The LRA and BCEA Amendments: what is all the

fuss about?

Presented by:Professor Paul Benjamin

REGULATION OF NON-STANDARD EMPLOYMENT•Labour broking (temporary employment services)•Fixed term contracts •Part-time work

General themesAdditional protection for employees earning below BCEA threshold (R183k per annum or less)

Flexibility retained during first six months of employment to allow for “genuine” temporary work and trial periods

Right to be treated “on the whole not less favourably” than “standard” employees after six months.

LABOUR BROKING

Section 198

•Largely keeps its existing structure and effect

•The TES and not the client is the employer

•Joint and several liability for non-compliance by TES, except for dismissalSome additional protection for employees:

•Employee may institute proceedings against either TES or client, and enforce against either

•Labour Court or arbitrator may determine whether employee’s contract complies with obligations in law

• Labour brokers to register under Employment Services Act

LABOUR BROKING (2)

Section 198A

Applies only to low paid employees (BCEA threshold - R183k or less)

Employed by TES only if performing temporary services

Temporary services means

•First six months•As a substitute for someone temporarily absent•In category or work or for period determined by collective agreement or Minister

LABOUR BROKING (3)

Section 198A (continued)

If employee of labour broker not performing temporary services for the client -

•Deemed to be employee of client

•Entitled to be treated on the whole not less favourably than (actual) employee of client performing same or similar work (unless justifiable reason for different treatment)

•Termination of assignment to avoid deeming provision is a dismissal

FIXED TERM CONTRACTS

Section 186 – definition of dismissal

Dismissal extended to include where employee reasonably expected to be offered indefinite employment – not limited to expectation of renewal of fixed term

This applies to all fixed term contracts

FIXED TERM CONTRACTS (2)

Section 198B - new restrictions on use of fixed term contracts

Does not apply to:

•Employees earning more than R183k•Small businesses or start ups •Fixed term contracts permitted by statute, sectoral determination or collective agreement

FIXED TERM CONTRACTS (3)

Section 198B (continued)

No scrutiny of reasons for use of fixed term contracts for period up to 6 months

Fixed term contract can be used for longer then 6 months only if nature of work is of a limited or definite duration, or if there is a justifiable reason for fixing the term

FIXED TERM CONTRACTS (4)Justifiable reasons include:

•Temporary replacement•Temporary increase in volume of work – up to 12 months•Work exclusively on a genuine limited duration project•Student or recent graduate being trained or gaining work experience•Trial period of up to 6 months to determine suitability for employment•Seasonal work•Official public works scheme•Limited funding by external source•Employee is over retirement age

FIXED TERM CONTRACTS (5)

Section 198B (continued)

•Employee on fixed term for longer than 6 months without justifiable reason is deemed to be employed on an indefinite contract

•Employee on fixed term for longer than 6 months is entitled to be treated on the whole not less favourably than comparable indefinite employee

•Fixed term contract employees must have same opportunity as indefinite employees to apply for vacancies

•If fixed term extends beyond 24 months, employee has a right to “severance pay” on expiry

PART TIME EMPLOYEES

Section 198C

Additional protection does not apply to

•employees earning over BCEA threshold•Small employers•Employees who ordinarily work less than 24 hours a month•During first 6 months of employment

PART TIME EMPLOYEES

- Employees to whom the section does apply are entitled to:

• Be treated on the whole not less favourably than comparable full time employees, including access to training and skills development

• Same access to opportunities to apply for vacancies as full time employees

GENERAL PROVISIONS APPLICABLE TO NEW PROTECTIONS FOR NON-STANDARD EMPLOYEES

- Disputes arising from interpretation or application of new protections can be referred to conciliation and arbitration

- Justifiable reason for different treatment includes where different treatment is a result of the application of a system that takes into account:

• Seniority, experience, or length of service• Merit• The quality or quantity of work performed• Any other criteria of a similar nature not excluded by Employment

