Labour Relations Amendment Bill aims to protect vulnerable employees

Introduction

Anastasia Vatalidis

INTRODUCTION

In December 2010, the Minister of Labour published the
following draft legislation for comment -
Labour Relations Amendment Bill, 2010
Basic Conditions of Employment Amendment Bill, 2010
Employment Equity Amendment Bill, 2010;
Employment Services Bill, 2010.

The draft legislation met with opposition from all
stakeholders
The draft legislation was withdrawn and submitted to
NEDLAC for reconsideration.
The NEDLAC process commenced in January 2011 and
was concluded in January 2012.

INTRODUCTION (CONTINUED)

In February 2012 the revised draft LRA and BCEA
Amendment Bills were published for public comment
On 14 March 2012 the Minister of Labour submitted
amendment Bills for the LRA and the BCEA to Cabinet
Committee
On 20 March 212 the Cabinet approved the submission
of these Bills to Parliament to be considered by the
Portfolio Committee on Labour
If accepted by the Portfolio Committee the Bills will be
submitted to the National Assembly and the National
Council of Provinces for adoption
Public briefings were held in relation to the Bills on 4
and 5 April 2012

INTRODUCTION (CONTINUED)

According to a press statement released by the Minister
of Labour these bills aim to-
protect vulnerable employees
ensure compliance with international labour standards
ensure that labour legislation gives effect to fundamental
constitutional rights
enhance the effectiveness of labour institutions such as
the Labour Court and the CCMA
rectify historical anomalies and clarify uncertainties that
have arisen from the application of these statutes.

THANK YOU
Anastasia Vatalidis

Nothing in this presentation should be construed as formal legal
advice from any lawyer or this firm. Readers are advised to consult
professional legal advisors for guidance
on legislation which may affect their businesses.

© 2012 Werksmans Incorporated trading as Werksmans Attorneys.
All rights reserved.

The Labour
Relations
Amendment Bill

Sandile July

PURPOSE

Protect vulnerable employees
Align employment laws to ensure decent work by
regulating sub-contracting, contract work and
outsourcing
Extend the jurisdiction of the Labour Court
Prohibit certain abusive practices
Amend the section dealing with temporary employment
services

ORGANISATIONAL RIGHTS

Trade unions could be awarded the right to elect shop
stewards even if the union does not represent the
majority of the employees in the workplace
When determining organisation rights a CCMA
commissioner must take into account non-standard
employees when determining whether a trade union is
a representative trade union
Arbitration awards dealing with organisational rights will
be binding, not only on the employer of the effected
employees, but also on the clients of labour brokers
who are bound by such awards as well as on any other
party who controls a workplace where affected
employees work

ORGANISATIONAL RIGHTS

Trade unions representing employees of a temporary
employment service may enforce organisational rights
at the workplace of the temporary employment service
or at the workplace of its clients

THE RIGHT TO STRIKE

Strike ballots are re-introduced as a pre-strike
requirement in an effort to reduce violence in
circumstances where a strike only enjoys minor support
The majority of the trade union’s members in good
standing must vote (ordinary or special votes?) in
favour of a strike
A certificate of compliance issued by the CCMA,
Bargaining Council or Accredited Agency will serve as
proof that a ballot has taken place
The failure by a trade union to comply with a provision
in its constitution to conduct a strike ballot may not give
rise to, or constitute a ground for any litigation that will
affect the legality, or the protection conferred by the
LRA, on the strike

RIGHT TO LOCK OUT

An employer’s organisation will also have to conduct a
ballot of its members entitled to participate in industrial
action calling upon such members to vote on the
implementation of a lock-out
The ballot requirements in respect of lock-out
requirements are similar to those applicable to strikes

