SUMMARY OF AMENDMENTS TO THE LABOUR RELATIONS

ACT 66 OF 1995 (“LRA”)

Prepared by: Richard Pemberton

A-TYPICAL CONTRACTS : S 198 A - D

INTRODUCTION

These sections contain arguably the most important amendments that have the greatest impact on employment law.  Three important areas of employment/contracts are identified and they are :-

• Temporary employment services • Fixed period contracts • Part time employees

These amendments are aimed at stopping alleged abuse of employees who have been employed in these areas prior to the amendments.

The cost implications are significant for employers.

ThresholdThese types of employment/contracts are subject to an annual remuneration threshold i.e. they only apply to employees who earn less than the current threshold which is R205 433.50.

TEMPORARY EMPLOYMENT SERVICES (TES) (Section 198 A)

SS 1: Definition  Temporary Service in terms of this section means an employee:-

• who works for a client not exceeding three months• who works as a substitute for an employee temporarily absent• whose job is covered by a collective agreement made by a bargaining council or a

sectoral determination or notice by the Minister (cross reference SS6) SS 2: Provides for the threshold exclusion

SS 3: If an employee does not fall within the definition the employee will be deemed to be an employee of the client

(SS 3b). It also means that after 3 months an employee is deemed to be an employee of the client.

 SS 4: Termination to avoid the consequences of this section

constitutes a dismissal (X ref Section 198 D(3) – these disputes go to the Labour Court). Employee must prove it was unfair. Clearly unfair if to avoid this section.

 SS 5: An employee deemed to be an employee of the client must be

treated no less favourably than any employee of the client per-forming the same or similar work.

SS 9: Rights under this section accrue three months after the commencement of the amendment act.

FIXED TERM CONTRACTS (“FTC”) (Section 198 B) SS 1: Definition of an FTC means:-

A contract that terminates on :-• An occurrence of a specified event • Completion of a specified task/project• A fixed date (other than a retirement date)

SS 2: Exclusions • Earnings above the threshold • Employ less than 10 employees• If in operation for less than 2 years and employs less than 50 employees • The FTC is permitted by statute or a sectoral determination or a collective

agreement 

SS 3: Further exclusions• Successive contracts if nature of the work limited or for a defined duration• Other justifiable reason

SS 4: Justifiable reasons

• Replacing temporary absent employee• Temporary increase in volume of work (not beyond twelve months) • Student/graduate training• Exclusively employed on a specified project with a defined duration • A non-citizen employed on a work permit for a defined period • Seasonal work • Official public works scheme • Job funded externally for limited period• Post retirement age

SS 6: FTC

• Must be in writing• Must state the reason for it

SS 7: Onus to prove justifiable reason on the employer

SS 8 (a): If FTC exceeds three months it becomes a permanent

contract on the same terms for same or similar work [can have different terms if justifiable x-ref 198D(2)]

 SS 8(b): Applies three months after coming into force of

the section  SS 9: Equal opportunity provisions for vacancies

SS 10 & 11: Rights for severance pay after 24 months

PART – TIME EMPLOYMENT (Section 198 C)

SS 1(a) : Definition:Remunerated wholly or in part by reference to the time the employee works who works less hours than a comparable full time employee

 SS 1(b): Definition of a comparable full time employee

SS 2: Exclusions:• Earnings above the threshold• Less than 10 employees or less than 50 employees for a business

in operation for less than two years – but not an employer who has more than one business or the business has been formed by a divisional dissolution of an existing business

• Employee who works less than 24 hours per month• Employee in first three months of continuous employment

SS 3(a): After three months the employee must be treated on not less favourable terms than an comparable fulltime employee

 SS 3(b): Employee must be given access to training and

skills development  SS 4: Sub section applies 3 months after the

coming into force of the section

SS 5: Access to vacancies SS 6: Identifying comparable employees

5. General (Section 198 D) SS 1: Interpretation disputes referred to CCMA  SS 2: Justifiable reasons to treat differently:-

• Seniority, experience, length of service• Merit • Quality and Quantity of work • Any other similar criteria

 SS 3SS 4 Constitute dispute resolution framework – referral to CCMA orSS 5 Bargaining Council within 6 months. If unresolved to arbitrationSS6 within 90 days.

ORGANISATIONAL RIGHTS: ARBITRATION OF ORGANISATIONAL RIGHTS

DISPUTES : SS21 and 22• A registered trade union which does not have as members the majority of employees in a workplace may be

granted: 

– the right to elect shop stewards(s14) by the CCMA in arbitration proceedings if it is entitled to the right of access(s12), deduction of union subscriptions(s13), leave for union office bearers(s15) and no other trade union enjoys this right.

