Understanding the labour law changes

The newly released bills amending the Labour Relations Act and the Basic Conditions of Employment Act offer more clarity to questions surrounding the future of labour brokers in South Africa. Jan du Toit, Senior Labour Law Consultant at SA Labour Guide, highlights key amendments.

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The proposed amendment to the Labour Relations Act (LRA) in 2010 left many people with more questions than answers regarding the future of labour brokers and the use of fixed term contracts. However, the Labour Relations Amendment Bill and Basic Conditions of Employment Amendment Bill, which were published on 22 March 2012, bring much more clarity to some of the questions.

The temporary employment services industry must be relieved that government aligned itself with the ANC’s 2009 Polokwane resolution instead of with the radical demands of Cosatu, which called for a ban on the use of labour brokers. It is my view that the 2012 amendment bills are far more subdued than the proposed amendments of 2010, specifically relating to temporary employment service providers.

The use of fixed term agreements for seasonal workers will still be allowed. This as a result of section 198B (4)(g) which makes provision for employing an employee on a fixed term contract for longer than six months if involved in seasonal work. The downside is that such an employee must then be treated the same as an employee employed on an indefinite basis performing the same or similar work, unless there is a justifiable reason for different treatment.

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In other words, a fruit picker who is employed on a fixed term contract for longer than six months must, after six months of employment, be paid the same as a permanent employee performing the same duties. This is not applicable if the employer can justify the difference in remuneration based on seniority, experience or length of service; merit; the quality or quantity of work performed.

Section 198 of the LRA currently regulates the relationship between the broker and temporary employee. In 2010 it was proposed that this section should be removed, leaving temporary employment services completely in the dark. In contrast, the latest bill elaborates extensively on the relationship between broker and client, as well as the rights of a temporary employee employed by a broker, especially those earning less than the prescribed minimum wage in terms of the Basic Conditions of Employment Act (BCEA).

Temporary Employment Services
As a result of the changes to be made to section 198 of the LRA, a temporary employee may institute proceedings against either the temporary employment service or the client or both parties for contravening: a collective agreement concluded in a bargaining council that regulates terms and conditions of employment; a binding arbitration award that regulates terms and conditions of employment; the BCEA; or a sectoral determination made in terms of the BCEA.

A temporary employment service provider must provide an employee it assigns to a client with written particulars of employment that comply with section 29 of the BCEA. The information referred to relates to the employment conditions of the employees and includes inter alia the following:

  • The name and occupation of the employee, or a brief job description.
  • The place of work, and an indication if the employee is required or permitted to work at various places.
  • The period of notice required to terminate employment, or if employment is for a specified period, the date when employment is to be terminated.
  • A description of any council or sectoral determination which covers the employer’s business.

An employee may not be employed by a temporary employment service on terms and conditions of employment not permitted by legislation or a collective agreement concluded in a bargaining council applicable to a client to whom the employee renders services. No person may perform the functions of a temporary employment service unless he/she is registered in terms of any applicable legislation in force.

An employee earning below the minimum wage in terms of the BCEA may be assigned as a temporary employee to a client for a period not exceeding six months or for a period exceeding six months if the temporary employee is a substitute for an employee of the client who is temporarily absent.

A collective agreement concluded in a bargaining council, a sectoral determination or a notice published by the minister, may allow a temporary employee employed by a broker and earning below the minimum wage to be employed for longer than six months on a temporary basis. Should the temporary employee earning less than R172 000 a year be assigned for longer than six months without justification or authorisation as described above, the client will be deemed to be the employer and the employee.

Such an employee must be treated the same as another employee of the client performing the same, or similar work, unless there is a justifiable reason for different treatment such as seniority, experience or length of service; merit; the quality or quantity of work performed; any other criteria of a similar nature not prohibited by section 6(1) of the Employment Equity Act.

The termination by the temporary employment service of an employee’s assignment with a client (moving temps between contracts without justification) for the purpose of preventing the employee from working longer than the allowed six months for one client will be seen as a dismissal. Again this is only applicable to employees earning less than the prescribed minimum wage in terms of the BCEA.

Commissioners of the Commission for Conciliation, Mediation and Arbitration (CCMA) will have jurisdiction to make a ruling in terms of the contents of an agreement between the temporary employee and the broker as well as the broker and the client. This is to avoid ‘dismissals’ as a result of a pre-empted event that would signal the automatic and natural expiration of the contract of employment, something over which the CCMA lacks jurisdiction.

Fixed term contracts
The use of fixed term contracts will also be greatly impacted by the amendments to the LRA. These changes are to protect vulnerable employees who earn less than the prescribed minimum wage. These changes, however, do not apply to:

  • An employer who employs fewer than 10 employees.
  • An employer who employs fewer than 50 employees and whose business has been in operation for less than two years.

These changes also do not apply if the employer conducts more than one business or the business was formed by the division or dissolution for any reason of an existing business. An employer may engage an employee on a fixed term contract or successive fixed term contracts for longer than six months of employment only if:

(a) the nature of the work for which the employee is engaged is of a limited or definite duration; or
(b) the employer can demonstrate any other justifiable reason for fixing the term of the contract such as:

replacing another employee who is temporarily absent from work; engaged on account of a temporary increase in the amount of work which is not expected to last beyond 12 months; a student or recent graduate employed to be trained or to gain work experience to enter a job or profession; engaged to work exclusively on a genuine and specific project that has a limited
or defined duration;

is a non-citizen who has been granted a work permit for a defined period; is engaged in a position which is funded by an external source for a limited period; or has reached the normal or agreed retirement age applicable in the employer’s business.
Employees who are appointed on fixed term contracts exceeding six months will be deemed to have been appointed on an indefinite duration employment agreement unless the conclusion of the fixed term contract for more than six months can be justified.

An employee employed on a fixed term contract for longer than six months must be treated the same as an employee employed on an indefinite basis performing the same or similar work, unless there is a justifiable reason for different treatment.
An employer must provide an employee employed on a fixed term contract with the same access to opportunities to apply for vacancies as it provides to an employee employed on an indefinite contract of employment.
An employer who engages an employee on a fixed term contract for a specific project for longer than 24 months must pay the employee on expiry of the contract, one week’s remuneration for each completed year of the contract.

Interesting changes
There are other interesting changes to the LRA. The first is the protection of employees involved in subcontracting work. This is particularly important in the context of the subcontracting and outsourcing arrangements if these arrangements are subterfuges to disguise the identity of the true employer.

In such event, both the employer and the client of the employer will be held jointly and severally liable for any failure to comply with the obligations of an employer in terms of the LRA and any other employment law. The right of expectation in terms of section 186 (1)(b) is extended to circumstances where expectation of indefinite employment has been created.

The topics discussed above are only some of the several changes to the LRA and BCEA.

Source: www.labourguide.co.za
Contact Jan du Toit on 082 664 6527 or 012 661 3208, email
[email protected] or visit www.labourguide.co.za