Labour Relations Amendment Bill: proposed amendments

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Employment and Labour

20 May 2013
Chairperson: Mr M Nchabaleng (ANC)
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Meeting Summary

The proposed A-list of amendments to the Labour Relations Amendment Bill (the Bill) was tabled, and the legal advisers from the Office of the Chief State Law Adviser, the Department of Labour (DOL), and Parliament’s research and legal units, took Members through the proposals not already agreed to by the Committee, concentrating on the clauses highlighted in green and blue. Many of the amendments were technical in nature, and these were agreed to, in respect of clauses 11, 17, 26, where a typographical error in a section reference was corrected, and clause 43, where wording was switched around for clarity.

Some clauses were amended for emphasis, such as clause 23, where the words “made in the absence of any party, on good cause shown” was inserted. In clause 35, there was a proposal to use the phrase “employee in employment”, which the DOL explained was chosen to clearly illustrate that a person technically on the books of an employment agency could be argued to be “employed” although not actually deployed. The Parliamentary advisers felt that this was tautologous, but Members agreed to adopt the proposal, a well as to substitute “contract of employment” with “basis” in the same clause. A reference to previous subsections was inserted to clause 44.

The proposal was made, for clause 26, following a debate at National Economic Development and Labour Council, that the word “Director” on line 40 of page 14, be replaced with “Commission” (for Conciliation, Mediation and Arbitration). However, the DOL and Parliamentary advisers preferred retention of the term “Director” because the lines of responsibility and accountability were fully set out in the Act, and there was a possible of appointment of an Acting Director so in practice there should not be delays if responsibility to call back the parties was retained as falling upon the Director. Members agreed not to make the changes requested. Other proposals in other lines to replace “Director” with “Commission” would then fall away. In clause 26, there were changes to “at the request”, which was to be replaced with “with the consent” as the Commission essentially tried to get parties to consent. Members had no objection to this. They also consented to changes to clause 41, which added the phrase "irrespective of the number of employees who are dismissed", to ensure that the CCMA would have the ability to arbitrate certain cases. For clause 44, the DOL had suggested new wording to close loopholes in section 198A, and to ensure that all employees were covered under a new paragraph (b). The phrase “whether at the instance of the temporary employment service or the client" would be added to ensure that workers could seek redress, no matter whether a dismissal order came from the employment service or its client, and subclause (3)(b) was also clarified. Transitional arrangements were clarified, although it was noted that the Committee still had to make a final decision on time frames, and new subsections that applied to sections 198A to 198C of the Act were drafted to clarify the requirements for launching a dispute.

Members were then asked to consider alternative wording for clause 38, which the Committee had previously discussed but had concerns about. The new clause would amend sections 193 and 194 of the Act. The Parliamentary legal advisers reiterated their serious reservations on both the original and new drafts, and said that they did not believe that drawing a distinction between employees on the basis of salary levels was justifiable, and also pointed out that because this was totally new wording, it would have to be submitted to he full approval processes should the Committee agree to insert the new clause. The DOL believed that the wording could survive a constitutional challenge and said that it was not in fact precluding employees from seeking reinstatement, although they would have to provide substantive reasons why this could apply. The Parliamentary advisers criticised this as akin to imposing a reverse onus and again suggested it was not justifiable. Members did not take a decision on this clause, but agreed to reserve further discussion on it to a later meeting.


Meeting report

Labour Relations Amendment Bill: Proposed amendments
The Chairperson noted that the Labour Relations Amendment Bill (the Bill), Version B16A-2012, had been tabled, which included amendments agreed to already by the Committee.

Mr Thembinkosi Mkalipi, Chief Director, Department of Labour, noted that many of the clauses had been dealt with, apart from issues around violent strikes, labour brokers, and others, but it had been agreed that the latter should also be included into the A-list, highlighted to show the amendments not yet approved.

Ms Soraya Williams, State Law Advisor, Office of the Chief State Law Advisor, noted that the items in black font indicated amendments proposed - but not yet agreed to - by the Committee. Those in blue indicated the Department's proposals. The purple font indicated amendments that the Committee was happy with, and the green font showed amendments proposed that had not yet been deliberated upon by the Portfolio Committee.  