 – the right to disclosure of information(s16) by the CCMA in arbitration proceedings if it is entitled to all the rights

relating to access(s12), deduction of union subscription(s13), shop stewards(s14), leave for trade union office bearers(s15) and no other trade union enjoys this right.

 • A trade union or two or more registered trade unions acting jointly may, in CCMA arbitration proceedings, be

granted the right of access to the workplace(s12), deduction of trade union subscriptions(s13) or leave for trade union office bearers(s15) even if they do not meet a threshold established by a collective agreement provided that

 – all the parties to the collective agreement have been given an opportunity to participate in the arbitration proceedings;

and– the union or unions jointly represent a significant interest in the workplace; or– the union or unions jointly represent a substantial number of employees at the workplace.

 

• A trade union may exercise organisational rights in relation to employees of a temporary employment service at the workplace of the client(s) and/or the temporary employment service.

 • An arbitration award in respect of organisational right disputes may be

made binding on an employer and

– A client of the temporary employment service which is the employer of the employees to whom the award applies;

 – Any person who controls access to the workplace to which the

award applies if that person has been given an opportunity to participate in the arbitration proceedings(a landlord and possibly, a security company contracted to control access).

BARGAINING COUNCILS: EXTENSION OF COLLECTIVE AGREEMENTS TO NON-

PARTIES: S 32

• The following are additional requirements to be met before the Minister can extend a collective agreement concluded in a bargaining council to non-parties:

– The bargaining council must have in place effective procedures to decide on exemptions applications within 30 days

– The collective agreement makes provision for appeals against a refusal to exempt or withdrawal of an exemption to be heard and decided within 30 days of bargaining council

– The Minister must publish a notice in the Government Gazette stating that she has received an application, where copies thereof may be inspected or obtained and providing a period of not less than 21 days for comment by interested parties; and

– The Minister must take into account comments submitted by interested parties before deciding whether or not to extend the collective agreement.

• For purposes of determining representativity of the parties to a collective agreement that is to be extended, the Minister may take into account the composition of the workforce in the sector, including the extent to which there are  

– employees assigned to work by temporary employment services,– employees employed on fixed term contracts, – part-time employees or– employees in other categories of non-standard employment

• A bargaining council must supply the registrar with information about the representativity of its constituents which will be used for purposes of, inter alia, s 32

 • A bargaining council may by a collective agreement provide for the payment of a dispute

resolution levy and payment of a fee for arbitrations for which the CCMA may also charge a fee(s188A arbitrations)

 • Representatives, officials and office bearers of employers organisations and trade union

parties to a collective agreement that has been extended to non-parties by the Minister cannot be members of the appeals body that considers exemption applications or participate in the proceedings.

STRIKES & LOCK OUTS: S 65

• S 65 is amended to prohibit strikes and lock outs in respect of any issue in dispute that a party has the right to refer to arbitration or the Labour Court in terms of the LRA or any other employment law.

• The addition of “any other employment law” will have the effect of prohibiting strikes and lock outs in respect of arbitrable issues in dispute arising from the BCEA, UIF Act, EEA, OHSA, Skills Development Act, COID

 • Strikes and lock outs are prohibited in respect of issues in dispute regulated

by a determination under Chapter 8 of the BCEA, repealing reference to the Wage Act.

NOTE: The original amendment introducing a compulsory secret strike ballot has been deleted = a trade off to permit labour brokers to a limited extent.

PICKETS: S 69

NOTE: Initially the amendments provided for the deletion of “supporters” in SS(1). This was amended by the National Council of Provinces due to pressure from the unions and has been reintroduced.

• The CCMA may authorise a picket on the property of third parties provided such parties have been given an opportunity to make representations to the CCMA. Third parties will include:

 – Landlords where the employer is a tenant– Landlords in shopping malls and factory estates– Municipalities

• The Labour Court is given the power to issue urgent interim relief in respect of pickets, including orders(section 69(12):

– To comply with picketing rules– Varying picket rules or agreements– Note: first approved amendment provided for power to –

• Suspend a picket • Suspend a strike

This was deleted the NCOP in its amendments (pressure from the unions)

– Note: first approved amendmentsProhibiting an employer from engaging replacement labour during a strike even though the employer is not prohibited from doing so by section 76 of the Act

• A party seeking urgent relief in terms of section 69(12): 

– must have referred a dispute to the CCMA; and  – must also give 48 hours notice of the application to the other party.

ESSENTIAL SERVICES: SECTIONS 70, 70A TO 70 F

• The ESC is now to be established under the auspices of the CCMA, resolving the issue dealt with by the courts in Eskom v Num and Others (essential Services Committee Intervening) (2011) 32 ILJ 2904 (SCA).

