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Suzanna Harvey and Craig Bosch Amendments to the LRA: their interpretation and practical effect

SASLAW SEMINAR 27 October 2014. Suzanna Harvey and Craig Bosch Amendments to the LRA: their interpretation and practical effect. Style. Hosting a discussion (towards harnessing our collective curiosity).

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Suzanna Harvey and Craig Bosch Amendments to the LRA: their interpretation and practical effect

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  1. SASLAW SEMINAR 27 October 2014 Suzanna Harvey and Craig Bosch Amendments to the LRA: their interpretation and practical effect

  2. Style Author and Date Hosting a discussion (towards harnessing our collective curiosity)

  3. Chapter IX of Act 66 of 1995: REGULATION OF NON-STANDARD EMPLOYMENT AND GENERAL PROVISIONS THE NEW SECTION 198 Author and Date

  4. Strong views Cosatu “Our position on labour [broking] is that it treats workers as commodities, who can be traded to generate a profit. That is why we make no apology for calling it human trafficking and a modern form of slavery." DA “Cosatu’s call for a total ban on labour brokers is a clear sign of an organisation that is delusional to its core ... the country would actually come to a standstill if labour brokers were banned.”

  5. Value of Employment Security Non-standard employment arrangements limit employment security Employment security a core purpose of the LRA and s23 of the Constitution: Nehawu v UCT & Others 2003 (3) SA 1 (CC)

  6. Old s198 of the LRA • Labour broker employees • Arbitrary dismissals – often at instance of clients Nape v INTCS Corporate Solutions (Pty) Ltd (2010) 31 ILJ 2120 (LC) Dyokhwe v de Kock NO and others (2012) 33 ILJ 2401 (LC) • Primary remedy of reinstatement not available • SA workers vulnerable: • lack accumulated resources/savings • often responsible for entire extended families • ILO’s Decent Work Agenda

  7. LRAA Strikes the Balance Author and Date • Employers’ genuine, objective need for efficiency requires reasonable flexibility • Workers need jobs AND protection from opportunistic rights violations leading to insecurity • LRAA protects • low earners • working > 3 months • Mainly by requiring objective justification for temporary, fixed term or part-time work

  8. Employee earns ≤ R205 433.30 pa (~ R 17k pm)

  9. SECTION 198 -PROTECTS ALL LABOUR BROKER WORKERS Section 198All labour broker workers

  10. Section 198 – mainly unchanged Author and Date (1) A TES: any person who, for reward, procures for or provides to a client other persons a) who perform work for the client; and b) who are remunerated by the TES. (2) For the purposes of this Act, a person whose services have been procured for or provided to a client by a TES is the employee of that TES, and the TES is that person’s employer

  11. S198 changes to joint liability Author and Date Old 198(4) joint and several liability if the TES contravenes a CA, arbitration award, BCEA or SD regulating terms and conditions of employment. New s198(4)A: If Client and TES are jointly/severally liable or Client is deemed e/r, then a labour inspector may enforce compliance an employee may institute proceedings an order or award made be enforced against either or both

  12. Section 198New protections in ss4A-4F TESs must comply with regulated employment conditions in the CLIENT’s industry An arbitrator or the LC may determine whether provisions in TES-Client contracts, as well as in employment contracts, comply with SD/CA – and make an appropriate order

  13. SECTION 198ALOW PAID LABOUR BROKER WORKERS Protects low-earning labour broker workersNo exclusion for small employersIf they started before the LRAA commenced, ss3-5 apply after 3 months

  14. Section 198A ‘Temporary Service’ Defined • New definition of a Temporary Service (TS): • lasts less than 3 months OR • replacing absent employee OR • a category of work which is a defined TS in a Ministerial Notice, SD or CA Distinguish a Temporary Employment Service from a Temporary Service

  15. s198A (3) Restricts employment through labour brokers to genuinely temporary work. “ For the purposes of this Act, an employee • performing a TS .. for the client is the employee of the TES in terms of s198(2); or • not performing such TS for the client is- • deemed to be the employee of that client and the client is deemed to be the employer; and • subject to the provisions of s198B, employed on an indefinite basis by the client.”

  16. Effect of s198A(3) deeming When the TES’s client is deemed to be the worker’s employer: Query Does the contract of employment transfer to the client, terminating the employment relationship between the worker and the TES? Are there perhaps still two employers? IF SO what are the implications? Organisational rights, strikes, dismissals, administration of leave, salary, benefits, s189 consultations, s197 transfers Client becomes the duty-bearer(of duties/remedies assigned to employer under LRA – not affected by TES continuing admin function.

