CHAPTER 9: LABOUR LEGISLATION

1. Constitution (108 of 1996) With the birth of Democracy (27 April 1994) it became necessary to amend the Constitution to ensure

equality for all citizens Democracy: rule by the people – all citizens have the right to vote for the

government Both private citizens and businesses fall under

the Constitution, and it also forms the basis of all other laws within the country

The new Constitution resulted in many other laws having to be amended to incorporate the new provisions – such as the Labour Relations Act

Specific areas of the Constitution that affect businesses in South Africa:

o Human rightso Inclusivityo Environmental issues

You are not required to learn detail on the Constitution, but it is important to understand the role it plays in underpinning both the law and the ethos under which businesses in SA operate.

1.1. Human Rights Bill of rights: spells out very detailed and specific rights and responsibilities of all citizens The Constitution and the laws of the country will protect you (citizen), but you have a responsibility to

uphold those laws/values entrenched in that Constitution Human dignity is entrenched as follows:

o Human rights are those basic and fundamental things that you are entitled to just because you belong to the human race

o No one has any more or any less such rightso They are also inalienable – they are yours forever, and cannot be taken away

Among the rights stipulated are those of equality, freedom of expression and association, political and property rights, housing, healthcare, education, access to information, access to courts, children’s rights and women’s rights

These rights have been the source of greatest impact on life in SA since 1994 The ability of citizens to live, work, worship, be educated and travel freely meant a lot, especially to the

PDI (previously disadvantaged individuals) who were restricted in their rights prior to 1994

1.2. Generation of Rights The SA Human Rights Commission will assist people that have had their rights violated to approach the

Constitutional Court When a group brings a court action, it is called a class action suit The commission also works at developing Human Rights awareness amongst citizens, and advises

parliament on such issues The Public Protector (appointed by the President), also provides a free service to the general public in

the form of a facility for registering complaints against government agencies and officials

1.3. Limitation Clause It is necessary to limit rights, as different people’s rights may conflict E.g. I have the right to freedom of expression but I may not threaten your dignity, as this alienates one of

your rights

1.4. Inclusivity One of the basic rights in the Constitution – the right to have equal opportunities and inclusion in all

aspects of life, and to not be discriminated against In some cases, specific laws are needed to redress the problems of the past, like the Skills Development

Act (SDA) – aims to provide training / opportunities to improve skills and earning capacity The SDA makes no discrimination in the up skilling of staff – everyone must have access to training and

broadening of their skill base

Three Generations of RightsFirst Generation- civil and political rights: included in most countries' Constitutions - basic rights to life, dignity, equality and privacy- fundamental freedoms associated with democarcy: expression, assocation, assembly, opinion, belief and religion, and movement

1.5. Environmental Issues The environment also needs protection – increased technology, growing populations and urbanization

put a strain on our natural resources Government, business and individuals need to work together to address these issues and contribute

towards Environmental Management At the World Economic Forum in Switzerland in 1999, a Global Compact was introduced with the aim to

promote sustainable globalisation by addressing the issues of Human Rights, Labour, Environment and Governance through Ten Principles which global companies and multinational corporations are asked to subscribe to. SA joined this Global Compact in 2003, and the process is monitored by UNISA.

The three principles relating to the environment are:o Supporting a precautionary approach to environmental challengeso Undertaking initiatives to promote greater environmental awarenesso Encouraging the development and diffusion of environmentally friendly technologies

2. Labour Relations Act (66 of 1995) as amended (LRA) The LRA is based on the New Constitution and provides the basic legal framework for SA labour relations The main objectives of the LRA are:

o To enforce the fundamental rights granted by section 23 of the Constitutiono To enforce SA’s international obligations as a member of the International Labour Organisationo To provide a framework for collective bargaining between trade unions and employerso To promote effective resolution of labour disputes through employee participation in decision-

making in the workplace The Act contains basic rules and mechanisms to control communication, bargain or negotiate relationships

between employers and employees LRA applies to every employer and employee in every business in SA, except members of the National

