Workforce Development Specialists

Proposed Labour Amendments – pipe dreams or pipelines to efficiency?

By Dyonne Modlin of Lateral Labour

So, what is all the fuss about?

The proposed labour amendments work on a need to know basis and the reality is that if you are in business you are going to need to know the impact of the four bills published on the 17^th December 2010 by the Minister of Labour.  These bills, in the form of Labour Relations Amendment Bill, the Basic Conditions of Employment Bill, Employment Equity Bill and the Employment Services Bill are set to be promulgated in February 2011 and will significantly affect the labour arena.

The proposed amendments to the Labour Relations Act primarily address the following areas:

-         Fixed Term Contracts: It has been the practice (possibly malpractice) of many employers, (from SMEs to large Corporate concerns) to rely on fixed term contracts to avoid permanently employing staff, which they have either repeatedly renewed or badly administered (failed to renew so that the fixed-term contract runs past its expiry date and creates an expectation of permanency with the fixed term employee; and/or failed to terminate in adherence with the clauses contained therein).   The amendments are aimed at stopping this abuse.

-         The proposal repeals Section 198 that deals with Temporary Employment Services and as such effectively “outlaws” labour broking or at the very least makes the use of labour brokers moot for employers as a result of the fact that even if they use such services the employer/client will be fully liable in the event of a CCMA referral.  This is also emphasized in the proposed changes to the definition of the employee.

-         The amendments outline several changes to the CCMA and Labour Court operations, jurisdiction, powers and functioning which are presumably aimed at improving the effectiveness and speed with which CCMA resolves and finalises disputes referred to it.  An interesting addition with similar objectives is that Senior Employees (The Minister of Labour will gazette a salary amount defining these employees) will be excluded from referring disputes to the CCMA and are deemed to be able to afford the cost of judicial process.

-         Where matters of public interest are concerned the CCMA gleans extended powers to intervene in industrial action with or without the consent of the parties to the dispute.

-         Agreements to private arbitrations/dispute resolution are basically unenforceable if the employee is required to pay any part of the costs or if the arbitrator is not independent of the employer party as CCMA can assume jurisdiction.

The Bill amending the Basic Condition of Employment Act incorporates proposals changing the power of the Minister pertaining to organizational rights issues (particularly access to employers premises), which may well mean rapid unionization in sectors or Companies which were previously not organized.

In this Bill the Minister also has the power to set increases on actual rather than minimum wages for sectors which are governed by Sectoral Determinations which is bound to have a significant impact on relevant industry negotiations this year.

The Bill also empowers the Minister to determine the conditions of labour tenants and aligns the BCEA with child labour legislation.

Non-compliant employers have reason to panic once the Bill is promulgated as contraventions of certain provisions in monitoring and enforcement of the Act are criminalised which will enhance the effectiveness of the inspectorate, heavier penalties for non-compliance are also proposed.

The proposed amendment to the Employment Equity Act focus heavily on “same work, same pay” issues and aligns to the International Labour Organisation’s conventions.  Enforcement mechanisms for non-compliance are also strengthened in this arena and non-compliant Employers may want to advance from mild panic status to breaking a sweat.

The introduction of the Employment Services Bill is bound to be a hot topic for the months to come and is aimed at enhancing the Department of Labours’ public employment services, partly through the provision of legal status for the Sheltered Employment Factories administered by the Department and Productivity SA and partly through the regulation of private employment agencies.

And…where is all this going?

It is apparent to me that whilst the proposals are clearly aimed at reducing unemployment they simultaneously scare off a lot of employers as a result of the possible risk of employing new staff.  Some of the conundrums which employers may face will arise when they have junior level project specific vacancies but are hesitant to appoint personnel on a fixed term basis given the legislated presumption of bias towards permanency of employment.

Many recruitment agencies are small businesses run by entrepreneurs and won’t the over-regulation of such agencies pose a threat which will lead to closures and create further unemployment?

I have no doubt that the CCMA processes will become more efficient when the LRA amendments are promulgated but whether or not this legislation will raise a whole new host of technicalities, still remains to be seen?

Just a thought – Does the separation of the higher earning employees into different jurisdictional areas amount to discrimination in itself, or render the Acts which promote equality unequal?

Fasten your seat belts and watch this space!

Do we have something to smile about?