She noted, after conferring with Members, that the drafters would take the Committee through the new clauses only.

Clause 11
Ms Williams noted that in Clause 11 on page 7, at line 51, it was proposed that the words "and maintenance services" be inserted. This was a technical amendment, proposed by the Essential Services Committee.

Mr Mkalipi said that there were two areas for essential services. The first related to minimum service level agreements and the second to maintenance services. Maintenance services were actually the opposite of essential services, but there were certain industries in which maintenance was necessary to allow operations to continue. He cited the examples of those pumping out water from the mines, or those who were maintaining furnaces in the glass industry. The employer could apply for those sections to be regarded as maintenance services so that they could not go on strike.

The section spoke to the powers of the Essential Services Committee, who should observe and maintain and monitor minimum service level agreements, but there had not been a reference in this section to maintenance services, which was now being corrected.

Dr Barbara Loots, Research Unit, Parliament, made a technical comment. This Committee, before the last recess, had instructed the Parliamentary advisers from the Legal and Research unit to sit with their colleagues from the Office of the State Law Adviser (OCSLA) and the Department of Labour (DOL). Some of the technical changes agreed to were not included in this list, and there were some that she would speak to where the Parliamentary advisers differed in their view.

She noted, for clarity, that in line 58, it had been agreed that the word “and” should not be included, but the list “minimum services, maintenance services, ..” and others would be separated with a comma. She asked that this change be effected.

Members agreed.

Ms Williams went on to say that on page 10, in line 51, the word "conciliation" would be substituted for "mediation". This had been proposed by the Commission for Conciliation, Mediation and Arbitration (CCMA or the Commission).

Mr Mkalipi said this was a technical amendment, as the Commission felt that this was clearer. In practice, the word "conciliation" was used more often.

Members agreed to this change.

Clause 17: page 12, line 4i
Ms Williams noted that the suggestion was to substitute the word "administrator" with "a suitable person, who may be a commissioner".

Mr Mkalipi noted that this suggestion came from the CCMA, and it was again technical in nature. The CCMA wanted to ensure that it was clear that a Commissioner could be appointed. He explained that this could happen if, for instance, the registrar believed that the union officials were abusing the organisation, such as taking money for themselves, s/he could approach the Labour Court and ask for the appointment of an administrator for the union. CCMA believed that it was desirable to spell out that the person appointed may be a commissioner, to instill more confidence in the process.

The Chairperson asked what the chances were of a commissioner not being appointed, and whether, if one was not appointed, there would be a lack of confidence in the appointee.

Mr Mkalipi said that there were numerous commissioners who could be appointed, but all this was doing was suggesting that a commissioner may be appointed.

Dr Loots noted that the Parliamentary advisors had raised the point that an administrator should be a suitable person, but there was no objection to clarifying this phrase further as suggested.

Members agreed to the changes.

Clause 23
Ms Williams noted that on page 13, from line 54, there was a proposal to omit the existing (d) and to substitute it with "made in the absence of any party, on good cause shown”.

Mr Mkalipi noted that this was done for emphasis. The current wording of the section did indicate on what grounds it was possible to vary the awards of the CCMA. There was a feeling that "on good cause shown" should be included in this clause in particular. The phrase was used elsewhere in the Act also, where it carried a wider meaning that for this proposal. The intention of the parties at National Economic Development and Labour Council (Nedlac) was to confine this “good cause shown” situation to when awards were made in the absence of all parties.

Dr Loots indicated that the Parliamentary advisors were in agreement.

Members had no objections.

Clause 26
Ms Williams said the next proposal related to clause 26, on page 14, in line 40, where "director" was to be substituted with "Commission". She noted that "director" was defined, to mean the Director of the Commission, including an acting director. Previous discussions went to whether a specific person was required to be named, or the Commission as a whole.

Mr Mkalipi said that this followed a debate at Nedlac. The Union FEDUSA had felt very strongly on the point, and suggested that this was very important work, and therefore it should be clear that the responsibility rested not with an individual, but with the Commission. The DOL had made the point that the Director was responsible for the workings of the Commission. The CCMA had said that if there was reference only to the director, then it might be impossible, in practice, for the convenor in a province to do something urgently, without referring back to the director, and so from a practical point of view it was considered better to use the term “the Commission”. He noted that the sort of situation in which this clause might come into play was if there were prolonged strikes, or strikes that were affecting the public interest, where the parties may need to be called back. The argument went to whether “the Director” or “the Commission” would call the parties in.

