Proposed Labour Law Amendments

NCOP Public Enterprises and Communication

12 April 2011
Chairperson: Ms M Themba (ANC)
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Meeting Summary

The Committee received a presentation from the Parliamentary Research Unit on the proposed changes to South Africa’s labour laws.

The proposed amendments to the labour laws in South Africa had their origins in the growing “casualisation” of work that had become a feature of the South African labour market over the past decade. Amendments had been proposed for the Labour Relations Act, the Basic Conditions of Employment Act; and the Employment Equity Act. Amendments had been effected to these acts to bring them in line with labour law developments, to improve the functioning of the Commission for Conciliation Mediation and Arbitration, and to fulfil South Africa’s obligations as a member state of the International Labour Organisation. In addition to the amendments to existing labour legislation, the Employment Services Bill was published and would provide a legal framework for the operation of employment services in South Africa.

The Labour Relations Amendment Bill of 2010 proposed to stop the exploitation of workers, ensure decent work for all workers; and prohibit certain abusive practices. A proposed amendment aimed to stop the practice of repeated contracting for short-term periods. The onus would be on employers to justify the use of short-term or fixed term contracts, in place of contracting employees on a permanent basis.  The Bill proposed to repeal section 198 that deals with Temporary Employment Services in the Labour Relations Act (no 66 of 1995) amongst other proposals.

The Basic Conditions of Employment Amendment Bill address Government’s commitment to avoid exploitation of workers, ensure decent work, and protect the employment relationship. The Bill would introduce laws to regulate contract work, sub-contracting and outsourcing, address the problem of labour broking; prohibit certain abusive practices; and effect certain consequential amendments as a result of the insertion of new definitions and to effect certain corrections. Amendments were proposed in the Bill to give the Minister the power to prescribe thresholds of representativeness of a trade union to have the organisational rights of access to employer premises. This was intended to apply to situations where unionisation is difficult but where a more flexible threshold may facilitate unionisation within a sector or area.

The Employment Equity Amendment Bill would aim to ensure compliance with South Africa’s obligations in terms of international standards and promote the prevention of unfair discrimination in the workplace; ensure that the Act gives effect to fundamental Constitutional rights including the right to equality, the right to fair labour practices and protection from unfair discrimination. It would increase fines for non-compliance with the Act, align the provisions of the Act with the Promotion of Administration and Prevention of Unfair Discrimination Act, 2000 (Act No. 4 of 2000); and effect certain consequential amendments and textual corrections.

The Employment Services Bill would aim to contribute to the Government’s objectives for “More jobs, decent work and sustainable livelihoods”. The Bill repositions employment services to play a major role in employment promotion and employment preservation and will assist employers and workers to adjust to changing labour market conditions. The Bill seeks to elevate opportunities for citizens over those of foreign workers by requiring employers to make use of the public employment service before employing foreign nationals, and to submit reasons to the Director General as to why citizens with suitable profiles referred to them by the department could not be employed instead of foreign nationals. Employers engaged in sectors designated by the Minister for this purpose will be required to notify the Department of any vacancy or new position in their establishment within 14 working days after the position has become vacant or was created, and to notify the Director General of the filling of any vacancy within 14 days.

Certain members commented that South Africa created its own problems on foreign nationals taking jobs, the country had weak border protection and that allowed foreign nationals to enter the country and take jobs from the native population. Members sought clarity on where the figures the researchers had used on the Apartheid section of their presentation had been attained from. They asked whether any of the Amendment Bills mentioned would attempt to curb casualisation of work and unnecessarily long arbitration of employment issues.

They asked whether the Employment Equity Amendment Bill related to racial demographics in provinces. They asked whether the Employment Services Bill would legalise labour brokers. They asked whether the Labour Relations Amendment Bill would not protect uncategorised workers and take away their right to go to the CCMA before approaching the Labour Court. They commented that the Committee would do well to learn from its study tours such as the trip it had taken to Japan.

Meeting report

Presentation on Labour Amendment Laws
Ms Ronelle Barreto, Committee Researcher, (Labour and Public Enterprises) and Mr Lwazi Mahlangu, Committee Researcher (Economic Development) presented the Committee with the proposed changes to South Africa’s labour laws.

