Labour Relations Amendment Bill: deliberations on clauses requiring policy decision

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Employment and Labour

04 June 2013
Chairperson: Mr M Nchabaleng (ANC)
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Meeting Summary

Preparatory to considering and voting on the A-list of the Labour Relations Amendment Bill, the Committee went through a list prepared by the Parliamentary Legal Advisers, setting out the clauses on which decisions in principle were still to be taken. The State Law Advisers noted that they had prepared and circulated to Members the latest version of the A-list (which was not tabled at the meeting) in which all the amendments agreed to by Members at prior meetings were reflected, so that it was not necessary to discuss those clauses again. There were very few clauses in which a decision in principle was still required.

In respect of clause 5, Members confirmed that the intention was not to allow for fluctuating fees and agreed that they did not wish to make any changes. There was substantial discussion, but no agreement reached, for clause 6, which was seeking to reintroduce a provision that unions should hold ballots of their members prior to going on strike. Some ANC Members took the view that the clause was not necessary, and should thus be deleted, because nothing in this clause could take away the constitutional right to strike. One ANC Member suggested that it would be unconstitutional, as it was placing restrictions on the right to strike. COPE would be happy to see the clause retained, but with changes, because the views of all members of the union must be taken into account. Both COPE and the DA pointed out that their main concern was that union bosses should not be given the power to decide for members whether they must strike, but the decision must be taken by the workers who would be affected directly by it. The DA maintained that it was critical to retain the clause in its current form to recognise balloting when it was included in the union’s constitution. The FF+ suggested that perhaps it might be useful if the Act were to recognise unions’ right to insert requirements for ballots in their constitutions. After substantial debate, Members agreed that they could not decide on the issue and asked the drafters to indicate three options for this clause, reflecting a deletion of the clause, retention of the clause, or retention with amendment. It was also noted that the decision on clause 6 would affect the decision on clause 8(a), where similar three options would be reflected. Members did, however, agree in principle to reject clause 8(b). Clause 9 also had to do with rules of picketing, and Members agreed to the clause in principle. The majority of Members indicated that they were inclined to reject clause 13, but COPE did not agree. ANC Members indicated that they were intending to propose a rejection of clause 20. All Members had previously recommended the rejection of clauses 27 and 28, which overlapped with the Superior Courts Bill. They had also previously indicated that they would be prepared to accept only (b) of clause 31, and to reject clauses 34 and 38. Clauses 43 and 44 were discussed together and sparked heated debate. During the debate, Members were using the terms “labour broking” and “temporary employment services” interchangeably, but also discussed whether “temporary employment services” would, as a result of the ANC’s proposals, fall away altogether, or morph into placement agencies. The discussion had to do with the time periods mentioned in the clause; originally it was suggested that an employee who was hired by a temporary employment service (TES) could be regarded as an employee of the TES, rather than the TES client, for six months, but would thereafter have to be regarded as having an employment relationship with the client. There had already been substantial discussion on an appropriate time frame and the ANC now proposed that the term “six months” be changed to “zero months” so that in effect the employee would not have an employment relationship with the TES. The DA strongly disagreed, believed that to do this would amount to banning labour broking, which would be unconstitutional, and urged that in the current employment climate, the TES provided most important services in assisting people to get employment, and anything that promoted employment should be encouraged. The ANC indicated that its main concern was that those employed in such a way by a TES ended up being paid less because they were required to share wages with the TES, and the DA countered that this was then a matter for the labour inspectors, but it was still not appropriate to try to do away with the service. One ANC Member intimated that the DA was “suggesting that slavery be brought back” and the DA Member took the strongest exception to this. The ANC still maintained that there would be a place for placement work, and recognised the need for temporary employment. The FF+ suggested that perhaps higher-level debate was needed to try to find the best path to formalise the economy, yet maintain fluidity and decent work, and cautioned that over-regulations and red-tape would drive many businesses, particularly foreign-owned ones, to set up in other countries in preference to South Africa. It was eventually decided that Members must reconsider what they wanted, in principle, for these clauses. The Parliamentary drafters indicated that if Members were to decide to delete the time periods, or express them as “zero months” this would require a substantial re-working of the Bill and checks for consistency, which could take some time. It was agreed that further debate on the Bill would stand over until the following week.

Meeting report

Labour Relations Amendment Bill: Summary by Parliamentary Legal Advisers
Dr Barbara Loots, Parliamentary Legal Adviser, noted that she had forwarded to Members a colour-coded document that indicated where policy decisions were required, or where approval had been reached, in principle, on the clauses in the Labour Relations Amendment Bill (the Bill). She would take Members through that document.

New clause
Dr Loots noted that at the beginning of the process, the Committee asked for permission to insert the correct reference to section 23 of the Constitution, in section 1 of the Labour Relations Act (the LRA). This had been  captured in the A-List.

Clause 1
Dr Loots indicated that in Clause 1, subsection 8D was deleted, because it was erroneously included in the first place (it had in fact merely been drafted as an alternative). The Department had presented a transitional amendment in the meeting of 23 April 2013, in relation to section 21 of the LRA.