Ms Williams referred to section 116 of the Labour Relations Act (LRA), which related to the governing body of the Commission. The Commission consisted of a chairperson and nine other members, who were appointed for three years, and the Director of the Commission. The Director was a member of the governing body, who did not have voting power at the meetings. There was no constitutional issue in relation to either word being used. The Director was clearly part of the governing body, which ran the Commission, and the OCSLA would prefer to use “Director”, but this was a personal preference.

Dr Loots said that the Parliamentary advisers had taken a certain stance on this point previously. They had reservations about using the term “Commission” because this was creating a new line of accountability. The LRA defined the word “Director” and she agreed that the “governing body” and not “the Commission” was referred to in section 116. Furthermore, section 118 stated that the Director must manage and direct the actions of the Commission, and s/he would be held responsible for that function. There may be some instances where another person may be delegated to do something, but the Director would remain accountable. The Director could, in managing the Commission, set in place structures within which the Commission would function. This position of Director could be equated to the Judge President of a court. Another judge in that court, whilst maintaining independence on his own decisions, must ensure that the Judge President was aware of what was going on. She cautioned against the change, as it might create problems in definition. The “Director” was defined and the scope of functions and the structure were clearly set out, and it was clear that the Director must report to the structure of the governing body. The Parliamentary advisers felt that this change could create confusion and interfere with the structures. She asked that the term "director" be retained.

Ms L Makhubela-Mashele (ANC) agreed with the retention of the term "director", which was more focused and did not leave space for confusion.

The Chairperson asked what would happen if the Director was not present.

Dr Loots noted that the LRA allowed already for delegation, and it was also possible to fill functions by acting appointments.

Mr S Motau (DA) agreed that the Director would have to manage the situation, and whoever was doing the job on the ground would be acting on that person’s behalf.

The Chairperson added that even delegated work would remain the responsibility of the Director, not the delegated person.

Ms WiIliams agreed, and further pointed out that the LRA, in section 119, provided a role for the Acting Director, who could be appointed by the governing body. Only a senior commissioner may be appointed as Acting Director.

Members agreed not to change the wording.

Mr Mkalipi pointed out that the next proposals set out in the attached document, which detailed further instances where “Commission” should be substituted for “Director” would then fall away, since Members did not approve of the changes requested.

Clause 26
Ms WiIliams noted that the next amendment to clause 26 was at line 44 on page 14, where it was proposed that "at the request" be substituted with "with the consent". A similar amendment was also to be made to line 45, where the phrase "if there is no request" was being substituted with "in the absence of consent".

Mr Mkalipi clarified that this request emanated from the CCMA. The Commission’s main function was to bring the parties together. Its first attempt would related to trying to get the parties to consent whether this was an issue of public interest. If this failed, and there was no consent, the Director would take over the function of making the decisions on this point.

Members had no objection to this.

Ms Williams also noted that on page 14, line 55, there was a technical correction, correcting the reference to a subsection.

Mr Mkalipi agreed that this was effectively a typographical correction.

Members agreed that this was in order

Clause 35
Ms Williams noted that there were two proposals for clause 35 on page 17, at line 47. The first was to add, after "employee", the words "in employment", and the second was to substitute the phrase "contract of employment” with the word “basis”. This would make the sentence refer then to “an employee in employment on an indefinite basis".

Mr Mkalipi noted that this change was intended to clarify the section. The intention was to emphasis the employee, not the employer. The word "basis" was intended to clarify the status of employment. He did not think that there was any major change in practice.

Dr Loots said that she had felt that the phrasing “employee in employment” was tautologous. There was no other definition that was possible for an employee, other than a person who was in employment. However, it was for the Committee to make the final decision.

Mr Motau agreed with Dr Loots that the wording was rather repetitious. However, his concern related to whether the original wording of the Bill had been changed. He sought and received confirmation that the concept of “engaged” had been replaced with the concept of “employed”.

