Basic Conditions of Employment Amendment Bill; Labour Relations Amendment Bill; Unemployment Insurance Fund Bill: briefing

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Employment and Labour

09 October 2001
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Meeting Summary

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Meeting report

9 October 2001


Relevant Documents:

Basic Conditions of Employment Amendment Bill (B70–2001)
Labour Relations Amendment Bill (B77–2001)
Unemployment Insurance Bill (B3–2001)
Presentation by Department on amendments to labour legislation (Seftel)
Presentation by Department on policy inputs to Unemployment Insurance Fund Bill

The key issues which the Committee focussed on in relation to the amendments to the set of labour laws included the following. Collective bargaining and bargaining councils, dispute resolutions, rights and responsibilities of workers in the event of retrenchments, transfers of a business and insolvency and conditions of employment and contractual relationships. The unemployment insurance fund commissioner, Mr S Mkonto, informed the Committee that a number of key policy issues were raised at the last meeting which prohibited the finalisation of the Unemployment Insurance Fund Amendment Bill.

Department of Labour

The Committee was addressed by the Director General of the Department of Labour, Advocate Rams Ramashia.

The Director General stated that prior to 1994 the labour relations environment in South Africa consisted of inherent rigidities causing heightened awareness amongst employers and employees. In addition, there was rampant discrimination in the workplaces of employees. The Department of Labour has been attempting to alleviate these grievances since 1994.

Subsequent to this, the President himself had indicated that some of the clauses contained in the Labour Relations Act had intended consequences, which needed review. In determining this process the Department of Labour were required to establish whether or not there existed laws which were sound for the economic growth and job creation in the country.

The proposed amendments to the labour laws
Ms Lisa Seftel, the Chief Executive Director in the Chief Directorate of Labour Relations, outlined the criteria used to determine where a sound thrust was needed in enacting this legislation. Ms Seftel in addressing these criteria indicated that the brief merely aimed at addressing legislation that was problematic and the Department proposed eliminating these problems.

Ms Seftel outlined the key objectives of the Labour Law amendments as follows, namely:
-to improve the application of the Labour Relations Act and Basic Conditions of Employment Act.
-to ensure the alignment of laws with the changing labour market.
-to address unintended consequences.
-to create jobs.

Collective Bargaining and Bargaining Councils
Ms Seftel stated that the aim of the proposed amendments to collective bargaining and bargaining councils was to allow the Department to monitor how effectively small businesses were performing, to improve the enforcement of agreements and to ensure proper oversight of councils and benefit funds.

As regards dispute resolutions by the CCMA and Labour Court, the proposed amendment to Section 49 of the Labour Relations Act envisaged the following:
-the rationalisation of public sector bargaining.
-to prevent the abuse of workers and small employers by unscrupulous labour organisations.

On this issue Ms Seftel notified the Committee that there appeared to be a plurification of small businesses such as unscrupulous labour organisations, hence the reason for the amendment. It was stated that the Registrar of a trade union once encumbered with these powers would be required to satisfy himself as to the genuineness of a trade union before registering it.

Mr Clelland (DP) asked the Department what the requirements were to establish whether a trade union was genuine or not. Ms Seftel replied that Section 18 of the Labour Relations Amendment Bill granted and afforded the Registrar certain powers. Additionally she noted that no one single factor could determine whether a union was bona fide or not. Therefore a number of guidelines would be made available to the Registrar to assist him.

Ms Mshudulu (ANC) required explanation on bargaining rights from the Department of Labour. He enquired whether the Department had achieved what they sought to do in putting the necessary bargaining rights in force.

Ms Seftel stated that neither the Act nor the amendment Bills dealt with this issue. Furthermore, during consultations with NEDLAC, no concerns were raised regarding this issue. In 1996 when the new law was introduced, it was a requirement that all bargaining councils align their agreements in terms of the Act. This applied to organisational rights as well.

Small businesses and vulnerable workers
Ms Seftel then proceeded to deal with the improvements and advantages of effecting these amendments for small businesses and vulnerable workers. In addressing the Committee on application procedures, Ms Seftel referred to S153 and S154 of the Labour Relations Act. These amendments would afford Labour Court Judges the same tenure as High Court Judges. It would also give a Commissioner the discretion to determine the amount of compensation to be awarded for procedurally unfair dismissals. This power was prohibited in terms of the existing Act. The aim of the application procedures was to protect "whistle-blowers" by aligning the Labour Relations Act with the Protected Disclosures Act.