• The Minister appoints members of the ESC, which may be chaired by a senior commissioner and the deputy chairperson must be a senior commissioner.

• The Minister must appoint two representatives each for organised labour, business and government at NEDLAC as nominated by the parties

• For purposes of considering disputes, the ESC may establish a panel of three or five members, to be presided over by its chairperson or deputy or a senior commissioner trained for that purpose

• The ESC may

– Monitor compliance with essential services agreements, determinations, minimum services agreements

– Promote effective dispute resolution within essential services

– Develop guidelines for the negotiation of minimum services agreements

– On its own initiative or at the reasonable request of a third parties, investigate whether or not a service or part thereof must be declared an essential service

– Establish a panel to conduct an investigation at the request of a bargaining council.

• The powers and duties of the ESC panel include the following:

– Conduct an investigation into whether or not a service is an essential service;

– determine whether or not to designate the whole or a part of that service as an essential service;  – determine disputes as to whether or not the whole or a part of any service falls within the scope of

a designated essential service;

– determine whether or not the whole or a part of any service is a maintenance service; – ratify a collective agreement that provides for the maintenance of minimum services in a service

designated as an essential service; – determine, in accordance with the provisions of this Act, the minimum services required to be

maintained in the service that is designated as an essential service;– vary or cancel a designation of a service as an essential service

NOTE: Minimum services i.t.o. Section 72 also revamped.

REVIEWS OF ARBITRATIONAWARDS : S145

Designed to speed them up and require security from the Applicant to prevent frivolous reviews

• Must apply for set down within 6 months of delivery of the application;

• Arbitration award not suspended unless security put up

Security :-

– Reinstatement orders – 24 months remuneration

– Compensation orders – the equivalent of the compensation ordered

• Only applies to reviews brought after the commencement of the amendment Act

TRADE UNIONS AND EMPLOYERS’ ORGANISATIONS : S 103A

• The Labour Court may appoint an administrator to administer the affairs of a trade union or employer’s organisation on application by the union or employer’s organisation or the registrar of trade unions.

• This may be done if the trade union or employers organisation is not fulfilling its functions or is mismanaging its finances.

CONCILIATION IN THE PUBLIC INTEREST : S 150

• The Director of the CCMA may appoint a commissioner to conciliate a dispute, whether or not that dispute has been referred to the CCMA or bargaining council for conciliation.

 • Parties may consent to the appointment of a commissioner under this section or  • The director of the CCMA may appoint a conciliator even if the parties do not consent to

the appointment if he/she believes that it is in the public interest to do so • The director of the CCMA must, before appointing a conciliator, consult the parties first and

the bargaining council with jurisdiction, if applicable • The director may also appoint one person each from a list provided by organised labour

and business representatives on the CCMA governing body respectively  • The right to strike or lock-out is not affected by the appointment of the conciliator unless

the parties to the dispute agree otherwise.

EXPECTATION OF RENEWAL OF FIXED PERIOD CONTRACTS: S 186

Additional provisions introducing expectation of renewal indefinitely (i.e. permanent employment)

AUTOMATICALLY UNFAIR DISMISSALS : S 187

• Section 187(1)(c) of the LRA Amendment Act of 2013 has been amended to provide that the dismissal of an employee is automatically unfair if the reason for the dismissal is

“a refusal by employees to accept a demand in respect of any matter of mutual interest between them and their employer.”

• The purpose of the amendment is to neutralise the decision in NUMSA v Fry Metals (2005) 26 ILJ 689 (SCA) and related judgments which permitted an employer to dismiss employees who refuse to accept changes to conditions of employment if such changes were necessitated by the employer’s operational requirements.

• After the amendment, all such dismissals, at least where they involve a refusal by more than one employee to agree to changes to employment conditions, will be automatically unfair, even if the reason is related to the operational requirements of the employer.

• Thus dismissals can no longer be used to effect workplace changes

LARGE SCALE OPERATIONAL TERMINATIONS : S 189A

• Section 189A has also been amended by the addition of s 189A(2)(d) which provides that a consulting party may not unreasonably refuse a request by another party for an extension of the consultation period.

• The amendment introduced by s 189A(2)(d) does not, however, provide an explicit mechanism to compel a party to continue consulting, nor does it spell out the consequences for unreasonably refusing to agree to an extension.

• The Labour Court will presumably be able to issue an order on an urgent basis extending the consultation period at the request of a party where the other party has unreasonably refused to agree to a request for an extension of the consultation period.

• The test whether or not to agree to a request to extend the consultation period should be objective.

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