PICKETING

Picketing rules established by the CCMA may allow for
picketing to take place at a location owned by a person
other than the employer, provided that such person has
had an opportunity to make representations to the
CCMA
Prior to a picket third parties must be informed of the
possible effect that the picket could have on them
The term “supporters” has been removed from the
group of persons entitled to participate in a picket
Conduct in material breach of a picketing agreement or
picketing rules does not enjoy protection against civil
legal proceedings

ESSENTIAL SERVICES

The Bill deals with the composition of the essential
services committee that will decide on the ambit of
essential services
The committee will be composed of 8 persons, including
an independent chairperson, deputy chairperson and
representatives nominated by government, labour and
business
The committee’s powers will be extended to the
essential services, minimum services in a service
designated as an essential service and maintenance
services
Arbitration awards in relation to essential services
disputes will be binding on government unless a vote
from Parliament is acquired to make it non binding on
government

DISPUTE RESOLUTION

Extension of the functions of the CCMA to include
Providing administrative assistance in respective of
service of documents and notices for employees who
earn less than the threshold prescribed in the BCEA
(presently R172 000 per annum)
The right of any party to be represented by any person
in any conciliation or arbitration proceedings including
the limitation of the right to representation to those
proceedings
Providing employees, employers, registered employers
organisations, registered trade unions and its federations
advice or training relating to the primary objects of the
LRA or any other employment law

EFFECT OF ARBITRATION AWARDS

An arbitration award issued by a commissioner;
is final and binding;
may be enforced as if it were an order of the Labour Court
in respect of which a writ has been issued; and
equally applicable to certified arbitration awards issued by
Bargaining Councils.

Non compliance with an arbitration award for an act
other than the payment of money may be enforced by
contempt proceedings instituted in the Labour Court.
If an arbitration award is for the payment of money,
that award for purposes of enforcement of execution
must be treated as an order of the Magistrates Court.

VARIATION AND RESCISSION

The Bill introduces the following new ground upon which
Commissioners may vary or rescind a certificate,
arbitration award or ruling-
If good cause is shown

Currently Commissioners may vary or rescind a
certificate, arbitration award or ruling if the certificate,
award or ruling is-
Erroneously sought or made in the absence of any party
affected by the award
is ambiguous or has an obvious error or omission;
Granted as a result of a mistake common to the parties to
the proceedings.

REVIEW OF ARBITRATION AWARDS

A party will not be entitled to launch review
proceedings until the dispute has been finally
determined
An applicant in review proceedings will have to apply
to the Labour Court for a date to hear the review
within six months of delivery of the review application
The Labour Court ruling on the review must be handed
down by the judge within six weeks after the hearing
An application to set aside an arbitration award
interrupts the running of prescription in respect to
that award

REVIEW OF ARBITRATION AWARDS
(CONTINUED)

Review proceedings will not suspend the operation of
the award, unless the applicant provides security to the
satisfaction of the Labour Court or shows that it is in the
interest of justice that security should not be tendered
Unless otherwise provided by the Labour Court the
following security will be payable-
reinstatement awards - 24 months remuneration
Compensation awards - the equivalent of the
compensation awarded

CONCILIATE IN THE PUBLIC INTEREST

Commissioners may be appointed to conciliate in
public interest matters whether or not the dispute has
been referred to the Commission or a Bargaining
Council.
This is done to secure resolution of the dispute which
is in interest of the public
The appointment of the commissioner in such cases
does not affect any entitlement to strike and lock-out

DISMISSAL OF HIGH INCOME EARNERS

In the case of employees earning more than the
threshold to be prescribed by the Minister (R1 000 000
per annum?)-

A dismissal will be deemed to be for a fair reason and
effected in accordance with a fair procedure if the
employer gives the employee notice
Notice must be in writing and equal to 3 months
remuneration (or longer if the employee’s contract of
employment contemplated a longer notice period

Exception - Automatically unfair dismissals

TEMPORARY EMPLOYMENT SERVICES
Definition
Any person who, for reward, procures for or provides to a
client other persons who perform work for the client and
who are remunerated by the temporary employment
service

