Intro to proposed amendments

Transcription

1 1 Intro to proposed amendments presented by GRANT WILKINSON

2 2 MEET THE PRESENTER : GRANT WILKINSON

3 3 Grant Wilkinson Executive Grant matriculated at Muir College in Uitenhage and progressed to the University of Port Elizabeth, where he attained his LLB degree. At University he was involved in numerous activities and was awarded awards including holding office as Public Relations Officer of the Law Committee (1999/2000); Vice Chairman of Law Committee (2000/2001), AC Cilliers prize for best performance in Civil Procedure ;Golden Key Academic Honours Society. Grant completed his articles at Greyvensteins Nortier in Port Elizabeth, before staying on as a civil litigation attorney, appearing in both the Magistrates and High Courts by the age of 24. Grant then went on to work for an employer s organisation, SEESA, where he worked in the EL and PE branches, before settling with Global in Cape Town. He continues to study a variety of courses. Grant is a versatile individual whose career has been moulded in the hotbed of the Eastern Cape. Grant is a hardworking, dedicated individual whose eye for detail has made him a contracts specialist. Grant belies the old saying of Jack of all Trades and Master of None and has utilised his commercial law and psychology backgrounds to good effect in his roles as manager, attorney and facilitator. In more recent times Grant has been fortunate enough to be asked to be a contributory author in a multinational book on Drugs and Alcohol in the Workplace and his articles have been published in numerous publications including HR Future and Business Day Tax & Law Review Grant designed and implemented the Labour Audit process and is also the anchor facilitator and Institute Liaison for GBS Diploma in Labour Law and has lectured for various institutes including inter alia: Da Vinci Institute of Technology; Rhodes Investec Business School and the University of Stellenbosch Business School(where he is a member of the Faculty for the African continent). Grant has been the CAPES and a business representative at the Department of Labour s consultation proccess as well as the Parliamentary sessions

4 4 Index Introduction Brief background TES Fixed term contracts/temporary employees Collective Bargaining/Organisational rights Compliance and enforcement Employment Equity and ESB Way Forward

5 INTRODUCTION 5

6 6 Where are we? 5 Acts on the cutting table Labour Relations Act Basic Conditions of employment Act Employment Services Bill Employment Equity Act Broad Based Black Economic Empowerment Act

7 Introduction 7

8 8 The Bills Following negotiations in NEDLAC during 2009 and 2010 on the Department of Labour s (DOL) various proposals to amend the labour laws, the DOL drafted the Labour Relations Amendment Bill, 2010, the Basic Conditions of Employment Amendment Bill, 2010, the Employment Equity Amendment Bill 2010 as well as the Employment Services Bill, The DOL thereafter submitted these Bills to Cabinet who requested a Regulatory Impact Assessment (RIA) to be conducted on the proposed Bills. The Employment Promotion programme (EPP) subsequently commissioned a multi-disciplinary team to conduct the RIA. The completed RIA was submitted to the DOL and the Presidency on 9 September 2010.

9 9 Process in NEDLAC The Nedlac 6-a-side Task Team, (six from Business, six from Unions and six from Government) also referred to as the Plenary, was established early in At its first meeting, held on 20 January 2011, Government presented the Bills to the social partners for engagement. Business rejected the Bills as being unconstitutional and against the recommendation in Government s own Regulatory Impact Assessment study

10 10 Process in NEDLAC It was agreed that the process of engagements would be conducted under six broad themes, in the following order of engagement, Theme 1: Theme 2: Theme 3: Theme 4: Theme 5: Theme 6: A-typical Employment Relationships Dispute Resolution Collective Bargaining Compliance and Enforcement Employment Equity Access to Employment