Mr Mkalipi explained that there were many kinds of employees, including those reinstated by the CCMA. This section was essentially dealing with people who were employed by labour brokers. If a person was not actually working at a company, the labour broker could say that the person had not been dismissed by the broker, because he was still on the books of the labour broker. The new wording was trying to stress that the person referred to should be a person who was still actually “in employment” at the company, who was not dismissed by the company. Many people were reinstated, but were still not in actual employment. Whilst he agreed that under normal circumstances an employee could be assumed to be employed, this clause was attempting to deal with those who, although technically still employees (of the broker) were listed or awaiting a possible placement.

Mr Motau repeated that the initial concern of the Committee related to the word "engage". A person could be “engaged” by being put on the books, but "employed" meant that he was actually working.

Ms Williams said the point had been discussed and it was agreed that in the general context, an “employee” would be someone “in employment”. However, this clause related to a specific aspect of employment, section 186, which dealt with unfair labour practices. It was intended to emphasise that the new wording related to employees who were physically employed in doing work, not sidelined or absent from the office. The words "in employment" were added to emphasise the kind of employee contemplated.

Mr Mkalipi added that this related to fixed term contracts. There was no legal difference whether or not the words “in employment” were left out or put in, but if the emphasis would assist in understanding, he recommended that they be included.

Dr Loots said that this emphasis already appeared in section 186(b), which dealt with dismissal. Sub-section (b)(ii) referred to "an employee employed in terms of a fixed term contract of employment". It was contextualised already and this was a duplication.

The Chairperson asked if the Parliamentary advisers actually had a problems with the content.

Dr Loots said they did not; their concern was with the clumsy style.

Mr Motau confirmed that the difference was one of formulation.

The Chairperson asked if the DOL felt very strongly about the matter.

Mr Mkalipi repeated that this was about emphasis, and it could aid the understanding of readers who were not lawyers.

The Chairperson noted that the Act would apply to all people; lawyers and practitioners would also be looking at the legislation. Whilst the law was being made for the "ordinary people" it still had to make sense.

Ms Williams thought it might assist the Committee if Mr Mkalipi were to clarify what situations the Department was trying to cater for, and if other interpretations would be possible without the added phrase.

Mr Mkalipi said that the DOL was concerned about the position where employees of a labour broker were retained in the latter’s list, but were not actually working. The temporary employment agencies argued that such people were not “dismissed” because they would be employed again, when the right contract came up. The expectation of the employee was in issue, and that was that an employee should be “in employment”, not merely sitting not working with his name on a list. He said, however, that the final decision rested with the Committee.

The Chairperson did not think it was a particularly important issue.

Dr Loots noted that this was a person under temporary services, and suggested that perhaps it was not appropriate to include the wording here, but to consider if it might sit better elsewhere. In this context, she still did not see that the added phrase was needed.

Mr K Manamela (ANC) agreed that an employee could not be out of employment, but he also thought there should be provision for those who, because their names were listed, could be argued as “employed” but who were not deployed or engaged in active work. If there was no real consequence, then he wondered why the Committee was having this debate.

The Chairperson suggested that the emphasis be left in, even if it was clumsy, if it would assist anyone to understand the reference better.

Mr Motau emphasised again that as long as “engaged” had been replaced with “employed”, he could live with the wording suggested.

Ms Williams read out the whole sentence as it would be amended, under section 186 of the Act, and Dr Loots then read out how the Parliamentary advisers version would read, and repeated that this reading merely dropped the phrase "in employment".

Ms Anthea Williams, Parliamentary Legal Adviser, said that this had been discussed at length earlier. It was agreed in April that the draft of the introduced version should remain. The Parliamentary advisers had not agreed to make the changes to either "in employment" or "contract of employment".

The Chairperson noted that the matter had been discussed again now, and so the earlier decision could be reversed.

Ms Soraya Williams said that the amendments listed in green had been agreed upon. She had been acting on instructions received at the last meeting.

Members agreed with the Chairperson that the changes, as suggested by the drafters, both should be made.

Clause 41
Ms Williams noted that clause 41, on page 20, in line 28, would be amended by the insertion, after "employees", of the phrase "irrespective of the number of employees who are dismissed".

