People: Labour law amendments
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www.zbconsulting.za.com
ZBZinn & Botha Consulting
what defines you?
We are in the business of sustainable BBBEE strategy
optimisation by bespoke innovation in talent
management, workforce optimisation and labour law
BZ Labour Relations Act Employment Equity Act Basic Conditions of Employment Act Employment Services Act BBBEE Codes
Scope of amendments
BZ Time to face up to the…
201420132011 2012
LARGEST regulatory changes in
the past 40 years
2015
BZ Stakeholder communication & capacitation (all levels of
management, employees, TES & suppliers) Draft & maintain a Risk Register Update Fixed-term Contracts Update TES Service Level Agreements Arrange an audit of TES Start an investigation into equal treatment risk exposure &
strategic options to minimize risk & employee cost increases Review IR policies such as retrenchments, employment equity
& the like Establish impact on collective agreements Commission an audit into the entire employment equity
compliance domain on the basis of the requirements of a DG review
Draft new a-typical employment & equal treatment/pay for work of equal value policies
Immediate administrative matters to address
Contact us now to arrange for any of
these [email protected]
.com
BZIts all inter-related; a “system” which calls for systems thinking rather than narrow-mindedness
LRA epicentre
LRA EMPLOYMENT STRUCTURE DECISION
WILL IMPACT
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www.zbconsulting.za.com
ZBZinn & Botha Consulting
what defines you?
BBBEE codes & relationship with LRA & EE Act
BZ Three ways of securing human capital
Business strategy
SBO’s human capital needs
Temporary employment services
Direct employmento FTCo Part-timeo Permanent
Independent contracting/sub
contracting
BZElement Previous Weighting New Weighting
Ownership 20 Points 25 Points
Management Control
(Employment Equity)
10 Points Consolidated with Employment Equity
15 Points15 Points
Skills Development 15 Points 20 Points
Enterprise & Supplier Development
(Preferred Procurement Enterprise Development)
20 Points
40 Points
15 Points
Socio Economic Development 5 Points 5 Points
Generic scorecard
BZContribution Level Previous Calibration New Calibration
BEE Recognition Level
Level one contributor
≥ 100 points on the Generic Scorecard
≥ 100 points on the Generic Scorecard 135%
Level two Contributor
≥ 85 but < 100 points on the Generic Scorecard
≥ 95 but < 100 points on the Generic Scorecard 125%
Level three contributor
≥ 75 but < 85 on the Generic Scorecard
≥ 90 but < 95 on the Generic Scorecard 110%
Level four contributor
≥ 65 but < 75 on the Generic Scorecard
≥ 80 but < 90 on the Generic Scorecard 100%
Level five contributor
≥ 55 but < 65 on the Generic Scorecard
≥ 75 but < 80 on the Generic Scorecard 80%
Level six contributor
≥ 45 but < 55 on the Generic Scorecard
≥ 70 but < 75 on the Generic Scorecard 60%
Level seven contributor
≥ 40 but < 45 on the Generic Scorecard
≥ 55 but < 70 on the Generic Scorecard 50%
Level eight contributor
≥ 30 but < 40 on the Generic Scorecard
≥ 40 but < 55 on the Generic Scorecard 10%
Non-compliant Contributor
< 30 on the Generic Scorecard
< 40 on the Generic Scorecard
0%
Recalibration of BBBEE levels - current score = ??
