Labour Relations Amendment Bill: Clause 45-50 briefing; Clauses 1-15 deliberations

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Employment and Labour

30 October 2012
Chairperson: Mr M Nchabaleng (ANC)
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Meeting Summary

The Department of Labour continued with the briefing on the Labour Relations Amendment (LRA) Bill from Clause 45 to 50. The Committee Secretary was asked to make arrangements for public hearings on the Labour Relations Amendment Bill and the Public Employment Services Amendment Bill. Members deliberated upon how to consider the Bill. It was eventually agreed that the DOL should proceed with the Bill on a clause by clause basis and the parliamentary legal advisers would be requested to give their legal opinion whenever the Committee required advice on any contentious clause. Clauses 1-6 were considered by the members and the parliamentary legal adviser gave an opinion in respect of contentious Clause 6.

Afternoon session
The Department of Labour legal representatives, the Parliamentary Legal Advisor and the State Law Advisor continued to go through the Bill with Members asking questions. Clause 7 contained technical amendments. Clause 8 noted that in addition to protection not being afforded to those who took part in criminal activity, those who breached a picketing agreement would also not be protected. Clause 9 added a new section 69(12) to allow a third party to approach the Labour Court in cases of violence or destruction of property. The COPE Member commented that this was highlighting that there was no absolute right to strike, and the right was coupled with responsibilities. Clause 10 was largely technical, dealing with establishment of the essential services committee, and new sections 70A to 70F set out details around this committee. Clause 13 caused substantial debate, as it was inserting a new section 71A into the Act, for workers exercising authority on behalf of the state. It was pointed out that these workers would not have the right to strike but instead their matters must be referred to arbitration. However, an ANC Member was not happy with the provisions that the arbitration award would not be final until confirmed by Parliament, whereas the COPE Member and the legal advisors said that this was clearly to allow Parliament some leeway to protect the fiscus. The legal advisors also noted that the distinction between sectors was a policy, not a legal decision. After substantial discussion, it was agreed to park the issue for later debate. Clauses 14 and 15 were not contentious and were not debated.

Meeting report

Mr Thembinkosi Mkalipi, Chief Director: Labour Relations of DOL stated that he would continue from where he had stopped at the previous meeting which was clause 44.

Clause 45
This contained the proposed amendment of s200A of the principal Act which dealt with the presumption of any person working or rendering services to another person as being an employee.

Clause 46
This was the insertion of s 200B in the principal Act. The proposed insertion was in respect of liability for employer’s obligations. It was proposed that the word ‘employer’ should include persons who carried on associated or related activity or business by or through an employer if the intent or effect of their doing so was to directly or indirectly defeat the purposes of the principal Act or any other employment law. The proposed section also provided that  in cases where more than one person were held to be employers, then those persons were to be jointly and severally liable for the failure to comply with the obligations of an employer.

Mr E Nyekemba (ANC) asked what s 200B currently provided for in the principal Act.

Mr Mkalipi reiterated the fact that s 200B was a new section proposed to be inserted into the principal Act and did not presently exist in the principal Act. He explained that previously under the principal Act, a third party who carried out associated or related work through an employer could not be linked for the purposes of making him liable for his actions. However, this situation sought to be remedied by the Bill.

Clause 47
This dealt with the amendment of s 203 of the principal Act. The section made provisions to enable the Minister to issue a code of good practice by publishing it in the Government gazette.

Clause 48
This dealt with the amendment of s 213 of the principal Act. The amendment proposed the insertion of the word ‘Commission” which would be defined to mean the Commission for Conciliation, Mediation and Arbitration. It was further proposed that the word ‘serve’ in respect of the service of documents should also be extended to the Labour Courts, bargaining councils and the Commission.

Clause 49-50
It was decided that these clauses were not contentious in any way.

The Chairperson stated that there needed to be public hearings on the Bill.  He suggested that the Committee should have a working draft with the various options raised until the final draft of the Bill could be arrived at. Members were asked for comments.

Members agreed with the suggestion.

Adv A Gordon, Parliamentary Legal Adviser, stated that her understanding of the agenda for the meeting was that the Committee would look at specific clauses in the Bill which were found to be contentious during the presentation and not that the Committee was going to examine the Bill on a clause by clause basis.