Ms Seftel then proceeded to deal with the misuse and abuse of these amendments. In so doing she stated that the Minister would be allowed to make certain regulations after consulting with the two regulatory bodies, namely NEDLAC and the CCMA on representation and fees. In attending this task CCMA commissioners would be entitled to deal with contemptuous conduct by labour consultants and to issue costs awards.

Ms Botha (DP, NCOP) required clarity on whether the legislature would be authorised in giving Labour Court Judges the same powers as that of High Court Judges. Ms Seftel replied by stating that this decision and conclusion had been arrived at whilst in consultation with the Department of Justice. They have concurred with this view.

The Chair then intervened and stated that due to time constraints the remaining two issues be dealt with first, prior to taking questions from the Committee members.

Retrenchment, transfer of a business, insolvency
Ms Seftel then addressed the Committee on the next key issue, namely the rights and responsibilities of employers and workers in the event of a retrenchment, transfer of a business and insolvency. In explaining the process of retrenchments, Ms Seftel stated that the aim of this amendment was to strengthen the process for parties to engage in meaningful joint consensus seeking process. And, that the process be enhanced through facilitation by the CCMA. Should this process fail, workers could exercise one of two options by either striking or alternatively, referring the dispute to the Labour Court. Section 64 of the Labour Relations Act applies and takes effect in the case of a strike situation with the exception of secondary strikes which requires a 14 day notice period.

As regards proceedings in the Labour Court, the Court must consider the following:
-dismissal is in fact a retrenchment.
-dismissal is justifiable on rational grounds.
-was a proper consideration of alternatives.
-the selection criteria was fair and objective.

Ms Seftel in addressing a situation relating to contracts of employment when a business is transferred, noted that Section 197 of the Labour Relations Act only applied to a going concern with the addition of the amendment Section 197(A), insolvent businesses would also be incorporated.

With comment to the Insolvency Act, Ms Seftel stated that amendments related to the Labour Relations Act, the Basic Conditions of Employment Act and the Unemployment Insurance Bill with the aim of improving the position of workers in companies facing insolvency.

In dealing with the final issue relating to the basic conditions of employment and contractual relations amongst parties, Ms Seftel stated that amendments would be made to achieve:
-substantive conditions.
-improve application.
-address problems of "disguised employment relations".

Ms Botha (DP, NCOP) referred the Committee to the third issue dealing with the rights and responsibilities of employers and workers and asked the Committee why it failed to include the "employees". Ms Seftel in responding agreed with this view and stated that it would be amended to include the "employees".

This concluded the presentation by Ms Seftel of the Department of Labour.

Department: Unemployment Insurance Fund Commissioner
The Unemployment Insurance Fund Commissioner, Mr S Mkonto, informed the Committee that a number of key policy issues were raised at the last meeting which prohibited the finalisation of the Unemployment Insurance Fund Amendment Bill. These key issues were as follows:
-domestic and seasonal workers.
-state employees.
-composition of the Board.
-migrant workers.
-income from other sources.
-employees working less than 24 hours per month.
-funding arrangements.
-recovery of benefits paid in error.
-dispute resolutions.
-technical amendments.

Domestic and seasonal workers
Regarding domestic and seasonal workers, the Commissioner stated that these workers were only to be included once a report had been tabled in Parliament within 12 months of promulgation of the Act. The Minister, depending on the discretion given by Parliament, will determine the date for the inclusion.

State Employees
In dealing with State Employees, the Commissioner stated that the Department of Labour had engaged in consultation with other Ministries who expressed the view that State Employees should be excluded. He added that the matter must be decided at the Public Services Bargaining Council.

Composition of the Board
With comment to the composition of the Board, the Commissioner stated that Clause 49 of the Unemployment Insurance Bill would be amended to include a "community constituency".

Migrant workers
As regards migrant workers, it was stated that the current provision adequately guaranteed the coverage to this category of workers and, therefore, there was no need to amend the Bill in this regard.

Income from other sources
The Commissioner stated that as far as income from other sources had been generated, he had noted the concerns of the stakeholders and proposes that Clause 14 be amended accordingly.

Working less than 24hrs per month
As for employees working less than 24 hours per month, the Commissioner informed the Committee that this view was not supported and could be supported by the following reasons, namely:
-the current labour laws exclude them.
-it creates inconsistancies in the application of laws.
-that the matter is subject to investigation to the extent that it effects domestic and seasonal workers.