Members agreed that they were happy with the wording.

Mr S Motau (DA) noted that there were still some outstanding issues from the A-list received from the Office of the Chief State Law Adviser. He had thought that the Committee would have been provided with a cleaned-up document.

Ms Suraya Williams, State Law Adviser, Office of the Chief State Law Adviser, OCSLA, noted that the A list (which had been circulated to Members, but was not tabled at this meeting) now contained all amendments proposed by the Committee during the past discussions. The Parliamentary Law Advisers were now taking Members through some outstanding issues, and it was necessary to deal with those first, and then they could be incorporated into the A list so that the Committee could vote, clause by clause, on the final A-list

Advocate Anthea Gordon, Parliamentary Legal Adviser, noted that the A list could not be finalised until the Committee members had agreed on the “parked” issues, which were policy matters.

The Chairperson noted that there were very few issues that were parked. He thought that perhaps the Committee could move clause by clause, and where there was a parked issue, then the Committee could pause and deal with the matter then.

Mr Motau suggested that all administrative matters must be sorted out, so that Members knew exactly what they were voting on.

The Chairperson said that this did not really change the issues.

Members continued to briefly discuss how they thought the process should unfold.

Ms Loots suggested that she continue in the meantime, with the process outlined at the beginning, as her document would provide a basis for the “cleaned version” of the Bill, on which Members would vote

Members confirmed they were happy with what was reflected for clause 1.

Clause 2
There were no changes to clause 2.
The Committee confirmed its policy decision to change the words “engaged” for “employed”.

Clauses 3 and 4
These clauses had no changes on which the Committee must decide at this meeting.

Clause 5
Dr Loots noted that both clauses 5 and 6 needed policy decisions. Clause 5 dealt with the bargaining council issues regarding levies and fees, and the Committee had expressed some doubt whether this was necessary.

Mr E Nyekemba (ANC) said that the intention was not to have fluctuating fees.

This view was supported by Mr S Motau (DA) and Mr D Kganare (COPE).

Dr Loots confirmed that there would then be no changes to clause 5.

Clause 6
Dr Loots noted that the Committee then needed to decide whether it was desirable to have ballots reintroduced, in respect of clause 6.

Mr D Kganare (COPE) said he would be happy with the clause, if, in line 36, there was deletion of the words “who voted in that election”

Mr K Manamela (ANC) thought it would make little difference whether or not there was a ballot process. The right to strike was protected both in the LRA and the Constitution. The introduction of a ballot was inconsequential as long as the right was covered elsewhere, so he did not think there was a need for this provision at all.

The Chairperson noted that some unions would have balloting prescribed in their internal processes.

Mr Motau questioned Mr Manamela's use of the word “inconsequential” and pointed out that there would be consequences flowing from whether there was a ballot or not, prior to the strike.

Mr Nyekemba said that the main issue was not in the current LRA or in the Bill drafted by the Department, but had been a new proposal as a result of engagements at the National Economic Development and Labour Council (Nedlac). There were trade unions who had their own clauses in their founding documents or constitutions, to the effect that if the union decided to embark on a strike, it would ballot its own members. It was up to the parties who were engaging on matters to decide whether to strike, and on what terms. That was all that needed to be reflected. In the past, there was a clause on balloting, which was intended to assist trade unions with their procedures.

Mr Kganare said that the issue was not whether the parties agreed on a ballot on not. His main concern was the current wording, which  suggested that some who may not have voted in the election could sway the majority vote.

Mr Manamela said that the essence was that the outcome of the balloting process should not be used to affect the ability to strike. The fact that it may or may not have been the subject of agreement at Nedlac did not take away the right of this Committee to consider the point. There were already agreements between specific unions and employers to allow for balloting. If any parties wished to include, as part of their recognition agreements, the issue of balloting, or if the union's constitution required balloting prior to a strike, then that should be recognised. He still did not believe there was any necessity for the clause.

Mr Motau said that the clause was originally in the LRA, and then was taken out and when this happened it had led to a proliferation of strikes. That was one of the reasons it had been brought back. Where a majority decision had been taken, through a constitutional democratic ballot at the union, then democratic processes would have to follow. He believed it was critical that the clause be retained.

Adv A Alberts (FF+) said it was necessary to ask why Nedlac had put this back on the table. It could be for the reasons that Mr Motau had suggested.

Mr A Williams (ANC) said it was important to protect workers' right to strike. The DA had suggested that since that was removed, wildcat strikes had resulted. However, the nature of wildcat strikes did not depend on this type of clause. Once permission had been given to strike, the union had no need for a ballot. This was originally intended to stop strikes on technical grounds. He felt that this was unconstitutional and that the clause should be removed.

Mr Nyekemba now understood that Mr Motau was essentially concerned with unprotected strikes. However, the LRA already had a way to deal with them. This clause was contemplating strikes that were protected, where certain set procedures had been followed. The issue that would lead to a strike was a matter of interest, not right, and would happen when parties had reached a deadlock in the bargaining processes. If mediation had not solved the issues, the union members would proceed to vote. However, he repeated that  section 64 of the LRA dealt with the issues, and there was no need for a ballot to be reflected in the LRA.