11 A-Typical Employment 11

12 Temporary Employment Services 1. S 198(1)(b)(i) and s198(2)(b)(ii) - A 6 month threshold is placed on labour broker employment after which employee is deemed to be employee of the client and the labour broker for the purposes of the Labour Relations Act. Comment - The 6 month period should be longer, and joint and several liability should apply rather than the deeming provision. Deemed is referred to in the same manner as in the current Employment Equity Act. The Labour Broker may continue as normal after six months. You the client would need to look at indemnities with Broker specifically in regard to dismissal after 6 months. This does not mean permanent employment. this has now been changed to three months S198(2) Application of Labour Broker provisions of deeming to the entire LRA, rather than Chapter 8 only. This will deem the employee of the labour broker to be an employee of the client and the labour broker for the purpose of organisational rights, strike action and dismissal. Comment Against a deeming position. The rights should only be Chapter 8 (Dismissal of the LRA). Joint and several liability is from day one on breaches of bargaining council agreements, sectoral determination and collective agreements. The real problem only will occur in dismissals. See comments as above. No huge risk to the business if you are using legitimate labour brokers and there is an

13 Temporary Employment Services 3. S198 (4F) Temporary employment service (TES) employee must be treated on the whole not less favourably than an equivalent employee of the client (after 6 months). Comment - The whole absurd concept of equal pay for equal treatment is problematic. In theme 5 it will reappear in relation to all employees. 13 This has not worked anywhere in the world. In most cases there will be differentiating factors and therefore unless there is an exact full time comparative, you do not face high risk. 4. Justifiable reasons for different treatment would be: The employees seniority, experience or length of service Merit criteria Quantity or quality of work performance or Any other relevant criteria that is not prohibited in terms of section 6 of the Employment Equity Act.

14 Temporary Employment Services 5. S21(8)(v) A person determining (eg. an arbitrator) whether a trade union is representative must take into account the extent to which employees are from TES, part time and fixed term employees. Comment - This will make it easier for the union to gain organisational rights at lower thresholds of representivity. Practically no effect. Atypical workers difficult to organise as a rule Threshold of R per annum generally agreed. It is only employees earning less than R per annum after 6 months that get the extra protection. Subsequently the threshold has increased to over R190 thousand

15 15 Fixed Term Contracts 1. S200B(3) Fixed term contracts in excess of 6 months have numerous restrictions for employees earning below the threshold (R per annum). Comment - Is the period should be longer (12 months). Practical implication is that the onus then is placed on the employer beyond 6 months to justify the use of a fixed term contract. Comment this is now proposed at 3 months 2. S200B(7) Fixed term contract employees over 6 months to be treated equally to indefinite employees. Comment - Again like 3 above. Same comment little risk if no full time comparatives. Same comment 3. S(10) One week remuneration per year of service to be paid to employees engaged in a fixed term contract for a genuine project.only kicks off after 24 months. Comment - This just adds to the cost of doing business. You will have to budget for this.

16 16 Part Time Employees Part time employees earning under the earnings threshold and after 6 months of employment are to be treated equally to full time employees. Same as above. Comment this is now proposed at 3 months Comment - This is absurd and has not worked anywhere else in the world, all you do is raise expectations. Can part time employees survive?

17 Collective Bargaining 17

18 Collective Bargaining 1. S21 Easier access to previously majority trade union rights under s21 on trade union official, leave and access to information. Comment - This is a problem messing with the principle of a majority union situation. Workplace Example of 1000 employees ie union might get majority trade union rights with say 400 members. Not like in the past 501. Cosatu now also has a problem with this clause S32(5A) When the Minister considers extension of Bargaining Council minority agreements, the Minister can take into account the extent to which employees are employed by labour brokers, on fixed term or part time contracts. Comment Sufficiently representative is already a problem.

19 19 Collective Bargaining 3. S43(3) Providing that any matter, including negotiation of wages and terms conditions of employment, can now be agreed upon by a Statutory Council and extended by the Minister. Comment Could be of major impact for instance in the building industry who have battled to extend statutory council agreements. 4. S55(1)(4)(b) of BCEA Sectoral determinations may provide for minimum increases on actual rates of pay. Comment - This will result in much higher wage costs where employees are paid above the minimum prescribed rate.

20 20 Collective Bargaining 5. Watered down provisions by Government that fail to restrain strike violence adequately. Comment Government rejected a proposal that dismissal of workers in essential services who go on strike should be automatically fair. Unrestrained strike violence will be a continued deterrent to employment and direct foreign investment. 6. S69(6)(a) Picketing rules may apply to third parties who are not employers. Comment - For instance mall owners.