The Bill requires the registration of all temporary
employment services with an as yet to be established
body
Once registered the TES and its client will be jointly and
severally liable in the event that the TES contravenes-
a collective agreement concluded in a Bargaining Council
that regulate terms and conditions of employment
a binding arbitration award that regulates terms and
conditions of employment
the BCEA
any determination made in terms of the BCEA

(CONTINUED)

TES employees must be employed on terms set out in a
sectoral determination or bargaining council or collective
agreement if the client is subject to a such
determination or agreement
The Bill distinguishes between TES employees earning
above and below the BCEA threshold as well as TES
employees performing “temporary services”
The Bill defines “Temporary Services” work as work for
a client by a TES employee-
For a period not exceeding 6 months;
as a substitute for an employee of the client who is
temporarily absent;
work determined to be temporary by a collective
agreement concluded in a bargaining council, sectoral
determination or notice published by the Minister

(CONTINUED)

TES employees earning below the BCEA threshold and
not performing “temporary services” work-
will be deemed for purposes of the LRA to be the
employees of that client (including for purposes of
dismissal claims)
may not be treated less favorably than employees of
that client who perform same or similar work, unless the
distinction is justifiable

The Minister must invite representations on the type
of work to be deeded as “temporary service”

FIXED TERM EMPLOYMENT

Fixed term contract: Employment that terminates on-
the occurrence of a specified event
on the completion of a specified task or project
a fixed term date, other than an employee’s normal or
agreed retirement age.

Employees may not be employed on a fixed term
contract for longer than six months unless –
The nature of the work is of a limited or definite duration
The employer can demonstrate any other justifiable reason
for fixing the term of the contract

FIXED TERM EMPLOYMENT (CONTINUED)

The prohibition against employing employees on fixed
term contracts longer than 6 months does not apply-
If the employers employs-
Fewer than 10 employees
Fewer than 50 employees if its business has been in operation
for less than 2 years
Unless the employer conducts more than one business or the
business was formed by division or dissolution

The employee earns in excess of the BCEA threshold;
The fixed term contract is permitted by-
Law;
Sectoral determination

Collective agreement

FIXED TERM EMPLOYMENT (CONTINUED)

Employees employed for more than 6 months must be
treated on the whole no less favourably than indefinite
duration employees, unless there is a justifiable reason
Fixed term employees must be given the same
opportunities to apply for vacancies as the indefinite
duration employees

FIXED TERM EMPLOYMENT

Renewal or extension of a fixed term contract must be
done in writing and must state justifiable reasons for
the renewal
Fixed term employees employed for more than 24
months are entitled to a severance package (at least
one week’s remuneration for each completed year of
service)
The severance package shall be forfeited is the
employee unreasonably refuses offer of employment

PART-TIME EMPLOYMENT

Part-time employee:
Is an employee who is remunerated wholly or partly by
reference to the time that the employee works and who
work less hours than a comparable full-time employee.

Comparable full-time employee:
Employee who is remunerated wholly or partly by
reference to the time that the employee works and who is
identifiable as a full–time employee in terms of customs
and practice of the employer of that employee
Does not include a full-time employee whose hours have
been reduced by agreement due to operational
requirements

PART-TIME EMPLOYMENT (CONTINUED)

An employer must-
Treat a part-time employee on the whole no less
favourably than a comparable full-time employee, unless
there is a justifiable reason
Provide part-time employees with access to training, skills
development on the whole no less favourably than a
comparable full-time employee
Provide part-time employees the same opportunities to
apply for vacancies as comparable full-time employee

PART-TIME EMPLOYMENT (CONTINUED)

The provisions regulating part-time employees don’t
apply if:
Employees earning in excess of the BCEA threshold

If the employers employs:
Fewer than 10 employees
Fewer than 50 employees if its business has been in operation
for less than 2 years
Unless the employer conducts more than one business or the
business was formed by division or dissolution