The Chairperson asked members for suggestions concerning how the Committee should proceed with the consideration of the Bill.

Mr Nyekemba observed that it appeared that the parliamentary legal advisers had already prepared written submissions concerning those clauses which had been identified during the presentation of the Bill by the DOL. It was suggested that the legal advisers could present their submissions.

The Chairperson suggested that it was better to consider the Bill on a clause by clause basis and the Committee could request for a legal opinion whenever it got to a clause which was contentious.

Ms L Makhubela-Mashele (ANC) suggested that the Committee should consider the legal opinions on the contentious clauses immediately and the parliamentary legal advisers could thereafter be given a mandate to incorporate the legal opinions into the Bill.

Adv Gordon suggested that there should be a working document which would not be regarded as another version of the Bill but would contain only those clauses that members were considering to change. Therefore if members were not satisfied with a particular clause during the deliberations on the Bill, such a clause would be transferred to the working document and not the entire Bill.

The Chairperson directed that the Bill would be considered in line with the suggestion given by Adv Gordon.

The Chairperson directed the DOL to proceed with the Bill on a clause by clause basis and the parliamentary legal advisers would be requested to give their legal opinion whenever the Committee required advice on any contentious clause.

Consideration of Bill
Mr Mkalipi proceeded going through of the Bill clause by clause, allowing for comment by Members.

Clause 1
Mr S Motau (DA) raised an objection in respect of Clause 1 which dealt with the amendment of s 21 of the principal Act. He stated that the amendment still did not address the issue of the majority versus those who were excluded. There should be provision for the minority unions to be heard. The exclusion of a union could result in the use of violence to enable itself to be heard and this had distasteful consequences.

Mr Mkalipi replied that issue of violence could work both ways. The majority could also resort to violence if the minority was allowed to have its way at all times. Therefore there was the need for a balance to be struck in the issues involving both the majority and the minority unions.

Clause 2 amending section 22 of the principal Act
Mr Mkalipi said the amendment provided that an arbitration award might be made binding on an employer to the extent that it applied to the employees of a temporary employment service and any other person other than the employer who controlled access to the workplace to which the award applied, if that person had been given an opportunity to participate in the arbitration proceedings.

The Chairperson asked if members had any comments.

Members had no comments and the deliberations proceeded.

Clause 3 amending section 32 of the principal Act
The amendment made provisions for the bargaining council to put in place an effective procedure to deal with applications by non parties for exemptions from the provisions of the collective agreement and to deal with such applications within 30 days. This provision was not a controversial area and it had already been agreed upon by stakeholders.

Members had no comments.

Clause 4 amending section 49 of the principal Act
The amendment provided that a bargaining council having a collective agreement that had been extended by the Minister had to inform the registrar annually in writing.

Members had no comments.

Clause 5 amending section 51 of the principal Act
The amendment provided that the bargaining council could by collective agreement provide for payment of a dispute resolution levy and also provide for the payment of a fee in relation to any conciliation or arbitration proceedings.

Mr D Kganare (COPE) wondered why the provision was proposed as workers already contributed to the bargaining council; this would mean that they would be charged again despite the fact that they already paid levies to their unions.

The Chairperson stated that the issue raised by Mr Kganare appeared to show that there was no need for the proposed provision. The issue would be revisited when the Committee held further deliberations on the Bill.

Clause 6 amending section 64 of the principal Act
This compelled the trade union or employer’s organisation to conduct a ballot of it members in good standing who were entitled to strike or lock out in respect of any issue in dispute.

The Chairperson observed that an opinion on this clause had earlier been requested from the parliamentary legal advisers and he asked if the opinion was ready.

