The parties achieved the following in terms of agreements or
noted their reservations on the issues as listed below:
3.1. Amendments to the Labour Relations Act 66 of 1995
3.1.1. Bargaining Councils
Amendments were agreed to in relation to private and public
sector bargaining councils to ensure that they service employers
and employees better, through improving their efficiency, the
information required on their activities in relation to small
business, regulatory oversight, expanding the scope of their
functions to include provision of services to industries and their
coverage of the informal sector.
Amendments in the draft amendment Bill agreed include
to:
- Increase the functions of bargaining councils
to include providing support services to industry and extending
their scope to include the informal sector (s. 28);
- Shorten the processes to vary the scope of a
bargaining council in the event that there are no objections (s. 29
and s. 58);
- Revise the powers and functions of designated
agents of bargaining councils (s. 33);
- Improve the dispute resolution function of bargaining councils
(s. 33A);
- Enable a more efficient process of and criteria for checking
the representivity of parties to bargaining
councils (s. 49 and s. 32);
- Oblige bargaining councils to provide a report to the Registrar
of Labour Relations on which basis it can be determined the extent
to which the bargaining councils cover small
employers and take small business interests into account
(s. 54);
- Increase the power of the Registrar to
investigate allegations relating to the administration and
functioning of bargaining councils including the funds administered
by councils (s. 53 and s. 54).
Policy statement
In addition to the statutory changes set out above, the
negotiations covered a policy statement on bargaining councils, and
acknowledged the following:
Bargaining councils are an important part of the collective
bargaining arrangements in South Africa, and there is a need to
strengthen their functioning. One feature is the number of
non-parties to the council. The parties agreed it would be
desirable to promote membership of small businesses of employers'
associations so that their interests may be represented more
effectively in bargaining councils where such bargaining councils
have jurisdiction. Membership of such employers' associations would
be voluntary.
To this end, the parties identified a number of possible means
to achieve the above:
- a political signal by the leadership of government, business
and labour to non-party employers that good practice will be
developed by bargaining councils to encourage better communication
and to achieve the objectives in the above paragraph; and
- an institutional environment within bargaining councils to
facilitate the achievement of the above.
3.1.2. Commission for Conciliation, Mediation and
Arbitration (CCMA)
The parties agreed that it was desirable to improve the
functioning of the CCMA through measures that will, inter alia,
simplify CCMA processes, shorten the time taken to process cases
and limit the scope for abuse of CCMA resources and processes.
Amendments in the draft amendment Bill include
to:
- Clarify the rule-making power of the Governing
Body and give the Minister the power to make regulations
in respect of representation at the CCMA and the charging of fees
(s.115);
- Increase the scope of commissioners to make cost
awards in the event of abuse of the dispute resolution
process (s. 138);
- Align the processes relating to subpoenas with
the rest of the justice system (s.142);
- Deem arbitration awards to be final and
binding and to be capable of being enforced in the same manner as a
court order(s.143);
- Clarify who can vary and rescind an
arbitration award or ruling (s. 144);
- Give CCMA conciliators the power to continue to
conciliate a dispute even after a certificate to strike
has been issued (s.150).
The parties agreed that:
- The CCMA Governing Body would receive a new mandate through
Nedlac to settle every dismissal dispute within a set period
determined after consultation with the CCMA management, with this
mandate accompanied by appropriate measures to ensure achievement
thereof.
Reservations
Reservations were recorded by both labour and business in
relation to the proposed amendments to Section 115 and Section
138.
Business and Labour proposed that rules in respect
of representation at the CCMA, charging of fees and the criteria
for cost awards by commissioners should be developed in
consultation with Nedlac.
The other amendments in relation to the CCMA were
agreed.
3.1.3. Labour Court
The parties agreed on measures relating to the status of Labour
Court judges and the appointment of acting judges.
