1 DEPARTMENT OF LABOUR LABOUR LAW AMENDMENTS Briefing to the Select Committee on Labour and Public Enterprises

Background Four bills published on 17 th December 2010:  Labour Relations Amendment Bill, 2010  Basic Conditions of Employment Amendment Bill, 2010 Submitted to NEDLAC at same time, together with report on Regulatory Impact Assessment conducted on the bills during

Background cont. Public consultation sessions held in each province during January and February 2011 with average attendance of approx. 250 representatives of all stakeholders. Comment received from approximately 390 individuals and organisations. Most comment focused on issue of labour brokers and mostly critical of approach in published bill. NEDLAC process commenced in January 2011 and concluded in January The Bills were tabled in Parliament on 29 May

What do the bills respond to? increased informalisation of labour in the labour market; Adjust the law to ensure compliance with South Africa’s obligations in terms of international labour standards; Ensure that labour legislation gives effect to fundamental Constitutional rights including the right to fair labour practices; Enhance the effectiveness of the labour market institutions such as the Labour Court, the CCMA, the Essential Services Committee, the labour inspectorate and bargaining and statutory councils; Clarify uncertainties that have arisen from the interpretation and application of the LRA and BCEA in the past decade. 4

What do the bills respond to? “ In order to avoid exploitation of workers and ensure decent work for all workers as well as to 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. Provisions will be introduced to facilitate unionisation of workers and conclusion of sectoral collective agreements to cover vulnerable workers in these different legal relationships and ensure the right to permanent employment for affected workers” 5

What do the bills respond to? Cont. Abuses in the labour market: Labour brokers roll-over contracts of employees thereby making workers permanent temporary employees; Workers employed by Labour brokers earn less than their counterparts employed by clients doing the same job; Workers employed by labour brokers are not able to take up their dismissal cases with the CCMA/Labour Court and not able to enforce decisions (the issue of who is their employer is always a problem); Workers employed by Labour Brokers often do not have access to social benefits (eg. retirement funds) 6

Temporary Employment Services (labour broking) Focus on discussion around amendments to section 198 of Labour Relations Act. Amendment adds general protections as follows: i.Employees bringing a claim for which a TES and client are jointly and severally liable may bring proceedings against either. ii.A labour inspector may enforce compliance against TES or client in terms of BCEA. iii.A TES may not employ on terms and conditions not permitted by LRA or BCEA or bargaining council agreement. iv.Labour Court or arbitrator may now rule on whether a contract between a TES and a client complies with the LRA, a sectoral determination or bargaining council agreement. 7

s.198 cont. New section 198 A – temporary employment services for employees earning below earnings threshold. Protection for employees earning below BCEA threshold (R172,000.00). Employees of a TES if employed to perform ‘genuinely temporary work’ – otherwise deemed to be employees. Temporary work defined and limited to 6 months. Termination of assignment to avoid deemed employment constitutes a dismissal and may be challenged. Employees may not be treated less favourably than employees who perform same or similar work. 8

s.198 cont. New section 198B – fixed term contracts for employees earning below earnings threshold Ten justifiable reasons for fixing the term of a contract. If employed for longer than 3 months, deemed to be employed for an indefinite period. Any renewal or extension to the contract must be in writing and must state reasons that justifies fixed-term nature of contract. Equal treatment applies if employed for longer than 3 months. S 198B does not apply to an employer employing less than 10 employees nor does it apply to an employer who employs less than 50 and who has been in operation for less than 2 years (flexibility for SMME’s) 9

s.198 cont. New s 198C – part-time employment of employees earning below threshold New section follows ILO Convention on part-time work (Conv 175, 1994). Defines part-time employees and requires no less favourable treatment than comparable full-time employees. Requires employers to give part-time employees access to training and skills development that is no less favourable than comparable full-timers. Employers must provide part-time employees with the same access to opportunities to apply for vacancies as full-time employees 10

Temporary employment overview Temporary employment will be limited to a period not exceeding 6 months and must be for genuinely temporary work. Temporary employees must be treated the same as permanent workers unless there is a justifiable reason. Temporary employees protected against unfair dismissal. Temporary employees (and trade unions) may pursue either the TES or the client in cases of abuse. Protection applies to those earning below the BCEA threshold of R172,

