January 2011

2010 was acknowledged by most of us as having been a very difficult year. Business was disrupted by the World Cup, which although it was very successful and did a great deal to put South Africa on the map, did mean a second holiday season for business. We hope that 2011 will be a much more productive year.

The Department of Labour has posed four proposed bills on their website, www.labour.gov.za, for comment. Comment closes on the 17th February 2011. Below I have summarised the main proposed amendments in each of the acts.

BASIC CONDITIONS OF EMPLOYMENT ACT

The good news is that there are no proposed changes to the actual conditions of employment, i.e. leave, hours of work etc. Most companies are in any case providing more generous conditions than those provided by the act. The main changes are as follows:

1. Protection of Fixed Term or contract employees:
   1. The act clearly defines an Independent Contractor as a person who works for or supplies services to a client or customer as part of the persons business, undertaking or professional practice. This is to further clarify who is an employee.
   2. Employers will be required to contribute benefits of the same or equal value to employees on fixed term contracts
   3. The sections referring to temporary employment services have been repealed and are now addressed in the amendment to the Labour Relations Act
2. New, much more stringent legislation is proposed for the employment of children
3. Employers will not be permitted to require employees to pay them any amounts or to purchase goods from them. In the explanation of the amendments this is to address issues such as parking attendants who have to pay their employer for the privilege of being able to work in that area.
4. The Act has the intention of forcing compliance by removing many of the requirements that the Department of Labour needed to go through before prosecuting an employer who does not comply. It is proposed that they can ask the South African Police to accompany them when entering a business property and they are able to impose fines and /or prison sentences when employers are in contravention of the act. This table has been inserted into the Act:

The provision for criminal prosecution was contained in the original act, but only for the employment of children and section 92. They obviously mean business.

LABOUR RELATIONS ACT

The amendment intends to align the employment laws to ensure decent work by regulating sub-contracting, contract work and outsourcing, to amend the jurisdiction of the Labour Courts and to provide for the prohibition of certain abusive practices to workers.

It does this by proposing that:

1. Many amendments covering the operation of the CCMA and the jurisdiction of the Labour Court. These appear to give the awards of the CCMA a greater legal status and to
   increase the jurisdiction of the CCMA and the Labour Court to matters arising from any of the employment laws, including UIF, WCA, OHS, BCEA and the Employment Equity Act. It also clarifies the role of the Bargaining Councils in terms of their ability to arbitrate.
2. Further explanation of clause 186 b) with regard to fixed term contracts and the reasonable expectation that an employee has that the contract will be renewed A
   very important new clause which states:
   “Limitation on application of Chapter VIII
   187A. An employee earning in excess of an amount
   determined by the Minister by notice in the Gazette, may not refer labour disputes in respect of the provisions of sections 185, 186, 188, 189, 189A and 197 to the CCMA.”
   This implies that employees who earn more than R149 736-00 per annum will not be able to refer unfair dismissal cases to the CCMA. They will have to refer cases to the Labour Court. This will be a much more complex procedure for them. The determination has not been revised since April 2008, although a government notice published in December asks for comment on the revision of the determination.
3. With regard to temporary employment the following clauses have been added:
   “Declaring Temporary Employment to be permanent
   200B. An employee must be employed permanently, unless the employer can establish a justification for employment on a fixed term.
   Liability of client company in sub-contracting
   200C. An employee must have recourse against the employer and its client company where there is unfair labour practice.”

This seems to be the extent to which they are legislating against labour brokers. This was previously provided for in the Basic Conditions of employment Act.

EMPLOYMENT EQUITY ACT

The much awaited amendment to the Employment Equity Act largely serves to bring it in line with regulations which have already been passed. Important proposed changes are as follows;