Defense Force, the National Intelligence Agency and the South African Secret Service The Act covers issues such as freedom of association, Trade Unions, strikes and lockouts, collective

bargaining, dispute resolution to unfair labour practice including unfair dismissal. The basics of the LRA is founded on the common-law contract of employment (individual relationship) but

the content of the Act is described in statutes and collective agreements that are negotiated between employers and trade unions

The LRA also regulates the process of collective bargaining. Both the individual and collective relationships are subject to international labour standards and to the provisions of the SA Constitution of 1996

In terms of the Constitution, employees and employers will be guaranteed certain rights e.g. the right to fair labour practices, strikes, engage in collective bargaining

No legislation which takes away any of these rights will be passed by the state, but restrictions can be placed on how some rights are exercised

2.1. Collective bargaining

A healthy economy should maintain industrial peace through Industrial Relations (IR). Collective bargaining is the foundation of IR and includes two broad issues: Contract negotiations between employers and Unions The handling of grievances

The law cannot prevent labour disputes, but creates procedures that can prevent disputes between employers and labour from developing into strikes and lockouts Strike: a temporary refusal of employees to work in order to put pressure on employers to agree to their

demands Lock-out: a refusal on the part of the employer to allow employees to continue to work unless they accept

certain conditions of the employer

At national level NEDLAC (National Economic, Development and Labour Council) brings employers, employees and government together. NEDLAC played a vital role in the formulation of the LRA

Within the legal framework established by the state, there is collective bargaining between trade unions (representing employees) and employers (and employers’ organisations) to:

Determine wages, terms and conditions of employment and other matters of mutual interest Formulate industrial policyCollective Bargaining StructuresAll 3 are aimed at PREVENTATIVE actionBargaining councilHelp to establish collective agreements for a certain sector or industryStatutory councilsEstablished in sectors and areas where there is no bargaining councilsFunction:To dissolve disputes within their area of jurisdictionFunction:To establish training and education schemesFunction:To establish and administer pension & provident funds, medical aid and unemployment schemesWorkplace forumHelps with grass root level labour relations and shifts the focus to joint problem solving and decision-making to the workplace. The LRA forces the employer to consult intensively with the workplace forum over a wide range of matters of mutual interest

The LRA tries to ensure that disputes are resolved as quickly as possible

2.2. Industrial action: Strikes, Lock-outs and other forms of industrial actionThe LRA gives employees the right to strike, but it also gives employers recourse to lock out striking employees

2.2.1. Strikes Two or more employees must participate in the action These striking employees might work for the same or different employers, but they must act with a

common work-related purpose The reason for the strike action must be to solve a grievance / dispute about a matter of mutual interest

that concerns employees and employers Action can be partial or complete refusal to work, e.g. go-slow, work-to-rule or intermittent strikes

(where employees stop and start the same strike over a period of time). It may also include overtime bans.

2 step procedureStep 1ConciliationThe parties in dispute get together with a neutral 3rd party. Conciliator does not decide who is right or wrong, but tries to help parties reach an agreement. conciliation can include mediation, i.e. making recommendation to the partiesStep 2ArbitrationDispute is referred to a neutral third party who makes a decision about who is right. This decision is binding on both partiesAdjudicationDispute goes the Labour Court instead of arbitration. A party can appeal (Labour Appeal Court) if leave to appeal is grantedIndustrial ActionLast resort: strikes (employees) / lock outs (employers)

Protected strikes Strike action can be protected or unprotected. If protected, employees enjoy certain benefits which

employees who engage in unprotected strikes do not have.A Procedures to follow for a strike to be considered protected

o Any collective agreement regarding dispute resolution procedures must be followedo If there is no agreed dispute resolution procedure then the procedures of the LRA must be

followed: The issue in dispute must be referred in writing to the CCMA, a bargaining council or a

statutory council (who must try to settle within 30 days through conciliation) If this fails a certificate to this effect must be issued At least 48 hours notice in writing of the proposed strike must be given to the employer

(7 days if the employer is the state)

B A strike will not be protected if:o A collective agreement specifically states that the workers may not strike over the issueo The corrective procedures have not been followed or if the arbitration decision is ignoredo The parties are engage in an essential service

