are in place.
The Employment Equity Act again emphasises equal treatment and echoes the provisions of the other acts. Probably the biggest challenge is the increase in fines where fines ranging from R1.5m to 2% of your turnover for a first offence are currently gazetted. One is in no way attempting to justify non-compliant business; however, the increase in fines together with the wide discretion given to an inspector — who is often undereducated, underpaid and underresourced — could lead to potential corruption.
Other interesting changes are that the door is opened for sexual harassment cases to be dealt with in the CCMA as well as other discrimination cases, under certain conditions. Some sanity is brought in on the psychometric front in that psychometric tests now can only be utilised within the employment sphere if they are recognised by the Health Professions Council of SA. This limits Dr Google.
While recent court decisions indicate that the regional demographics, together with the national demographics, must be taken into account in determining the need for affirmative action, the proposed act moves to the national demographics in isolation. Clearly the legislature and judiciary are at odds and it will be interesting to see how developments occur particularly in light of the fact that there is still a task team investigating equal treatment as we speak. One would have assumed that the report of the task team would have been taken into account first, prior to implementing these various pieces of legislation.
Employment Services Bill: It is likely that the four pieces of legislation will be signed into law as a package, seemingly ahead of the national elections, and although the status quo applies now, we strongly urge businesses to understand the changes and potential impact on their business and to make the necessary changes to ensure not only their continued compliance but profitability as well.
NEW DEVELOPMENTS IN LABOUR LAWS