ESSENTIALLY: Where a dismissal is based on poor work

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- CPE 11 –
LABOUR LEGISLATION UPDATE
FORWARD
The title of this CPE is “Labour Legislation Update”. The course material, as contained in
this handbook, is intended to serve as a reference guide for employers and managers on
the practical application of current labour legislation in the workplace. Accordingly the
course material aims to be current and includes updates and amendments with regards to
the main labour laws in South Africa.
Since this CPE presentation is not aimed at legal and/or human resource practitioners but
at employers and managers in the Fasset Sector (particularly SMMEs), the developer of
the course material has worked on the assumption that not all attendees at this CPE
intervention have an understanding of basic labour law principles and rules as contained in
original legislation. To ensure that this handbook contains useful, holistic and
“user-friendly” information and may serve as a practical guide for SMMEs, it includes basic
rules of implementation as well as updates, amendments and reference to recent case law.
This course material is simply a guide, is not meant to be a complete summary of the
legislation and/or legal advice. It is not intended to replace professional advice. Should
there be any doubt as to rights and obligations in terms of labour legislation a lawyer or
other professional should be consulted.
© Copyright 2004 Bright Labour Solutions CC.
All rights reserved. No part of this
publication/course material may be reproduced, used for commercial gain or transmitted in
any form by any means without the prior written permission of Bright Labour Solutions CC
Disclaimer: While every attempt has been made to ensure that the information published
is accurate the developer of this material takes no responsibility for any loss or damage
that may arise out of the reliance by any person upon any of the information contained
herein.
1
CONTENTS
1.
INTRODUCTION TO THE 4 MAIN LABOUR LAWS IN SOUTH AFRICA,
BACKGROUND AND CONTEXT
2.
THE IMPORTANCE OF IDENTIFYING AN “EMPLOYEE” AND
DISTINGUISHING BETWEEN AN “EMPLOYEE” AND AN
“INDEPENDENT CONTRACTOR”
3.
THE IMPORTANCE OF DISTINGUISHING BETWEEN DIFFERENT
TYPES OF EMPLOYEES
4.
SALIENT FEATURES OF THE LABOUR RELATIONS ACT, NO 66 OF
1995 (as amended)
Basic Distinction Between Individual Labour Law and Collective Labour
Law
Aspects of Individual Labour Law
Dismissal and Unfair Labour Practice
Methods of terminating a contract of employment
Forms of Dismissal
Forms of Unfair Labour Practice
Fairness
Automatically unfair dismissals (S187)
Other dismissals (S188)
Misconduct
Incapacity
Operational Requirements of the Business
Forums and Procedures for resolving disputes about unfair dismissals and
unfair labour practices
“Con-Arb”
Remedies for unfair dismissal and unfair labour practices
Sections 197 and 197A: Transfer of contract of employment and
Transfer of contract of employment in circumstances of insolvency
Aspects of Collective Labour Law
Freedom of Association
Trade Unions – Registration and Representation
Organisational Rights
Collective Agreements
Industrial Action
4.1
4.2
4.2.1
4.2.1.1
4.2.1.2
4.2.1.3
4.2.1.4
4.2.1.4.1
4.2.1.4.2
4.2.1.5
4.2.1.6
4.2.1.7
4.2.2
4.3
4.3.1
4.3.2
4.3.3
4.3.4
4.3.5
5.
5.1
5.2
THE CONTRACT OF EMPLOYMENT–TERMS AND CONDITIONS:
PRACTICAL IMPLICATIONS OF THE BASIC CONDITIONS OF
EMPLOYMENT ACT, NO 75 OF 1997(as amended)
What the Act does
Employees who are covered by the Act
2
5.3
5.4
5.4.1
5.4.1.1
5.4.1.2
5.4.1.3
5.4.1.4
5.4.1.5
5.4.1.6
5.4.2
5.4.2.1
5.4.2.2
5.4.2.3
5.4.2.4
5.4.3
5.4.3.1
5.4.3.2
5.4.3.3
5.4.3.4
5.4.4
5.4.4.1
5.5
5.6
6.
6.1
6.2
6.2.1
6.2.2
6.2.3
6.3
6.3.1
6.3.2
6.4
6.5
Minimum Terms only!
