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UNIVERSITY OF PRETORIA Prof Stefan van Eck Update on the LRA Amendments 25 August 2014

UNIVERSITY OF PRETORIA Prof Stefan van Eck Update on the LRA Amendments 25 August 2014. LRA AMENDMENTS (Bill [B 16D-2012]). INTRODUCTION L abour market reality – growth of atypical work Became political issue when trade unions called for a ban on labour brokers before Polokwane in 2007

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UNIVERSITY OF PRETORIA Prof Stefan van Eck Update on the LRA Amendments 25 August 2014

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  1. UNIVERSITY OF PRETORIA Prof Stefan van Eck Update on the LRA Amendments 25 August 2014

  2. LRA AMENDMENTS (Bill [B 16D-2012]) INTRODUCTION • Labour market reality – growth of atypical work • Became political issue when trade unions called for a ban on labour brokers before Polokwane in 2007 • Number of changes – most significant relate to “non-standard work” • The context: employers’ desire flexibility and workers seek protection • Amendments have passed all stages at parliament – but President has not signed ASPECTS COVERED • Temporary employment services (labour brokers) • Fixed term contracts • Part-time employees • Time permitting: CCMA awards; reviews; dismissal; and automatic unfair dismissal

  3. LRA AMENDMENTS (Bill [B 16D-2012]) 1. Temporary employment services (“TES” - labour brokers) THE CURRENT POSITION • Definition S 198(1) the TES provides an employee to a client, the TES remunerates the employee, the worker is an employee of the TES, the employee works under supervision and control of the client, the TES invoices the client • Consequences S 198(4) – TES and client jointly and severally liable: • Collective agreements; • Arbitration awards regarding conditions of service; • Provisions of the Basic Conditions of Employment Act; and • Determinations Wage Act.

  4. LRA AMENDMENTS (Bill [B 16D-2012]) • Temporary employment services (“TES” - labour brokers) • Problems • Who is liable for ULP and unfair dismissal? • Long duration – nothing temporary about it • Paid less than clients’ employees doing the same work • Acquisition of organisational rights and collective bargaining • Additions to general provisions • S 198 heading “Regulation of non-standard work” • S 198(4A) – If jointly and severally liable - proceed against TES or client • S 198(4B) - Written particulars of employment - when commences • S 198 (4F) - No person may be TES unless registered itoEmplServ Act

  5. LRA AMENDMENTS (Bill [B 16D-2012]) • Temporary employment services (“TES” - labour brokers) • S 198A(2) - application • Persons earning below earnings threshold R205 433-30 • S 198A(1) – Definition of “temporary service” • Period not exceeding 3 months; or as substitute for employee; or BC collective agreement, sectoral determination or Ministerial notice • Consequences • S 198A(3)(a) - within the 3 months employee of the TES • S 198A(3)(b) - longer than 3 months “deemed” employee of the client • S 198A(3)(c) – and, subject to 198B, indefinitely employed • S 198A(4) - termination to avoid = “is a dismissal” • S 198A(5) - treated on the whole not less favourarably – unless justified • S 198A(9) – Employed before Amendment – acquire rights 3 months after

  6. LRA AMENDMENTS (Bill [B 16D-2012]) • Temporary employment services (“TES” - labour brokers) Comments: • Significant improvements for lower earners – but hardly any for higher earners • Covers equal treatment, temporary nature and joint liability • 3 months short – could devastate the lower portions of the industry • To be noted: • uncertainty about the term “deemed to be employee” • no equal rights regarding training or access to positions • no prohibition against contracts prohibiting joining client • no alleviation to smaller employers

  7. LRA AMENDMENTS (Bill [B 16D-2012]) 2. Fixed Term Contracts • S 198B(2) – Application: Does not apply to: • Employees earning above R205 433-30 • Employers with less than 10 employees or less than 50 in first 2 years • Contracts permitted by other statute, collective agreement or sectoral determination • S 198B(1) - Definition: • Fixed term contract means a contract of employment that terminates on: • Occurrence of specified event • Completion of specified task or project • Fixed date prior to retirement subject to s 198B(3) (justifications)

  8. LRA AMENDMENTS (Bill [B 16D-2012]) 2. Fixed Term Contracts • S 198B(3) – May employ longer than three months only if: • Nature of work is of “limited or of definite duration”; or • Employer can demonstrate other justifiable reason: • S 198B(4)(a)-(i) - Justifiable reasons – such as: • Replacing another employee, increase in work volume, student or recent graduate, non-citizen on work permit, seasonal work ect Consequences: • S 198B(5) - deemed to be indefinite duration • S 198B(6) - offer in writing and state reasons • S 198B(8) - not treated less favourably than permanent employee • S 198B(9) - must provide equal access to opportunities to apply for jobs • S 198B(10) - after 24 months – severance pay of 1 week per year

  9. LRA AMENDMENTS (Bill [B 16D-2012]) 2. Fixed Term Contracts Comments: • Significant improvement for lower earners – but none to higher earners • 3 months short • More protection than TES workers regarding equal access to join the employer • Less protection regarding training than part-time employees • Nothing about a comparator as with part-time work

  10. LRA AMENDMENTS (Bill [B 16D-2012]) 3. Part-time Employees • S 198C(2) - Application: Does not apply to: • Employees who earn above threshold R205 433-30 • Employers with less than 10 employees or less than 50 in first 2 years • Employee working less than 24 hours a month • During employees first 3 months of employment • S 198C(1) - Definition: Employee who is remunerated: • Wholly or partly by reference to the time worked • Works less time than comparable full-time employee

  11. LRA AMENDMENTS (Bill [B 16D-2012]) 3. Part-time Employees Consequences - Taking account of hours: • S 198C(3)(a) - treated not less favourably than comparable employee • S 198C(3)(b) - equal access to training and skills development • S 198C(3)(b) - equal access to opportunities to apply for vacancies • S 198C(6) - comparable full-time employee - same type of employment relationship and who performs the same work Comments: • More protection than other categories – training and access to jobs • Uncertain whether refers to indefinitely employed person

  12. LRA AMENDMENTS (Bill [B 16D-2012]) • General provisions • S 198D(1) – Disputes regarding 198A-C referred to BC’s and CCMA • S 198D(2) – Different treatment justifiable on grounds of: Seniority, experience, length of service, merit, quality and quantity of work • S 198D(3) – Disputes referred in 6 months 5. Arbitration Awards • S 143(1) – Arbitration award final and binding as if order of LC

  13. LRA AMENDMENTS (Bill [B 16D-2012]) • Review of Awards • S 145(7) - Application does not suspend award • S145(8) – Security - reinstatement orders 24 months’; compensation – equal to amount of compensation ito the award • Termination • S 186(1)(a) - termination of [contract of] employment • S 186(1)(b) - reasonable expectation “on indefinite basis” • Automatically Unfair Dismissal • S 187(c) – if the reason for dismissal is “[to compel the employee] refusal by employees to accept a demand” • S 67(5) – May dismiss protected strikers on operational grounds subject to Chapter VIII - Fry’s Metals - to compel the employee Questions?

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