Dr Barbara Loots, Parliamentary Legal Adviser, stated that the introduction of the ballot could be traced to the 1956 Act which predated the Constitution. The impact of the provisions was to give effect to s 23 of the Constitution and everything had to be measured against this. s 23(2)(c) of the Constitution granted every worker the right to strike and s 23(4) granted every trade union and employer’s organisation the right to organise their administration and internal processes. The impact of the proposed amendment was to remove the technicalities which made parties to be at loggerheads and to create a cooperative and more flexible system. What was more important was that under the 1956 Act, for a strike to be allowed to be initiated the ballot would have to be legal and proper before the strike could be embarked upon. Therefore it remained to be seen if the provision of the ballot in the proposed amendment could still be used by the employers to declare a strike as being irregular if the ballot was not validly taken. It was thereof not unjustified to question whether a ballot should be used, especially in view of the fact that the Constitution protected the right to strike.

The Chairperson asked for comments from members.

Mr Kganare stated that he was in support of the ballot because it legitimised the strike and reduced the level of intimidation. The difference between the ballot which was required by the proposed amendment and the ballot which was required in the past was that previously, the workers union would conduct a ballot on its own and the employers would then challenge it. However, in this case the provision provided that a certificate issued by the Commission, a bargaining council, any council or private agency which had been accredited that a trade union or employer’s organisation had conducted a ballot was proof that the trade union or employer’s organisation had complied with the provisions. This made it clear that the ballot would be done properly and it showed the will of the workers.

Mr Motau agreed with the opinion of Mr Kganare and stated that the ballot would ensure that the strike was conducted properly and that it would promote good labour relations.

The Chairperson suggested that the ballot would not necessarily reduce or remove intimidation. This was because intimidation happened before workers had to ballot and before the strike would occur. It was his opinion that the proposed amendment would make it more difficult for workers to go on strike and would eventually take worker’s rights away.

Adv Gordon stated that unlike the previous situation when the ballot existed but there was no Constitution, the situation was very much different at the present time. This was because there was now in existence a Constitution and all laws were to be interpreted in accordance with it. Therefore, the interpretation of the proposed provisions would inevitably take into account the right of workers to strike which had been expressly provided for in the Constitution. This would be used as the yardstick and the clause would not frustrate the strike.

Afternoon session

Chairperson’s opening remarks
The Chairperson noted that the Secretary had been asked to start preparing for the public hearings on this Bill and the Public Employment Services Amendment Bill.

Labour Relations Amendment Bill
Dr Barbara Loots, Parliamentary Legal Advisor, responded to a question asked in the morning session about Clause 6. The Legal Unit believed that this clause was a buffer, but it was still able to be challenged. It was supposed to prevent violent strikes. The Constitution only protected peaceful participation in gatherings, so no such protection would apply to violent events. Ultimately, it was the decision of the Committee whether Members felt it was appropriate.

The Chairperson commented that action against those involved in violence would have to be dealt with by the Justice Cluster.

Mr Thembinkosi Mkalipi, Chief Director: Labour Relations, Department of Labour, continued to take Members through the Bill:

Clause 7
This contained technical amendments, referring to “any other law” (rather than only the Labour Relations Act).

Clause 8
The current Labour Relations Act, in section 67(2), dealt with strikes and lockouts, and gave some immunity to those taking part in strikes against being challenged with breach of contract. Subsection (6) went further to prevent civil proceedings being instituted against a person for participating in a strike. Subsection (8) contained an exclusion, saying that despite the protection given elsewhere, if a person committed a criminal offence during the strike, the protection would fall away. The Bill, however, was including in this exception also a breach of the picketing agreement established under section 49. Mr Mkalipi reminded the Members of the judgment recently given about violence during strikes, in terms of which a trade union or anyone else involved in public protests would be held responsible for that damage.

Clause 9
Mr Mkalipi reminded Members of discussions on clause 2, regarding any person other than an employer who could be held responsible, if they had been informed. The same principle applied in this clause. It was being extended not only to section 21 rights, but to areas other than organisational rights.

A new subsection (12) was being introduced into section 69 of the Act, dealing with the Labour Court. He cited the example of a union picketing in front of a gate, causing damage, and said that the third party could, in terms of the Bill, ask the Labour Court to force the parties to comply with the agreement. The Labour Court would be able to suspend the strike, or, in the case of an employer, decide that the employer could not employ “scab labour” (replacement labour). The 1956 Act allowed parties to apply for urgent relief, which was then removed in 1995. The Bill, however, was bringing back this concept, in cases of violence and destruction of property. The Court would have the opportunity also to reduce the hours. The other party must get notice, and comply with requirements of fair administrative justice.

