Labour Relations Amendment Bill: flagged clauses

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Employment and Labour

12 November 2012
Chairperson: Mr N Nchabaleng (ANC)
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Meeting Summary

The Parliamentary Legal Advisers began by outlining the legal advisers’ concerns about s193 and 194. There were three main concerns: (1) the aims did not align with the issues highlighted in the explanatory memorandum. The mischief that the Department was trying to remedy was unclear. This rationale would be important in justifying the limitations that were being placed on senior managers. (2) the power imbalance had shifted to the employer and the employer was being given an easy opt out. An employer could easily pay off an employee without following the proper processes. (3) these sections were not included in the Bill when public hearings were held on the Bill. This could open up the Labour Relations Amendment Bill to Constitutional challenge. The Department maintained that the sections were fair because the intention was to discourage senior managers from going to the CCMA and this would unclog the CCMA. Members had a lengthy discussion about the issue and concluded that the matter had to be discussed in a private caucus meeting in order to decide whether there was political support for the Bill.

The Committee then decided to go through Working Draft 1 of the Labour Relations Amendment Bill to indicate its agreement or disagreement for each clause. The key outstanding issues were clauses 27 and 28 which dealt with service conditions of judges in the Labour Courts. The Parliamentary Legal Advisers maintained that the competence to make such amendments was with the Minister of Justice and not the Minister of Labour. They were advised to consult with the Portfolio Committee on Justice on when the Superior Courts Bill would be completed. Key also were the flagged proposed amendments in s193 and s194. These amendments were to be discussed in a private caucus.

Meeting report

The Committee decided to finish off the deliberations on the working draft of the LRA Amendment Bill in order to enable the State Legal Advisers to start working on the A-list of Portfolio Committee proposed amendments.

Dr Barbara Loots, Parliamentary Legal adviser, submitted the legal advisers’ concerns on the proposed amendments of s193 and s194:
(1) Their initial concern was clause 38, which in the memorandum had specific objectives the clause was supposed to achieve. The Department mentioned in oral submission the dire need to address the clogging up of the CCMA. The aims did not align with the issues highlighted in the Explanatory Memorandum. In order to determine whether a limitation was justifiable one would look at the mischief that was being addressed. The mischief behind the clause was not clear anymore. Further explanation was now required from the Department to clearly outline the purpose of the proposed amendments. The legal team’s imbalance concerns remained. There was also a need to assess whether less restrictive means could be used to achieve the same purpose and this could be proper management of the employer-employee relationship. The clause shifted the power balance back to the employer and made the clause open to abuse. This was particularly so because it related to remuneration. Despite the potential unfairness of the process, an employer was being given an easy opt out thus creating an imbalance in the balance of power which labour legislation was trying to achieve. An employer could easily pay off an employee without paying attention to whether the proper processes had been followed. The clause gave discretion to the Labour Court or an arbitrator and this would not unclog the CCMA as suggested by the Department.

(2) They had procedural concerns as the Portfolio Committee proposed amendments to s193 and s194 were not in the Amendment Bill tabled before Parliament. This meant that National Assembly permission would be required before any further processing of these amendments. The original Memorandum allowed the Committee to make only technical amendments. The proposed amendments were going into the substance of the law and the mandate given to the Committee did not extend to substantive changes the Committee wanted to make. The policy decision however remained with the Committee and if the Committee decided on this route then another Memorandum would have to be tabled seeking permission to amend the sections.

(3) They cautioned that there was a constitutional mandate on the Committee to allow public participation. Public participation had to be taken into account if permission was sought to allow substantive amendment to the sections. Effect had to be given to this constitutional obligation.

Mr Thembinkosi Mkalipi, Chief Director: Labour Relations, Department of Labour, noted that the previous week’s objections to the amendment concerned the constitutionality of the section. The issue was now the Memorandum not including the amendments that the Members were being asked to make. The Department was of the opinion that the amendments constituted fair discrimination. If thresholds were being questioned then all other thresholds would have to be analysed. If thresholds were going to be removed because they would be open to manipulation, then all thresholds had to be removed. This was not a legal issue. The intention of the memorandum was clear; its intention was to discourage senior members from going to the CCMA and instead rather settle their cases. The amendment persuaded senior members not to go to the CCMA. The tweaking of a Memorandum could never be a reason to reject a clause. He stated that according to his understanding the legal advisers were no longer challenging the constitutionality of the amendments.

