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Labour Legislation

Bringing clarity to the proposed new labour legislation

Fri, 01 Jun 2012 13:21

There are currently two very important bills before the parliamentary labour portfolio committee. They are the amended and redrafted Labour Relations Act (LRA) and the Basic Conditions of Employment Act (BCEA). In addition the government is also redrafting the Employment Equity Act and has added a new piece of proposed legislation entitled the Public Employment Services Bill. Formal negotiations in NEDLAC are still underway regarding these two Acts, with the recruitment industry being represented by the Confederation of Associations in the Private Employment Sector (CAPES).

Nritika Singh, MD of Isilumko Staffing, a national recruitment company, which offers temporary, flexible and permanent staff, comments, “There has been some confusion regarding the final wording and consequences for Temporary Employment Services (TESs) of the amendments to the Labour Relations Act (LRA) now before parliament. What is clear is that the new amendments to the LRA have been watered down from the original radical framework and will still allow labour brokers to operate, something that COSATU and other unions were trying to prevent. Much stricter compliance and enforcement will be implemented if the amendment is passed, which is anticipated.”

“Clarification is needed in the interpretation of the LRA amendment and how this will affect the employment relationship between labour brokers, employers and employees. How will the amendment affect labour brokers in an A-Typical Employment relationship?

“During the first 6 months of assignment with a labour broker / TES, the status quo remains and the client and TES are jointly and severally liable for breaches of the BCEA, Sectoral Determinations and Bargaining Council agreements. Thereafter, only for purposes of the LRA the client is jointly and severally liable for unfair dismissals and the provision relating to equal pay treatment has application. After a 6 month contract period for temporary staff, the client is deemed to be responsible as well as the employer (TES) for contraventions of the LRA, but the client does not have to sign new employment contracts nor transfer temporary staff to its payroll, as the TES remains the employer. In instances of unfair dismissal, temporary employees will now have recourse against the TES and the client.”

Singh continues, “In terms of the LRA amendment, the temporary employee is expected to be given equal pay for work of equal value after a contract period of 6 months. This applies to remuneration for employees earning up to R172,000 per annum. Overtime is to be paid for all those employees in this category. Anyone above this threshold does not qualify for overtime under the Acts.

“Equal pay can only be departed from if there is justifiable reason for different treatment and includes the fact that the different treatment is as a result of the application of a system that takes into account-

• the employees seniority, experience or length of service
• merit criteria
• the quality or quantity of work performed ; or
• any other relevant criteria of a similar nature that is not prohibited in terms of Section 6 of the Employment Equity Act.”

“What is interesting is that learnerships are excluded from the Act and may provide legitimate flexibility. Employers can also manage their risk by putting performance criteria structures in place,” says Singh.

Singh concludes, “The two Acts ( LRA and BCEA) discussed could be promulgated before the end of the year. It is encouraging that there will be no ban on labour broking and that protection of employee rights will be dealt with through legislative amendments.

This is a reinforcement of the 2006 International Labour Organisation (ILO) conference, where consensus was reached that there was a need for labour brokers, but that they should be regulated. We are hopeful that these amendments will not be too restrictive. After all there are 500,000 temporary employees who go through TESs every day, with over 1 million in total across South Africa. This is a significant percentage and we look forward to continuing to operate and assist thousands of people to find employment each day.”