The Chairperson asked if he was suggesting that ballots would lead to wildcat strikes, when people felt that they did not have the numbers needed to do as they would prefer. Wildcat strikes and lockouts were linked.

Mr Thembinkosi Mkalipi, Chief Director, Department of Labour, clarified that the provision was put in the Bill as published by the Department of Labour (DoL or the Department). It had been supported by business, but not by labour, and therefore Nedlac had failed to reach a consensus on this point.

Mr A van der Westhuizen (DA) said that much had been said about the right to strike. However, it was equally important to have regard to a person’s right to work and earn a living to support the family. Basically, he said that the principle was autocracy versus the majority. If the majority of workers did not want to go on strike, they should be allowed to express that through a ballot. They should also be allowed to take a stance if they wanted to show the employer that they would rather strike than tolerate what the employer was doing. He said that essentially the DA’s concerns were around whether those affected directly by the strike should be allowed to express themselves, or whether it should be left to the union bosses ( (many of whom may not be affected by the strike) to decide whether there should be a strike. He welcomed the reintroduction of the clause.

Mr van der Westhuizen further expressed agreement with what Mr Kganare’s proposal was trying to achieve. Sometimes a ballot may not be well advertised, or there was intimidation, or emotions ran high. Many unions had inflated membership numbers on paper. It could well be that Nedlac had recognised this point. By including the majority of those who had participated, it would be easier to audit who had actually voted in the ballot. He understood the sentiment but thought that the current wording was the best for the moment.

Mr Kganare said that the issue was whether the process of going to strike would involve other people. The problem of balloting, according to some Members, was that it created technical challenges. When the balloting was required, it was possible to mobilise a lot of workers to vote for a strike, and many may still opt for “no work, no pay”. However, he had a problem with the union committee deciding on the point, rather than the workers affected, because this laid the way open to intimidation. A decision could be taken by the executive committee of the union, which may look democratic. However, he would prefer that the workers who were actually to go on strike should decide the point. He agreed that the union committee may consist entirely of people who were not working on the site where the strike was planned and therefore would not be affected by it. If there were fears about the balloting process, then those should be challenged directly. The right of workers to decide whether to strike must be well defended.

Adv Alberts agreed with previous speakers. A union was an association of workers, and should be about the workers, not managers. When something as significant as a strike was to take place, the workers must have a say. This was not only required of a democratic process, but would be good corporate governance, since the union must have sufficient mandate before embarking on a strike. He wanted Mr Manamela to explain what were the fears or unintended consequences around holding a ballot.

Mr Williams said that this clause was actually restricting workers. In the past, in the apartheid era, it was used by the employers who would claim that the strikes were illegal because there was no ballot, and therefore it would effectively prevent workers from going on strike. He feared that it would be used in this way again, and must be removed.

Mr Manamela answered Adv Alberts that there was no direct threat but his point was rather that there was no need for the provision. Whether or not there was balloting, and whether the majority agreed on a strike, the constitutional right to strike still prevailed. It may be a minority of workers who went on strike, and that was why he believed the ballot was inconsequential. The process would be that the CCMA would be approached, and even if there was a ballot, the minority still had the right to strike. The second point was that it was only workers who could break a strike. If the executive decided to strike, but only a handful of workers went out on strike, it would be immaterial for workers to continue on that strike. The decision to strike was not taken lightly, and the decision would usually be taken at a general meeting of all affected workers. That did not take away the function of the trade unions to mobilise their workers whether to strike. He said that the position of workers who went to work despite the strike, and were targeted for doing so, was covered elsewhere. The essence of his argument was that because the provision had no consequence, it was not necessary to have it at all.  He suggested that during negotiations on recognition agreements, both the union and employer could say that they wanted balloting. However, he did not agree that the clause should be included in the legislation because it had no consequences. 

Mr Nyekemba agreed with Mr Manamela in relation to the process. Adv Alberts had made the point correctly that the unions should be driven by the workers. No organisational issue should be put in the legislation. If the certificate said that the workers could strike, when a dispute could not be resolved, that was a matter of right and would go to arbitration. The ballot had nothing to do with that process. The action by the workers would be legal, as it was authorised by the law.

Mr Motau agreed with Mr Kganare. However, he urged strongly that the responsibility of legislators was to ensure that democracy was exercised across all spheres, and if it did not do so, then Members would be betraying the Constitution.

Mr Kganare said that the issue of legitimising a strike was fundamental. A strike may well be legal but might not necessarily be supported by the union members. He cited the instance of the recent teachers' strikes. Mr Manamela was correct in that if 30% decided to go on strike, they should be allowed to do so, but they should not be able to force the other 70% to go on strike because it was legal. The ballot would determine the legitimacy of the strike. This clause did give employers the right to interdict a strike if the ballot was done properly. However, it did not say that only after the ballot would be strike be legitimate. The question was how democratic the organisation was.