The Commissioner in discussing funding arrangements stated that Clause 10 needed to be amended to deal with future funding needs.

As regards the recovery of benefits paid out in error, the Commissioner suggested that the amendment effect the following:
-that the State is informed about the affected beneficiary within 3 months.
-that the repayment period is to be extended to 90 days.

Dispute Resolutions
The Commissioner, in addressing the issue of dispute resolutions, recommended that an amendment be made to simplify the Appeals Procedure and that Appeals Committees be created.

The Chair referred the Commissioner to Section 3(e) of the Bill and asked if the exclusion of domestic and seasonal workers was dependent on the outcome of Parliament. Mr Hoover: State Law Advisor, stated that this view was correct. The Chair recommended that a mechanism be incorporated into the Act to include seasonal and domestic workers. Mr Hoover agreed.

The Chair asked the Commissioner and State Legal Advisor why "employees" had been excluded from Section 3(1)(d) of the Bill. Mr Hoover in responding stated that the term had been exhausted in Section 3(1)(a) and Section 3(1)(b).

Mr Clelland (DP) posed the question of whether or not public service fell foul of the Constitution. The Chair suggested that a two fold view existed; one in support thereof and the other not. However, both had opinions to substantiate and justify their views. One element which was evident was the State’s willingness to underwrite the Fund.

Ms Botha (DA, NCOP) expressed her concern surrounding the definition of the term "seasonal worker" as outlined in Clause 1(2) of the proposed amendments to the Unemployment Insurance Bill. She enquired if it referred to persons employed for a period of one to two days and what the phrase "continuously employed" meant.

Adv Ramashia agreed with Ms Botha that the term "continuously employed" was ambiguous and misleading and that, instead, it should be substituted with the words "seasonally employed".
The Commissioner then proceeded with an explanation on the Composition of the Board and recommended that the 12 members as comprised in Clause 49(2)(a), (5), (c) of the Bill be amended as follows:
-3 members from organised labour.
-3 members from organised businesses.
-3 members from a community constituency.

Migrant workers
The Commissioner referred to the next key issue relating to migrant workers as contained in Clause 3(1)(d) of the Bill and stated that the exclusion of these people from the section centred around the idea that they entered the Republic with a specific purpose in mind. On expiration of a contract of employment, these persons should be required to leave the Republic.

Ms E Thabetha (ANC) asked if the contract of employment was renewable. She suggested that a time period be mentioned in this Section. The Commissioner disputed this view and stated that each task deployed by migrant workers had varying time periods and for this reason no specific time period should be made mention of.

Mr R Moropa (ANC) asked what type of persons the Bill aimed to target. The Commissioner replied that the Bill targeted people with technical skills development and apprenticeship.

In dealing with Clause 14(a)(i) of the Bill, the Commissioner suggested that the words "disability grant" be excluded. Mr Clelland (DP) stated that in terms of the proposed amendments to the Unemployment Insurance Act Section 14(a)(i) and (ii) was to be omitted. What then was the correct decision? The Chair suggested that Mr Hoover, State Legal Advisor, revisit this issue at a later stage.

The Commissioner then addressed the Committee on Clause 3(1)(a) of the Bill. The Chair recommended that the words "with a particular employer and their employees" as contained in Section 3(1)(a) of the Bill be deleted to avoid confusion. Mr Kettledas of the Department of Labour said that this would be investigated.

The Commissioner requested that Mr Hoover continue with an explanation of Clause 10 of the Bill. Mr Hoover stated that previous legislation prohibited the underwriting of a deficit by the State. The Amendment now made provision for this. Adv Ramashia disagreed with this opinion and stated that the word "may" as contained in Section 10(4) was derogatory and should in fact be substituted with the word "shall". The Chair agreed and stated that two problems could arise: firstly, what would the Minister of Finance be required to do; and secondly, what would be required of the Minister of Labour?

Adv Ramashia (DG) posed the question of whether this clause provided for guarantee to the fund. He suggested that it be redrafted to give such effect. The Chair agreed.

Mr Hoover in dealing with Section 35 stated that the amendment was self-explanatory, as was Section 37.

As a concluding remark the Chair asked for an indication as to when the final draft of the Bill would be made available for scrutiny and debate. The Director General, Adv Ramashia, advised that the redrafted Bill would be made available on the 11 October 2001.

The meeting was adjourned.



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