August 2002

We are nearing the end of the third quarter of 2002. It hardly seems possible.

New labour legislation was promulgated on the 1st August 2002. These were amendments to both the Basic Conditions of Employment Act and the Labour Relations Act. As a result we will be contacting you to revise the policy and procedure manuals to comply with the new legislation.

The amendments were in fact contained in the previous acts, but were open to interpretation. The new phrasing makes the intentions of the acts perfectly clear. The main points to note are as follows:

PROBATION

The provision of a probation period for a new employee is very clearly stated and includes responsibility for the employer to counsel, train and set very clear standards. The act however, states that should these processes have been followed then termination of the contract should not be as onerous as it would be for an employee who is not on probation. The notice period has been reduced to one week for a six month period.

RETRENCHMENT

The process to be followed to retrench employees has been described in the act as a “joint consensus-seeking” process. Employees are entitled to have information regarding previous retrenchments carried out by the employer, have a freer access to the labour court and may request facilitation. They also have limited powers to call a strike.

TRANSFERRING CONTRACTS OF EMPLOYMENT AND LIQUIDATIONS

These provisions have been more clearly stated in the act. Employees transferring from one company to another have the right to continuity of service and it is regarded as an unfair labour practice to offer them employment on less favourable terms than those they enjoyed with their previous employer.

DEFINITION OF AN EMPLOYEE

The definition of an employee has been redefined as follows:

PRESUMPTION OF WHO IS EMPLOYEE

A person who works for, or renders services to, any other person is presumed, until the contrary is proved, to be an employee, regardless of the form of the contract, if any one or more of the following factors is present:

1. the manner is which the person works is subject to the control or direction of another person;
2. the person’s hours of work are subject to the control or direction of another person;
3. in the case of a person who works for an organisation, the person is a part of that organisation;
4. the person has worked for that other employer for an average of at least 40 hours per month over the last three months;
5. the person is economically dependent on the other person for whom he or she works or renders services;
6. the person is provided with tools of trade or work equipment by the other person; or
7. the person only works for or renders services to one person.

Subsection 1 does not apply to any person who earns in excess of the amount determined by the Minister in terms of section 6 (3) of the Basic Conditions of Employment Act.

The amount referred to above is currently R89 455-00 per annum.

NEDLAC is currently preparing a Code of Good Practice to set out guidelines for determining whether persons, including those who earn in excess of the amount determined by the minister are employees.

OVERTIME

The BCE act had a target to reduce the hours of work to 40 hours in a five-year period. In many industries this has now been achieved. However, the new amendments have limited the amount of overtime a person may work to 15 hours, despite any agreement, which may be reached between the employee and the employer.

As a result of these amendments we will be revising all existing policy and procedure manuals in order to ensure compliance with these acts. We are currently promoting our two-day Industrial Relations Course, which explains the acts affecting the management of staff,

i.e. Basic Conditions of Employment Act
Labour Relations Act
Employment Equity Act
Skills Development Act
Occupational Health and Safety Act
Workmen’s Compensation Act
Unemployment Insurance Act

For more information please contact:
Desrae Connold (082-885-0124) or
Sasha Zito (082-805-5561).