Mr Mkalipi said this was another emphasis. The Act presently made a distinction between companies employing more than ten and less than ten employees. At the moment, if an employee was intending to retrench more than a certain number of employees, the case could not go to the CCMA for conciliation, but would have to go to the Labour Court. It had been found that an employer might only wish to retrench two employees, but might give notice of retrenchment to twenty, to stop them going to the CCMA. The new wording would ensure that if an employer employed less than ten employees, no matter how many were ultimately to be retrenched, the CCMA would have the ability to arbitrate the case.

Dr Loots said that the Parliamentary advisers agreed on this point.

The Chairperson suggested that if there was agreement on the points, perhaps the clauses need not be read out.

Other Members thought it was still important to go through them, as this was of benefit to the Committee, and they wished to hear the reasons and views. At the end of the day, the Committee, and not the advisers, would be making the final decision.

Clause 43
Ms Williams read out an amendment on page 21, in line 22, to insert “the fact that” after the word “and”, and to delete the word “that” after the word ‘service. This was intended to make the sentence read more clearly, and she read it out.

Mr Mkalipi noted that the sentence had started with the word "and" and this was trying to emphasise that the fact that temporal employment services were not registered would not constitute a defence. This was essentially a grammatical correction.

Members agreed with this.

Mr Manamela took over as Acting Chairperson, as Mr Nchabaleng had to attend another meeting

Clause 44
Ms Williams noted that clause 44, on page 21, in line 44, would be amended by inserting, after "services", the phrase "as contemplated in subsection (`1)". This would then link to the temporary employment service referred to in subsection (1).

Mr Mkalipi said that this was essentially including a reference, and reminded Members that subsection (1) had talked to what temporal services were.

Members agreed with the change.

Ms Williams then noted that on page 21, from line 46, paragraph (b) would be omitted and substituted with new wording (see attached document, page 12). This was a proposal from the DOL.

Mr Mkalipi said that the DOL was trying to close loopholes in section 198A. Subsection (1) had indicated what temporal employment services were. If a person was not performing temporal services, which were defined as including certain aspects, that person would be deemed to be employed by the client directly (the company). This might be, for instance, where a person employed for more than six months, or where other conditions of “temporaral employment” did not apply. A person might also be employed on a fixed term contract in terms of section 198B (which regulated fixed term contracts or seasonal workers). If there was a dispute, the employer should not be able to say that the person was not on a fixed term contract.

Members agreed with the new paragraph (b).

Ms Williams then noted that on page 21, in line 49, after the word "client", a new phrase would be inserted "whether at the instance of the temporary employment service or the client". This referred to termination of a person who was employed by temporary employment services.

Mr Mkalipi explained that this was intended for protection of workers. He cited an example where a person might be employed, by a labour broker, to guard the business of client X, in terms of an agreement between the broker and X. If X then approached the person and asked him to stop guarding and wash cars, and the person refused, X could insist on the person being dismissed, but the broker could attempt to hide behind this by saying that the contract had been terminated not by the broker, but by X, which could prevent the employee from seeking redress. This section was therefore ensuring that no matter who was the cause of dismissal, the worker could still seek redress.

Members agreed with this amendment.

Ms Williams then noted that the next amendment was on page 21, in line 50, after (3)(b) to insert "or because the employee exercised a right in terms of this Act".

This made it clear that it would be regarded as a dismissal if actions were taken to avoid subsection (3)(b).

Members agreed with the change.

Ms Williams continued that the next amendment was on page 23, in line 8, where the phrase "as from the commencement of the LRA Amendment Act 2013” would be inserted.

Members agreed to this change.

Ms Williams noted that the next amendment was on page 23, after line 56, adding the phrase "applies to a part time employee employed before the commencement of the Labour Relations Amendment Act 2013, and comes into operation six months after the commencement of the said Act."

Mr Mkalipi noted that these changes related to transitional arrangements. The Committee had asked the drafters to come up with a formulation. He noted that the period of “six months” would depend on the decision on temporal employment services and fixed term contracts. There must be transitional arrangements to cater for innocent parties who should not find that previously legal actions were now being made illegal, and there must be a period within which to correct the situation to comply with new requirements.

Members agreed with the principle.

