Workshop on Labour Laws: day 1

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Employment and Labour

22 May 2012
Chairperson: Mr M Nchabeleng (ANC)
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Meeting Summary

The Department of Labour presented a high level overview of the Labour Relations Act, No. 66 of 1995 and the Basic Conditions of Employment Act, No. 75 of 1997 to the Committee.  The briefing included the background to and purpose of the current labour legislation, the application of the Acts and the most significant provisions.  The proposed amendments to the Acts were intended to address certain problem areas and weaknesses in the current legislation and to improve the enforcement of the legislation.  A more detailed briefing on the amendments would be presented on the second day of the workshop.

Members noted the progress that had been made since the introduction of the labour legislation in 1995.  Members were concerned over the availability of the legislation in indigenous languages; the continued exploitation of workers by employers; the failure of employers to adhere to labour legislation; the lack of trust between organised labour and organised business; the need to educate and inform workers and employers of the legislation and the need for government, organised labour and employers to work together to improve compliance to the legislation.

Members asked questions about provision in the legislation for fines and penalties rather than in regulations; the level of understanding of labour legislation concerning essential services by workers; whether the public sector legislation was aligned with the labour legislation; whether the recommendations in the Regulatory Impact Assessment report issued in September 2010 was considered in the proposed amendments; the impact of the no-work-no-pay policy when a minimum service agreement was in place; the impact of a compressed work week and the legal provision for the youth and the unemployed sectors of society.

Meeting report

The Chairperson noted the apology of Ms L Makhubela-Mashele (ANC).  The purpose of the workshop was to familiarise the Committee with the current labour legislation and to identify where amendments were required to address problem areas.

Presentation on Labour Laws
Mr Les Kettledas, Deputy Director-General, Department of labour (DOL) presented the briefing to the Committee (see attached document).  The briefing gave a high level overview of the Labour Relations Act, No. 66 of 1995 and the Basic Conditions of Employment Act, No. 75 of 1997.

The Labour Relations Act (LRA)
Prior to 1994, there were eleven labour entities in South Africa, each governed by different pieces of legislation.  The LRA consolidated the various entities and repealed 58 laws dealing with labour matters.  A drafting team was appointed by the Minister of Labour and international best practice was taken into account.  Section 23 of the Constitution dealt with labour relations.

The briefing covered the purpose of the LRA and its application to employers, employees, persons seeking employment and former employees.  Members of the South African National Defence Force, the National Intelligence Agency and the South African Secret Services were excluded. The Act made provision for organisational rights for trade unions and the establishment of statutory bargaining institutions.

The purpose, establishment, functions and powers of bargaining councils were explained.  The Minister of Labour could extend collective agreements concluded by bargaining councils to other parties.  The LRA regulated industrial action, disputes about unfair labour practices and dismissals and the transfer of contracts of employment and employees should the employer become insolvent.  The criteria applicable to protest action was summarised. 

Dispute resolution institutions included the Commission for Conciliation, Mediation and Arbitration (CCMA), bargaining councils, the Labour Court and the Labour Appeal Court. The composition, purpose and functions of the CCMA, Labour Court and Labour Appeal Court were outlined.

The proposed amendments to the LRA were mainly technical in nature and were intended to bring about improved efficiency, provide for atypical labour relations (i.e. labour brokers), deal with collective bargaining issues (such as violent strike action), make provision for the appointment of an administrator for a trade union, provide for minimum service agreements for essential services and for dispute resolution mechanisms for essential services and to enhance compliance and enforcement of the Act.

The Basic Conditions of Employment Act (BCEA)
The purpose and application of the BCEA were explained. The Act dealt with the rights of workers and included provisions prohibiting child labour and forced labour. The provisions concerning the responsibility of the employer and the termination of employment were summarised. The BCEA regulated working time, different types of leave, variation of certain basic conditions of employment, sectoral determinations, the presumption of who was considered to be an employee, monitoring, enforcement and legal proceedings. The establishment, composition and functions of the Employment Conditions Commission (ECC) were outlined.

The proposed amendments to the BCEA were intended to strengthen compliance and to deal with enforcement issues. Amendments to certain definitions would provide more clarity.  Other provisions concerned forcing employees to purchase goods from the employer; demanding payment to secure employment; the employment of children; subjecting employees to medical examinations; matters of jurisdiction and compliance order procedures. The penalties for certain offences would be increased.

Mr A van der Westhuizen (DA) asked if fines and penalties could be dealt with in regulations rather than in legislation.