Employee works less than 24 hours in a month
During the first 6 months of employment

THANK YOU
Sandile July



The Basic
Conditions of
Employment
Amendment Bill

Bradley Workman-Davies

DEFINITIONS

Sector
An industry or a service or part of an industry or service
and in respect of a sectoral determination and means the
employers and employees covered by that determination

Serve
To send by registered post, telegram, electronic mail,
telefax or deliver by hand or any prescribed method of
service

PROHIBITED CONDUCT

In terms of section 33A an employer is prohibited
from-
requiring or accepting any payment from an employee or
potential employee in respect of employment or
allocation to employment
requiring an employee to purchase goods from the
employer or a business or a person nominated by the
employer
This does not apply to schemes in terms of which the
employee receives a financial benefit through the
purchase of goods, products or services at a fair and
reasonable price and the purchase is not prohibited by
any other statute.

PROHIBITION OF EMPLOYMENT OF
CHILDREN AND FORCED LABOUR

The existing prohibition on the employment of children
is extended to include all work by children and not only
work done by children as employees
This prohibition is included to:
ensure full compliance with international labour standards
is achieved
create consistency with the Constitution and other
legislation protecting the rights of children
enable the Minister to make any regulations that are
necessary for any international law instrument dealing with
child labour

SECTORAL DETERMINATIONS

The Minister may issue an umbrella sectoral
determination that will cover employers and employees
not covered by any other sectoral determination or by a
Bargaining Council collective agreement

SECTORAL DETERMINATIONS (CONTINUED)

Sectoral determinations may:
Prescribe minimum increases in remuneration
Prohibit or regulate the subcontracting of work
Prescribe a threshold of representation for registered
trade unions to have organisational rights
Specify methods for determining the value of a labour
tenant’s rights to occupy or use a farm for purposes of
land reform for the agriculture sector

CONSOLIDATION OF PROCEEDINGS

The jurisdiction of the Labour Court and the CCMA is
extended to include any claim by the employee under
the BCEA that has not prescribed
Once the matter is determined, a non compliance order
or other proceedings cannot be continued or brought in
respect of the claim
This amendment is aim at avoiding the splitting of
claims and prevent unnecessary duplication of
proceedings between employers and employees

JURISDICTION OF LABOUR COURT

The Labour Court has jurisdiction to grant civil
remedies in respect of matters which are criminal
offences

ENFORCEMENT

DOL inspectors are no longer obliged to secure written
undertakings to comply from defaulting employers
Employers no longer have the right to-
Lodge objections to the Director-General of the DOL
against compliance orders issued by the DOL;
Appeal against the findings of the D-G to the Labour Court

D-G may, without further notice to the employer,
approach the Labour Court for the compliance order to
be made an order of the Labour Court if a compliance
order has not been complied with

OFFENCES AND PENALTIES

The maximum term of imprisonment for an offence
involving child labour or forced labour is increased from
three years to six years
The maximum term of imprisonment for requiring or
accepting payment from an employee or potential
employee in respect of employment or allocation thereof
is set at three years
Maximum permissible fine not involving underpayment
is increased by 200%

THANK YOU
Bradley Workman-Davies



Aviation Union of
South Africa v SA
Airways (Pty)
Limited and Others
2012 (2) BCLR 117
(CC)

Anastasia Vatalidis

THE FACTS

SAA outsourced its facilities management operations to
LGM
SAA employees were transferred to LGM in terms of
section 197 of the LRA
SAA paid LGM a fee for the services rendered by LGM
LGM purchased assets and inventory relating to the
services from SAA
On termination of the agreement SAA would be entitled
to repurchase the assets sold to LGM
All services could be transferred back to SAA or to a
third party

THE FACTS (CONTINUED)

In 2007 SAA cancelled the agreement with LGM
LGM commenced a retrenchment procedure
Aviation Union inquiring from SAA as to the status of
the LGM employees
SAA denied that is had a legally obliged to take the
employees back
Aviation Union and SATAWU approached the Labour
Court for urgent relief