C During a protected strike:o Employees may not be dismissed for going on strike. They may be dismissed for misconduct

during the strike e.g. intimidation, violenceo The employer may not apply for a court interdict to stop the strike, but may apply for an interdict

to prevent unlawful action e.g. damage to property, intimidation of working employeeso The refusal to work is not seen as a breach of contract and the employer cannot claim damages

for loss of production from striking workerso An employer does not have to pay employees participating in strike action, i.e. the “no work, no

pay” rule can be enforced

The LRA defines an essential service as: A service where the interruption of that service may endanger the life, personal safety or health of any part of

the population The parliamentary services, and The South African Police Services

Disputes in essential services go to arbitration if conciliation has failed to settle the matter

Reasons for strikes / lock-outs:Strikes and lock-outs may be held over disputes regarding issues of mutual interest between the employee and employer and may include issues such as:

Wage increases A demand to recognize a trade union Unhappiness about unilateral changes to the working conditions In sympathy with a protected strike by another party

Lock-outs:Employers can lock-out employees (physically exclude them from the work-place) to force them to accept a demand / offer of the employer that relates to the strike.

2.2.2. Other forms of industrial action

A PicketingThe LRA recognizes the right to picket as follows

Only a registered trade union may organise a picket

A picket may be held at any place to which the public has access e.g. outside the premises of an employer. Union’s must obtain the

employers permission to picket inside the workplace, but the employer may not withhold this permission unreasonably

The picket must be peaceful

B Secondary action Employees striking in support of a strike by other employees Secondary action is protected if:

o The main strike is protectedo The secondary strikers give 7 days’ notice to their employer

2.3. Unfair treatment in the workplaceUnfair discrimination will not be tolerated in the workplace, but discrimination is not unfair if it is on the grounds of affirmative action or the inherent requirements of the particular job

The LRA defines four kinds of treatment which amount to an unfair labour practice:

2.3.1. Unfair discrimination According to the LRA, this may include discriminating against employees or applicants for

employment based on an arbitrary reason such as race, gender, sexual orientation, age, disability, religion, political opinion, culture, language, marital status or family responsibility

E.g. an employer advertises for a man to do a job that a woman could also do

There are two exceptions to this provision on unfair discrimination:

1. Affirmative action or employment equity is not considered unfair discrimination2. Excluding applicants or employees based on the inherent requirement for a particular job is not

unfair

2.3.2. Unfair conduct Of the employer relating to promotion, demotion or training of an employee of the provision of

benefits

2.3.3. Unfair suspension Of an employee or any other disciplinary action short of dismissal

2.3.4. Failure or refusal of an employer to reinstate Or re-employ a former employee in terms of any agreement

Disputes about unfair treatment:

Disputes about all forms of unfair treatment should be referred firstly to conciliation e.g. by the CCMA

If a dispute about unfair discrimination remains unresolved, it will then be referred to the Labour Court

If a dispute about other kinds of unfair treatment remains unresolved, it can be referred to arbitration

2.4. Discipline One of the most important business objectives is probably to ensure a stable and well-motivated work-

force The HR department has to create a positive environment for staff to ensure both individual workers and the

businesses are achieving their goals Control measures, such as disciplinary and grievance procedures ensure that staff members are performing

to their maximum potential because workers will know what is expected from them and what the consequences will be if goals are not achieved

The purpose of discipline in a work environment is to: Maintain order and ensure cooperation Avoid future problems by ensuring employees know what is acceptable and unacceptable behaviour Motivate employees to change their behaviour where necessary

The South African Labour Law (LRA 66 of 1995) is aimed at protecting the rights of employees. It states clearly that dismissal is always the last resort and only allowed once all other avenues of disciplinary action have been exhausted.

Dismissing a worker is a cumbersome process and has to meet the requirements of:

Substantive fairness (misconduct, incapacity to perform duties, operational reasons)

Procedural fairness (correct procedure followed during dismissal)

Under the LRA an employee is regarded as unfairly dismissed when: An employer ends a contract without notice to the employee An employer refuses to allow an employee to return to work after maternity leave Constructive dismissal: when the employer makes the working environment impossible for the

employee to tolerate, and so forces the employee to resign As employee is dismissed because he took part in the activities of a trade union / workplace forum An employee is dismissed because he took part in a protected strike or protect action An employee is dismissed due to pregnancy or any reason related to the pregnancy An employee is dismissed on arbitrary grounds e.g. race, age (except retirement age), religion, gender,

sexual orientation or family responsibilities

Disputes over dismissals An employee may refer a dispute over constructive dismissal or over a dismissal for misconduct,

incapacity and operational reasons to the CCMA

If a dispute remains unresolved, the employee may refer it to arbitration (for misconduct or incapacity) or to the Labour Court (for operational reasons)

Dismissals arising from a strike, victimization or unfair arbitrary discrimination are referred to the Labour Court after conciliation.