Mr F Maserumule (ANC) questioned the publication of the labour legislation in English.  He was concerned that workers would not understand the legislation if it was not available in indigenous languages.  He said that the exploitation of workers was entrenched in South Africa and wondered why it was so difficult to enforce labour legislation in this country.  Many foreign-owned companies operated in South Africa and complied with labour legislation elsewhere.  He found that the private sector had failed to respect the labour laws and continued to disregard the rights of workers.  He wondered what else had to be done to ensure that employers adhered to the labour laws.

The Chairperson agreed that little had changed since the current political dispensation came to power 18 years ago and that exploitation of workers continued to be a major concern.

Mr S Motau (DA) asked if a list of the 18 identified essential services was available.

Mr D Kganare (COPE) asked if workers in the essential services understood the legislative requirements and that there were alternative mechanisms available to them for dispute resolution.  He understood that NEDLAC had engaged with employers and trade unions on the issue of violent industrial action.  There was little trust between employers and trade unions.  There were problems with perception and each party tended to blame the other for labour problems.  He asked if the amendments applied to the public sector as well.

Advocate A Alberts (FF+) remarked that the labour legislation had contributed much towards achieving a balance between the rights of employees and employers in South Africa.  The legislation allowed organised labour to build a powerbase to counter-act the practice of companies making use of strong-arm tactics to subdue their workers.  He asked if the DOL had considered the concerns that were raised in the Regulatory Impact Assessment (RIA) report dated 9 September 2010 when drafting the Amendment Bills.

Mr Kettledas advised that a list of essential services was available on the CCMA website.  He confirmed that the matters raised in the RIA were taken into account in the proposed amendments to the LRA and the BCEA.  The LRA was the primary legislation and all other legislation (such as the Public Service Act) had to be aligned with it.  The level of understanding of workers in essential services was directly linked to the extent the workers had been educated on the subject.  In his opinion, workers in essential services tended to go on strike because there was a lack of clarity and an absence of minimum service agreements.  Maintenance agreements were in place in the mining sector, which ensured that the mine was operational once a strike by mineworkers was over.  The business sector was fully aware of its responsibilities.  All labour legislation was essentially an agreement between government, organised labour and organised business.  All parties were responsible for ensuring that the laws were properly implemented.  Monitoring and enforcement measures served to remind the parties that the laws had to be complied with.  He acknowledged that government’s social partners could do more to ensure the labour legislation was properly implemented.  The LRA gave guidelines on the size of fines and penalties.  It was not necessary to amend the Act whenever it was necessary to increase the amount of the fine in order to keep up with inflation.  The Department had found that the fines originally set were too low and were not a deterrent for non-compliance.

Mr Thembinkosi Mkalipi, Chief Director: Labour Relations, DOL explained that the LRA made provision for the Minister to increase the fines by regulation.  The matter had been debated in NEDLAC and the conclusion was reached that the fines in the legislation had to be increased by at least 200%.  Provision needed to be made for the fines to be increased by regulation on a regular basis.

Mr Kettledas said that the labour laws had to be enforced through partnerships as there would never be enough inspectors to ensure that the legislation was fully implemented.  All parties needed to play their part.  He cited statistics on the number of workers registered for the Unemployment Insurance Fund (UIF) and the number of registered companies to illustrate the extent of the problem if employers failed to adhere to the labour laws.  Inspectors had to be trained on the laws that they were required to enforce.

Mr Kganare asked what the impact was of the no-work-no-pay policy when a minimum services agreement was in place.  Certain workers would be working and getting paid whilst their colleagues would be on strike and receive no pay.  This situation could split the workforce and cause further dissent.

Mr E Nyekemba (ANC) said employers had complained that the labour legislation was restrictive.  The proposed amendments were important and progress was being made in addressing problem areas.  Employers and the unions did engage with each other and generally understood on which issues the parties were in agreement.  He asked for more clarity on the provisions concerning the compression of the work week.  He thought that longer workdays would have a negative impact on productivity and on the lives of workers.  Alternative means to bring the parties together needed to be explored and critique against NEDLAC had to be addressed.

The Chairperson agreed that the grey areas in labour legislation needed to be clarified.  He had found that information available did not always filter down to employers and employees.  He had found during a visit to farm workers in the Free State Province that the agricultural union did not engage with the farmers and their workers and that the farmers were not aware of the assistance that was available to them.  As a result, dissent between farmers and their workers continued.  The major challenge was to get all employers to recognise the rights of workers.