Mr Mahlangu touched on some of the historical issues affecting the labour market in South Africa. The
structure of the labour market originated from the oppressive nature of the colonial and apartheid eras. These periods were characterised by forced employment, unpaid labour and discriminatory practices. All of this resulted in poverty, income inequality, unemployment, high labour costs and low productivity. South Africa's labour market has undergone a transformation since 1994, with an emphasis being placed on strategies that eliminate the labour inequalities of the past and improve general working conditions for all South Africans. Despite the many improvements, there were still significant challenges that that still needed to be overcome. These included:
•Dual labour market model has challenged the notion of the informal sector as a free entry sector of last resort
•The existence of two or more sectors with different wage setting mechanisms, with limited upward mobility for workers in the “less productive” sectors
•Institutional barriers to mobility (wage settings coupled with skills)
•Geographical barriers (poor infrastructure connecting urban and rural areas)
•Legal barriers (such as weak enforcement of property rights
•Barriers due to discrimination based on ethnicity, race or gender (may make it difficult for the poor to participate in sectoral growth)

The government had put in place a number of policies to attempt to tackle structural unemployment. These measures included education and training, training and retraining programmes, changes in the tax structure with tax incentives, wage subsidies, and restrictions on labour union power. They included the promotion of Small and Medium and Micro Enterprises (SMMEs), strengthening the informal sector, restructuring of the agricultural sector and land use and an improved public works programme. Most of the unemployed people in South Africa were between the ages of 18 and 21, highlighting the dire need to create policies which adequately addressed youth unemployment.

Ms Barreto addressed the issue of the proposed changes to the labour laws in South Africa. The proposed amendments had their origins in the growing “casualisation” of work that had become a feature of the South African labour market over the past decade. Amendments had been proposed for the Labour Relations Act (“LRA”), the Basic Conditions of Employment Act (“BCEA”); and the Employment Equity Act (“EEA”). Amendments had been effected to these acts to bring them in line with labour law developments, to improve the functioning of the Commission for Conciliation Mediation and Arbitration (CCMA), and to fulfil South Africa’s obligations as a member state of the International Labour Organisation (ILO). In addition to the amendments to existing labour legislation, the Employment Services Bill was published and would provide a legal framework for the operation of employment services in South Africa.


The Labour Relations Amendment Bill of 2010 proposed to stop the exploitation of workers, ensure decent work for all workers; and prohibit certain abusive practices. A proposed amendment aimed to stop the practice of repeated contracting for short-term periods. The onus would be on employers to justify the use of short-term or fixed term contracts, in place of contracting employees on a permanent basis. The Bill proposed to repeal section 198 that deals with Temporary Employment Services in the Labour Relations Act (no 66 of 1995). The Department would introduce a new Employment Services Bill which would address both Private and Public Employment Services. The Bill proposed substantial changes to the jurisdiction of the Labour Court which were aimed very simply at giving the Labour Court exclusive jurisdiction (to the exclusion of other civil courts) in all employment related disputes. Another significant new provision precluded employees earning above a specified threshold (to be determined by the Minister) from referring unfair dismissal and unfair labour practice disputes to the CCMA. A further change would make con/arb (where arbitration commences immediately after conciliation) the normal process that would be followed in the CCMA and eliminated the present position where either party can object to con/arb without providing any reason for doing so.

The Basic Conditions of Employment Amendment Bill address Government’s commitment to avoid exploitation of workers, ensure decent work, and protect the employment relationship. The Bill would introduce laws to regulate contract work, sub-contracting and outsourcing, address the problem of labour broking; prohibit certain abusive practices; and effect certain consequential amendments as a result of the insertion of new definitions and to effect certain corrections. Amendments were proposed in the Bill to give the Minister the power to prescribe thresholds of representativeness of a trade union to have the organisational rights of access to employer premises. This was intended to apply to situations where unionisation is difficult but where a more flexible threshold may facilitate unionisation within a sector or area.

The Employment Equity Amendment Bill would aim to ensure compliance with South Africa’s obligations in terms of international standards and promote the prevention of unfair discrimination in the workplace; ensure that the Act gives effect to fundamental Constitutional rights including the right to equality, the right to fair labour practices and protection from unfair discrimination. It would increase fines for non-compliance with the Act, align the provisions of the Act with the Promotion of Administration and Prevention of Unfair Discrimination Act, 2000 (Act No. 4 of 2000); and effect certain consequential amendments and textual corrections.