Basic Terms and Conditions of Employment
Working Time
Ordinary Working Hours
Overtime and formula for payment
Compressed Working Week and Averaging Hours of Work
Meal Intervals and Rest Periods
Pay for Work on Sundays and Public Holidays
Night Work and Shift Work
Leave
Annual Leave
Sick Leave
Maternity Leave and the Protection of female employees before and
after the Birth of a child
Family Responsibility Leave
Particulars of Employment and Remuneration
Written Particulars of Employment (Contract of Employment or Letter of
Appointment)
Informing employees of their rights
Keeping Records
Payment of Remuneration, Information about Remuneration, Deductions
and payment of contributions to benefit funds
Termination of Employment
Notice, Severance Pay and Certificates of Service
Replacing or Excluding Basic Terms and Conditions of Employment
Monitoring and Enforcing Compliance with the Act
THE EMPLOYMENT EQUITY ACT, NO 55 OF 1998 AND ITS IMPACT
ON SMMEs
The Purpose of the Act
The Prohibition of Unfair Discrimination
Forms of Unfair Discrimination
Interviewing applicants for employment in terms of the Employment
Equity Act
Unfair Discrimination Disputes
Affirmative Action
Income differentials
Miscellaneous duties of designated employers
Monitoring, Enforcement and Legal Proceedings
Does not implementing Affirmative Action amount to Unfair
Discrimination?
7.
AN UPDATE OF SKILLS DEVELOPMENT LEGISLATION
8.
EMPLOYMENT POLICIES AND INDUCTION
9.
ANNEXURES: MISCELLANEOUS FORMS AND GUIDELINES
3
TOOLKIT
Employers and/or managers are advised to obtain copies of the
following documentation for reference in the workplace:
Original Legislation
 Labour Relations Act, No 66 of 1995
 Basic Conditions of Employment Act, No 75 of 1997
 Employment Equity Act, No 55 of 1998
 Skills Development Act, No 97 of 1998
 Skills Development Levies Act, No 9 of 1999
You may also wish to obtain the following:
 Unemployment Insurance Act, No 63 of 2001
 Compensation for Occupational Injuries and Diseases Act, No 130 of 1993
 Occupational Health and Safety Act, No 85 of 1993
 Protected Disclosures Act, No 26 of 2000
 Promotion of Equality and Prevention of Unfair Discrimination Act, No 4 of 2000
Amendments





Labour Relations Amendment Act, No 42 of 1996
Labour Relations Amendment Act, No 127 of 1998
Labour Relations Amendment Act, No 12 of 2002
Basic Conditions of Employment Amendment Act, No 11 of 2002
Skills Development Amendment Act, No 31 of 2003
Useful Codes of Good Practice








Code of Good Practice on Dismissal
Code of Good Practice on Dismissal Based on Operational Requirements
Code of good practice on the arrangement of working time
Code of good practice on the protection of employees during pregnancy and after
the birth of a child
Code of Good Practice on the Handling of Sexual Harassment cases
Code of Good Practice on Key Aspects of HIV/AIDS and Employment
Code of Good Practice: Preparation, implementation and monitoring of employment
equity plans
Code of Good Practice: Key Aspects of Disability in the Workplace
Other useful Regulations



LRA: CCMA: Tariff of Fees, Regulations (Contains CCMA forms)
LRA: Rules regulating the practice and procedure for resolving disputes through
conciliation and arbitration proceedings
BCEA: Regulation No.R.1438 (contains some useful forms e.g. payslip, certificate of
service)
Books and Posters



Preparing an Employment Equity Plan: A User’s Guide
Basic Conditions of Employment Act (Summary)
Employment Equity Act (Summary)
4
Useful Websites and contacts




www.labour.gov.za (Dept of Labour)
www.ccma.org.za (Commission for Conciliation, Mediation and Arbitration-CCMA)
Govt Printing Works does not have a web address. The phone number of the head
office in Pretoria is (021) 334-4507/8/9/10. They will give you the local number
www.fasset.org.za (Fasset)
NB: The Department of Labour and the CCMA websites have very useful forms,
contract templates and guidelines for practical application in labour relations
5
1.
INTRODUCTION TO THE 4 MAIN
LABOUR LAWS IN SOUTH AFRICA,
BACKGROUND AND CONTEXT
The introduction into South Africa of the “new” Political and Constitutional dispensations
in 1994 completely changed the face of labour law. The spirit of labour and related
legislation introduced and amended over the past decade affords the employee greater
protection and advancement than was previously the case and seeks proactively to redress
the imbalances of the past.
Our opinion is that while our current labour law does indeed empower employees it is a
misconception that it necessarily disempowers employers. The law is not aimed at
undermining or negating managerial prerogative nor is it intended to invoke feelings of
threat for employers and business or to harm small, medium or micro enterprises
(SMMEs). The discomfort employers seem to experience in relation to labour law stems
possibly from a lack of knowledge and distorted information.