Remedies for unfair dismissal1. Reinstatement is the first choice, unless special circumstances exist:

a. The worker does not want to return to workb. The dismissal was only procedurally unfairc. The working relationship between the parties has become intolerabled. It is not practical to do so e.g. costs to modify workspace for an incapacitated worker

2. Compensation: the employer may be required to pay either a set amount or a specified number of months salaries

3. A combination of reinstatement and compensation

2.4.1 Dismissal for misconduct Misconduct: transgression of a rule e.g. defiance of authority, theft, dishonesty, substance abuse,

intimidation, assault or fighting, lateness, absenteeism, abuse of sick leave, falsifying medical records, abusive language

It is not appropriate to dismiss an employee for a first offence, unless serious Dismissal for misconduct is the last resort: when other measures to correct the misconduct have failed Each case should be judged on its merits and other factors must be taken into account e.g. length of

service, previous record, personal circumstances. The circumstances if the infringement must also be taken into account e.g. provocation by another employee

Dismissal for misconduct is substantively fair if: The employee broke a rule of conduct in the workplace The rule was valid or reasonable The employee knew of, or should have known of, the rule The employer applied the rule consistently Dismissal is the appropriate step i.e. instead of a less serious action

such as a written warning / suspension

Procedural fairness – the correct procedure to follow The employee must be notified in writing of the reason for disciplinary action The employee needs to be given sufficient time to prepare for the hearing but it must take place as soon

as possible The employee has the right to state his case or can be represented by a fellow employee, trade union

representative of lawyer (in serious cases) The employee has the right to an interpreter if needed Any witnesses may be cross examined The employee has the right to be informed about the outcome of the hearing and appeal should he wish

to do so.

Employers should keep record of disciplinary action for each employee, stating the nature of the misconduct, the disciplinary action, and the reasons for the action

2.4.2 Dismissal for incapacity Incapacity: the result of poor health (incapable to perform) or due to unsatisfactory work performance Poor health: the employer should aim to accommodate the employee through sick leave. If the

employee cannot perform regular duties these should be adjusted or an alternative position offered Poor performance: work standards have not been met (should be distinguished from misconduct) Poor performance may be dealt with in accordance with stipulations of the disciplinary code. However it

must be established that the worker was aware of:o Expectationso How failure to meet these standards will be dealt with

Trade Unions will attempt to ensure work standards are realistic and reasonable, and if standards are changed, the law requires the business consult with the trade union before implementation of the changes

Probation:o A period where the new recruit works in the business and only after this period has been

completed is the appointment confirmedo Reason: to allow the employer the opportunity to assess the performance of the employee

before finalising the appointmento The time period should be reasonable (usually 3 months) and during this time the employer must

evaluate the employees performance and provide guidance and training should it not be satisfactory

o If the employee still fails to meet the criteria the employee will be given a hearing and may then be dismissed due to poor performance

o The employee still has the right to appeal the dismissal

Employer responsibility: the staff must be given the opportunity to perform to the best of their abilities which may include training and skills development, as well as supplying the correct equipment and tools, to help the employee meet performance standards

Should the employee fail to meet the pre-determined and clearly communicated standards, the employer may have reason to consider dismissing the employee based on poor work performance

Disciplinary action due to poor performance must meet the following requirements to be seen as a valid reason and procedurally fair if it can be shown that the employee:

o Failed to meet a performance standardo Was aware of the required standardo Was given an opportunity to improve performance (including training)o The reason for not meeting the standard was investigated and dismissal is the only optiono Was given an opportunity to be heard, and represented, at a hearingo Was given the opportunity to appeal the dismissal

2.4.3 Dismissal for operational reasons (retrenchment) Dismissal for operational reasons may only occur if the employer has tried to avoid this as far as possible

This may include consultation / negotiations with employees and their representatives

Once the retrenchment is considered the employer must start the consultation process and must notify the employees and their trade union in writing of:

o The reasons for the proposed retrenchmento The alternatives consideredo The number of employees who are likely to be affectedo The proposed methods of selection of jobs involvedo The timing of the proposed retrenchmento Offers of severance payo Assistance offered / prospects of re-employment in the future

To ensure the consultation is genuine the employer must respond to any suggestions from the other consulting party and explain any reasons for disagreeing with that party.