21 21 Compliance & Enforcement

22 22 Compliance & Enforcement 1. S69 BCEA Removal of compulsory undertakings and removal of employers right to object and engage upon compliance orders. Comment - Inspectors now have a discretion. This could open the way for bribery and corruption. 2. Schedule 2, table 1 of BCEA. Increase to fines for administrative noncompliance. Proposed 200%. Comment - Increased cost of employment for administrative obligations. 3. S55(o) of BCEA Provides for the ECC can set thresholds in a sector for organisational rights of access and subscriptions in a sector, regardless of the agreement in the workplace. Comment Undermines the Labour Relations Act

23 Employment Equity Access to Employment Still to proceed through the Parliamentary process

24 24 Amendment of section 6 of Act 55 of Section 6 of the principal Act is hereby amended (a)by the substitution for subsection (1) of the following subsection: (1) No person may unfairly discriminate, directly or indirectly, against an employee, in any employment policy or practice, on one or more grounds, including race, gender, sex, pregnancy, marital status, family responsibility, ethnic or social origin, colour, sexual orientation, age, disability, religion, HIV status, conscience, belief, political opinion, culture, language, [and] birth or on any other arbitrary ground. ; and (b)by the addition of the following subsections: (4) A difference in terms and conditions of employment between employees of the same employer performing the same or substantially the same work or work of equal value that is directly or indirectly based on any one or more of the grounds listed in subsection (1), is unfair discrimination. (5) The Minister, after consultation with the Commission, may prescribe the criteria and prescribe the methodology for assessing work of equal value contemplated in subsection (4). Comment: This widens the reach of discrimination arbitrary means without any justification. So if you have a justification then this is not unfair discrimination. 24

25 25 Amendment of section 10 of Act 55 of Section 10 of the principal Act is hereby amended (a)by the deletion in subsection (6) of the word or at the end of paragraph (a) and the insertion in that subsection after paragraph (a) of the following subsection: (aa) an employee may refer the dispute to the CCMA for arbitration if (i) (ii) the employee alleges unfair discrimination on the grounds of sexual harassment; or in any other case, that employee earns less than the amount stated in the determination made by the Minister in terms of section 6(3) of the Basic Conditions of Employment Act; or ; (b)by the substitution in subsection (6) for paragraph (b) of the following paragraph: (b) any party to the dispute may refer it to the CCMA for arbitration if all the parties to the dispute [may] consent to arbitration of the dispute. ; and (c)by the addition of the following subsection: (8) A person affected by an award made by a commissioner of the CCMA pursuant to a dispute contemplated in subsection (6)(aA) may appeal to the Labour Court against that award within 14 days of the date of the award, but the Labour Court, on good cause shown, may extend the period within which that person may appeal.. 25

26 26 Amendment of section 10 of Act 55 of 1995 Comment: These are significant changes. Arbitrators can get involved in discrimination cases. Discriminatory cases are complex and we do not believe the average Commissioner is equipped to deal with such. Appeal within 14 days. 26

27 27 Substitution of section 42 of Act 55 of The following section is hereby substituted for section 42 of the principal Act: Assessment of compliance 42. (1) In determining whether a designated employer is implementing employment equity in compliance with this Act, the Director-General or any person or body applying this Act [must] may, in addition to the factors stated in section 15, take [into account all of] the following into account: (a)the extent to which suitably qualified people from and amongst the different designated groups are equitably represented within each occupational [category and] level in that employer s workforce in relation to the[ 27

28 28 Substitution of section 42 of Act 55 of 1998 (i)] demographic profile of the national and regional economically active population; [(ii) pool of suitably qualified people from designated groups from which the employer may reasonably be expected to promote or appoint employees; (iii) (iv) (v) economic and financial factors relevant to the sector in which the employer operates; present and anticipated economic and financial circumstances of the employer; and the number of present and planned vacancies that exist in the various categories and levels, and the employer s labour turnover;] 28