The Employment Services Bill would aim to contribute to the Government’s objectives for “More jobs, decent work and sustainable livelihoods”. The Bill repositioned employment services to play a major role in employment promotion and employment preservation and will assist employers and workers to adjust to changing labour market conditions. The Bill sought to elevate opportunities for citizens over those of foreign workers by requiring employers to make use of the public employment service before employing foreign nationals, and to submit reasons to the Director General as to why citizens with suitable profiles referred to them by the department could not be employed instead of foreign nationals. Employers engaged in sectors designated by the Minister for this purpose would be required to notify the Department of any vacancy or new position in their establishment within 14 working days after the position has become vacant or was created, and to notify the Director General of the filling of any vacancy within 14 days.

Discussion
Mr H Groenewald (North West; DA) commented that he did not believe that the government could create 5 million jobs. He argued that jobs must be created by the private sector and by the citizenry.

The Chairperson replied that Mr Groenewald was out of order. This was not the correct forum to raise those issues and the researchers were not in apposition to respond to them. Mr Groenewald should rather bring those issues up in a meeting with the Departments of Labour or Economic Development.

Mr Groenewald referred to the figures quoted in the presentation about the Apartheid schools and questioned where it had been taken from. He commented that South Africa created its own problems on foreign nationals taking jobs, the country had weak border protection and that allowed foreign nationals to enter the country and take jobs from the native population.

Mr Mahlangu replied that the statistics had been garnered from the Department of Labour. The figures provided context to the issues affecting the labour market in contemporary times. There was a crisis at various border posts but blame should also be placed on the door of people who employed illegal foreign nationals. Employers sought to maximise their profit margins with minimal expenditure on labour, this created a problem for native nationals seeking employment.

Ms Barreto added that the Employment Services Bill had been introduced specifically to deal with the issue of foreign nationals being employed in places where locals could be employed. The Bill would place responsibility on employers to employ nationals ahead of foreign nationals but in cases where foreign nationals were employed, proper explanation would have to be provided for that. 

Mr M Jacobs (Free State; ANC) asked several issues. Firstly, he sought clarity on where the figures the researchers had used on the Apartheid section of their presentation had been attained from. Secondly, he asked whether any of the proposed Amendment Bills would attempt to curb the casualisation of work and unnecessarily long arbitration of employment issues. Thirdly, he asked whether the Employment Equity Amendment Bill enforced the use of racial demographics in provinces. Lastly, he asked whether the Employment Services Bill would legalise labour brokers.  

Mr Mahlangu replied that the numbers varied but the information that the researchers had sourced had given them that specific set of numbers. The average ratio of teachers to students in classes was 1 is to 30.

Ms Barreto confirmed that the
Labour Relations Amendment Bill would seek to curb casualisation and would bring in fixed term contracts for workers. The onus would be on employers to show valid reasons for temporarily employing an individual. The Employment Equity Bill would seek to level racial demographics in the workplace but there would still be room to address unfair employment practices in the Labour Court where an individual was dissatisfied. Private arbitration could still be undertaken but it would be regulated to avoid the process being used to abuse workers and infringe on their rights. Where private arbitration forced the worker to pay for some of the arbitration, the CCMA would be the avenue for the employer and employee to visit, where there was a dispute. The Department of Labour was not seeking to take on the task of being a labour broker but was trying to alter the system so as to ensure that the right people were assigned to the right jobs. 

Mr Z Mlenzana (Eastern Cape; COPE) asked whether the Labour Relations Amendment Bill would not protect uncategorised workers and take away their right to go to the CCMA before approaching the Labour Court. 

Ms Barreto replied that Mr Mlenzana was correct in his assessment; uncategorised workers would have to go to the Labour Court to resolve employment disputes as opposed to the CCMA. She was unsure about how the system would work when it was finalised. 

Mr Jacobs commented that the Committee would do well to learn from its study tours such as the trip it had taken to Japan. Japan had a public service system which was enviable and South Africa could learn a lot from it. It was important to take lessons out of study tour trips and not just take them for the enjoyment of travelling.  

The Chairperson thanked the researchers for their presentation. 

Adoption of Outstanding Minutes
The Committee considered and adopted minutes from meetings held on 9 February, 16 February, 2 March, 16 March, 23 March, and 30 March.

Adoption of Outstanding Reports
The Committee also adopted its Report on the Department of Labour’s Strategic Plan. It further adopted a report on its Koeberg Study Tour and its Japan Study Tour.
The meeting was adjourned.

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