It was agreed that:
- The LRA should be amended to provide for the
appointment of Labour Court judges simultaneously as judges
of the High Court with the same remuneration and terms and
conditions (s.153 and s.154);
- Transitional provisions should be included in relation to the
present Labour Court judges including that they
are able to receive a gratuity the same as other judges in similar
situations (Sch. 7);
- Discussions should be initiated between the Nedlac parties and
the Judge President of the Labour Court in respect of a protocol or
similar arrangement or a statutory provision to guide the
appointment process of acting judges;
- The Nedlac parties should interact with the process of the
Department of Justice that is designed to rationalise the
court system to ensure their concerns relating to the
Labour Court and the Labour Appeal Court are taken into account in
this process.
3.1.4. Unfair dismissals and unfair labour practices
(including probation and formal hearings)
Amendments were effected which improve the resolution of
disputes in respect of unfair dismissals and unfair labour
practices. Amendments were agreed that would have the
effect of:
- Changing Chapter 8 to cover both unfair dismissals and
unfair labour practices (s.185, s. 86);
- Introducing an enquiry into allegations of an
employee's conduct and capacity by a council, accredited agency or
the CCMA (s. 188);
- Aligning the LRA with the Protected Disclosures
Act (s.186, s.187);
- Clarifying the date of dismissal and the
time periods in which an unfair dismissal and
unfair labour practice dispute must be referred (s.191);
- Introducing a single seamless (one stop)
con-arb process for resolution of disputes, in
order to simplify and shorten current procedures (s.191);
- Amending the Code of Good Practice in respect of dismissal to
include a more extensive section on probation. This section
provides guidelines as to the time period of probation, employer
and employee obligations during probation, the role of an
adjudicator and the criteria to be used when determining the
fairness of a dismissal in the case of probation (Sch. 8).
Agreement was not reached on introducing a greater degree of
discretion for arbitrators, in the awarding of compensation for
procedurally unfair dismissals (s. 194).
Reservations
Labour recorded its reservation on the terms of the
compensation to be awarded in the case of an unfair dismissal. It
proposed compensation be at the rate of pay that the employee would
have been receiving at the time of the award being made, a minimum
compensation for unfair dismissals and no ceiling to apply to the
compensation awarded.
Labour expressed a reservation with the concept of
compatibility in relation to probation.
3.1.5. Retrenchments
The parties agreed to a substantial amendment to the current
provisions governing retrenchments and they agreed that saving jobs
and limiting retrenchments was desirable.
The parties considered a detailed text from the MLC agreement in
respect of proposed amendments to Section 189 that addressed this
principle as well as proposed measures requiring a meaningful
process of engagement, clarifying and streamling the process, and
spelling out the rights of parties in the event of no agreement
being reached. It was agreed that any amendment to this section
needed to be constitutional, practicable (implementable) and not
lead to increased litigation.
Arising out of the negotiations, the following amendments were
made to Section 189 and a new Section 189A was inserted to:
- Require the parties facing possible retrenchments to engage in
a meaningful joint consensus seeking process;
- Allow parties, if they agree, to request a
facilitator from the CCMA;
- Change the onus of proof in disputes regarding
disclosure of information;
- Permit industrial action by the parties in
accordance with time periods set out in the Act or refer a dispute
about whether there is a fair reason for the retrenchment to the
Labour Court;
- Require employers to give 30 days notice of
retrenchment to individual workers with more than one year's
service or a lesser notice period for those with
less than one year's service after the time periods for meaningful
engagement have been exhausted;
- Allow workers to refer a complaint about procedural
fairness to the Labour Court on an expedited basis and
allow the Labour Court to compel an employer to comply with a fair
procedure;
- Define the grounds that the Labour Court can
consider when deciding on the substantive fairness of the
retrenchment of workers covered by s.189A.
Section 189A is only applicable to employers who employ more
than 50 employees; and a defined number of retrenchments in any
12-month period depending on the number of employees employed by
that employer.