3. Basic Conditions of Employment Act, 1997 (BCEA)

The BCEA aims to impact positively on the conditions of employment of South African workers

It is primarily aimed at improving the working conditions of vulnerable workers and specifically addresses the problems of:

o Inadequate protection for vulnerable workers such as part-time, farm and domestic workerso The lack of mechanisms to set minimum wages for farm and domestico Child labouro Exclusively long working hours, especially in areas such as transport and securityo Working hours: a maximum of 45 hours / week with meal after 5 hours of work. Maximum 9 hours /

day for 5 day week and 8 hours / day for 6 day week. Overtime: maximum 3 hours / day or 10 hours / week, with payment at 11/2 time normal rate or paid leave

o Leave: 21 consecutive days after every 12 months continuous employment. Maternity leave – 4 consecutive months. Family responsibility leave – 3 days / year

o Sick leave: 30 working days per 36 month cycle

o Public holidays: employees must be paid if a public holiday is worked – double rate or time offo Notice of termination of employment: 1 week notice if worked for less than 1 month, 2 weeks if less

than one year and 1 month if worked for a full yearo Deductions: employers must deduct UIF, tax, union fees or other amounts agreed upon

4. Employment Equity Act (55 of 1998) Past policies of discrimination: contributed to inefficiencies in the labour market

o The placement of white males in positions of leadership at the expense of females and other raceso Blacks, females and the disabled were reduced to marginal roles in the labour market which

imposed inefficiencies in the allocation of labour and had adverse consequences for our economy

The Act seeks to eliminate unfair discrimination in employment and provides for affirmative action to correct imbalances of the past with respect to access to employment, training, promotion and equitable remuneration, especially for blacks, women and the disabled

A business is obliged to display the EE Act in all relevant languages in the workplace

Employers who employ 50 or more workers are forced to develop specific affirmative action plans in consultation with workers or representatives. Voluntary targets are set and the monitored by government through the submission of the Employment Equity Plans

Designated employers must progressively reduce the difference in salaries, promotion opportunities and other relevant aspects. Businesses wishing to tender for government contracts must comply with EE requirements

The Act also establishes an advisory Commission for Employment Equity to assist and advise businesses on the formulation of Codes of Good Practice

The EE Act was introduced to force businesses to employ more people form disadvantaged groups but also to promote said people to managerial positions as business would not do this on their own without it being law.

Differences between Employment Equity and Black Economic Empowerment

EE BEE / BBBEEEmployment Equity Black Economic Empowerment

Broad Based Black Economic EmpowermentEmphasis on creating jobs Emphasis on empowering blacks to:

Get into management Become shareholders (ownership)

Includes previously disadvantaged groups: Blacks, Coloureds, Indians, Females, Disabled & Chinese

Includes blacks only

Enforced by EE committee within business, based on labour guidelines

Judges on Balanced Score Card (BSC) for each particular industry and type of business

4.1. Black Economic Empowerment The BEE Act supports the development and economic empowerment of the historically disadvantaged

and applies to black people only (Africans, Indians, Coloureds) The act recognises that black females were the most disadvantaged followed by black males, with white

males being the most favoured Disabled persons were also discriminated against previously and must now gain preference when a

business employs staff The Equity Act has attempted to formalise this process by forcing business to have a work force that

represents the demographics of the region The government and influential business role players try to implement a system of making BEE

compliant companies the preferred supplier when it comes to contracts Each industry has a BEE scorecard (e.g. see page 134) that is used to assess the degree of compliance.