THE FACTS (CONTINUED)

Before the Labour Court Aviation Union and SATAWU
argued that:
The termination of the agreement between SAA and LGM
constitutes a transfer of a business
Section 197 of the LRA should apply to second generation
outsourcing arrangements
The LGM employees associated with the facilities
management operations should be transferred either to
SAA or to the entity awarded the tender

SECTION 197

In terms of section 197(2) of the LRA if the whole or
part of any business, trade, undertaking or service is
transferred then, unless otherwise agreed:
the new employer is automatically substituted in the
place of the old employer in respect of all contracts
of employment in existence immediately before the
date of transfer
all the rights and obligations between the old
employer and an employee at the time of the
transfer continue in force as if they had been rights
and obligations between the new employer and the
employee

SECTION 197 (CONTINUED)

anything done before the transfer by or in relation to
the old employer, including the dismissal of an
employee or the commission of an unfair labour
practice or act of unfair discrimination, is considered to
have been done by or in relation to the new employer

LABOUR COURT

The Labour Court held that section 197 was not
applicable to a second or subsequent outsourcing
agreement (second generation transfers) for the
following reasons-
The SAA agreement does not involve a transfer by an old
employer to a new employer
A section 197 transfer is defined as the transfer of a
business by one employer to another employer and not
from one employer to another

The Labour Court therefore took a literal approach to
the term ‘transfer as a going concern’ as used in
section 197 of LRA

LABOUR APPEAL COURT

Not satisfied with the Labour Court decision Aviation
Union and SATAWU appealed to the LAC
The LAC reversed the Labour Court decision taken and
held that:
section 197 should be interpreted purposively and not
literally in order to advance job protection
The word by had to be read as if it had been replaced with
the word from in the definition of transfer
The transferor need not be active in bring the transfer to
fruition
Second generation outsourcing is subject to section 197

SUPREME COURT OF APPEAL

Not satisfied with the LAC it was the turn SAA to appeal
to the SCA
The SAC overturned the LAC decision and held-
The LAC had distorted the plain meaning of the word by to
mean from
The LAC has erred in finding that a transfer of services had
occurred
A transfer of a business as a going concern had not
occurred
Minority judgment

CONSTITUTIONAL COURT

Aviation Union and SATAWU appealed to the
Constitutional Court
The Constitutional Court was unanimous that the appeal
should succeed
The Constitutional Court Judges were split 6: 5 on the
basis upon which the appeal should succeed
The CC consideration the following-
The correct interpretation of section 197
Was there a transfer of services

CONSTITUTIONAL COURT (CONTINUED)

The majority of the CC judges found that-
when SAA outsourced a portion of its business the intention
was never to outsource that business permanently and the
ownership of that business remained with SAA
LGM merely acquired the right to conduct the outsourced
business for a period of time
LGM had the right to use certain of SAA's facilities when
performing the outsourced services
if the outsourcing institution from the outset never offered
the service, the service cannot be said to part of that
institution's business. The cancellation of the contract in
these circumstances would also not give rise to a transfer
of a business in terms of section 197


The SCA judgment erred in holding that section 197
does not apply to second generation outsourcing
agreements
It did not matter whether LGM transferred the
business to SAA and SAA thereafter transferred the
business to a third part or whether LGM transferred
the business directly to a third party
There is a transfer of a business from an old
employer to a new employer and the employees
should have followed the business


The cancellation clause of the agreement contemplated
a transfer of a business as a going concern
As long as a there is a transferor the identity of that
entity or person is of no material significance
Rather, what matters is determining whether the
business is being transferred

THE FUTURE AFTER AVIATION UNION

Service level agreements

Outsourcing services

Protection for the outsourcing entity
Enforcement of indemnities?

Labour Relations Amendment Bill aims to protect vulnerable employees

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