Mr D Kganare (COPE) pointed out that this clause highlighted some of the points made earlier in the morning discussion.  There was no absolute right to strike. The process leading up to that process was very clearly set out. He did not want to open up the debate again, but said that this clause could give Members further thought on the issue.

Mr Mkalipi confirmed that the right to strike was coupled with responsibilities. The right to strike must be exercised with responsibility. He pointed out that Labour, at the National Economic Development and Labour Forum (Nedlac), had been opposed to this clause. Business was prepared to concede its position on scab labour in exchange for this clause.
Clause 10
Mr Mkalipi said that this was largely a technical clause, enabling the Minister to establish an essential services committee (ESC).

Clause 11
This clause spoke to the composition of the ESC, and was inserting a number of new sections into the Act.

The intention was to ensure that the ESC was broadened, to enable that committee to do its job. There would be six constituencies represented. He did not think there was anything controversial.

The new section 70B spoke to the powers and functions of the ESC. The present Act did not spell out the powers and functions in depth, but, from a matter of practice, nothing was being changed.

The new section 70C dealt with the appointment of panel members, and again there was no controversy.

The new section 70D set out the powers and functions of the panel. The new section 70E dealt with the jurisdiction and administration of the essential services committee, and how it would be financed. New section 70F said that the Minister may make regulations around the functioning of the ESC. Government was now being represented in the ESC. The Minister would appoint the Chair.

Clause 12
Mr Mkalipi said that section 71 dealt with the panel

Clause 13
This clause was inserting a new section 71A to the Act.

The State could now approach the ESC to make an application for workers who were exercising authority in the name of the state. Instead of the State having to justify essential services as those that would affect “life and limb”, a second test was being inserted; that the officials were exercising authority in the name of the state. Mr Mkalipi said that those performing essential services would include customs officers, judicial officers, justice officials (prosecutors and the like). He said that there had been debate on Parliamentary Services, and to whom exactly it would apply. Provincial legislatures were not regarded in the same way.

He noted that Labour, at Nedlac, had argued that the fact that an arbitration award was not binding in the public sector gave Parliament the final authority, as the Minister had 14 days to submit that award to Parliament.  In the private sector, this provision did not apply. Labour felt that this did not encourage arbitration in the public sector. Parliament also had a chance, through the Money Bill process, to move money around after arbitration awards.

Mr Kganare was happy with this explanation and understood it.

Mr E Nyekemba (ANC) asked why the officials who were already declared essential services could not follow this process. He agreed that there were difficulties with the service level agreements. He was not sure of the purpose of this insertion. Once a piece of legislation was passed, dealing with labour, but a particular sector or operation was regarded as an essential service, this gave rise to a contradiction, for the sectors would be treated differently. If there was any dispute, which was not resolved, then labour, instead of being able to exercise its power by striking, would have to go to arbitration. He reiterated his concern that arbitration awards would be regarded as binding on the parties in the private sector, but not in another, that seemed to be creating two parallel systems. Labour legislation was surely supposed to apply to all workers in the country. He wondered what the point was of having the arbitration, if that award was not binding unless it went to Parliament. Furthermore, it was adding another layer to the decision-making process. He asked the State Law Advisors to comment and explain further.

Mr Mkalipi said that this was not a legal issue, but a policy issue. There was no infringement of the law. Personnel expenditure constituted a huge chunk of government expenditure, and if there was not careful allocation and negotiation over wages, it would create problems. That was probably the rationale behind this policy decision. At the time that this was introduced, there was not much arbitration expertise around wage negotiations, and there was concern about the effect of unexpected increases.

Mr Kganare understood that certain groups of workers would be identified and told that, because they acted on behalf of the state, they were not permitted to strike. Instead, they would have to go to arbitration. He added that the arbitrator’s award may have an impact on the budget already allocated. The Minister of Public Service and Administration would have to go back to the Minister of Finance and the two would have to consider the implications for the whole fiscus. The Money Bill may need to be amended to take an arbitration award into consideration. Sometimes, it may be able to be done, but in other cases it may not be possible. He felt that this provision was essentially giving government space to consider all the implications.

