Summary of the Labour legislative amendments

Transcription

1 Summary of the Labour legislative amendments The Employment Equity Amendment Act came into operations 1 of August The dates on which the Basic Conditions of Employment Amendment Act and the Labour Relations Amendment Act will come into operation will be announced. Labour Relations Amendment Act and Basic Conditions of Employment Amendment Act The amendments to the Basic Conditions of Employment Act (BCEA) and Labour Relations Act (LRA) seem primarily aimed at affording greater rights and uniform protection to atypical forms of employment such as part time and fixed-term contract employees. In addition, the Minister will now be able to set minimum increases in all wages within a sector, opposed to merely setting a minimum wage. This concept is referred to as setting actuals opposed to theoretical minimums. Greater organisational rights are afforded to minority trade unions that are sufficiently representative, albeit not the most representative within a workplace. Finally, draconian powers are afforded to labour inspectors and the Director-General to enforce compliance with the Acts. Their authority to issue compliance orders and enter into written undertakings is unqualified and unchecked, with no opportunity to object or appeal to the Labour Court. Finally, a number of non-controversial amendments are made to regulate the functioning of the CCMA and Labour Court as well as adjusting thresholds and fines for inflation. Child Labour All references in the Basic Conditions of Employment Act to employment of children have been replaced with work by children in order to align our legislation with International Labour Organisation (ILO) standards. According to the ILO, any chores that can distract from school and learning can be regarded as work by a child. The ILO has committed to provide a list of acceptable chores.

2 Minimum increases on sectoral determination or actuals. In addition to the power to set minimum levels of remuneration, the Minister now has the ability to provide for all workers within a sector to receive a minimum raise. This not only affects the minimum wage, but also the actual amount that workers are paid. So if a farmer s senior or skilled workers earn more than the prescribed minimum wage, their salaries will also have to be proportionally increased if the Minister announces a minimum increase in a sectoral determination. This undermines and actually threatens the job security of higher-earning farm workers because it may act as the risk of increases on actual actually Acts as a disincentive to pay warm workers more than the prescribed minimum. Monitoring and enforcement by labour inspectors, the Department of Labour and the Labour Court. Prior to the amendment, if a labour inspector had reason to believe that an employer is not complying with any provisions of the BCEA, he/she was obliged to enter into a written undertaking with the employer whereby he/she undertook to comply. If the employer refuses or fails to adhere to it, the labour inspector could issue a compliance order. The employer could still object to the compliance order by making a representation to the DG of Labour to squash it. If this fails, the employer could appeal the compliance order to the Labour Court. The amendment have to a large extent removed the employer s ability to put his case forward. Labour inspectors can now exercise discretion whether or not to enter into a written undertaking with the employer or whether to issue a compliance order directly. If a compliance order is issued, it must state the time period within which to comply, failing which the DG can approach the Labour Court to make the compliance order an order of court. The provision allowing the employer to object and make a representation to the DG has been removed, as has the right of appeal to the Labour Court. This effectively means that the employer must comply with the compliance order if issued. If the employer does in fact have a valid reason not to comply with the order, he/ she should be able to oppose the DG s application in the Labour Court and state his/her reasons why the court should not make the compliance order an order of court. The position is certainly unsatisfactory; if an employer does have a valid reason to oppose the compliance order, instead of allowing the DG and the employer to settle the matter the employer must simply ignore it and wait until the DG approaches the court before he can oppose it. In other words, the first chance to oppose the Department is in court, this runs completely contrary to the state s tendency to avoid litigation, especially in labour matters, and attempt to resolve disputes by mediation or arbitration. The new provisions may fall short of Convention 81 of the ILO, which grantees the employer s right to appeal a decisions made by a labour inspector to a judicial or administrative body. For the same reasons, the amendment s constitutionality is called into question in light of section 34 and the constitutionally protected principle of audi alteram partem (let both sides be heard). Penalties for non-compliance The penalties for non-compliance with the BCEA have been raised from a maximum of 3 years to 6 years imprisonment, whilst all of the fines have been trebled.