The purpose of this Labour Legislation Update is to give employers and managers a working
understanding of the law, providing a practical guide to implementing current labour laws in
the workplace and to highlight the rules, policies and procedures, which should be adopted
and followed to align with the spirit of current legislation and to avoid future conflict and
potentially costly problems. An understanding of the salient features of the legislation,
remaining abreast of legislative and case law developments and getting to grips with the
practical implications of the law will contribute to maintaining stable and harmonious
employment relations. Without this, money and energy may be wasted by employers in
trying to fend off litigation and discontentment in the workplace.
Before embarking on a more detailed examination of current labour law the following is an
outline of the 4 main laws which affect labour relations in South Africa. Each law has a
different purpose and has a unique and important impact on the relationship between
employers and their employees:
I
Labour Relations Act, No 66 of 1995 (“LRA”)
This law was passed in 1995 at the beginning of the “new” political dispensation. It is the
main framework within which labour relations operates in South Africa. It governs and
regulates all employment and collective bargaining relationships in South Africa and it
provides vital rules and procedures governing individual employers and employees as well as
trade unions and employer organisations.
The LRA regulates, among other things, Trade Unions, Bargaining Councils, Collective
Agreements, Industrial Action, Discipline and dismissal, Poor Work Performance and
dismissal, Dismissals based on Operational Requirements of the Business (including
6
retrenchments), Transfer of Businesses and Forums and Procedures for resolving labour
disputes.
II
Basic Conditions of Employment Act, No 75 of 1997 (“BCEA”)
The BCEA is aimed at preventing employers from imposing unreasonable terms and
conditions of employment, thereby exploiting employees. The BCEA prescribes minimum
terms and conditions of employment in South Africa and also lays down the instances in
which these terms and conditions may be varied, replaced or excluded. Working hours,
leave, notice and overtime are a few of the issues covered by this Act.
III Employment Equity Act, No 55 of 1998 (“EEA”)
Until the passing of the EEA there was much debate and speculation regarding the nature
and application of affirmative action in the South African context. Until this Act was
passed employers had no more than a moral obligation to implement affirmative action in
the workplace. The EEA was designed to redress the legacy of apartheid and it has a
2-fold purpose: Firstly it prohibits unfair discrimination by employers against employees
and applicants for employment. Secondly it seeks to proactively advance workers who
were discriminated against in the past, via affirmative action measures. The EEA sets out
the forms which unfair discrimination may take and also the penalties which may be
imposed on employers in this regard. The Act also provides a framework for implementing
affirmative action, specifying which employers are bound to implement affirmative action
measures in the workplace.
It must be emphasised that the EEA does not only deal with affirmative action and with
employment equity plans. At least as important are its provisions dealing with unfair
discrimination and the application that these provisions have to all employers, regardless
of size of workforce or turnover.
IV
Skills Development Act, No 97 of 1998 (“SDA”) and
Skills Development Levies Act, No 9 of 1999 (“SDLA”)
Skills Development Legislation and the Employment Equity Act are inextricably linked.
Both aim at redressing the legacy of apartheid and look towards achieving a work
environment that proactively advances employees who were discriminated against in the
past and one that creates equal opportunities for employment and advancement. The main
aim of Skills Development legislation is to develop the skills of the South African
workforce and to create a culture of learning in the workplace. Although most employers
are compelled to pay a skills development levy there are financial incentives for employers
who facilitate the skills development of their staff and who use the workplace as a place
of learning. Perhaps staff development via training and education may be viewed as one of
the most effective affirmative action measures.
7
Apart from the above-mentioned Acts there are other laws which impact on employment
relationships. The following is a non-exhaustive list:
Constitution of the Republic of South Africa Act, No 108 of 1996
The Constitution is the highest law of the land. It prescribes and regulates government
power and sets out basic fundamental human rights (in the Bill of Rights). Since our
Constitution is the supreme law of South Africa, every other law must be aligned with it.
Naturally, the Constitution does not deal solely with labour issues. However, it does,
directly and indirectly, impact upon labour law.
S23 of the Bill of Rights contains fundamental human rights, which relate directly to the
employment relationship. These rights are:
-
-
every employee’s right to fair labour practices;
the right of every employee to form, join and participate in the activities
and programmes of a trade union (freedom of association);
the right of every employee to strike;
the right of every employer to form, join and participate in the programmes
and activities of an employer’s organisation (freedom of association);
the right of every trade union and employers’ organisation to determine its
own administration, programmes and activites, the right to organise and the
right to form a federation;
the right of trade unions, employers and employers’ organisations to engage
in collective bargaining; and
protection of trade union security arrangements such as the closed shop
(where employees are compelled to join a particular trade union) or agency
shop (where employees are compelled to contribute fees to a particular
trade union).