Dr Loots explained that this was not so much a case of two different systems, but one system that could be adapted to circumstances. There was always a public interest element to the public service. The nature of the job in essential services must also take into account the need for adaptability. People were not really being treated differently. Elements of fairness did not mean that one person should be treated in exactly the same way as another, but that both sides’ interests must be equally considered and due processes applied.

Ms Suraya Williams, Principal State Law Advisor, Office of the Chief State Law Advisor, noted that the Public Services Act governed the position. Public interest played a huge role; for instance those working in public hospitals had a greater focus on the public interest. The question was how to achieve a balance. She agreed with Dr Loots that this was not a dual system but an attempt to take account of competing interests.

Mr Nyekemba pointed out that certain matters were defined in the Act (and the Bill), to clarify what arbitration would comprise. The same Act could not be applied differently in different sectors, in relation to arbitration. He had a problem with calling both private and public sector arrangements “arbitration”, when their effect was different.

The Chairperson asked if Parliament was bound by the Public Finance Management Act, which governed finances in the public sector.

Dr Loots confirmed that it was not.

Ms L Makhubele-Mashele (ANC) noted that Parliamentary staff were appointed under their own Act, so they were not public servants. However, everything was in line with the Treasury regulations.

Mr Kganare said that there seemed to be agreement on many issues, but there was still a different stance on arbitrations. He thought the Committee was probably not opposed to the arbitration, but the process of implementing it should be seen within the context of how Parliament worked. If there was no money available, the arbitration could not be confirmed. He felt that both parties had to be reasonable. The question was how to couch this clause in a way that made it clear what the clause sought to achieve.

Mr Mkalipi asked Members to refer to section 74(5) of the LRA. He noted that any arbitration award that had an implication on the financial affairs of the State would become binding in 14 days, unless the Minister had tabled the award, within that period, for a decision by Parliament. Parliament could pass a decision that the award was not binding, but it would be likely to do this only if the award was completely unreasonable. Parliament had no power to alter the award. It would have to say why it was not binding. The matter would then have to go back to the parties and the arbitrator. Currently, this was no different from the case where there was a dispute in the private sector about demarcation, or the scope of the bargaining council. Before the CCMA award became final, Nedlac would have to pronounce on that award. A similar principle was being applied here.

Mr Kganare gave the example of someone creating a union with the intention of making the country ungovernable, and making a deal with the Commissioner to give a certain award. If Parliament did not have any say in that award, the effect could be to bankrupt the country. There was a difference between the public sector and the private sector.

Mr Nyekemba agreed that Parliament was bound by a separate finance act. However, he still could not agree that the process of dealing with issues of mutual interest should follow different paths. The same State should not have different procedures. He had hoped that Mr Mkalipi would refer also to subsection (6), which said that if Parliament passed a resolution that the award was not binding the dispute must (not may) be referred back, and if that failed, anyone to the dispute may request the Commission to arbitrate. This was essentially running around in circles. He made the point that the Commissioner would be looking at all aspects with an expert eye.

The Chairperson noted that parties clearly did not agree and he suggested that Members agree to park the issue for further debate.

Clause 14
Mr Mkalipi noted that this clause spoke to the problem of the sectors where there were no minimum service level agreements (SLAs). For instance, Eskom had to have at least 50% of its people working to ensure service delivery. However, many had never been drawn. This was another area where all parties at Nedlac had agreed, and the ESC would have powers if the parties did not agree to minimum SLAs.

Clause 15
Mr Mkalipi said this was a small amendment. Parties were being encouraged to enter into agreements around maintaining minimum services. In mines, for instance, or businesses that ran on furnaces, a stopping of machinery could lead to closure of the business. Those responsible for minimum maintenance could not go on strike. It was impossible to employ replacement labour. Those not in maintenance services could strike on behalf of the others.

Mr Kganare asked what a strike on behalf of others would mean, and if the “no work no pay” would apply.

Mr Mkalipi said that they would be paid because they were working.

Mr Mkalipi stressed that there had been general agreement at Nedlac on Clauses 11 to 15.

The meeting was adjourned.


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