The Chairperson noted that often those at the lower pay scales may have nothing to lose by going on strike because they were in any event not making a living wage. He also thought that it would make no difference whether or not a ballot was held. He suggested that the idea of the ballot be dropped.

Mr Kganare asked for it to be placed on record that he did not support dropping the clause.

Adv Alberts asked if the legal advisers could give an opinion what the effect of the clause would be on the right to strike, whether or not a ballot was held.

Mr Nyekemba said that the Committee had to take a decision on the policy, and disputed that any point would be served by the legal advisers giving an opinion. He cautioned that the Committee should be careful of giving rights to workers who must belong to a trade union, who must then seek registration. He did not understand what “democracy” his colleagues were speaking of. Any decision of the union would be taken in terms of the union's own constitution. The examples that Mr Kganare had raised presumably referred to the South African Democratic Teachers Union (SADTU) strike. A trade union would ballot its members in terms of its own constitution. The issue of ballots could not be tied in to principles of democracy. The Constitution allowed for the right to strike, and section 64 of the LRA put details to what the Constitution was saying.

Mr Mkalipi said that the legislation did not take way the constitutional right to strike. What it would, however, do was to take away some protection that was being offered by the LRA. The Act currently said that provided the proper procedures were followed, any workers striking would be protected. This proposal was introducing another step into that process, so that a dispute must be declared, the parties must go to the Commission for Conciliation, Mediation and Arbitration (CCMA), who would provide a certificate, and then 48 hours notice must be given. This clause was, in addition, saying that if the ballot was provided for but was not done, then there was a risk that the strike would not be protected.

Mr Motau said that every organisation had its own constitution, and all of them had to abide by the laws of the country also. This Bill was trying to provide a framework, and the DA was trying to ensure that democratic principles were adhered to. It was important to learn from history.

Mr Williams said that fundamentally, this Committee must be looking at what was being protected. If the ballot system was being reintroduced, it was inserting another hurdle before workers had the right to go on a protected strike. He believed that it could be challenged as being contrary to the Constitution, and as removing workers' rights to a protected strike.

Mr Kganare countered that no rights were being taken away. The workers on the shop floor must have the right to be heard. If negotiators declared a dispute and decided not to reach agreement, but to strike, this was not enough as the feelings of workers themselves should be tested. A ballot was not taking away the right to strike. If 80% of the workers said they wanted to strike, that would be legitimate. However, if 80% did not want to go on strike, they should be allowed to make that decision. He believed this was a fundamental point.

Adv Alberts suggested that the answer might lie with the unions. If the unions' constitution required a decision like this to be put to a poll, then the law would support that. The law should support unions who did allow for democracy. That might be a mid-line to follow.

Mr Nyekemba noted that there were various arguments advanced. However, he reiterated that if where a right was provided, nobody should have to fulfil certain conditions before that right would apply. The principal LRA set out the right to a protected strike. However, he still had a problem with requiring that all the organisational requirements should be exhausted. No negotiator would ever be able to conduct the negotiations without feedback and mandates from the union members. The negotiator would have to report back to members when the dispute was not resolved. There would have to be a notice in writing to the employer of embarking on strike action. The LRA itself did not currently require the unions to ballot and he believed that this clause should not be put into the legislation to force unions to act in a certain way.

He requested a brief caucus.

On resumption, Mr Manamela summarised that it was clear from the discussions that the parties still differed. He suggested that for the moment, the clause remain as stated in the Bill, but the parties could reconsider their position and vote on it. The ANC still maintained that it was not necessary.

Dr Loots asked how the version of the Bill that would be voted upon would be expressed. She suggested that three options be set out; one to reject the clause, one to accept it, with Mr Kganare’s amendment, and one to retain the clause in its current form.

Mr Manamela summarised that the DA wanted the clause to be accepted as it stood, and COPE was suggesting that it be amended but retained. The ANC rejected the clause altogether. The FF+ seemed to prefer an emphasis on the democratic principles of the trade unions, so that only those with democratic practices could be recognised as being able to take the decision whether to strike.

Adv Alberts clarified that the LRA should sanction that if the union's constitution required a poll, then that must be recognised as another hurdle. This should be specifically written into the Act.

Adv Gordon noted that section 67(7) already provided for this in the LRA.

The Committee agreed that the three options be reflected, as suggested by Dr Loots, and that the Committee would vote later which it wanted

Clause 7
Adv Gordon noted that the Committee had approved the clause in principle, although there were some consequential changes.

Clause 8
Mr Manamela said that the ANC view on this clause was that the provision was not needed. If, during a strike, there were disruptions, there was already provision that those contravening the Gatherings legislation could be held criminally liable, and already there were precedents of actions taken by City of Cape Town.

Mr van der Westhuizen suggested that the decisions on clauses 6 and 8 were linked, and he thought that clarity was first needed on clause 6.

Adv Gordon agreed, and said that clause 8 was essentially a consequential amendment, so that on the A-list it would also be noted that the three options applied to both clauses 6 and 8.