Equity Act

NO EVASION OF EMPLOYMENT LAW

Section 200B

- Joint and several liability for employers who carry on associated or related activities or businesses if the intent or effect of doing so is to “directly or indirectly defeat the purposes of” the LRA or any other employment law

Section 187(1)(c) -THE “FRY’S METAL” AMENDMENT

- Section 187 (1)(c) – A dismissal is automatically unfair if the reason for the dismissal is –

• (CURRENT WORDING) To compel the employee to accept a demand in respect of any matter

of mutual interest between the employer and employee;

• (PROPOSED CHANGE) A refusal by employees to accept a demand in respect of any matter of

mutual interest between them and their employer.

ORGANISATIONAL RIGHTS

Amendments to Section 21

- In a dispute about representativeness a commissioner must in addition to the other factors mentioned in Section 21(8) consider the composition of the workforce taking into account labour brokers, fixed term, part time and non standard employees.

ORGANISATIONAL RIGHTS

Amendments to Section 21

- A Commissioner may grant shop steward representation rights (section 14) and disclosure of information rights (section 16) to a union that is not a majority union if –

1. The union already enjoys access rights (section 12), stop orders (section 13) and office bearer leave rights (section 15); and

2. No other union has the relevant rights; and

3. The union satisfies the other considerations in Section 21(8).

ORGANISATIONAL RIGHTS

Amendments to Section 21

- If a majority union and an employer have agreed on thresholds in terms of Section 18 a commissioner may overrule the threshold if:

• All parties to the collective agreement have been given an opportunity to participate in the arbitration, and

• The applicant union or unions represent a significant interest or a substantial number of employees.

ORGANISATIONAL RIGHTS

Amendments to Section 21

- A union may seek to exercise organisational rights in respect of a temporary employment service or one or more of its clients and

- If it exercises rights in a temporary employment service it will include the premises of the client.

ORGANISATIONAL RIGHTS

Amendments to Section 22

- An award about the interpretation and application of organisational rights may be made binding on:

• The employer;

• Clients of a temporary employment service; and

• Any person who controls access to a workplace to which an award applies provided that person is given a chance to participate in the arbitration.

ESSENTIAL SERVICES

Amendments to Section 70

- To improve the Essential Services Committee.

- To regulate minimum services.

- To improve interest arbitration.

REFINEMENTS TO THE DISPUTE RESOLUTION SYSTEM

- Section 103A – Appointment of an administrator for a trade union or employers’ organisation

- Section 111(5) – an appeal to a decision of the Registrar to deregister a trade union or employers’ organisation does not suspend the operation of the Registrar’s decision

- Section 115 – changes to the CCMA’s powers, to include:

• Providing administrative assistance to low paid employees• Making rules to regulate or limit right to be represented in CCMA proceedings• Accrediting organisations to certify ballots

- Section 143 – more streamlined enforcement of arbitration awards

- Section 144 – rescission of awards and rulings “on good cause shown”

REFINEMENTS TO THE DISPUTE RESOLUTION SYSTEM (2)

- Section 145 - various changes to speed up review proceedings, including:

• enforcement of arbitration awards is automatically suspended if security paid• Amount of security equals amount of compensation payable or, in cases where

reinstatement ordered, 24 months remuneration• Applicant in review application must apply for date within 6 months • Judgment to be handed down in 6 weeks, save in exceptional circumstances• Application for review interrupts running of prescription in respect of the award

- Section 147 – limited circumstances in which CCMA must ignore private arbitration clause

- Section 150 – CCMA may appoint commissioner to conciliate where this is in the public interest, even where dispute otherwise outside CCMA jurisdiction or prior conciliation has already failed; but this does not affect the right to strike or lock-out

REFINEMENTS TO THE DISPUTE RESOLUTION SYSTEM (3)

- Section 154 - Tenure of Labour Court judges improved

- Section 158 – Labour Court may review a decision or ruling of the CCMA or bargaining council only once the issue has been finalised by that tribunal, save in exceptional circumstances

- Section 159 – persons appearing in Labour Court in capacity other than as lawyers may not charge without the permission of the Court

MODIFICATIONS TO DISMISSAL LAW

- Section 188A – pre-dismissal arbitration, now “Enquiry by Arbitrator”

• May be provided for in a collective agreement

• Either party may require this where employee alleges that disciplinary action is a breach of the Protected Disclosures Act;

• Holding of such an enquiry, and suspension pending its outcome, is not an “occupational detriment”.