Reservations
Business, although agreeing to the introduction of
the principle of a strike, cannot agree with s.189A as in the
current Bill. The areas of concern are fundamental to Business
agreeing to the entire section. These are:
- reference to s.37(2) should be included in paragraphs 7(a) and
8(b)(l) of s.189A;
- the employer should not be limited to a defensive lockout in
s.189A;
- the period of 30 days referred to in s.17 (a) of s.189A is too
long and should be reduced to 21 days.
Labour expressed reservations regarding the
operation of the proposed facilitation and proposes that
facilitation should be triggered at the request of either an
employer or a trade union/employees and that rules on facilitation,
including on variation of the periods of facilitation prescribed in
the Act, should be concluded in consultation with Nedlac. 3.1.6.
Transfers of contracts of employment (Section 197)
The parties agreed that the provisions relating to the transfers
of contracts of employment should be redrafted for greater clarity,
to ensure adequate protection for worker benefits in the event of
transfers, and to reduce possibilities for abuse of the provisions.
It was agreed that Section 197 should be amended to provide
for:
- the automatic transfer of the contracts of
employment when a business changes hands;
- the transfer of all rights and obligations as
between old employer and employee to new employer and transferred
employee, with provisions to protect collective agreements and the
rights of employees not covered by collective agreements. In this
latter case, an appropriate balance between flexibility and
protection of rights was crafted;
- the transfer of employees' pension, provident,
retirement or similar funds upon the transfer of the
business provided that the benefits of the new funds are reasonable
and equitable;
- the new employer to be bound by the collective
agreements and arbitration awards that bound the old
employer;
- the old employer to take reasonable steps to ensure that the
new employer can meet the obligations of leave pay,
severance pay and other monies owing to employees.
Similar amendments in respect of section 197A that regulates the
transfer of employees of an insolvent company were also
agreed.
3.1.7. Independent contractors
The parties recognised that abuse of contractual relationships
was occurring on an increasing scale in the labour market including
the phenomenon of disguised employment relationships. An amendment
to the LRA (s.200A) and BCEA (s.83A) was agreed
which:
- Creates a rebuttable presumption of an
employment relationship should any of a number of conditions hold,
for all persons who earn below a threshold of approximately R90 000
per year (as determined in s.6 (3) of the BCEA);
- Enables Nedlac to issue a Code of Good
Practice on guidelines in respect of the existence of an
employment relationship;
- Allows parties to approach the CCMA for an advisory
award as to whether persons involved in the above
mentioned arrangements are employees.
3.1.8. Public service amendments
The parties recognised the need for amendments to align the LRA
with changes in the regulation of public service councils and
changes to laws that govern the public service. The parties
agreed amendments which:
- Clarify the processes of designating, establishing,
amalgamating and varying the scope of public sector bargaining
councils (s.29, s.37, s.61);
- Give the CCMA the power to resolve jurisdictional
disputes between public sector councils (s.38);
- Amend the definition of public service, workplace and
registered scope in respect of the public service.
Reservations
Labour recorded its reservation in relation to the
definition of a workplace in the public service (section 213) and
proposed that workplaces should be defined by the Public Services
Co-ordinating Bargaining Council.
3.1.9. Other amendments
The parties agreed to a number of other amendments,
some technical and others more substantive that are aimed at
improving the application of the law.
Among those that were agreed are:
- Giving the Registrar of Labour Relations the power to refuse to
register labour organisations that are not genuine
(s.95);
- Giving the Registrar greater oversight over
the effective functioning of bargaining councils (s.53, s.54);
- Simplifying the processes of de-registration
of labour organisations and increasing the powers of the Registrar
to wind up and de-register defunct organisations (s.103, s.105,
s.106).
A further proposal was tabled extending the power of the Labour
Court to make an order in the event of an unprocedural strike or
lock out to any conduct in contemplation or in furtherance
of the strike or lock out (s.68).