The Chairperson noted that some of those arrested in the past as a result of strike action were charged under the Criminal Procedure Act.

Mr Mkalipi agreed that the two clauses, 6 and 8, were linked. However, he drew a distinction between (a) and (b) and pointed out that the picketing issue was essentially covered in (b).

Mr Kganare agreed with the ANC viewpoint only in regard to (b), relating to picketing. However, he agreed that the three options must be set out for (a).

Mr Nyekemba asked what exactly was to be amended and asked for clarity on the reasons for the amendment to section 69.

Mr Mkalipi responded that the current legislation, in section 67(2), gave protection for workers being sued for breach of contract, because of their involvement in a strike. This new proposal was adding in an exception to the protection, if there was a material breach of picketing rules established under section 69.

Members agreed to reject clause 8(b), and to link the decision on clause 8(a) with the decision on clause 6.

Clause 9
Adv Gordon noted that the Committee still had to make a policy decision on clause 9.

Mr Mkalipi explained that this clause also related to picketing rules. The Constitution guaranteed the right to strike and the LRA took that further. However, there had been a complaint that workers organised by SACAWU and other trade unions in the retail sector had difficulty in exercising their right to strike and picket. They might, for instance, have a dispute with Shoprite, based in a mall, and be able to picket within 100 metres of Shoprite’s premises. However, that might bring them, when picketing, within 20 metres of Pick N Pay’s premises in the same mall, and affect that store’s ability to do business. The rules for picketing prescribed distances and conduct. This amendment was saying that even third parties, who were not involved in the strike (such as Pick N Pay) could go to the CCMA, as an interested party to give input into the picketing rules for that strike. If they failed to make input, the picketing rules would be deemed to affect them also.

Mr Motau believed it was important for third parties to be involved in the decision making.

Parties agreed in principle to clause 9.

Clause 10
No changes were proposed, but there were proposals from the Essential Services Committee, which had been accepted at a previous meeting and incorporated into the latest version of the A-list.

Clauses 11 to 16
Adv Gordon said that these were no longer reflected as requiring decisions, because decisions were taken on 21 May.

Clause 12
Members indicated their agreement with clauses 12.

Clause 13
Mr Nyekembe said that in relation to clause 13, there was a need to understand what “essential services” were. The current situation in terms of the LRA was acceptable. However, the ANC did not agree on inclusion of clause 13. The LRA made reference to situations where operations were regarded as “essential service”, and what would happen if workers in this sector became involved in industrial action. However, clause 13 did not, in his view, reflect the same urgency around “essential services” and he questioned the need for it.

The majority of Members noted that they would suggest rejecting clause 13.

Mr Kganare interjected that he did not agree on that point, and stressed that different parties had different views.

Clause 14
Mr Kganare moved that clause 14 should remain,

Other parties did not comment.

Clauses 15 and 16
The Committee agreed upon these clauses, in principle.

Clause 17
Adv Gordon noted that this clause related to the appointment of the administrator. There were amendments made by the Committee at a previous meeting, which were already captured in the A-list and there was no other outstanding issue. Members would vote on the A-list at a later stage.

Mr Kganare agreed with what Adv Gordon had said and proposed the adoption of clause 17.

Other Members had no objections.

Clauses 18 and 19
Members agreed in principle with the clauses.

Clause 20
The ANC Members indicated they wished to reject the clause.

Clause 21, linked with clause 22
The Chairperson noted that there would be a consequential deletion from the principal LRA if clause 22 was accepted.

Mr Kganare thought that the Committee had agreed on this point. The Department had presented a transitional amendment on 23 April 2013.

Clause 23
Members were in agreement with this clause.

Clause 24
It was noted that the Department had presented a traditional amendment on 23 April 2013, and Members were in agreement with it.

Clause 25
Members were in agreement with this clause, in principle.

Clause 26
Mr van der Westhuizen thought it necessary to state, for the record, what was agreed to in respect of this clause.

Adv Gordon explained that the yellow markings reflected what had been captured in the A-list. The Committee had rejected the proposal to substitute “director” with “commission”.

Clauses 27 and 28
The Members had agreed to reject these clauses because they overlapped with the Superior Courts Bill.

Clauses 29 and 30
The Committee agreed to these clauses, in principle

Clause 31
It was noted that the Committee had already agreed to approve (b) but reject the remainder of the clause.

Clauses 32 and 33
It was noted that, in principle, the Committee approved clauses 32 and 33.

Clause 34
The Committee had already agreed to reject this clause.

Clauses 35, 36, 37
The Committee had no problem in principle with these clauses.

Clause 38
The Committee had rejected the clause in principle, unanimously

Clauses 39 and 40
The Committee had already indicated that it agreed with these clauses.

Clause 41
It was noted that the Department had proposed additional wording, for clarity, which had been agreed to at the last meeting.

Clause 42
No changes had been proposed and the Committee had agreed to this clause, in principle.