MODIFICATIONS TO DISMISSAL LAW

- New Section 188B – dismissal of high earning employees deemed to be fair if contractual notice or three months is given (whichever is longer)

• Earnings threshold not yet determined, but expected to be approximately R1.2 million per annum

• Does not permit automatically unfair dismissal

• May contract for longer notice

• For existing contracts, comes into effect two years after amendment comes into effect

MODIFICATIONS TO DISMISSAL LAW

- Section 189A

• Consulting party may not unreasonably refuse to extend period for consultation if this is required to ensure meaningful consultation

• Deletion of subsection (19) – no longer a separate test for substantive fairness under section 189A

MODIFICATIONS TO DISMISSAL LAW

- Section 190 – date of dismissal on notice is date on which notice expires or date on which employee is paid all outstanding salary, if earlier

- Section 191(12) – unfair retrenchment claims may be adjudicated by the CCMA if consultation process applied to one employee only, or if only one employee dismissed, or if employer employs less than 10 employees.

PROPOSED AMENDMENTS TO THE BCEA

Most significant proposals:

•Prohibiting payment by employee in return for providing work•Bringing child labour provisions in line with international standards•Changing the Minister’s powers in relation to sectoral determinations•Changing enforcement procedures•Increasing penalties and maximum sentences

Insertion of section 33AAn employer may not:

require an employee to pay or accept payment from an employee in return for providing the employee with work

require an employee to purchase goods, products or services from the employer or from any business or person nominated by the employer; except where the employee is required to participate in a scheme involving the purchase of specific goods, products or services if:

the employee receives a financial benefit from participating in the schemethe price of the goods/products/services is fair and reasonablethe purchase is not prohibited by another statute

Tool schemes?? Clothing schemes?? Safety equipment schemes??

Maximum jail sentence = 3 years; but no provision creates any criminal offence

Sectoral Determinations (s 55)

The minister may issue-an “umbrella” sectoral determination covering employers and employees who are not covered by any sectoral determination sectoral determination covering employees covered by a collective agreement concluded in a statutory council

A sectoral determination may:prescribe rates of pay and minimum increases in remuneration – even where employer pays in excess of the minimumprohibit or regulate the subcontracting of work (in addition to task-based work, piecework, home work and contract work)prescribe a threshold of representativeness for a registered trade union to have the organisational rights of:

accessdeduction of subscriptions

Enforcement: Objections and appeals

Sections 71 and 72 are deleted

No provision for OBJECTIONS against compliance orders (s71) [Previously employers could object to the DG]

No provision for APPEALS against compliance orders (s72)

Accordingly:If employer gave written undertaking and fails to complyIf employer does not comply with compliance order

DG may approach LC directly for order compelling the employer to apply with the written undertaking / compliance order

Labour Court ordering compliance (s73)

The DG may apply to the LC on the date specified in the compliance order or, with further notice to the employer, on a subsequent date, for a compliance order to be made an order of the LC

After considering any representations made to it, the LC may issue an order requiring

the employer to comply with any provision of the BCEA the payment of a fine calculated in terms of Schedule 2 of the BCEAsubject to section 70(d), the payment of any amount owing to the employee (i.e. the amount should not have been owing for more than 12 months before a complaint re non-payment has been made to the Dept)

Fines

Child labour offences

•Maximum term of imprisonment increased to 6 years

Maximum fines increased significantly