Reservations
Labour indicated that the amendment to section 68
was receiving careful consideration and it would revert with a
position on the amendment during the parliamentary process.
Government's proposed amendments focused on two areas:
- Changing of substantive conditions of employment
- Improving the application and enforcement of the Act
3.2.1. Changing of substantive conditions of
employment
The parties agreed amendments which:
- Enable employers and trade unions to conclude a collective
agreement to extend the weekly limit on permissible
overtime to 15 hours for two months in any 12 month
period (s.10);
- Require employers to pay over their contributions as
well as deductions made from employees' salaries for
benefit funds within 7 days of the deduction being made or the
contribution becoming due (s.34A);
- Reduce the minimum notice period to one week
during the first six months of employment and provide that a
collective agreement may not reduce the notice period below two
weeks (s.37);
- Ensure that workers whose contracts of employment are
terminated when their employer is sequestrated or liquidated are
entitled to severance pay (s.41).
Reservations
Reservations were expressed in relation to the following
amendments:
- Payment for work on Sundays
Labour did not agree to an amendment that would remove the
premium for work on Sundays.
Labour expressed a serious reservation to the proposal that the
premium be removed for work performed on a Sunday, for the
following reasons:
- the compromise reached in 1997 during negotiations on the BCEA
had a clear trade-off that organised labour drop a general
opposition to Sunday work in return for the retention of a premium
for Sunday work;
- the argument of constitutional problems with a Sunday premium
was facile since the premium was based on the social inconvenience
of work on a Sunday;
- the architecture of the Act recognises that work at socially
inconvenient times (e.g. night work) should carry a premium.
Labour further noted that the test of an unintended
consequence did not apply to the 1997 amendments, since a premium
similar to the current premium had been in the old Act. Labour
supported the formulation agreed to at the MLC on Sunday work that
proposes to vary the premium in respect of certain businesses, but
would not support the removal of the premium.
Business advised that it can accept the proposal as
set out by Government although this did not form part of the MLC
text as tabled at the negotiations.
- Power of the Minister to vary the 45 hour
week
The Bill provides for an amendment which would enable the
Minister, through a ministerial or sectoral determination, to
increase the ordinary hours of work above 45 if the resultant
working time arrangements are more favourable, and in the following
circumstances:
- where there is a collective agreement;
- where it is necessitated by the operational circumstances of
the sector; or
- in respect of the agricultural or private security
sectors.
Labour expressed strong opposition to the
formulation in the Bill. Labour agreed that provision should be
made to vary hours of work in an industry such as the maritime
industry (and after substantial negotiations labour was prepared to
accept that this list be expanded to include agriculture and
private security) provided that the resultant package of hours and
leave are more favourable to employees and that the variation
carried the support of the representative trade union/s, but it was
opposed to hours of work (a core right in the BCEA) being capable
of being increased above 45 hours for every other sector or
workplace. It was further opposed to:
- the wide remit of the formulation, 'the resultant working
arrangements', (which may permit, for example, a normal working
week in excess of 45 hours simply in return for double overtime
pay);
- the provision that any collective agreement
may vary hours of work (which would permit progress to a 40 hour
working week to be seriously undermined in every sector of the
economy, even in sectors where it is practicable to retain the
current 45 hour week and decrease it over time to 40 hours a
week);
- the abuse possible through reference to 'operational
circumstances of the sector' (a formulation likely to be used by
every sector of the economy as a justification to move away from
the 45 hour week);
- the absence of a provision that agreement by a representative
trade union was required for any variation on hours of work, albeit
variation on the more limited basis as set out in labour's
submission;
- the inclusion of agriculture and private security in the
provision unless the concerns of labour were adequately
addressed.