The Chairperson remarked that there were two issues: procedural and constitutional. The constitutional issues came first. The Bills had to be hinged on constitutionality. The Committee could differ with the Department or the legal advisers. The Committee had to engage with the constitutionality issue because the procedural issue was not too complicated.

Mr F Maserumule (ANC) noted that his personal opinion was that the Department and the parliamentary legal advisers had to try and find common ground and come back to the Committee.

Mr S Motau (DA) asked whether the Department’s rationale satisfied the comment about the fact that the underlying policy proposal was not clear. The other issue was the fact that the amendments would not help the process of unburdening the CCMA. There was definitely a need for the Department’s lawyers and the Parliamentary legal advisers to get their heads around the issues.

Mr E Nyekemba (ANC) noted that the ultimate decision rested with the Committee. Advice was not instruction and despite the differing points of view submitted by the legal teams, the decision was to be made by the Committee. He looked at s36(1) of the Constitution which indicated what had to be looked at when there were limitations. He compared this with s23 on labour relations. The Constitution did not speak specifically to labour relations but the law had to make sure that s23 of the Constitution was applied. In his opinion the Committee was doing exactly that. It was important to note that the President was also concerned about long cases that were not being finished, making an example of the public sector. There was no law dealing with this issue and the Committee was trying to deal with this issue and such laws were important for service delivery. The point he was trying to emphasise was whether s23 of the Constitution prohibited those earning above the threshold from being limited. If the amendment was not in line with s23 of the Constitution what about the other thresholds that existed in legislation. There was a need to balance matters and make decisions that did not contradict other pieces of legislation.

 The Chairperson stated that the reason for having three legal teams was that each team had a particular role to play according to its mandate. Whatever input they had, had to be given to the Committee so it could make its own determination. The Committee could still refer matters back to the legal teams but ultimately it made its own decision. The Committee had to be convinced about the constitutionality of its decisions.

Dr Loots wanted to clarify that the legal advisers had not made a judgement call on the constitutionality of the clause because in order to determine whether s23 was being limited justifiably there had to be a clear purpose stated as to what the amendment was trying to achieve. It would be beneficial for the Department to submit an amended justification to supplement what had previously been stated. The previous constitutional concerns were based on the arguments, basis and justifications in the Explanatory Memorandum. She added that as legal advisers to Parliament the legal team would eventually be instructed by the Committee on how to proceed.

The Chairperson then suggested that the Committee take a ten minute caucus break.

After the caucus break, the Chairperson decided that the Department of Labour had to write a motivation or an explanatory note explaining why the section was not discriminatory or negative. There had to be enough motivation to convince whoever had doubts that the Committee had the best intentions when making these amendments. The question of process still worried him. When the Bill was advertised for public comment, he seemed to think s193 and s194 were part of the Bill when they were dealt with. If further changes were needed was there a need for public hearings or could a memorandum be written to Parliament.

Dr Loots explained that the concern was the fact that the Bill did not include s193 and s194. These sections fell within the gaps. The Bill referred to s191 and then jumped to s198. It could be beneficial for the sections to be put to the public to get comment and clarification. The concern was that the document given to the public for comment and submission did not indicate specifically that they had to take into account the scope of s194. For this reason they were cautioning that public participation was a constitutional concern.

Mr Motau raised the same point and stated that there was a gap and s193 and s194 were not referred to in the introduced Bill.

Mr Mkalipi replied that if the Committee chose to go the public hearing route and stated that the intention was to streamline the work of the CCMA and restrict senior managers from going to the CCMA; members of the public could comment on the issue. The issue that was being discussed was not a new one and the amendment could be done but in a different section. There were many comments on this area. He did not agree that the amendments to s193 and s194 had to be sent back for public hearings. It would be necessary to go for public hearings if the issue was totally new. He agreed with the procedural concerns that the legal advisers raised. Changes to the Bill could be made as long as the changes were in keeping with what the Members of the Bill had said they would do.