3 The penalties for not reporting in terms of the Employment Equity Act (EEA) or not timeously submitting an employment equity plan has also been raised. The fines now range from the greater of R1,5 million or 2% annual turnover and R2,7 million or 10% annual turnover. Limited rights afforded to non-representative trade unions Previously, only trade unions that represented the majority of the employees in a work place were afforded certain organisational rights such as the right to access the workplace, deduct subscriptions from the employee s pay, elect representatives, take leave to addend to trade union duties and be privy to confidential information. The new Amendment Act allows the commissioner to extend these rights to trade unions that are sufficiently representative, even though they might not be the most representative trade union in a work place. Crucially however, it does not entitle that trade union to enter into collective agreements and there is no obligation on the owner to bargain collectively with such a trade union. These rights will are reserved for the majority trade union. This proliferation of trade unions in the workplace can hamper meaningful engagement between employers and employees as it blurs the lines of official communication. The employer will be within his rights to only engage with the trade union that represents the majority of employees in the work place, this fact may well be confused by employers and unions alike. If so designated, the employer will however be obliged to allow the minority trade union(s) to enter the premises, allow leave for trade union duties, make deductions for union subscriptions etc. It is not certain what effect this amendment will have on labour relations but it is likely to increase competition between trade unions in the work place. Disputes about organisational rights If there is a dispute regarding the organisational rights of any trade union, the matter may be referred to the CCMA. Currently an arbitration award on this matter would only be binding on the employer and the permanent employees, however after the amendment, all organisational rights afforded by the CCMA in view of a dispute may be extended to temporary employment service (TES) employees and client. Extension of agreements concluded in the bargaining council If the Minister is satisfied that it is in the best interest of collective bargaining in the bargaining council, and upon application by sufficiently representative trade unions and employers organisations, the Minister may extend an agreement to all other employees in the sector. The Amendment will now guarantee that the Minister may only do so if there is a mechanism in place by which interested parties can apply for exemption, and such party must receive an answer within 30 days. The Minister will also be obliged to take all non-permanent employees interests into consideration. The impact of these amendments are generally be positive. Several amendments provide more clarity and certainty in the appeal body s ability to hear applications for exemption and the time period involved therein. Further restrictions, such as the fact that no official of the trade unions or employers organisations may be involved in the appeal body, provide welcome checks and balances that can help ensure the appeal body s impartiality.

4 Picketing The Act currently allows picketers to picket in any public place including in front of the employers premises. After the amendment, picketing is only be allowed in a public place if the owner of that premises has had a chance to make representations to the Commissioner. Financial assistance for employees for alternative dispute resolution outside of the CCMA Where an employment contract obliges an employer and employee to settle any dispute through an independent alternative dispute resolution agent and the employee is obliged to contribute to the costs thereof, the CCMA is able to provide financial assistance to that employee provided he/she earns less than the prescribed threshold set by the BCEA. Powers of the Labour Court Several standard-form employment contracts contain a clause that obliges the parties to refer disputes to arbitration. As a result of the amendment, if a dispute is directly referred to the Labour Court, the court are now able to decide to act as an arbitrator instead of sending the matter to a private arbitrator, in this case it does not have the same powers it ordinarily enjoys but rather has powers equivalent to that of an arbitrator. Representation before the Labour Court After the amendment, one is no longer able to be represented by an ordinary member of a trade union or employer s organisation; such a person must be an official or an office-bearer such as the secretarygeneral of a shop Stewart. In addition, such a person may not charge a party to the proceedings a fee for such representation. Dismissals based on operational requirements by employers with more than 50 employees Subsection 19 currently limits the court s discretion by providing a closed list of reasons that would permit a large company with 50 plus employees to retrench employees. If the company s reasons fall outside of those four reasons, it is deemed an unfair dismissal. The amendment Act seeks to delete that subsection; it would seem as if large companies will be treated in exactly the same way as small companies with regards to the substantive fairness of dismissals due to the operational requirement of the employer. The position is therefore be regulated by section 189 (7) which simply requires the selection criteria to be agreed upon by the parties, or if not agreed upon it merely needs to be fair and objective. Date of Dismissal If an employee is dismissed by notice, the date of dismissal is now the earlier of the date in the notice or the date on which all outstanding salary is paid.