BZ Male
o AM (African male)– 40.7%
o CM (coloured male)– 5.8%
o IM (Indian male)– 1.9%
o WM (white male)– 6.4%
Total 54.8%
Femaleo AF (African female)
– 34.2%
o CF (coloured female)– 5.0%
o IF (Indian female)– 1.1%
o WF (white female)– 4.9%
Total 45.2%
National sub-race & gender
Now applies to management control/EE and skills development
Source: Statistics South Africa, (QLFS 3 2012) (all percentages are rounded to one decimal point)
BZ Skills development
Element Category Indicator Weighting points
Compliance
Target Score
Total Points = 20
Skills Development Spend on Learning Programmes in Matrix
Skills development spend on learning programmes specified in the matrix for black employees as a percentage of leviable amount
8 6%
Skills development spend on learning programmes specified in the matrix for black employees with disabilities as a percentage of leviable amount
4 0.3%
Learnerships, Apprenticeships & Internships
Number of black employees participating in Learnerships, Apprenticeships & Internships as a % of total employees
4 2.5%
Number of black unemployed people participating in training specified in the learning programme matrix as a % of number of employees
4 2.5%
Bonus PointsNumber of Black people absorbed by the Measured & Industry Entity at the end of the Learnerships programme
5100% or pro-
rata
BZ Enterprise & supplier development
Element Category IndicatorWeighting
pointsCompliance
Target
ENTERPRISE & SUPPLIER
DEVELOPMENT
Total Points = 40
Preferential Procurement
BEE Procurement Spend from all Empowering Suppliers based on the BEE Procurement Recognition Levels as a percentage of Total Measured Procurement Spend
5 80 %
BEE Procurement Spend from all Empowering Suppliers that are Qualifying Small Enterprises based on the applicable BEE Procurement Recognition Levels as a percentage of Total Measured Procurement Spend
3 15 %
BEE Procurement Spend from all Exempted Micro Enterprises based on the applicable BEE Procurement Recognition Levels as a percentage of Total Measured Procurement Spend
4 15 %
BEE Procurement Spend from all Empowering Suppliers that are at least 51% black-owned based on the applicable BEE Procurement Recognition Levels as a percentage of Total Measured Procurement Spend
9 40%
BEE Procurement Spend from all Empowering Suppliers that are at least 30% black-women owned based on the applicable BEE Procurement Recognition Levels as a percentage of Total Measured Procurement Spend 4 12%
Bonus PointsBEE Procurement Spend from Designated Group Suppliers that are at least 51% Black-owned
2 2%
Supplier Development
Annual Value of all supplier development contributions made by the measured entity as a % of target
10 2% of NPAT
Enterprise Development
Annual Value of enterprise development contributions and sector-specific programmes made by the measured entity as a % of target 5 1% of NPAT
Bonus Points
Graduation of 1 or more ED beneficiaries to Supplier Development level
Creating one or more jobs as a result of Supplier Development & ED initiatives by the measured entity
1
1
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ZBZinn & Botha Consulting
what defines you?
Labour Relations Act amendments
BZ Section 189A of the Principal Act is hereby amended by
o the insertion in subsection (2) of the following paragraph– (d) a consulting party may not unreasonably refuse to extend the
period for consultation if such an extension is required to ensure meaningful consultation
Right-size; down-size; up-size…
Scope & Impact Retrench, change terms of
employment … 90 days is the minimum! Dismissal risk heightened
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ZBZinn & Botha Consulting
what defines you?
Fixed-term contracts, indefinite contracts & legitimacy of
contracts, equal pay matters etc.
BZ A ‘fixed term contract’
means a contract of employment that terminates on– the occurrence of a
specified event
– the completion of a specified task or project; or
– a fixed date, other than an employee’s normal or agreed retirement age
– Employment in terms of a fixed term contract in contravention of the above is deemed to be of indefinite duration
A ‘Dismissal’ meanso (b) an employee
engaged under a fixed-term contract of employment reasonably expected the employer– to retain the
employee on an indefinite contract of employment but otherwise on the same or similar terms as the fixed term contract, but the employer offered to retain the employee on less favourable terms, or did not offer to retain the employee
Fixed-term contracts – many shades of grey
BZApplies irrespective of direct FTC or via a TES
Joint and several liability for breaches of BC/SD/BCEA
D U R A T I O N O F C O N T R A C T
RE
MU
NE
RA
TI
ON
3 months
R205 per annum
Joint and several liability for breaches of BC/SD/BCEA
SERVICE LEVEL AGREEMENTo indemnificationso insuranceso SOP’s
Joint and several liability for LRA (if TES is involved)
Equal treatment Organisational rights
Fixed-term contracts – vulnerable persons
BZWhat does it really mean when it says the CLIENT is the deemed employer?