  17. E/e placed by TES at client Who is the employer? Does e/e earn above threshold? Yes No s198 applies Both ss 198 and 198A apply TES is e/r (Client has limited j/s liability) Is it a TS? Yes TES is e/r No Client is e/r

  18. Section 198AConsequences when client ‘deemed’ The audi principle may require CCMA/BC/Commissioners to consider joining the client meromotu at an early stage. If client is the deemed employer, the worker must be Considered to be employed indefinitely (unless a valid FTC – see s198B) – implications for remedy if dismissed treated on the whole not less favourably than the client’s comparable workers (unless justifiable reasons s198D)

  19. Section 198A (4)Termination to avoid deeming If the worker’s services for the client are terminated (at the instance of the client or the TES) in order to avoid deeming, this is adismissal. Query: If the TES removes the worker from the client and places her elsewhere in order to avoid her being deemed the client’s employee: is she nevertheless dismissed whilst continuing to be employed, and entitled to a remedy if the dismissal was unfair? what might an appropriate remedy be?

  20. SECTION 198BFIXED TERM CONTRACT WORKERS

  21. Section 198B (2)Exclusions s198B in its entirety does NOT apply if: Employee earns above threshold Employer is small/new (less than 2 years unless formed by division/dissolution) Overridden by CA ‘permitting’ (regulating?) FTCs ‘permitting’ is ambiguous - FTCs already permitted - memo suggests it means permitting unregulated FTCs longer than 3m

  22. Section 198B • FTC defined as one that terminates on • the occurrence of specified event • the completion of specified task or project • a fixed date other than retirement age • Offers must be in writing and state the reason for fixing the term • S186(b) extends dismissal definition to include reasonable expectation of renewal or indefinite retention • All FTCWs to have equal opportunity to apply for vacancies • Fixed term contract work lasting > 3m • requires an objective justification for fixing the term, and • treat FTCWs no less favourably than permanent employee • ‘end of term payment’ if specified project lasts >2years

  23. Section 198B (4) Justifiable reasons for fixing contract term Non- exhaustive list of justifiable reasons for fixing the term : • Replace absent employee; • temporary increase in work, not longer than 12 months; • student to gain experience; • specified limited-duration project; • non-citizen with work permit; • seasonal work; • official public works or job creation scheme; • Project with limited external funding; and • beyond retirement age.

  24. Section 198Bwhere requirements not met • FTC >3m without objective justification, the contract of employment is deemed to be of indefinite duration • the provision fixing the term in the contract is statutorily invalid (LRA overrides the contract, despite intention of the parties) • If unfairly dismissed, the employee may be reinstated into indefinite employment OR awarded compensation up to 12 months (regardless of the remaining term of the contract) • If the reason for dismissal was operational, s189 applies • Employer bears onus to show that • the reason for fixing the term was objectively justified; and that • the term was agreed upon

  25. SECTION 198CLOW EARNING PART TIMERS

  26. Sections 198C (1) & (2)Definition, application & interpretation • Definition: part-timer works fewer hours than comparable full-timer (a factual enquiry) • Application: This section protects workers who: • work less than full-timers, but more than 24hours per month • are low earners • work for large employers • have worked for more than 3 months • Interpretation: with reference to ILO Convention 175 (facilitate access to productive and freely-chosen part-time work which meets the needs of employers and workers)

  27. Section 198C (3)Treatment of part-timers Protected part-timers are entitled to: on the whole not less favourable treatment (unless justifiable reasons for different treatment); access to training and skills development & the same access to opportunities to apply for vacancies.

  28. Section 198C Remedies? • Prospective relief • Damages

  29. SECTION 198DGENERAL PROVISIONS

  30. Section 198DOverview Deals with two matters: • Justifiable reasons for different treatment of: • Deemed TES employees • FTCWs who work for over 3 months • Part-timers • Disputes over interpretation and application ofsections 198A, B and C.

  31. Section 198D (2)Justifiable Reasons Justifiable reasonsfor treating persons differently include applying a system that takes into account: • seniority, experience, length of service; • merit; • quality or quantity of work; or • other similar criteria (not prohibited under EEA) What is a system? Consistent/Objective Policy? Custom? Communicated?

  32. Section 198DDispute Procedure CCMA and BCs with jurisdiction empowered to interpret and apply sections 198A-C (this excludes dismissals, to be dealt with in usual manner) Dispute Procedure: Refer within 6 months of act/omission Conciliation (no time specified) Refer for Arbitration within 90 days of failed conciliation

  33. Strong views Free Market Foundation “Some voices in the government alliance have called for the total abolition of labour brokers. Or lately, for a regime where the client of a labour broker is deemed to be the employer, burdened with all the labour-law obligations that that entails. These calls on the part of the trade unions, are not only self-serving, but will lead SA to greater unemployment.”

  34. Thank you Author and Date

  35. Collective Bargaining Author and Date s21(8): in determining whether a registered union is sufficiently representative a commissioner must also consider the composition of the work-force in the workplace taking into account 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 Implication?