5 Disputes about unfair dismissals and unfair labour practices The amendment makes it easier for an employee dismissed due to the operational requirements of the employer to access the Labour Court or refer the matter to arbitration. Previously, the employee had to be the only one dismissed and the consultation process had to have been followed. After the amendment, the aggrieved employee need merely be the only employee dismissed for that reason, the only employee consulted, or simply work for an employer who employs less than 10 employees. If any of the above 3 conditions are present, the employee is now able to refer the dispute to arbitration or to the Labour Court. Regulation of non-standard work There is a definitive trend throughout the amendments to afford greater security and recognition to non-standard forms of work. The overarching aim seems to be aligning non-standard work with the rights and privileges enjoyed by permanent employees. Temporary Employment Services Legal proceeding by employees as well as compliance orders issued by labour inspectors will now be enforced against either the TES or the client. In addition, TES employees are now entitled to written particulars of employment and any beneficial employment conditions imposed by a sectoral determination or collective agreement on the client will also be enjoyed by TES employees contracted out to render service to him/her. A temporary service in terms of this section means work that does not exceed 3 months or as a substitute for an absent employee (a temp as they are often referred to). With regards to whom the employer is; if an employee performs a temporary service as defined above, then she is an employee of the TES. If not; then she is deemed to be an employee of the client and is entitled to the same benefits as a permanent employee. As a transitional arrangement, the new amendments will apply immediately for prospective TES employees, for existing ones, there is a 3 month window period after the amendments are enacted, following which all provisions must be adhered to. Fixed term contracts with employees earning below earning threshold A fixed term contract for the purposes of these amendments mean employment that terminates on the occurrence of a specific event, the completion of a specific task or project or a fixed date other than the employee s normal or agreed retirement age. Employees who earn above the threshold prescribed by the BCEA are once again excluded, as are employers who employ less than 10 people or less than 50 people but have been operating for less than 2 years. Importantly, an employee whose fixed-term contract is permitted by any statute, sectoral determination or collective agreement is also excluded. In terms of the amendments, an employee on a fixed term contract is presumed to be a permanent employee and is entitled to receive all the accompanying benefits if he is employed for longer than 3 months. This presumption does not apply however where the owner can provide a justifiable reason why a worker is employed on a fixed term basis in excess of 3 months. In addition, section 198 (4) of the LRA amendment Act provides a list of examples where it would automatically be justifiable to appoint employees on a non-permanent basis (fixed-term contract) in excess of 3 months.