Ms Williams said that this would be applicable to both paragraphs (a) and (b). The time period could be sorted out at a later stage. Mr A Williams (ANC) had previously suggested that instead of naming any time period, the drafters should refer to “x months” but this would have created a problem should it have found its way into any final version, as it could have been interpreted as the Roman number for ten months.

Members agreed with this, and joked about the time periods, on which there had been some heated discussion during earlier meetings.

Ms Williams noted that on page 24, after line 19, new subsections (3) to (6) were being proposed. She read them out (see attached document).

She explained that there were general provisions applicable to sections 198A to 198C of the LRA. A party could refer the dispute, in writing, to the CCMA or the bargaining council within six months. A copy of the  referral must be served on each party. If the dispute remained unresolved after conciliation a party could refer to the Commission or the bargaining council for arbitration within 90 days. The Commission or bargaining council could also permit a party who showed good cause to refer a dispute after the relevant time limit set out in subsection (3) or (5).

Mr Mkalipi explained that the new subclauses were intended to make it clear what the requirements were for launching a dispute. A longer time period than the current 30 days that applied elsewhere was being inserted. There was, however, already precedent for periods longer than 30 days; for instance, defamation cases had to be brought within ninety days, in terms of the Employment Equity Act. This was essentially confirming that anything to do with inequality, relating to section 198A (temporal employment) and 198C (part time) employees, could be dealt with under these sections. More time was allowed because of the complexity of bringing these cases.

Mr Manamela noted that the Committee had discussed this and had asked the DOL to formulate the necessary clauses.

Mr E Nyekembe (ANC) asked if the 90 days was after conciliation, noting that matters to be finalised through arbitration had a time period of 90 days that would apply. There was still reference elsewhere to disputes that must be referred to within 30 days. He was aware that the Committee was still debating whether certain other time periods should be six months, but, for the sake of argument, if there was not agreement on that, he wondered how this would change.

Mr Manamela said that at the last meeting there was a suggestion that the time periods would be linked and that caused confusion.

Mr Mkalipi said that there were separate procedures. Presently, in an ordinary misconduct case, a person would have 30 days to launch the dispute. However, sometimes people would only realise later that there had been unfairness, and so these new clauses were allowing for a longer time period to launch the dispute. They were not requiring the case to be resolved within six months, but had six months from the time of the unfairness, to launch the case. There was a time period of 90 days that applied when referring a case to arbitration. Everything else would remain the same, and there was no need to link anything to the other periods discussed earlier. These paragraphs were dealing with how disputes that emanated from sections 198A, B and C should be handled.

Ms Anthea Williams said that sections 198A to C related to lower income earners, and they often did not know their rights at the time of the dispute, but would only become aware of them later. This enabled them still to pursue their rights.

Members had no objection to these new clauses.

Clause 38: Alternative wording
Ms Williams referred Members back to clause 38, noting that they had asked the drafters to suggest alternative wording.

Mr Mkalipi confirmed that Members had had a long discussion about senior management in the organisation, and easy processes of dismissal. The new formulation was intending to amend sections 193 and 194(1)  of the LRA, whereas the original clause had inserted something into section 193.

This amendment allowed the Minister to set up the threshold in terms of section 6(3) of the Basic Conditions of Employment Act. Senior employees could expect an amount six times the amount as prescribed by the Minister, by way of compensation. It also introduced the issues of remedy by way of  financial compensation.

Dr Loots said that she would try not to re-state the arguments that had been set out previously. However, for the same reasons as the Parliamentary advisers had been opposed to the previous amendment sought by clause 38, they were opposed also to this amendment.

She noted that the clause was essentially saying that a person who earned a certain amount would be excluded from having the same remedies as a person earning a lower amount. That was, to her mind, a very arbitrary way of deciding upon the issue. The formulation blurred the lines between operational reasons, misconduct or incapacity. Regardless of whether or not the dismissal was substantially fair, the Commissioner would allow monetary compensation, instead of reinstatement. She pointed out that everyone had a right to fair labour practices, and it was not justifiable to make a change simply because of what a person may be earning. When deciding upon reinstatement, the Court, in other cases, would look at whether the employment relationship was of such a nature that the parties could still work together, and whether there was reconciliation, or whether there was a breakdown in the relationship, so the current law did cater for these options. As the Memorandum on the Objects of the Bill stated, there were instances where people would not be able to continue working together, and the law already provided for that and accepted that people could not be forced to work together. She had concerns that this amendment infringed, without reasonable justification, on the right to fair labour practice, and reiterated that salary alone was not enough to justify making a distinction.