1. Clarifying the definition of a black person in terms of the regulations, i.e. that they must have been citizens of South Africa prior to 1994.
2. An important addition to the discrimination clause 6, i.e. A difference in terms and conditions of employment between employees of the same employer performing the same or substantially the same work or work of equal value is a form of unfair discrimination and is prohibited on any one, or more grounds of unfair discrimination listed in subsection (1).
3. The burden of proof for the employer has been explained in much greater detail
4. employees are not required to sign any indemnity for working in any portion of the workplace where smoking is permitted;
5. All designated employers will have to report each year in October regardless of the number of employees they have
6. the substitution of subsection (1) of the following subsection:
7. The following has been added to clause 37:
   “(1) A labour inspector may issue a compliance order to a designated employer if that employer has failed or refused to—
   (a)  consult with employees as required by section 16;
   (b) conduct an analysis as required by section 19;
   (c) publish a summary of its report as required by section 22;
   (d) assign responsibility to one or more senior managers as required by section 24;
   (e) inform its employees of the provisions of this Act as required by section 25; or
   (f) maintain records as required by section 26;
   (g) prepare and implement an employment equity plan in accordance with section 20.”;
8. A new fine is proposed:

There has been a minor change in terms of the turnover requirement for a designated employer and that is to increase the turnover for agriculture from R2 million to R5 million. All other turnovers remain the same.

EMPLOYMENT SERVICE BILL

The provisions of this bill were previously part of the Skills Development Act and have had to be made into an independent act because Skills Development no longer falls under the Department of Labour. The act intends to provide for public employment services; to provide for the registration of private employment agencies; to provide for the establishment of
the Employment Services Board; to provide for the establishment of Productivity South Africa; to provide for transitional provisions and to provide for matters connected therewith.

Nothing within the act is really new, but there does seem to be a greater intention to enforce the act.

The act has wide ranging responsibilities for the Department of Labour to provide employment services and intervene where retrenchments are likely. It will also require Employers to notify the department of all their vacancies and the filling of the vacancies. They are proposing a R10000-00 fine if an employer fails to notify them of a vacancy.

There will also be a fine and possible prison sentence for anyone operating an Employment Agency without a licence.

We understand that the bills have already been “toned down” after their first introduction to parliament, however, they are still very onerous. Public comment will be invited at meetings to be held this month. We will be doing our best to respond with our comments before the 17th February 2011. Anyone who would like to have a look at the proposed legislation can view it on the Department of Labour’s website,www.labour.gov.za.

SKILLS DEVELOPMENT

We don’t yet have an amendment to the Skills Development Act, although the previous one, published in December 2008 has not yet been promulgated. However, we have had clarity on the “SETA Landscape which was published in November last year. The following changes to the SETA’s have been finalized:

A total of 21 SETA’s compared with 23 previously. We will be reviewing the Standard Industry Classification Codes for all our clients as soon as they are published to ensure that you are with the correct SETA as this could impact on your eligibility for discretionary grants in future

TRAINING

LEADERSHIP TRAINING

We will be starting new Leadership Development Training Courses in March as well as public courses for our Life Skills Training. Anyone who would be interested in attending or having staff attend should contact Tessa at our offices on 011-452 1707.

The Leadership Development Training course runs for 1 day per month for 10 months and is aimed at Line Managers. Content of the course includes Performance Management, Strategic Planning, Team Building, Coaching and Industrial Relations. We have been asked to provide training for Senior Managers and are putting together groups at this level currently.

LIFE SKILLS TRAINING

Life Skills training is aimed at all staff and covers goal setting, career development and financial management. Information on these courses is available on our website at www.connold.co.za or by contacting Tessa at our offices.

DOMESTIC WORKERS

According to the Sectorial Agreement for Domestic Workers Amendment which was sneaked in during December, with effect from 1 December 2010 the minimum wages for Domestic Workers in Area A (Urban Areas) is as follows:

For full time Domestic Workers:
R7.72 per hour   |   R347.79 per week   |   R1506.34 per month

For Domestic Workers who work 27 hours per week or less
R9.12 per hour   |   R246.30 per week   |   R1067.14 per month

Wages will be subjected to a CPIX plus 1% increase for the period 1 December 2010 to 30 November 2011. The CPI (excluding Owners’ Equivalent Rent) six weeks prior to 1 December 2010 has been 3,4%.This means that wages for this period was calculated as follows: CPI (excluding owners’ equivalent rent) plus 1% for Area A = 3,4% + 1% =4.4%.

We have been informed that the Department of Labour will be blitzing domestic homes to check on the working conditions of Domestic Workers. Please remember that it is law to have a letter of appointment for all domestic Workers (this includes gardeners). If you require a format for this letter please contact our office.

We would like to take this opportunity to wish you all a wonderful New Year. If you have any questions or comments about the proposed legislation please contact Jane or Desrae. We will keep you informed of any new developments