Mr Motau asked that when the adopted Bill was eventually published in the Government Gazette with the changes that the public had never seen before, it was possible for the Bill to be challenged.

Mr Maserumule maintained that the legal team had to go and discuss the issue amongst themselves and return with a solution to avoid remaking the law.

The Chairperson replied that there were no serious constitutionality issues and his main worry was the process. He asked whether the sections were part of the sections that were discussed in public hearings. If they were not, then they had to go for public hearings. Mistakes could not be made in the process.

Ms Williams gave the Committee an example of the Tongoane case dealing with the Communal Land Rights Bill. The whole Bill was struck down because of the procedure. Public participation could not be discarded because it was such an important part of South Africa’s constitutional democracy. The Constitutional Court attached a lot of value to the principle and struck down a much needed Bill because of the absence of public participation. Furthermore, public participation could bring other issues to the fore that the Committee had not considered.

Mr Van der Westhuizen asked if there was political support for the amendment. There was no point for public participation if Members voted against it.

Mr Nyekemba stated that constitutionality had been dealt with but process was now the issue. What outcome did the politicians wish to see? The political principles had to be taken into account.

Mr Maserumule suggested reconciliation. Flowing from what the previous speakers had said, they had to go back to their previous principles because the issue was now a policy one.

The Chairperson then stated that the matter would be discussed in party caucus as the meeting had to move on.

Mr Nyekemba said that there were areas in Working Draft 1 that had no legal issues. There was the basis for some work to be done on the LRA Bill. The legal team had to go and reflect and then produce a draft which the Members would work on again.

Working Draft 1: Assessing flagged clauses
Clause 1
Dr Loots noted that no legal issue was identified and this was a policy issue to be decided by the Committee.

The Chairperson said Members could request further information on any issues that they did not understand.

Mr Nyekemba clarified that inasmuch as the Committee was going clause by clause they were still going to repeat the process after the A list had been prepared.

Clause 2
The Chairperson asked if the Members had any issues that needed to be flagged. No legal issues were identified.

Clause 3
No legal issues was identified but a proposed amendment could be made by increasing the 60 days in which the Minister must act to 90 days – taking into account the added responsibility that the Minister would have. This was a policy decision.

Mr Mkalipi replied that there had been concern by Members about the change to 90 days. There was a different way to effect the change by stating that the 60 days would only kick in after public comment. For example the Minister could call for public comment within 30 days and this would be the same as having 90 days.

Mr Nyekemba said that he was worried about the 90 days. If there was a collective agreement in most instances it would bind that particular industry but there would be establishments not party to the agreement hence the issue of the extension. The implications were that those establishments would try to get out of the bargaining council. He asked the Department whether this would happen.

Mr Mkalipi replied that this was a Catch 22 situation. This was a proposal in the law to make sure that parties who were not members of a bargaining council had a say in the content of the bargaining council agreement before it was published. This process was fair and in line with the Constitution. The problem was that when this was done, this was using up the time that the Minister had to publish this agreement and this is why Members were being required to look into the issue of the time. The time for comment is normally a month. The Minister was not permitted to backdate the bargaining council agreements and the issue was that bargaining councils were not giving the DOL the requirements in time so that the bargaining councils could publish them on time. In other situations the bargaining councils reached an agreement a week before the existing agreements expired. The delay was always because bargaining councils provided their agreements late and the publication process was a lengthy one. Documents had to be provided in time.

Mr Nyekemba said that according to the explanation given by the Department, the issue was bargaining councils submitting agreements late. There was therefore no need to increase from 60 days to 90 days if that was the issue. Parties hardly ever reached agreement before the expiry of the agreement. Perhaps the solution would be for the Department to try and convince the bargaining councils to reach agreement early.

Mr Maserumule asked whether there was a major difference between 60 days and 90 days.

The Chairperson said that there was a need to fix the issues with the bargaining councils but the discussion did not concern bargaining councils. He also asked to whom the bargaining councils reported.

Mr Mkalipi said that bargaining councils were private institutions but sometimes they had to report to the Department. In terms of their own operations and about when negotiations started, this was their own decision.

