LABOUR RELATIONS AMENDMENT BILL, 2010
The government has put together some proposals to amend the Labour Relations Act, the Basic Conditions of Employment Act and the Employment Equity Legislation. Some of these changes are far reaching and could affect business quite radically.
The government has called for input, such input must be done by the end of February 2011. Although I do not intend to cover all the various amendments proposed, I do look at a selected few in order to outline the seriousness of the amendments.
The amendment to Section 115 of the LRA gives the CCMA greater powers with regards to rules regarding representation at the CCMA. In the past employers were absolutely entitled to representation in certain circumstances by their attorneys or registered employers organisations. The loose wording of this section might give the CCMA some leeway to outlaw this type of representation.
In many instances employers in their letters of appointment or contracts of employment set up private arbitration clauses so as to ensure that the disputes arising out of the employment agreements can be privately arbitrated swiftly and as cheaply as possible. In the proposed amendment in terms of Section 147 of the LRA it says that the CCMA has the right to override this private arbitration clause if the agreement requires the employee to pay the costs of the arbitrator or if the arbitrator is not independent of the employer. Obviously the independence of an arbitrator must be sacrosanct that costs are often shared between employer and employee. This will effectively outlaw other arbitration clauses.
An interesting amendment will exclude more senior higher paid individuals from access to the CCMA. This has enormous value to employers in that those employees will have to approach the Labour Court as opposed to the cheap and quick process of the CCMA. In the past con/arb proceedings could be subject to objection by the employer.
Now the proposed amendment says that all the parties including the Commissioner must agree to the objection otherwise the conciliation process will be immediately followed by the arbitration process if the conciliation process is not successful.
There have been problems in the past with the con/arb process as more often than not the parties feel free to confide in a conciliator. The parties will not feel free to do so in circumstances where the same individual will be the conciliator and the arbitrator. Furthermore, many times employers are not sure whether their offers will be accepted at conciliation and now will have to do all the preparation for arbitration including the arrangement for witness to be present. Arranging and preparing for an arbitration is expensive, time consuming and more often than not will not be necessary if the parties settle at conciliation. One of the reasons why employers have objected to con/arb in the past has been this very fact. This proposed amendment, if it goes through, will recreate all those problems.
Employees working for employers with less than 10 employees will be able to refer all the retrenchments to the CCMA for arbitration as opposed to the Labour Court. This might benefit both parties and has often been used by employers to buy some time.
The transfers of businesses as a going concern in terms of Section 197 of the Labour Relations Act is often a difficult section to understand and implement. The issue with regard to second generation transfers in which work has been previously outsourced is transferred from one service provider to another is now clarified. Although this explanation was needed businesses must be warned that these transfers create employment rights for all the employees.
The temporary employment services section will probably be repealed. This will create a fiction that the client becomes the employer in all circumstances. The most insidious proposal is that certain temporary employment will be declared permanent. The justification for the temporary contract will be placed on the employer who has to show that it is justification for the short term contract. This shifts the onus entirely on to the employer to show that there is a specific need in that the fixed term contract is not merely a way of avoiding some of the liabilities as contained in the Labour Relations Act. The section will discourage employers from at least trying to create new jobs or at least trying to explore whether a position will be viable or not. The exception is that the presumption will not impact on the use of fixed term contracts in respect of managerial and other senior employees.
The proposed Section 200 (C) creates a liability for the client of the sub contracted employees. This liability will create certain problems especially if the Client has already paid over the fee to the outsourced company. This might necessitate further agreements and guarantees being put into place between the client and the outsource company. An interesting amendment to the Basic Conditions of Employment Act specifically states that an employer cannot accept any payment by or on behalf of an employee in respect of the employment of that employee, furthermore, the employer cannot expect an employee to purchase any goods from that employer such as uniforms or protective gear. These are some of the proposed amendments, there are many others, many of which are of a technical nature and do not impact heavily on the employer.
MICHAEL BAGRAIM BA. LLB.
BAGRAIMS ATTORNEYS (LABOUR LAWYERS)