  36. Collective Bargaining Author and Date s22(8A) and (8B): most representative, sufficiently representative union entitled to rights in s14 if no other union has been granted that right Most representative, sufficiently representative union entitled to rights in s14 may also be granted the rights contained in s16 provided no other union has been granted that right These rights are forfeit as soon as the union is no longer the most representative

  37. Collective Bargaining Author and Date Retreating from majoritarianism (s21(8C)): Subject to subsection (8), a registered trade union/sthat does not meet thresholds of representativeness established by a collective agreement in terms of section 18 may be granted the rights in s12, 13 and 15 if it represents a significant interest, or a substantial number of employeesin the workplace. What does this mean and what of the tension with s21(8)?

  38. Collective Bargaining Author and Date s21(12): trade unionseeking to exercise organisational rights in respect of TES employeesmay seek to do so in a workplace of either the TES or one or more clients of the TES. To that end: An arbitration award granting organisational rights may be made binding on the employer and a client of the TES for whom an employeecovered by the award is assigned to work if given an opportunity to participate in the arbitration proceedings.

  39. Collective Bargaining Author and Date s65(1)(c) no protected strike if the issue in dispute is one that a party has the right to refer to arbitration or to the Labour Court in terms of the LRAor any other employment law s70D(1), s72 and s73: Essential services committee may determine the minimum services required to be maintained in the service that is designated as an essential service.

  40. Dispute Resolution Author and Date Getting finality faster: s143: A certified arbitration award may be enforced as if it were an order of the Labour Court in respect of which a writ has been issued If a party fails to comply with a certified arbitration award that orders the performance of an act, other than the payment of an amount of money it may be enforced by way of contempt proceedings instituted in the Labour Court.

  41. Dispute Resolution Author and Date s143: An arbitration award in terms of which a party is required to pay an amount of money must be treated for the purpose of enforcing or executing that award as if it were an order of the Magistrate’s Court. s145: Applicant for review must apply for a date for the matter to be heard within six months of delivery of the application Operation of award not suspended unless security furnished in terms of s145(8)

  42. Dispute Resolution Author and Date Application to set aside an arbitration award in terms of s145 interrupts the running of prescription in terms of the Prescription Act in respect of that award. Judgment in an application brought under s145 must be handed down as soon as reasonably possible. LC may not review any decision or ruling made during conciliation or arbitration proceedings before the issue in dispute has been finally determined, unless just and equitable to review before conclusion

  43. Dismissal Author and Date • s187(1)(c) a dismissal is automatically unfair is 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 • An employee may go to arbitration regarding an allegedly unfair retrenchment if: • the employer followed a consultation procedure that applied to that employee only • the employer’s operational requirements lead to the dismissal of that employee only; or • the employer employs less than ten employees, irrespective of the number of employees who are dismissed.

  44. Employment Equity Act s6(1) No person may unfairly discriminate, directly or indirectly, against an employee, in any employment policy or practice, on one or more grounds, including race, gender, sex, pregnancy, marital status, family responsibility, ethnic or social origin, colour, sexual orientation, age, disability, religion, HIV status, conscience, belief, political opinion, culture, language, [and] birth or on any other arbitrary ground.

  45. Employment Equity Act Author and Date Burden of proof 11. (1) If unfair discrimination is alleged on a ground listed in section 6(1), the employer against whom the allegation is made must prove, on a balance of probabilities, that such discrimination— (a) did not take place as alleged; or (b) is rational and not unfair, or is otherwise justifiable.

  46. Employment Equity Act Author and Date (2) If unfair discrimination is alleged on an arbitrary ground, the complainant must prove, on a balance of probabilities, that— (a) the conduct complained of is not rational; (b) the conduct complained of amounts to discrimination; and (c) the discrimination is unfair.

  47. ‘Arbitrary ground’ Author and Date Suggest that this be taken to refer to analogous grounds – test based on impact on employee’s dignity See New Way Motor & Diesel Engineering (Pty) Ltd v Marsland (JA 15/2007) [2009] ZALAC 27 (13 August 2009) – applying s187(1)(f) Contra du Toit ‘Protection against Unfair Discrimination: Cleaning up the Act?’ (2014) 35 ILJ 2623

  48. Equal pay for work of equal value Author and Date s6(4) A difference in terms and conditions of employment between employees of the same employer performing the same or substantially the same work or work of equal value that is directly or indirectly based on any one or more of the grounds listed in subsection (1), is unfair discrimination. = nothing new here

  49. Employment Equity Act Author and Date S10(6)(aA): Disputes relating to sexual harassment to conciliation and then arbitration by the CCMA All other discrimination disputes to CCMA arbitration if the applicant earns less than the prescribed threshold. S10(8) – awards issued in terms of 10(6)(aA) may be appealed to the LC within 14 days

  50. Some issues to consider Author and Date What is the practical effect of deeming the client to be the employer of a labour broker worker? Can a worker be dismissed (to avoid deeming, attracting a remedy) whilst remaining employed (at a different client)? What effect will changing TESs have on union representivity? Will the amendments relating to dispute resolution reduce the number of review applications? When is a dismissal contrary to s187(1)(c) as opposed to being for operational reasons? What is the effect of the changes to s6 and s11 of the EEA?

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