(4A) If the client of a temporary employment service is jointly and severally liable in terms of section 198 (4) or is deemed to be the employer of an employee in terms of section 198A (3)(b)o the employee may institute proceedings against either the
temporary employment service or the client or both the temporary employment service and the client
o a labour inspector acting in terms of the Basic Conditions of Employment Act may secure and enforce compliance against the temporary employment service or the client, as if it were the employer, or both; and
o any order or award made against a temporary employment service or client in terms of this subsection may be enforced against either
That deeming provision
Client instructs the TES to remove an assignee
Determine if FTC clearly defines an event, duration or project with clear indicators managing expectations: consider number of renewals/ rolling,
duration & wording of contract as well as reason for removal
FTC is clear wrt termination & expectation management
Probability is that assignee harbours an expectation of renewal of contract or
indefinite duration
Assigned for <24m
Give contractual notice if end date is not
clear
Assigned for >24m
Give contractual notice &
termination pay (1w
remuneration/ complete year
service)
Misconduct IncapacityOperational Requirement
s
Be careful of potential application of selection criteria across client & TES staff & severance
pay
SOP: ASSIGNEE REMOVAL GUIDELINES
BZStatute Client
Joint & Several Liability
TES Liability Severally
Labour Relations Act Yes – pending Yes
Employment Equity ActUnfair
discriminationAA (after 3 months)
Yes
Skills Development Act Yes
Skills Development Levies Act Yes
Bargaining Council/ Sectoral Determination/ BCEA Yes
UIF Yes
COID Yes
OHSA Yes
Risk management – labour law scenarios
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ZBZinn & Botha Consulting
what defines you?
Equal treatment
BZ General Approach…
1. Is the dispute a genuine equal pay/ equal treatment dispute?
2. Are the positions being compared of equal value?the responsibility for people, finances and material & the skills,
qualifications, including prior learning and experience required &physical, mental and emotional effort required to perform the work & the conditions under which work is performed, including physicalenvironment, psychological conditions, time when and geographic location where the work is performed.
3. Are there justifiable reasons for differentiation?Seniority, length of service, qualifications, ability, competence,
performance or quality of work, temporarily employed to gain experience or training, shortage of skills or market values thereof, any other factor
REMEDY: LRA – address immediately & EEA – take remedial steps
BZ JUSTIFIABLE REASON for different treatment... includes the fact
that the different treatment is as a result of the application of a system that takes into accounto the employee’s seniority, experience or length of serviceo merit criteriao the quality or quantity of work performedo any other relevant criteria of a similar nature
– (that is not prohibited in terms of section 6 of the Employment Equity Act)
Under the Labour Relations Act
BZ It is partly about correlations
Equal pay for work of equal value
BZ Determining Equal Pay risk exposure - first things first!
F
BA
A – Earning more than R193K/pa
B – Contracted for less than 3 months
C – Normal absenteeism replacement
D – Trainee/intern/learnership/ apprenticeship
E – Short-term project
F – Justifiable reason
(LOS/experience/performance/ merit/other)
Fields & data (data sheet)
o Client perm
o Client part-time
o Client FTC
o TES
100 Assignees
20 Assignees - Exposure
Clean up “Gene Pool”Options: perm,
attrition, increase …
CRUCIAL…Design & Develop a NEW DISPENSATION STAFFING SOLUTION going forwards
Opportunist Ambassador
Qu
an
tita
tive
Pro
gre
ss
Business Uncertainty & CyclicalityPe
rmanent
Em
plo
ym
ent
High Flexibility Needs
Cool Martyr
Hybrid
TE
S/
Outs
ourc
ed
Sta
ffing
Low Flexibility Needs
WHERE DO YOU FEATURE?
RESPONSEBusiness strategy must drive decisions
Options BlendIndependent Contractors/ Sub-
contractors/ Outsourcing
Temporary Employment
Service/ Labour Broker
Direct Employment
Managed Service Provider (MSP)
Full Function Outsource
Pay-for-Performance
Other arrangements
SLA indemnifications
integrated SOP’s Systems & MI Capacity & delivery Thought leadership Remove
comparator Compliance with
law
Recruitment process outsourcing (RPO)
HR outsourcing
LR outsourcing Payroll
bureau etc.
STRATEGIC STAFFING PARTNER CHARACTERISTICS (2014 & BEYOND)
• Back up SLA Indemnifications & Insurances
Strong Balance Sheet
• Management InformationSystems
• Innovation & differentiationThought leadership
• Global Best-practice, locallyCapacity to
Deliver
• Values, culture and track recordTrust & “in it for the long haul”
• Immerse into Client Business Drivers
Business Sense
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www.zbconsulting.za.com
ZBZinn & Botha Consulting
what defines you?
Thank you!
John Botha082 457 [email protected]