6 Seasonal workers are often employed for a period exceeding 3 months. There is a strong possibility that an employer can justify a fixed-term contract exceeding 3 months for seasonal fruit-picker for example, because the nature of the work (fruit picking) is limited (by the harvest season). Fortunately, seasonal workers are specifically listed in subsection 4 so an employer will be automatically justified in employing seasonal workers on a fixed-term contract exceeding 3 months. Farm workers, including seasonal workers, are covered by a sectoral determination that regulates minimum wages, deductions and housing standards amongst other things. The sectoral determination only prescribes minimum conditions of employment, not actual conditions of employment. Several employers provide their long serving employees with more favourable remuneration and benefits. According to sub-clause 8, after 3 months seasonal workers are entitled to treatment not less favourable than the permanent employees if they are doing the same or similar work. For example, if an experienced tractor driver or foreman is required to help pick fruits during the harvest, then technically the seasonal workers will be entitled to treatment that is not less favourable because they are doing the same work. There is however an important proviso to this section; employees doing the same work are entitled to be treated not less favourably unless there is a justifiable reason for different treatment. A cue could be taken from the section 198D of the Amendment Act. This allows an employer to discriminate with regards to remuneration on grounds such as seniority, merit, quality and quantity of work or any other criteria of a similar nature. Even though an experienced or more skilled employee may perform the same work, the LRA allows an employer to reward an employee and pay him more for his services he has more to offer in that position. An employer is therefore justified in giving a higher rate of remuneration to such an employee, despite being assigned the same work as junior employees. It can be speculated that the same may apply to certain benefits, but this remains to be seen. Employment Equity Amendment Act The Employment Equity Amendment Act places greater emphasis on numerical targets in achieving affirmative action by designated employers. By removing a number of considerations and qualifiers that previously allowed employers to justify non-compliance with numerical targets of representation, the Act places a greater burden on businesses to achieve representation of designated groups in all management levels. All references to categorise of employment have been done away with, as the sole focus now seems to be on representation on all levels. A number of non-controversial amendments are made to regulate the functioning of the CCMA and Labour Court as well as adjusting thresholds and fines for inflation. The fines for not complying with a designated employer s duty to report on his or her progress with implementing his or her affirmative action plan has been substantially increased and seem disproportionally steep. Since this amendment has been enacted on 14 January 2014, it is crucial that employers abide by the new reporting standards as a failure to do so can cause serious financial perils to employers. Finally, the same draconian powers of enforcement afforded to labour inspectors by the BCEA amendment Bill are afforded under this Bill.

7 Designation A designated employer is defined as an employer who either employs more than 50 people or less than 50 people but has an annual turnover equal to or greater to a small business in terms of schedule 4. Although the definition remains the same, all thresholds have been trebled. The adjustment is suggested to be largely in line with inflation. In addition, all back, coloured or Indian people are no longer classified as designated. designated group has now been qualified, it only refers to black/female/disabled people who became citizens by birth, decent, or by naturalisation before 27 April 1994 or were not allowed to do so by apartheid policies. There are however still concerns that an able bodied white male will not be treated more favourably than a foreigner because they both do not contribute towards EE. Prohibition of Unfair Discrimination The Act has always prohibited unfair discrimination in the work place; it provided a list of prohibited grounds that largely reflect section 9 (3) of the Constitution. In addition to the existing grounds, the amendment also prohibits unfair discrimination on any arbitrary ground. It is still unclear what would constitute an arbitrary ground for discrimination, however taking a leaf from constitutional law it seems logical that any discrimination that has no discernable reason object would be arbitrary. When an employee alleges discrimination on any listed ground, it is presumed to be unfair and the employer bears the burden to prove that it was fair. However where it is based on any other arbitrary ground, the onus is reversed and the employee must prove that the discrimination was unfair. This provision reinforces the amendments to the LRA and BCEA that promote equal pay for equal work. Our reservations regarding this principle can be repeated here. Psychological testing and other similar testing All forms of psychological testing will now need to be certified by the Health Councils Profession South Africa. Access to the CCMA Previously, all matters referred to the CCMA besides claims for unfair dismissal had to be consented to by both parties. The amendment now allows an employee to unilaterally refer a matter related to sexual harassment to the CCMA. In addition, all employees earning below the prescribed threshold in the BCEA can refer any labour matter. The new provisions seem to facilitate cheaper and quicker dispute resolution for vulnerable employees. Affirmative Action measures The Act mandates affirmative action measures to ensure that suitably qualified persons from designated groups have equal opportunities and are equitably represented in all occupational categories and levels in the workforce of a designated employer. Previously, designated employers had to report and specify the demographics in their company/organisation according to the level where they were employed, for example middle management, top management etc, as well as indicate the demographics in different categories such as clerical, technical, professional etc. This word category has now been removed. As a