Clauses 43 and 44
Mr Manamela proposed that clauses 43 and 44 be dealt with together. He noted that the principles had been agreed upon, but there was a decision needed on the time period. Previously, Members had considered a number of different proposals, and it had been decided at a prior meeting that the Committee would now have to decide what the period referred to should be.

Mr Mkalipi said that the last discussions by the Committee on this point related to clause 44, which spoke to a period of six months. He reminded Members that this clause essentially had to do with labour broking, and the main discussions had been around whether it should be allowed, and whether an employee should be allowed to be regarded as an employee of the labour broker, for a certain period (six months had been suggested), rather than of the client of the broker, the employer.

Mr Kganare asked if the Members were speaking to section 44(a). He thought there was no disagreement on clauses 42 and 43.

Mr Manamela said that the Members had agreed on all other provisions, in principle, of both clauses 43 and 44. However, the transitional period of months referred to in clause 43 would have consequences on clause 44(a).

Adv Gordon recalled that there had been reference made to temporary employees, who were employed for a period not exceeding six months. Whatever that period was to be would have a knock-on effect on clause 43, and the last part of clause 44. It referred to people who were earning below the threshold. If the Committee were to decide that the temporary work should not be delimited or defined by reference to a time period, then this would necessitate changes to  other periods of time mentioned in the Bill.

Mr Nyekemba said that the ANC had suggested that in fact no time period would be reflected, or it would be stated as “zero months”. He reminded Members that this amendment was saying that if a temporary employment service (TES) placed a job-seeker (the employee) on its files, that employee could only be regarded as the employee of the TES for six months, after which he would be regarded as the employee of the TES client (the employer). It was important that these time frames be put into their proper context. A “zero provision” would note that all that the TES would do would be to place the employee, but once that was done, there would be no employment relationship between TES and employee, because that relationship would be held between employee and new firm.  depending on how this would be crafted, no time period would be reflected. This amendment said that a temporary employment service placed people on its files, and there was no time frame to say how long the temporary-placement people would be employees of the service, or of the client. The proposed amendment said that if a labour broker placed an employee, he would have to be actually placed for six months, and thereafter the employment by the labour broker would cease. It was important that the time frames be placed in context. The LRA was silent on the issue at the moment. The “zero” provision would say that there was nothing wrong with placing the employee, but after doing that, TES would not have any employment relationship with the employee, but that relationship would be only between employee and employer.

Mr Kganare said it was necessary to understand that the “zero” provision being spoken of meant that nobody placed at any job through a TES firm would have any employment relationship with the TES or labour broker.

Mr Nyekemba agreed that this was correct.

Mr Motau said the interpretation was correct but he felt that it would be unconstitutional, because this would essentially be banning labour broking, and that was contrary to the right of labour brokers to engage in their chosen commercial economic activity.

Mr van der Westhuizen said that this was a serious matter. One of the challenges in South Africa was the high levels of unemployment. Labour broking had been proven to fill a gap in the labour market. Unfortunately it had been abused by some employers, which was why it had to be brought in the realm of the law. Labour broking was necessary because many employers, particularly in certain sectors, needed permanent employees but did not want to administer employment contracts with conditions, disciplinary processes and so forth. If the Committee went the route of banning labour broking, he cautioned that impact assessments had already shown that there would be huge job losses. He urged that the constitutional right of individuals to work must be considered. The country clearly needed to enhance employment but if there were no labour brokers, South Africans would find it harder to get employment. In relation to the sectors, he noted that a foreign company wanting to shoot a film in South Africa would clearly need a number of temporary employees. However, that company would no doubt be put off the prospect of shooting the film in South Africa if it had to employ those people itself, registering them for Unemployment Insurance, Compensation Fund and all the other administrative hurdles, and would be inclined rather to move the project to another country that did allow labour broking, and did allow the TES to offer temporary employees. He felt that following the route suggested by the ANC would be “playing with fire” and seriously asked that Members must put the interests of the country and of the unemployed first, and consider national interests above party interests.

Mr Kganare suggested that he would be happy to see a period of “six months” mentioned. If the position was still needed after six months, then the employee must be employed full time by the employer. If, as the ANC had suggested, “zero months” be used, it would be very difficult to assess whether the post was still needed. He urged that the Committee should not try to stop temporary employment; it was needed, by both employee and employer. An employer who needed staff for five days only should be able to hire someone for that period. He believed that the position of TES should remain, but also suggested that an employee who was “temporarily” employed in one post for six months should be regarded from then on as permanently employed, to stop any abuse.

The Chairperson asked if Members had taken into account the rights of workers in that system, particularly access to medical aid and other benefits, in addition to salary.

Mr Motau aligned himself with Mr Kganare’s views. He agreed that this was a very serious matter that concerned the people of South Africa. Every effort must be made to try to increase employment. The Committee should not be attempting to remove anything that would help people to get jobs. He made a personal and strong appeal to Members to do the right thing. There were over seven million South Africans without jobs, and he did not want to deny a single one the opportunity to get a job through labour brokers.