Dr Loots and Ms Anthea Williams therefore, as Parliamentary advisers, suggested that the Committee not adopt the amendments, but pointed out also that the new draft just presented by Mr Mkalipi was not in the Bill as tabled. If the Committee wished to include the clauses, it would have to go through the process of re-advertising and hearing comment on these clauses. She had no doubt that arguments similar to hers would be presented.  The clause would have high impact, and both legal and procedural implications would flow from adopting it.

Mr Nyekembe said that there would be limitations around some categories of employees, based on positions that they held at the particular time, and section 36 of the Constitution dealt with limitations of rights. He asked about the necessity of inserting this clause, and said that it would have to be in line with the Constitution and that any limitation must be justifiable.

Mr Motau noted that the point about a possible constitutional challenge had already been raised.

Mr Mkalipi said that it was believed that if a constitutional challenge was raised, in relation to clause 36, either in the old formulation or the one just proposed, the DOL could sustain the challenge. There was no way in which people could be prevented from applying to the Constitutional Court, but the point was whether the limitation was justifiable. This section excluded issues of transfers, which were dealt with in section 187. Employees could argue for reinstatement, although they must convince the court that there were special circumstances to justify that. Under the present law, there were limitations to when reinstatement could be ordered, which related not only to the earnings, but also to the nature of the unfairness. He drew the distinction between procedural and substantive unfairness. An employer might accuse an employee of stealing and dismiss the employee without a hearing. That was procedurally unfair, even if the CCMA also found out that the employee had been stealing – a substantive point. The CCMA was already empowered to order financial compensation for procedural unfairness. He believed that the new wording was constitutionally sound, although obviously the DOL could give no guarantee as to what the Constitutional Court may decide.

Mr Nyekembe wanted to follow up on those points, and was mindful that the current LRA drew a distinction between procedural and substantive fairness. If there was a challenge on the substantive points, then the end result would be reinstatement. If this was already in the law, he questioned why there was any need to deal with it in this clause. Mr Mkalipi had said that if dismissal was challenged, the substance of the dismissal may still stand, meaning that there would not be reinstatement, but financial compensation could still be awarded for procedural unfairness.

Mr Mkalipi explained that it really related to what was being challenged. If both the substantive and procedural aspects were challenged, and if, on substance, the employer’s claim was correct, but on procedure the employer had acted incorrectly, this could still be classed as unfair dismissal. However, if only the procedural aspect was challenged, only financial compensation would apply. The law already restricted the application of the reinstatement principle, by saying that there was no right to argue for reinstatement on the grounds of procedural unfairness. The effect of the amendment was that DOL was allowing a senior employee the right to argue for reinstatement, and he emphasised that reinstatement was actually not being removed as a right, because it did not apply in these circumstances, but the employee would have to argue for it. He also pointed out that retrenchment and transfers were excluded from this procedure.

Dr Loots agreed with the points made by Mr Nyekembe about the distinction between procedural and substantive matters. She cited the example of a company policy that said that a person must have four days to prepare for a hearing, but was given only three – that would be procedurally unfair. However, it did not affect the substance of the case, as to whether there had or had not been theft. The DL was, to her mind, making a proposal where the limitation of rights could not be justified under section 36 of the Constitution. The nature of the right affected was the right to fair labour practice. The limitations on reinstatement that currently applied – such as incompatibility of the parties – were being broadened, and there was a fear that an employer may not like a senior employee and could come up with charges to try to ensure that the employee was dismissed without being reinstated. She also noted Mr Mkalipi’s point that the employee could argue for reinstatement, but said that this was similar to a reverse onus being cast on the employee to justify the circumstances, and such reverse onuses were unfair. The mere fact that a person was a high income-earner meant that he was now required to prove why he should be allowed access to the normal remedies for unfairness. The Labour Courts had the power to order a just and equitable remedy. She added that section 36 of the Constitution noted that if there were less restrictive ways to achieve the purpose, they should be considered. In the example cited, the Court could be asked to check whether the dismissal was a smokescreen for something else, and if this was the case, it was unfair that the employee should have to “jump through hoops” to prove that the dismissal was unjustifiable. Finally, she cautioned Members that if there was a constitutional challenge on a Bill, the DOL would not be the party cited, but Parliament must justify why it had opted for certain wording. The Parliamentary Advisers were cautioning that they regarded the proposals as imposing arbitrary unfairness that was not justifiable. The remedies were intended for everyone. To exclude a person from having a remedy on the basis of earnings and procedural reasons was not justifiable. She suggested that the Committee should reject this new draft, for the same reasons as she had suggested the rejection of the previous draft in the original Bill.