Dispute Resolution Amendments proposed to approximately 36 sections and sub- sections of the LRA dealing with operations of CCMA and dispute resolution Broad thrust of the amendments expand the function and services of the CCMA, but also streamline dispute resolution and dispute resolution services Essential services and strikes dealt with under collective bargaining 12

Dispute Resolution cont. Significant amendments: i.CCMA may provide administrative assistance if asked in respect of service, but employee remains responsible for service (s.115). ii.Arbitration awards become final and binding and will speed up enforcement. This will apply to certified arbitration awards issued by bargaining councils as well (s.143). iii.Reviews must be heard within 6 months and judgement within 6 weeks, except in exceptional circumstances (s.145). iv.Institution of a review does not suspend operation of award unless party provides security (s.145). v.CCMA empowered to intervene in disputes when appropriate to secure resolution in the public interest (s.150). 13

Dispute resolution cont. Significant amendments: vi.Labour Court may only review applications against decisions or rulings of CCMA in exceptional circumstances. This aims to limit the use of review applications to delay arbitration outcomes (s.158). vii.Representation in Labour Court is tightened up to prevent the charging of fees by labour consultants unless agreed to by the Labour Court (s.161); viii. The section dealing with operational requirements dismissals is amended to ensure that a party does not unreasonably refuse to agree to extend the period for consultation over a proposed retrenchment (s.189). 14

Collective Bargaining Amendments to sections 32 & 49: i.Bargaining council required to have in place an effective procedure to deal with applications by non-parties for exemptions; ii. Applications for exemptions from collective agreements to be dealt with by bargaining councils within 30 days; iii.Appeals against decisions relating to exemptions to be dealt with no later than 30 days after appeal lodged and council to ensure that appeal body able to meet the time requirement; iv.Exemptions appeal body to be independent of trade union and employer organisations; 15

Collective Bargaining cont. v.Opportunity for public comment on collective agreements prior their publication introduced where parties only sufficiently representative; vi.In determining whether parties are sufficiently representative, the Minister may take into account the extent to which employees in the sector are employed in non-standard forms of employment; 16

Collective Bargaining cont. Other significant amendments: i.Labour Court may order that an administrator be appointed to administer a trade union or employer’s organisation if that organisation is not functioning in line with the requirements of the LRA; ii.The BCEA is amended to make provision for a sectoral determination to provide adjustments to minimum rates or minimum increases in pay; iii.Sectoral determinations may be promulgated to cover any workers not covered by other sector determinations or not covered by agreements entered into by statutory councils (also BCEA amendment); iv.The Minister may also determine levels of representativity for the purposes of organisational rights via a sectoral determination for vulnerable workers in sectors that are difficult to organise for trade unions. 17

Essential Services Key amendments: i. Power extended to ESC to determine minimum services in absence of an agreement; i.Government will also be represented on the ESC; ii.A new category of ‘public officials exercising authority in the name of the state’ are included within an essential service if covered in a minimum service agreement; iii.An arbitration award in relation to an essential services dispute that has implications for government becomes binding unless it is submitted to Parliament and Parliament vote within 14 days to make the award non- binding on government 18

Compliance & enforcement Key amendments to the BCEA: i.Written undertakings become discretionary. Inspectors are no longer required to issue them (s.68); ii.Compliance orders may specify date by which employer must make representations to the Department and the Labour Court (s.69); iii.DG applications to make compliance orders an order of the court streamlined to make enforcement more effective (deletion of sections 71 & 72 and amendment of s.73); iv.Penalties increased by 200 percent; v.Sectoral determinations may regulate or prohibit the placement of employees by temporary employment services and sub-contracting arrangement. 19

Maintaining a balance between regulation & flexibility Areas that promote flexibility in the amendments: i.Guidelines for justifiably different treatment of temporary and fixed- term contract workers; ii.Allowance for fixed-term contracts where there are justifiable reasons; iii.Use of fixed-term contract of 6 months as probation period; iv.Exemption applications from collective agreement and appeals to be dealt with in 30 days; v.Businesses employing less than 10 employees or employing less than 50 and who has been in operation for less than 2 years excluded from section dealing with fixed term contracts. 20

Summary Amendments to LRA and BCEA focus on: Regulating labour brokers and atypical forms of employment; Adding protection for vulnerable workers; Facilitating unionisation in vulnerable sectors; Improving the functioning of labour market institutions, including the CCMA, bargaining and statutory councils; Addressing current problems in industrial disputes and dispute resolution. 21

Thank you 22