Mr Williams said that no Members were taking this lightly. Section 198A said the temporary employment services covered those earning below the threshold. These people would usually be those in the lower income groups, with relatively low skills, and they would be the most vulnerable and exploited sector of the working population. If a period of six months was inserted, as requested by COPE and the DA, then for those six months he believed that the already-exploited workers would be paid different wages from other people doing the same work – because the employer was the labour broker. It was not possible to regulate exploitation of workers. The position of a zero month period would however stop the practice. He heard the concerns that jobs may be lost, but asked if the DA was suggesting that slavery be brought back and these vulnerable workers be exploited still further.

Mr Motau interjected sharply to ask Mr Williams “not to talk rubbish”. This was not what he had said, and he was most disturbed to hear Mr Williams ascribing these sentiments to him.

The Chairperson said that he did not think Mr Williams’ comment was directed against Mr Motau.

Mr Motau again took the strongest exception to the statements. He would not put up with any suggestion that he was condoning bad labour practices or suggesting returns to slavery.

Ms L Makhubele Mashele (ANC) appealed to all Members not to disrupt the meeting, and suggested that the Chairperson should ask any Member who was so heated perhaps to leave the room until he had calmed down, then return. This meeting could not be held to ransom because of highly emotive outbursts.

The Chairperson appealed to all Members to avoid emotional outbursts.

Mr Williams said that fundamentally the ANC did not want to see a situation where any job – no matter how much exploitation was taking place – was regarded as better than no job. The only people affected if the position was changed to read “zero months” were the labour brokers. Many companies used labour brokers because it was easier and they could thus avoid having to deal with HR issues. He said that even if the legislation was changed to read “zero months” the jobs would still exist to be filled. However, the employer, instead of taking workers from the labour brokers, would employ them directly. Labour brokers would become placement agencies – similar to the way institutions like Kelly Girl operated – and would fall out of the picture once the employee was placed. He said that he wanted to have no part in legislating for exploitation of workers.

Mr Nyekemba said that all Members were serious on this matter, irrespective of any differing positions that they may hold. These meetings were intended for different mindsets to be expressed and for engagement in order to reach a conclusion. In his view, the main issue was whether it was correct that an employee could, in effect, have two employers – broker and employer. Whether or not there was work to be had was not a point that needed to be taken into account at this stage. He noted that both Mr Kganare and Mr van der Westhuizen had made some critical points, and the example of foreign firms wanting to operate in South Africa was important. He fully agreed that they were likely to need assistance in employing the right people. He wanted to explain that the “zero months” meant that the labour brokers could still be approached, with the request that they source the right skills for the foreign firm, and they would charge a fee for placing the employees. However, there would not be an employment relationship between labour broker and employee. He hastened to add that he was not suggesting that a labour broker would not even be able to have an employment relationship with someone such as its own receptionist, clearly it would be able to do this for its own genuine employees within the labour broking firm. Labour brokers would not cease to exist. However, how they operated their business would change.

He added that whether the terms “temporary work” or “fixed term contracts” were used, clearly the different sections spoke to each other. There would not be a middle man for a “fixed term” contract, but there would be one for casual employment. The work contemplated by section 198B of the LRA was work of a temporary nature. Again, he reiterated that there was no question but that labour brokers would continue to exist, but the question was rather how they would operate.

The Chairperson agreed that this was his understanding also. This input was not suggesting that labour brokers be banned. It was in the nature of work that sometimes shorter periods of work would be required. His main worry had been the huge disparities in salary for people from the same places, with the same qualifications, doing the same work, depending on whether they were employed by the employer full time, or employed by a labour broker, with whom the employees were required to share their pay. The ANC preferred to see labour brokers operating like employment agencies, and receive a once-off fee for placing the employee.

Adv Alberts suggested that the Committee must find a way between formalisation of the economy and keeping a fluid economy going. He was concerned – and this had been repeatedly stressed also by others – that government was imposing too much red tape, and the Business Licensing Bill would impose even more onerous obligations on businesses. This could well drive potential employers away to seek other countries where they could operate more easily. Whatever route was chosen to improve employment, it must work. There must be good jobs, and the country must look after its residents and particularly those who were not employed, to help them enter the market place. He was not sure whether further research was available to guide the Committee. He was worried that the country was falling into the trap of “us and them” and thought that a middle road must be sought, that would allow for fluidity in the economy, and provide a safety net to ensure that people could not be so easily exploited and fired.

Mr Kganare noted that Mr Williams had made a statement to the effect that the DA was suggesting that slavery return, and he fully understood why Mr Motau had been so upset. This was a public meeting, and he was disappointed that people would be branded as having suggested a return to slavery when they disagreed. He made the point that Mr Williams needed to read Karl Marx more carefully; all workers in a capitalist society were exploited, but the question was what level of exploitation would be tolerated. This legislation was essentially talking of temporary labour services. There were clauses that stated that all employees – temporary or permanent - must be treated in the same way. Temporary employment services placed people in employment, and they must be treated the same as others. It was incorrect for the ANC to create the impression that other parties were suggesting they be treated in a lesser manner.