Mr Nyekembe agreed that before even considering whether they wanted, in principle, to consider the new proposal, and whether it had to go through new processes, it was necessary to consider if the proposal was justifiable. The LRA said that whether the matter came before the CCMA or another tribunal, procedural and substantive issues must be considered. The Parliamentary advisers were concerned that a certain category of employee was being treated differently. He noted that the DOL had not mentioned section 38 of the Constitution. It would be up to the CCMA or the Court or bargaining council to check whether the dismissal was procedurally unfair, and if it was, then financial compensation must apply, and it would be an unjustifiable limitation of that right if certain categories of employees were excluded from applying that right.

Mr Manamela said that there were two main issues. The first related to the process that would have to be undertaken because this was a new proposal. Secondly, the Committee had previously expressed reservations because it believed that everyone should have some form of recourse. He acknowledged the points that the DOL had raised. He himself had previously suggested that perhaps there should be consideration given to a separate category of employees, but his suggestion was not based upon the income, but upon the authority. Sometimes, those executing managerial responsibility did not own the company but were mandated by shareholders. Termination of employment was often also already built into the contract. Often, CEOs of major companies would be “voted out” by the shareholders, but the question was whether protection should apply to those on a managerial level. Members would have to think carefully on these points. Mr Nyekembe’s points were crucial. He thought that the intention of imposing financial compensation for procedural disputes was born because substantive issues had to do with a break in trust.

Mr Manamela noted that the amendments to section 194 followed on from those proposed on section 193, and Mr Mkalipi confirmed that if those to section 193 were not accepted, those proposals on section 194 would fall away.

Mr Manamela asked that the whole issue be “parked” for the moment.

Discussions on process
Mr Manamela then spoke to the process on the Bill. Members would want sufficient time to prepare for the budget vote debate on the following day. It was desirable that all parties be present during the final discussions on this Bill. He asked if Members wanted to go through the whole Bill, clause by clause, at the meeting scheduled for Thursday 23 February.

Ms Williams said she would redraft the A-list before the next meeting, to reflect decisions taken this morning.

Mr Nyekembe agreed that it was desirable for all parties to be represented but thought Thursday might be too soon for this and asked the Committee Secretary to check on their availability.

Mr Motau stressed that all parties must be informed, so that they could send apologies or make alternative arrangements.

After a brief discussion on suitable dates, the Committee Secretary was asked to try to set the most suitable date for all political parties.

Mr Mkalipi questioned how the amendments upon which the Committee had not yet reached agreement would be dealt with.

Mr Manamela suggested that those would be further discussed and finalised in the clause by clause process.

Mr Mkalipi asked if the revised “A-list document” should include all documents, and Ms Soraya Williams pointed out that the A-list document at the moment had only those amendments that the Committee had proposed, but there was also a “parked” list, which not specifically included in the document presented today

Ms Anthea Williams said that the “parked” items were substantive and policy issues.

Mr Manamela noted that a list had been prepared for Members setting out what had been agreed upon, and what had not, and agreed that there were likely to be reformulations on policy. The Committee would go through the revised A list at the next meeting, and ensure that the formulation reflected what was agreed upon today. Members would also be cross-referencing to the list of matters agreed upon, and suggested that the DOL prepare a list of the “parked” matters.

Mr Mkalipi agreed that this would be done.

Dr Loots said that she would re-draw the list of clauses agreed to, and e-mail that to Members as well.

The meeting was adjourned.


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