The result is that any business wishing to engage in economic activity with governments departments must be supporting this initiative in the fullest sense and should also only trade with other businesses that support BEE

4.2. Broad-Based Black Economic Empowerment (BBBEE Act 53 of 2003) The aim of BBBEE is to address the shortcomings of the EE Act, BEE and affirmative action as a whole It has not been enough for businesses to satisfy the EE Act as this has not resulted in black people being

introduced into managerial posts or meaningful ownership.

The government’s policy goes further than just ownership and is about encouraging black involvement in the development of the economy, black management, promoting employment equity and skills training

There are 3 aspects to the BBBEE Act:o Direct empowerment through share of ownership in business enterprises. This may include

introducing black partners or selling shares to blacks only (or at a substantial discount)o Skills development resulting in possible promotion and higher salaries for black peopleo Indirect empowerment through preferential treatment in the granting of government contracts

and licenses to business enterprises with a certain BBBEE status

5. Skills Development Act (97 of 1998) and Skills Development Levies Act (9 of 1999) The South African Qualifications Authority (SAQA) Act was the result of a joint effort by the Minister of

Education and the Minister of Labour in 1995

The Act aims to provide quality of an access to learning to learning at schools or in the workplace. SAQA is responsible to develop the National Qualifications Framework (NQF)

Policies and criteria must be formulated for the registration of educational institutions and service providers

The aim of the NQF is to ensure that people have access to training and education of an academic / vocational nature and that they receive credit for learning that has taken place

5.1. Skills Development Act (SDA) and Skills Development Levies Act The skills shortage in our country reflects – only 20% of our economically active population (EAP) is

skilled or highly skilled, while about 80% is semi-skilled, unskilled or unemployed. This low skills base is one of the reasons for the low levels of investment in our economy

General schooling and good efforts of businesses are insufficient; to strengthen the link between education, training, economic growth and employment opportunities, national intervention is needed

The Skills Development Act and Skills Development Levies Act were passed by parliament. Theyaim to:o Use the workplace as a place of learningo Improve the level of investment in education and trainingo Ensure that quality training (accredited) is offeredo Improve employment opportunities for disadvantaged peopleo Encourage workers to get involved in training programmes

5.2. SETAS Each business sector has formed a Sector Education and Training Authority (SETA) to prepare training

programmes, promote leaderships and control funds in that sector

These SETA’s consist of trade union representatives, employers organisations, government departments and interested professional bodies

SETA’s obtain funding from the skills development levies paid by all employers with a payroll of more than R250 000 per annum. This levy is currently 1% of the total payroll and is collected by SARS

Each SETA must control and approve learner ships and Workplace Skills Programmes (WSP), provide funds to employers and trainers and ensure education and training is happening in their sector

Employers are entitled to claim part of the Skills Development Levy back when providing skills development programmes

6. The Occupational Health and Safety Act (85 of 1993) This Act was established to provide for all issues regarding the provision of safe and healthy working

environments for employees

Not only the physical working environment – representatives that travel on behalf of enterprises are also covered

The Act has several sections, and covers the following:o The duty of employers is to take all reasonable measures to provide a risk free and healthy work

environment for employees. This includes: Acceptable levels of cleanliness (stricter in certain industries e.g. food) The provision of safety equipment (where required) e.g. hard hats, goggles The provision of health protection equipment (where required) e.g. gas masks, regular health

checks The appointment of a Health and Safety Officer in organisations of more than 20 employees,

and a Health and Safety Committee to ensure compliance Putting in place strategies to cope with problems e.g. fire escapes, first aid resources

o The duty of each employee is to take reasonable care and precautions for his own and colleagues health and safety. Negligence of employees could lead to the employer not being held responsible for problems arising

If problems arise, employees have recourse to COIDA (Compensation for Occupational Injuries and Diseases Act) for certain

compensations, providing certain conditions, such as lack of negligence, are met.

Labour Legislation

Constitution

Human RightsGeneration of rights

Limitation clauseInclusivity

Environmental issues

Labour Relations Act

Collective bargainingIndustrial action

Unfair treatment in the workplaceDiscipline

Basic Condition of Employment Act

Employment Equity ActBEE

BBBEE

Skills DevelopmentSkills Development Acts

SETA's

Occupational Health and Safety Act