He said that the Department's wording and proposal was a real “middle road”. It said that if an employee was placed by a TES, and worked in that post for six months, the employee would have to be permanently employed by the employer if the vacancy still existed after that six months period. Also, he made the point that if a person was employed for a few days here, a few days there, and weeks elsewhere, that person should have the right to Unemployment Insurance benefits. If the TES placed the person at different places from time to time, the employee should be able to claim these benefits through the TES.  He agreed that an employee must have access to protection and benefits.

Mr Motau said that the reason he had “lost my cool” was that he was careful to respect and treat everybody decently, and took it very personally if his views were distorted by others, and aspersions case on him. He reiterated that this Bill was concerned with very important issues. In relation to labour brokers, he said that if there were concerns about the way they had operated, the correct approach was not to ban them. Crimes were committed every day in South Africa by people using knives, yet knives were not banned. He agreed that some unscrupulous labour brokers would try to cut corners, but the correct approach was to use the labour inspectors effectively. Nobody – least of all a black person like himself – would want to see anyone being exploited. It was important to understand that the Bill was trying to give every South African the opportunity to earn money and self respect. He appealed for rationality when passing the legislation.

Mr van der Westhuizen believed it was a fallacy for the ANC to state that it was not effectively banning labour brokers, by changing the time period to “zero” months. It was important to make the correct distinction between placement services, and TES, and he believed that the zero months would result in TES no longer operating. There were various forces at work in the economy and at best, this Committee could only try to guide them. South Africa was part of a global economy and could no longer be out of step.  Those in power now seemed to be convinced they were right whilst everyone else was out of step.

He made the point that temporary employment opportunities were a sign and growing reality of the modern economy. Employers wanted employees, often for the short term. He noted the references to “slavery” and wanted to point out that a slave was someone forced to do something against his or her will. Nobody was forcing a person to put his name on the labour brokers’ lists, even if this  might not have been their first option, had the economy been moving faster. He knew of many very highly qualified people employed through labour brokers, so it was not limited to lower-paid employees. Specialist knowledge, in particular, was often needed for a short time. The film industry and event management were both prime examples of those with short-term needs. An entrepreneur could certainly advertise for the necessary staff itself, but he reiterated that if there was too much red tape, that entrepreneur would be likely to opt for operating in another country with less red tape. The implications of this needed to be carefully thought through. It was a choice between unemployment and employment, and South Africa was already being warned about further job losses. That was what prompted the need to find a middle ground that would not lead to job losses, and would bring back what a job service was about. This country could not afford to push up unemployment levels, particularly since it lacked supportive networks for the unemployed. If the proposal of zero months was accepted, the DA was adamant that this would result in effectively banning labour broking. He pleaded that Members seek a route that would give hope to young people.

Mr Nyekemba noted Mr Kganare’s points. He said that in fact Mr van der Westhuizen was accusing the ANC of certain things. Reference to the “ruling party” was misleading and he should not fuel what Mr Kganare and Mr Motau had earlier tried to settle. No words should be imputed to the ANC, and Mr van der Westhuizen should listen carefully to the arguments. The term “temporary employment services” was in the LRA, but Mr van der Westhuizen had spoken of “labour brokers”. He wanted to make it quite clear that the ANC had never spoken of “banning” labour brokers. The debate was essentially whether, in section 198A, there was a need to state any period.  The argument was not that temporary services should cease to exist, but rather how they should operate, and whether it was correct, in principle, that the employee have two “employers”. These points had not been discussed earlier. A TES may have welders “on the books” but be approached by the client employer, who would be paying the employee directly. The ANC was not suggesting that there should not be any temporary employment.

Mr F Bhengu (ANC) suggested that if Members were unhappy, then the correct procedure was to raise a point of order, and no Member should disrupt and undermine others. The reason why the ANC had to go to negotiations was to try to find each other. The reason for section 198A was the exploitation, despite general South African ( not party) programmes. He suggested that anyone disrupting the rules of this Committee should be asked to apologise.

Mr Manamela summarised that there were issues of disagreement on clauses 44(1)(a), and 43, and he thought that Members should work on those and consider any alternatives. He proposed that they should be left as currently worded, but that there could be further discussions on those if needed, before voting.

Clauses 45 to 49
The Chairperson noted that these clauses did not appear to be contentious, and Members expressed their agreement with them, in principle.

New Clause
Members agreed with the new clause in principle

Clause 50
Members agreed to the short title.

Mr van der Westhuizen thought that the legal advisers must be told exactly what to do with clauses 43 and 44. He believed that to mention “zero days” or “zero period” was not a neat form of drafting.

The Chairperson thought that the Parliamentary Legal Advisers knew what they were to do.

Adv Gordon said that even though there was essentially a stalemate in the Committee in so far as the principles were concerned, it would be possible to attempt a redraft. However, she cautioned that this exercise would be quite lengthy and complex, and the drafters would have to consider carefully the effect of the changes on other wording. This was not likely to take only half an hour, or even only an afternoon.

The meeting was adjourned, with the next meeting to adopt the A-list scheduled for 11 June.


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