New employment code aims to address SA unemployment crisis

Recent amendments to the Code of Practice on Dismissals aims to address SA’s stubbornly high unemployment rate of 31.9% by simplifying procedures for the dismissal of workers.

The code should reduce litigation and delays in dismissals by introducing less formal processes that government hopes will lower hiring risks for employers.

The code promotes fairness in all dismissals, with appropriate flexibility for small employers, without compromising the fundamental rights of workers.

Any dismissal that is not based on a fair reason and conducted through a fair, even if simplified, process remains subject to challenge under labour law, says a weekend statement by the Department of Employment and Labour (DEL).

Proposed amendments to the Labour Relations Act (LRA) agreed by Nedlac (National Economic Development and Labour Council) will see a new clause inserted allowing employers to dismiss workers provided they have been given a fair and reasonable opportunity to respond to the reasons for dismissal.

These reasons must be legitimate, but this new clause removes the adversarial and pre-dismissal arbitration requirement.

Dismissals are still deemed automatically unfair if they breach existing rights, such as for reasons of discrimination on the grounds of race, religion and gender, pregnancy or participating in a protected strike.

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Less formal procedures

The code allows for less formal procedures for dismissals for all employers, especially small businesses, though this is not a free-for-all to get rid of unwanted workers and side-step the LRA’s Section 189 protections for retrenchments.

It does, however, allow for informal disciplinary processes when workplace rules are broken, says labour union the United Association of South Africa (Uasa).

One of the criticisms of the proposed amendments is the lack of clarity on what constitutes a small business, with some labour representatives arguing this could lead to procedural irregularities.

The repeal of some parts of Section 189 of the LRA does not remove the right to challenge procedural unfairness but restores balance by allowing such challenges to be brought more effectively after the retrenchment, through ordinary unfair dismissal proceedings.

“Urgent court applications during consultations have often led to rushed litigation, disrupted processes, and undermined meaningful engagement between employers and employees, placing form over substance,” says the DEL.

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The new code aims to remove many of the disputes that clog the Labour Court, while still retaining legal remedies for workers under general labour law and the Constitution.

The code allows employers to assess whether a hire is suitable, without compromising basic worker rights.

Government hopes this will encourage job creation and reduce unemployment.

A three-month qualifying period means dismissals based on misconduct, poor performance, or operational requirements cannot be challenged at the Commission for Conciliation, Mediation and Arbitration (CCMA) or Labour Court, provided the dismissal is not automatically unfair.

The Draft Code lowers the procedural bar for dismissals within the first three months.

Employers can terminate employment within the first three months without extensive counselling or hearings, as long as the reason is not automatically unfair.

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Under the existing code, employees can claim unfair dismissal from the first day of employment, while employers are required to provide training, evaluation and fair process during the initial probation period. The new code reduces these obligations on employers.

Another change under the new code limits permissions for strike action related to socio-economic issues for 24 months, as opposed to the indefinite periods currently in force.

Another change involves Section 186 and the definition of unfair labour disputes. Excluded from this definition are disputes related to promotion, demotion, probation, training and a refusal to reinstate or re-employ former employees, though this amendment will be delayed for a year.

“One of the biggest hurdles in growing employment has been the difficulty businesses face when hiring first-time workers,” says the DEL.

“Employers are understandably cautious about taking on young, inexperienced candidates due to the legal risks and costs of dismissing someone for incompatibility.”

The period for public comments has closed. The DEL is now preparing for the implementation of the proposed amendments once these have been presented to parliament.

This article was republished from Moneyweb. Read the original here.