Business expressed a reservation with reference to
the determination only being able to be made where the conditions
"are on the whole more favourable". Business proposes that the
conditions should be " not less favourable than those applicable in
the BCEA". This reservation must also be read together with the
reference to section 50 and section 55(6)(d). Business also
proposes that a variation should be possible in any industry and
not be restricted to specific industries.
- Civil and criminal liability of company
executives
Business and Labour proposed that directors of
companies should be held criminally and civilly liable if they do
not pay over their and employee contributions to benefit funds and
the affected workers are thereby prejudiced as a result.
Government argued that remedies already exist in criminal law
and other legislation.
There was no agreement in this regard.
3.2.2. Improving the application and enforcement of the
Act
The parties agreed to amendments which:
- Clarify the definitions of 'day' and 'daily'
(s. 8);
- Remove the daily limit on overtime while
making provision that employees are not permitted to work more than
12 hours in one day (s.10);
- Give the Minister the power, after consultation with Nedlac to
determine what kinds of payment should be included or excluded from
the calculation of remuneration (s.35);
- Provide for alternate delegates from organised business and
labour to the Employment Conditions Commission (s.60);
- Improve the enforcement mechanisms in the Act (s.69, s.70,
s.73, s.74 and s.77A)
- Broaden the scope of Codes of Good Practice to all employment
laws (s.87);
- Deem wage determinations to be sectoral determinations (Sch.
3).
At present the Insolvency Act does not cover all instances of
insolvency. Aspects of insolvency are dealt with in several
different statutes.
The parties agreed that the statutory arrangements
currently covering insolvency should be audited against the
following principles:
- timeous notification of possible liquidation and notice of
applications for liquidations should be given to trade unions;
- workers' contracts of employment should not be terminated
simply by the act of provisional liquidation, and severance and
other payments due should be recovered from the insolvent
estate;
- worker and employer contributions to workers' benefit funds
(pension, provident or medical funds) should be managed in such a
way that workers are not prejudiced in the event of
insolvency;
- the risk to workers in the event of insolvency is inequitable
and this risk should be alleviated or shifted.
The constituencies agree that abuse of insolvency should be
curbed. Labour and Business are of the view that provision should
be made for the court to examine whether there are viable
alternatives to liquidation that would keep a business as a going
concern and save jobs.
The parties agreed to address certain of the above areas through
amendments to be introduced in the current sitting of Parliament,
and these are set out in 3.3.1 and 3.3.2 below
3.3.1 Amendments proposed to the LRA and BCEA
The following amendments were agreed to the LRA and
BCEA that address the problems of workers facing insolvency:
- Requiring that employers notify trade unions or
employees of circumstances and legal proceedings that may
result in insolvency (LRA, s.197B);
- Requiring employers to pay over their contributions as
well as deductions made from employees' salaries for
benefit funds within 7 days of the deduction being made or the
contribution becoming due (BCEA, s.34A);
- Ensuring that workers whose contracts of employment are
terminated when their employer is sequestrated or liquidated are
entitled to severance pay (BCEA, s.41).
3.3.2. Amendments proposed to the Insolvency
Act
The following amendments were agreed for inclusion
in the Insolvency Amendment Bill:
- Obliging a petitioner to give notice of a
provisional liquidation to a trade union or employee (s.4 and
s.9);
- Suspending (as opposed to terminating) the
contract of employment of an employee in the case of an insolvency
(s. 38);
- Providing for a process of consultation with
trade unions that may be able to assist in saving a company facing
insolvency (s. 38).
3.3.3. Further amendments
The parties noted the current process by the Department of
Justice to undertake a comprehensive review of insolvency
legislation with the intention of producing an all-encompassing
Insolvency Act. The parties therefore agreed that the
remainder of the issues listed previously should be taken up as
amendments to be addressed in the proposed comprehensive Insolvency
Amendment Bill.
Labour noted a reservation that should the process
of finalising the comprehensive Act be delayed beyond 2002, it
would reconsider support for the process and may seek to have the
matter dealt with more immediately in Nedlac.