Controversial amendments to labour act announced
This past Sunday the announcement of the enactment of the Labour Relations Act was made.
MBOMBELA – This past Sunday the announcement of the enactment of the Labour Relations Act was made.
The gazette was made available yesterday and this is an attempt to summarise some of the more pertinent changes.
According to the South African Chamber of Commerce and Industry (Sacci), one of the more controversial and debated amendments is the amendment of s198 which makes provision for temporary employment service (Tes) employees who earn below the threshold (currently R205 433 per annum) to be deemed permanent employees of the client after a continuous period of three months’ employment.
“Our interpretation of the impact of the three months’ deeming clause is that due to the extended joint and several liability, enforcement may occur against both the Tes and the client, and both may be referred to the Commission for Conciliation, Mediation and Arbitration (CCMA) and equal treatment applies unless there is a justifiable reason for differential treatment.
The extra protections will force users to use legitimate Tes as they would need to ensure that any indemnity provided by the Tes would be able to be honoured,” Ms Nonie Sibiya of Sacci said.
The S198B(3) adds numerous restrictions for the utilisation of fixed-term contracts in excess of three months for employees earning below the threshold. An employer may engage an employee on a fixed-term contract or successive fixed-term contracts for longer than three months of employment only if certain factors are present.
This is further supplemented by S198B(8) which provides that fixed-term contract employees over three months should be treated the same as indefinite employees.
An important addition which adds to the cost of utilising fixed-term contract employees on a project, is that one week’s remuneration per year of service would need to be paid to employees engaged in a fixed-term contract for a genuine project after a period of 24 months. Industries using long-term project-based work, such as the construction industry will now be faced with the extra financial burden of this payment in a time where the industry is under enormous financial pressure.
The retail sector is not spared from the impact of the amendments as part-time employees earning under the threshold and after three months of employment are to be treated the same as full-time employees.
One of the changes which has been the subject of much criticism for its one-sidedness and its restriction of the constitutional right of access to courts, is the addition of S145(8) which makes provision for 24 months’ security or the full amount of a compensation award to be paid by an employer pending review of a matter. Employers, not employees or trade unions, will now be required to lodge security in all review cases. The question is whether this is fair and equitable and also whether it is a reasonable limitation of the constitutional right of access to courts.
The S187 is amended by an insertion which will lead to a restriction on retrenchments for operational requirements by expanding the grounds for automatically unfair dismissals. The implication is that it seems that a Fry’s Metal type retrenchment, where a change in conditions of employment is required, will no longer be possible.
A further restriction on employers embarking upon a retrenchment exercise is set out in S189A, where more onerous provisions are inserted in relation to large retrenchments. No party, in a large-scale retrenchment, may unreasonably refuse an extension beyond the 60-day period. A licence is in a sense given to a facilitator to extend the 60-day consultation period. Under the circumstances one can suspect that an employer may now bank on a 90-day period.
S21 is amended to ease access to previously majority trade-union rights in respect of trade-union officials, leave and access to information. This may lead to a union with 40 per cent of the workforce (as an example) receiving majority status. To further ease recruitment there has been an extension of the definition of workplace to include permanent staff, fixed-term contract workers as well as Tes employees.
Other interesting changes are:
• The amendment of S69(6)(a) which provides that picketing rules may apply to third parties who are not the employers, such as mall owners.
• An award will have the same power as an order of court
• An amendment in respect of representation at CCMA will limit the utilisation of consultants
There is no effective date for the legislation as yet.
