Name of presenters: Paul Benjamin

SASLAW SEMINAR 27 FEBRUARY 2014 Name of presenters: Paul Benjamin Title of Presentation: Necessary protection or unnecessary rigidity? the new rules for non-standard work

Rise of non-standard employment • From atypical to non-standard • From secure to contingent – shifting risk (demutualisation) – from full to partial or no protection (informalisation) • Corporate restructuring (vertical disintegration) or labour law avoidance • SA: Ten year policy process • Triangular employment, fixed term contracts, part-time employment re-regulated • Section 197 transfers case-law • Sect 200B – disguised employer

Doomed or “deemed”: TESs past, present and future • 1983 LRA: triangular employment recognised: labour broker deemed to be employer of workers placed with clients • 1995 LRA: LBs become TESs; joint & several liability added 2002 LRA: presumption of employment introduced/ significant court decisions on disguised employment • October 2002: ERPM strike – workforce of 4000 supplied through labour brokers • 2004: DOL research: triangular employment major driver of informalisation: Motivation lower wages and absence of unfair dismissal protection: issue referred to NEDLAC • 2008: Minister of Labour calls for ban – 2010 Bill

Subsequent developments • Joint and several liability fails to protect- employer liability only on default by TES • TUs raise use of LBs as interest issue and strike : Goodyear (2006), Tshwane Municipality (2008), SAA (2009) ...also strikes to regain loss benefits • Exponential growth in use of labour brokers (CAPEs estimate – 1 million placed employees) • No significant decisions until 2010 (Nape, Mahlamu) • Cases – Dyokwe v de Kock (Mondi/ Addecco ‘conversion) • Abacendisi (SCA) (HR manager as labour broker)

Regulatory options • Legislative change required • “Agency as employer” an exception justified in limited circumstances – temp, sub, other (home care) • Regulatory models: ban/ joint employment/ deemed employment/ bargaining councils • “Deemed” employment lessens role of LBs • Role of labour market intermediaries in policy debate • NDP: subsidy for agencies who place new employees (Harambee) • We have not developed “value added” LMI sector

Statutory changes 198 (4) – full joint and several liability – employee may claim against TES or ER or both 198A – new protections iro employees earning below BCEA threshold (R193k) (198A(2)) (1) Temporary services – 3 months/ as substitute/ ito BC agr, sectoral determination or Ministerial notice. (3) Deemed to be employee of client after three months (4) Dismissal to avoid deeming unfair

Fixed Term Contracts • Section 186 – definition of dismissal • Dismissal extended to include where employee reasonably expected to be offered indefinite employment – not limited to expectation of renewal of fixed term • This applies to all fixed term contracts

Fixed Term Contracts • Section 198B – new restrictions on use of fixed term contracts • Does not apply to: • Employees earning more than R193k (BCEA threshold) • Small businesses or start ups • Fixed term contracts permitted by statute, ectoral determination or collective agreement

Fixed Term Contracts • Section 198B (continued) • No scrutiny of reasons for use of fixed term contracts for period up to 3 months • Fixed term contract can be used for longer then 3 months only if nature of work is of a limited or definite duration, or if there is a justifiable reason for fixing the term

FixedTerm Contracts • Justifiable reasons include: • Temporary replacement • Temporary increase in volume of work – up to 12 months • Work exclusively on a genuine limited duration project • Student or recent graduate being trained or gaining work experience • Seasonal work • Official public works scheme • Limited funding by external source • Employee is over retirement age

Fixed Term Contracts • Section 198B (continued) • Employee on fixed term for longer than 3 months without justifiable reason is deemed to be employed on an indefinite contract • Employee on fixed term for longer than 3 months is entitled to be treated on the whole not less favourably than comparable indefinite employee • Fixed term contract employees must have same opportunity as indefinite employees to apply for vacancies • If fixed term for project work extends beyond 24 months, employee has a right to “severance pay” on expiry

Part Time Employees • Section 198C • Additional protection does not apply to • employees earning over R193k • Small employers • Employees who ordinarily work less than 24 hours a month • During first 6 months of employment

Part Time Employees • Employees to whom the section does apply are entitled to: • Be treated on the whole not less favourably than comparable full time employees, including access to training and skills development • Same access to opportunities to apply for vacancies as full time employees (ghetto effect)

Cross-cutting provisions Transitional provisions – Existing non-standard employees acquire most rights three months after legislation comes into effect (198A(9), 198B (8)(b) 198C – inserted by NCOP) Reasons justifying differential treatment – 198D(2) – impact on remuneration packages

Name of presenters: Paul Benjamin