8 result, employers will have to reassess the horizontal structuring of their organisation so as to ensure maximum representivity of designated groups on the desired levels only. In other words, the Department will now only consider the representative numbers on each level in order to arrive at a BEE score. It will no longer matter how many employees from a designated group are employed to do clerical, technical, professional work etc, it only matters at which level of management the employees in question are. Reporting on Employment Equity Before the amendment, a distinction was made between designated employers who employed between 50 and 149 workers (who had to report biannually), and those employing more than 150 (who had to report annually). The amendment does away with this distinction; now all designated employers must report annually on the 1 st working day of October. Should there be a justifiable reason why the deadline will be missed, the employer must report it to the Director General of Labour by no later than the 1 st working day in August of that year. The fines for failing to meet the deadline or failing to submit a report or employment equity plan has also been increased by the Amendment Bill. An employer can now face a fine that is the greater of R1,5 million or 2% annual turnover for a first contravention, R1,8 million or 4% if an employer has failed to prepare or implement a plan for the 2 nd time, R2,1 million or 6% if the employer fails do so twice within 3 years or if the employer has also contravened another provision in the Act within the previous 12 months, R 2,4 million or 8% if the employer fails 3 times within 3 years, or R2,7 million or 10% if the employers fails to do so 4 times within 3 years. Failure to submit an Employment Equity Plan or failing to report on the progress made on achieving the Employment Equity targets annually will henceforth be met with stern fines, ranging from R1,5 million or 2% annual turnover for a first infringement and up to R2,7 million or 10% annual turnover for a repeated infringement. Employment Equity plans and reporting should therefore be made an absolute priority. Income differentials When reporting, an employer was obliged to disclose the remuneration afforded to employees on all levels and in all categories to the Department of Labour. The Department could then identify large discrepancies constituting unfair discrimination and order the employer to remedy it. After the amendment, employers now need to provide details of the various employment levels only; they no longer need to distinguish between different categories. However, income as well as benefits must now be listed. Enforcement The enforcement measures have been amended to align them with the amendments to the BCEA and LRA. In a similar fashion to the amended BCEA, a labour inspector who has reason to believe that a designated employer is not complying with his/her Affirmative Action obligations now has discretion whether or not to enter into a written undertaking with the Employer, or to summarily issue a compliance order. If the employer does not comply, the DG of labour can apply to the Labour court to

9 convert either a compliance order or a written undertaking into an order of Court. Once again, the employer s right to object and make representations to the DG have been done away with, as has his/her appeal to the Labour Court. Our comments on the relevant section on the BCEA and LRA amendment Act/Bill apply equally here. Assessment of Compliance Previously, in assessing a designated employer s compliance with affirmative action, the DG could have regard to factors such as the region s demographic profile, the pool of suitably qualified people available, current and foreseen economic/financial situation of the employer and the sector as a whole, present and planned vacancies and the progress made by other employers in the sector. The DG s discretion has been curtailed by the amendment Actl. The DG is now only permitted to consider the employer s workforce compared to the region/countries demographics. If there is a lack of skilled people from designated groups available, then the onus seems to be on the employer to train them, because the amendment does allow the DG to look at the reasonable steps taken to train suitably qualified persons from designated groups. It is also noticeable that an employer will no longer be judged according to the performance of the sector and other companies in the sector, but solely on compliance with the law. In light of this amendment, it is suggested that an employer should focus on obtaining specialist advice instead of looking at best-practice within the sector or judge itself by the performance of the sector as a whole. Failure to comply with the Director-General s recommendations Previously, where an employer failed to comply with a request made by the DG, he could refer the matter to the Labour Court to deal with according to its own procedures and sanctions. According to the amendment Act, the DG will now be responsible to institute court proceedings against a designated employer who does not comply, or who indicates that he does not accept the DG s request or recommendation, and seek relief as a party to the court proceeding. Powers of Commission in arbitration Where the CCMA finds that an employee has been unfairly discriminated against with regards to pay, the amendment caps the CCMA s discretion in awarding a monetary arbitration award. The money received may not exceed the amount determined in the sectoral determination. Where previously only the Labour Court could decide on matters relating to sexual harassment, the CCMA can now also make an arbitration award.

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