The Chairperson commented that justice delayed was justice denied and the delays in bargaining councils reaching agreements late would negatively affect workers. He then asked the Committee to make a decision between 90 days and 60 days after the presentation.

Mr Motau replied that this was a practical issue and both suggestions were fine.

Clause 4
No legal issue identified.

Clause 5
This was a policy decision that had to be made and there was no legal issue identified. An explanatory note was provided linking the fees that bargaining councils could charge to those of the CCMA.

Clause 6
The initial concern was supplemented by the fact that clause 8 dealt with matters related to the 1955 Act on the ballot system.

Clauses 7-12
No legal issues identified.

Clause 13
The fact that the concept in the clause spoke to the practice in the ILO was noted. No legal issues were identified.

Clause 14
No legal issues identified. This was related to the rationale allowing Parliament to intervene in issues related to essential services agreements that had financial implications.

Clause 15 & 16
No legal issues identified.

Clause 17
Adv Anthea Gordon, Parliamentary Legal Adviser, explained Working Draft 1 expressed the concern by the Members that the administrator’s fees should be a first charge. The proposal was the deletion of subsection (d). A further issue to be discussed was the fact that the administrator’s fees should not be charged against the assets of the trade union. A further addition was that the application would liquidation not be brought by the administrator but by the registrar in order to take away the abuse of prolonging administration.

Clause 18
No legal issue was identified.

Mr Van der Westhuizen commented that during the public hearings one of the submissions stated that clause 18 was not in line with the ILO standards, was this correct.

Mr Mkalipi explained that there were many ILO standards and it was impossible to assess the comment if it did not refer to a specific standard. Commentators were given an opportunity to report back and none of them did, therefore the comment was not taken into account.

Clause 19
A brief explanatory note was given on the judgement in the Northern Province Law Society case regarding the CCMA rules. No further legal issues were identified.

Clause 20
Whatever the Committee decided on clause 6, the decision would have a consequential effect on clause 20 because both clauses related to balloting.

Clauses 21 and 22
These clauses were linked and the deletion in clause 21 would affect clause 22.

Clause 23-26
No legal issues were identified.

Mr Van der Westhuizen referred to a discussion on the word ‘Director’ versus ‘Commissioner’ and whether the words were going to be exchanged one for the other.

Mr Mkalipi said that this was not an issue.

Ms Williams said ‘Director’ was more appropriate because there was certainty about the word as it had already been defined in the Act.

Mr Motau agreed.

Dr Loots noted the definition of ‘Director’ in the Act and also s118 set out the duties of the Director.

Clauses 27 and 28
These two clauses were flagged in relation to the Superior Courts Bill. The Committee had been advised to reject the clauses by the Parliamentary Legal Advisers. The Superior Courts Bill was set down for consideration. The issue they had was related to the competence of the Minister of Labour and this concern still remained because the competence was with the Minister of Justice.

Ms Williams noted that the Office of the State Law Adviser did not see anything unconstitutional with the clauses. The solution was for the Committee to consult with the Justice Portfolio Committee to avoid conflict. She agreed that the Justice Portfolio Committee was better suited to deal with such a matter.

Clause 29 & 30
No legal issues were identified.

Clause 31
 This clause was linked to clause 27 and 28 because of the phrasing in schedule 6 of the Superior Courts Bill that said that the competence was with the Minister of Justice. This competence was extended to management and administration of the courts.

Clause 32
No legal issues were identified.

Clause 33 & 34
Similar concerns as clauses 27 and 28

Clause 35
No legal issue identified except a drafting issue.

Clause 36
An explanatory note pointed out the reasoning of the court in the Frys Metal case. This was held to be in contravention with the intention of the legislature and remained a policy decision. The section merely had to be restructured to reflect the legislative intent.

Clause 37
No legal issue was identified.

Clause 38
This clause was parked because of proposed amendments the Department was going to make to s93 and 194.

Mr Mkalipi reminded the Chairperson that the flagged clauses had been identified the previous week from  clause 38 until the end of the Bill and the A list of Committee proposed amendments was now ready.

The meeting was adjourned.

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