Major labour law amendments imminent
JOHANNESBURG - A host of proposed amendments to the Labour Relations Act (LRA), along with the Basic Conditions of Employment Act (BCEA), are currently being reviewed by a parliamentary sub-committee and are expected to be promulgated sometime this year.
These amendments form part of a wider effort to “fundamentally alter unwarranted patterns in our labour market system,” according to the Department of Labour.
And with the current version of the drafts not likely to be significantly altered by the time they become law it is now possible to outline some of the major consequences the legislation will have for employers.
The proposed changes are significant.
Following the “complete and utter mess” made of the first round of drafts, which were eventually shelved in April last year, the proposals before parliament are essentially a “completely new set of amendments,” published last month according to Nick Robb, a partner at law firm Webber Wentzel.
Robb believes that the drafts will be “pushed through fairly rapidly” and are likely to be promulgated towards the middle or second half of this year.
Employers take heed as the drafts “we see now are pretty much what we are going to get … it seems pretty certain that most of, not all of, the amendments are going to come out in their current form,” says Robb.
Limitation on the ability to implement workplace changes
Currently employers are entitled to retrench staff in instances where they refuse to accept major proposed alterations in the work place, provided there is a sound operational requirement and commercial rationale to implement the changes.
An example might be that management can no longer afford the medical aid packages being provided to staff and, in order to remain profitable or even sustainable, are required to switch schemes.
Staff which refused to accept the switch could, if due process is followed, then be fired.
However, this amendment states that such a dismissal would be regarded as an automatically unfair dismissal as defined by the LRA.
Employees would then be entitled to claim compensation equivalent to up to 24 months of remuneration.
“From a practical point of view this is probably the most significant of all the amendments,” says Robb.
“What this is doing is guaranteeing employment for that minority of employees that stick their heels in, even when it’s to the detriment of the organisation or the majority of staff ….”
“It’s going to be used as a bargaining chip by trade unions and it’s going to cost businesses.”
The extension of protection to atypical employees
Following a prolonged debate around the use of labour brokers, with trade union Cosatu seeking to have them banned outright, a “sensible compromise” seems to have been reached in the proposed drafts, according to Robb.
In essence, employees contracted through a labour broker who earn on or below a current annual remuneration threshold of R172 000 per annum and who have been working for a company for a period in excess of six months, will then be deemed to be the employee of the labour broker client, not the labour broker.
The same terms apply to fixed-term contract employees.
These employees will thus be provided the full ambit of protection as provided by the LRA and the BCEA.
Notably, this protection includes employer obligations regarding dismissals giving employees the ability to be reinstated or remunerated with a year’s pay should they be dismissed unfairly.
Word on the street is that Cosatu are “very, very angry about this compromise” and are likely to throw their full weight into opposing it through a submission to Parliament’s committee.
Limitation on the right to strike
Following an up-surge in violent strikes since 2009, trade unions will once again be required to go “to the ballot,” to secure a majority vote before a protected strike can be held.
This amendment “is going to change the strike landscape significantly,” says Robb “it’s a massive thing.
“It introduces the notion of a more democratic approach to strike action … you are talking about the majority as opposed to the will of the leaders.
“It’s going to lessen the ability of unions to intimidate members into joining something that they don’t want to do.”
The amendment also means that where unions hope to call for an industry-wide strike they will need to hold ballots at each business within that industry.
Mass dismissal provisions
The procedures, designed to safe-guard staff, that employers will have to follow where they seek to dismiss staff en-masse ie, over pre-prescribed thresholds, will take much longer.
Businesses will have to go through a longer consultation process prior to dismissal and will need to appoint a facilitator which is a CCMA commissioner, a process which in itself takes approximately 90 days, according to Robb.
In addition “either party can be compelled to extend that already quite long consultation process in the event that there is good reason to carry on consulting,” he says.
“What that means is an already expensive process for employers will become more expensive … you are keeping people that you no longer require for longer,” he says.
Trade unions will also be able to contest the processes involved in the mass dismissal where the dismissal lands before the courts; currently they are not.