Mr Van der Westhuizen remarked that the South African labour legislation had been aligned with international laws and labour practices since 1995.  However, the country had a high unemployment rate and the impact of labour legislation on job creation could not be ignored.  He wanted to know how South Africa compared to other countries with similar high unemployment rates and social challenges.  He asked for comment on the efficacy of labour legislation more suited to a developed country in a developing country such as South Africa.

Mr Motau agreed that inspections were not adequate to ensure general enforcement of labour legislation.  A major challenge was poorly educated workers and the legislation was intended to provide protection for the most vulnerable category.  Without a two-tier labour system, the problem would not be solved.  He queried the role of NEDLAC in fostering a common vision amongst government, the unions and employers.  Such a common vision was essential when a country was faced with an economic crisis situation.  The Committee had learnt during a visit to Germany that it was necessary for the various parties to agree on at least one central issue and then work together to find solutions.  He felt that the DOL should be taking the lead in this matter.

The Chairperson recalled how organised labour and the private sector had worked together in an Eastern European country to fight a common enemy.  However, South Africa did not face an external threat and the focus should be on resolving conflict between employers and the workers.  In his opinion, the employers had much more to lose than the workers if areas of conflict were not resolved.  It was essential that all parties worked together to solve labour-related problems.

Adv Alberts noted that the RIA was issued in September 2010.  He asked the DOL to indicate how the RIA had impacted on the proposed amendments to the labour legislation.  It was necessary to protect informal workers as well as stimulate the economy.  There was potential for conflict and he wanted to know how this would be dealt with.

Mr Nyekemba asked what action had been taken by the DOL to provide jobs for the youth and for the unemployed.  He asked what monitoring mechanisms were in place and if the weaknesses in enforcement of the existing legislation had been identified.  Skills development legislation made provision for learnerships for the youth in an attempt to provide young people with some experience.  The Committee’s oversight responsibilities included ensuring that legislation was adhered to by both the private and public sectors.  He asked if current legislation made any provision for the unemployed and what action had to be taken to ensure that the applicable laws were fully implemented.  He cautioned against South Africa copying what was being done in other countries as other countries had a different historical context.

The Chairperson recalled that he got a very defensive reaction to his questions about the exploitation of workers by foreign-owned companies during the visit to Germany.  Workers were generally willing to compromise and their needs were relatively simple and easily understandable.   He was critical of half-baked reports issued by various commissions of enquiry in the past and the willingness of the police to respond to striking workers with teargas and rubber bullets.

Mr Mkalipi observed that the no-work-no-pay principle was better understood by workers in the private sector than in the public sector.  This issue was usually dealt with during pre-strike negotiations.  Essential services and minimum service agreements were only applicable to the public sector.  The compressed work week provisions were applicable in emergency circumstances, for limited periods (such as harvest periods) and when a specific task had to be completed within a fixed period.  There was no legal requirement for all the recommendations in the RIA report to be accommodated in legislation.  The only requirement was for the Department to apply its mind and consider the recommendations.  In the case of the RIA on labour legislation, all the recommendations were considered.  The DOL could provide the Committee with a summary of the recommendations and the corresponding action that were taken.  The LRA distinguished between workers employed for six months or less and workers with longer term contracts, thereby introducing a two-tier labour system.  A substantial amount of funding was made available by government to assist companies in financial difficulties to keep workers employed but the take-up rate had been less than satisfactory and more than a million jobs had been lost.  The Department felt that the private sector needed to change its attitude and to commit itself more fully to government’s labour policies.  He agreed that adherence to labour legislation was more satisfactory in other countries, such as Germany.  In China, changes had been made in the manner in which temporary workers and labour brokers were managed.

Mr Kettledas explained the history of the training/lay-off scheme.  Organised business leaders had urged companies to participate in the scheme and refrain from retrenching workers but were largely ignored.  The objective of the youth learnership programme was to provide the youth with the opportunity to gain knowledge and experience.  At one stage, there were 200,000 young people in the scheme but the problem was that there were not enough workplace positions available.  The legal provision remained in place.  There were other community and work programmes in place, for example in the agricultural sector.

The Chairperson advised that the workshop would be resumed on the following day.  He informed Members that the Committee had been invited by the Portfolio Committee on Communication to participate in a discussion on the utilisation of labour brokers and temporary staff by the South African Post Office on 12 June 2012.

The meeting was adjourned.


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