Amend­ment to ben­e­fit ca­sual staff

Pro­tec­tion for tem­po­rary, fixed-term and part-time work­ers may prove con­tentious

Business Day - Business Law and Tax Review - - BUSINESS LAW & TAX REVIEW - JONATHAN GOLD­BERG & GRANT WILKIN­SON

AFTER a long wait, the labour leg­isla­tive amend­ments have reached their fi­nal stage. We have al­ready seen the im­ple­men­ta­tion of the Ba­sic Con­di­tions of Em­ploy­ment Act as well as the Em­ploy­ment Eq­uity Act. But by far the most con­tro­ver­sial amend­ment is the Labour Re­la­tions Act.

The amend­ments of the act cover many themes, in­clud­ing atyp­i­cal em­ploy­ment, dis­pute res­o­lu­tion and col­lec­tive bar­gain­ing, among oth­ers.

The most con­tro­ver­sial as­pect of the Labour Re­la­tions Act is the ex­tra pro­tec­tion for tem­po­rary em­ploy­ment ser­vice, fixed-term and part-time em­ploy­ees, that is in­tro­duced by new sec­tions 198(A), (B), (C) and (D).

What is im­por­tant to bear in mind is that the three-month def­i­ni­tion of tem­po­rary work is not ap­pli­ca­ble to gen­uine re­place­ment em­ploy­ees, such as ma­ter­nity cover. The “deem­ing clause” ap­plies to sit­u­a­tions where the em­ployee is earn­ing less than the thresh­old, now R205,433 a year, 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 in terms of the act. The tem­po­rary em­ploy­ment ser­vice provider may re­main after three months. The ex­tra pro­tec­tions have al­ready led to con­fu­sion in the labour mar­ket.

Ac­cord­ing to the act and for the pur­poses for sec­tions 198A(5), 198B(3) and 198C(3)a, equal treat­ment is also pro­vided for. Jus­ti­fi­able rea­sons for dif­fer­ence in treat­ment in­cludes that dif­fer­ent treat­ment is a re­sult of cer­tain fac­tors, tak­ing into ac­count: a) Se­nior­ity, ex­pe­ri­ence or length of ser­vice; b) Merit; c) The qual­ity or quan­tity of work per­formed; or d) Any other cri­te­ria of a sim­i­lar na­ture, if such jus­ti­fi­ca­tion is not pro­hib­ited by sec­tion 6 of the Em­ploy­ment Eq­uity Act 1998 (Act No 55 of 1998).

This is wide enough to find rea­sons for such dif­fer­en­tials in most cases. The three-month and ex­tra pro­tec­tion does not only ap­ply to 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 for fixed-term and part-time em­ploy­ees.

Sec­tion 200B (10) places a greater bur­den on em­ploy­ers, as em­ploy­ees em­ployed on a fixed-term con­tract for longer than 24 months will need to be paid one week sev­er­ance for ev­ery year of ser­vice. No ac­tual re­trench­ment process needs to be en­gaged; how­ever, the sev­er­ance pay needs to be paid.

A big drive in th­ese amend­ments was the push to ease ac­cess to dis­pute res­o­lu­tion fo­rums and to as­sist in the stream­lined en­force­ment of awards.

To pre­vent abu­sive prac­tices by em­ploy­ers, sec­tion 145 is amended to pro­vide for the pay­ment of 24 months’ se­cu­rity (in the case of re­in­state­ment) or com­pen­sa­tion (equiv­a­lent to the amount awarded) by em­ploy­ers only, should they wish to take an award on re­view to the Labour Court. This onesided pro­vi­sion will no doubt put pres­sure on the con­sti­tu­tional right of ac­cess to courts for par­tic­u­lar small busi­nesses.

To fur­ther as­sist em­ploy­ees in en­forc­ing awards, an award is treated as an or­der of court. This would al­low a quick ac­cess­ing of en­force­ment pro­ceed­ings such as war­rants. The con­cern in this in­stance is the abil­ity of pro­cesses to en­sure proper no­ti­fi­ca­tion to an af­fected em­ployer.

There is also a change in sec­tion 187, which will po­ten­tially have 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.

Sec­tion 189A’s amend­ment there­fore puts enor­mous pres­sure on re­trench­ment pro­cesses as now no party, in a large-scale re­trench­ment, may un­rea­son­ably refuse an ex­ten­sion beyond the 60-day pe­riod.

One of the ma­jor aims of the leg­is­la­tion, as ver­balised by the Depart­ment of Labour in the leg­isla­tive pro-

A big drive in th­ese amend­ments was the push to ease ac­cess to dis­pute res­o­lu­tion fo­rums

cess, is the ease of ac­cess to work­places for unions. To ad­dress this, S21 pro­vides for this eas­ier ac­cess to pre­vi­ously majority trade union rights un­der s21 on trade union of­fi­cial, leave and ac­cess to in­for­ma­tion. This amend­ment may see a union with less than 50% plus 1 rep­re­sen­ta­tion be­ing given majority sta­tus. The con­cern here is that this may lead to a pro­lif­er­a­tion of trade unions in the work­place which is con­trary to the act’s orig­i­nal in­ten­tion.

Sadly, de­spite there be­ing a fun­da­men­tal prob­lem in how strikes are be­ing con­ducted, there are no real pro­vi­sions by the gov­ern­ment that re­strain strike vi­o­lence ad­e­quately and bal­lot­ing (pro­posed in the process) has been re­moved by the Par­lia­men­tary Port- fo­lio Com­mit­tee. Some­thing must be done to ad­dress this is­sue as there are reper­cus­sions across the board, in­clud­ing in­vestor con­fi­dence.

The amend­ment of S69(6)(a) which will see pick­et­ing rules pos­si­bly ap­ply­ing to third par­ties who are not em­ploy­ers, ie mall own­ers, will do lit­tle to quell the con­cerns.

There have been nu­mer­ous de­lays in the im­ple­men­ta­tion of the act. While all in­di­ca­tions were that the im­ple­men­ta­tion date would be Oc­to­ber 1, lat­est de­vel­op­ments lean to­wards a Novem­ber 1 im­ple­men­ta­tion. At the time of writ­ing the reg­u­la­tions were in the process of be­ing fi­nalised by Ned­lac and the CCMA rules re­drafted to en­sure th­ese are aligned to the amended act.

We need to be prag­matic and hon­est when analysing the con­se­quences of the amend­ments. It took the depart­ment un­til late 2012 to fi­nally ad­mit this leg­is­la­tion will lead to job losses.

SA is not in a po­si­tion where it can lose even one job. As busi­nesses we need to en­sure we prop­erly un­der­stand the leg­is­la­tion, its im­pact and then to plan for the proper strate­gic im­ple­men­ta­tion of same in the work­place to en­sure con­tin­ued suc­cess.

Pic­ture: THINKSTOCK

UN­DER­STAND­ING IS THE KEY TO CHANGE One of the ma­jor aims of the leg­is­la­tion, as ver­balised by the Depart­ment of Labour in the leg­isla­tive process, is the ease of ac­cess to work­places for unions There are no real pro­vi­sions by the gov­ern­ment that...

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