29 29 Substitution of section 42 of Act 55 of 1998 (b)[progress made in implementing employment equity by other designated employers operating under comparable circumstances and within the same sector] reasonable steps taken by a designated employer to train suitably qualified people from the designated groups; (c)reasonable [efforts made] steps taken by a designated employer to implement its employment equity plan; (d)the extent to which the designated employer has made progress in eliminating employment barriers that adversely affect people from designated groups; [and] (da) reasonable steps taken by an employer to appoint and promote suitably qualified people from the designated groups; and (e)any other prescribed factor. Comment: (b), (c), (d) (da) and (e) make it now critical to keep records and design all programmes to support compliance in Employment Equity. 29

30 30 Substitution of schedule 1 of Act 55 of The following Schedule is hereby substituted for Schedule 1 to the principal Act: Schedule 1 MAXIMUM PERMISSIBLE FINES THAT MAY BE IMPOSED FOR CONTRAVENING THIS ACT This Schedule sets out the maximum fine that may be imposed in terms of this Act for the contravention of certain provisions of this Act. 30

31 PREVIOUS CONTRAVENTION Take Aways CONTRAVENTION OF ANY PROVISION OF SECTIONS 16 (read with 17), 19, [20, 21,] 22, 24, 25, 26 and [23] 43(2) CONTRAVENTION OF ANY PROVISION OF SECTION 20, 21, 23 and 44(b) No previous contravention [R ] R The greater of R or 2 % of the employer s turnover 31 A previous contravention in respect of the same provision A previous contravention within the previous 12 months or two previous contraventions in respect of the same provision within three years Three previous contraventions in respect of the same provision within three years [R ] R The greater of R or 4 % of the employer s turnover [R ] R The greater of R or 6% of the employer s turnover [R ] R The greater of R or 8% of the employer s turnover Four previous contraventions in respect of the same provision within three years [R ] R The greater of R or 10 % of the employer s turnover 31

32 32 Substitution of schedule 4 of Act 55 of 1998 Comment: Section 16 Consultation with employees Section 19 - Analysis Section 22 Publication of report Section 24 Designated employer must assign manager R Section 25 Duty to inform Section 26 Duty to keep records Section 43(2) Review by Director-General Section 20 Employment Equity Plan Section 21 - Report Section 22 - Successive employment equity plans 2% of turnover Section 44(b) Recommendations by the DG 32

33 33 Substitution of schedule 4 of Act 55 of The following Schedule is hereby substituted for Schedule 4 to the principal Act: Schedule 4 TURNOVER THRESHOLD APPLICABLE TO DESIGNATED EMPLOYERS 33

34 34 Take Aways Sector or subsectors in accordance with the Standard Industrial Classification Agriculture Mining and Quarrying Manufacturing Electricity, Gas and Water Construction Retail and Motor Trade and Repair Services Wholesale Trade, Commercial Agents and Allied Services Catering, Accommodation and other Trade Transport, Storage and Communications Finance and Business Services Community, Special and Personal Services Total annual turnover [R2,00 m] R6.0m [R7,50 m] R22,50m [R10,00 m]r30,00m [R10,00 m]r30,00m [R5,00 m] R15,00m [R15,00 m]r45,00m [R25,00 m]r75,00m [R5,00 m] R15,00m [R10,00 m]r30,00m [R10,00 m]r30,00m [R5,00 m] R15,00m 34

35 35 Way Forward Basic Conditions Amendment Bill : Approved by National Assembly in June. Off to the National Council of Provinces for consideration. They usually take 6-8 weeks to consider. The Bill then goes through a process to the Presidency for signature. Labour Relations Amendment Bill : Approved by National Assembly in August. Off to the National Council of Provinces for consideration. They usually take 6-8 weeks to consider. The Bill then goes through a process to the Presidency for signature. Employment Equity Amendment Bill : Parliamentary Portfolio Committee took inputs on the 7th of August. The Committee will now deliberate Employment Services Bill : Same as Employment Equity above.

36 36 THE END THANK YOU

37 GRANT WILKINSON Cell : grant@globalbusiness.co.za Twitter : Wilkinson_SA Linkedin : za.linkedin.com/pub/grant-wilkinson/36/49a/795/ 37