Various other rights contained in the Bill of Rights indirectly affect the employment
relationship. The most important of these are the right to equality (including the right not
to be discriminated against), the right to privacy, freedom of expression and freedom of
religion, belief and opinion.
Unemployment Insurance Act, No 63 of 2001
This Act provides for the payment of social benefits to unemployed employees and
employees who are on maternity leave. During employment employers and employees each
pay 1% of salary towards UIF (there is a maximum payment level) and employees may claim
from the UIF during a period of unemployment or while on maternity leave.
Recent Unemployment Insurance Amendments have included domestic employees and
seasonal employees under the coverage of the Unemployment Insurance Fund. The
Amendments have also excluded the jurisdiction of the CCMA over UIF appeals and
appeals must now be made to the Regional Appeals Committees. Another interesting
8
amendment that has been introduced is that pertaining to employees (mainly domestic
workers) who work for more than one employer. Employees who work for more than one
employer and whose employment with one/more employer is severed will still be entitled to
unemployment benefits (even though they may still be employed by the other employer/s).
Note: This CPE does not deal with UIF issues. Interested attendees may use the links to
UIF on the Department of Labour Website.
Compensation for Occupational Injuries and Diseases Act, No 130
of 1993
This law provides for compensation to an employee (or his/her dependent/s) in the event
of the employee sustaining injuries in the course of employment or contracting a workrelated illness.
Occupational Health and Safety Act, No 85 of 1993
This provides for the safety and health of persons at work and of persons using dangerous
plant and machinery; it also regulates the protection of persons other than persons at
work against hazards to safety and health arising out of the activities of persons at work.
South African Qualifications Authority Act, No 58 of 1995
(“SAQAA”)
This law has completely revised the system of education in South Africa. It has
introduced the National Qualifications Framework (NQF). There are 8 levels on the NQF
and each nationally recognised qualifications, depending on the complexity of the
qualification will be at one of the levels on the NQF (8 being the highest level). In as far
as labour law is concerned, the SAQAA has application in the context of skills development
and training. Employers are encouraged under Skills Development Legislation not only to
train and develop staff but also to ensure, where possible, that training can lead to formal
NQF aligned qualifications and certificates. The South African Qualifications Authority
(SAQA) is a body that has been appointed by the Ministers of Education and Labour to
ultimately oversee both the development and implementation of the NQF. Learnerships
and skills programmes must be NQF aligned.
Protected Disclosures Act, No 26 of 2000
This Act protects employees who (provided that certain criteria are present and certain
procedures are followed) disclose information regarding unlawful or irregular conduct by
their employers
9
Promotion of Equality and Prevention of Unfair Discrimination Act,
No 4 of 2000
Deals with the topics equality and unfair discrimination in detail. It is not specifically a
labour law and is intended to flesh out the parameters of the relevant human rights as
contained in the Bill of Rights
2.
THE IMPORTANCE OF IDENTIFYING
AN “EMPLOYEE” AND
DISTINGUISHING BETWEEN AN
“EMPLOYEE” AND AN “INDEPENDENT
CONTRACTOR”
Who is an employee?
The contract of employment (which forms the basis of the relationship between an
employer and employee) may be defined as “an agreement between two parties in terms of
which one party (the employee) places labour potential at the disposal of and under the
control of the other party (the employer) in exchange for some form of remuneration”
(Essential Labour Law, volume 1 Basson et al)
At first blush the definition seems very clear on the issue as to who is an employee.
However, the concept of a person placing their “labour potential” at another’s disposal may
in some instances refer to a relationship other than that of employment. Over the past
ten years there has been on-going debate and dispute as to who is an “employee” and who
is not an employee but rather an “independent contractor” or some other type of worker.
The South African contract of employment has its roots in Roman-Dutch law.
The Romans viewed an agreement between two parties in terms of which one party
rendered personal services to the other party in exchange for remuneration as a contract
of letting and hiring (locatio-conductio).
The Romans distinguished between 3 types of letting -hiring contracts:
a)
locatio-conductio rei (the letting and hiring of a thing in exchange for a sum
of money)
b)
locatio-conductio operarum (the letting and hiring of personal services in
exchange for remuneration)
The forerunner of the contract of employment
10
c)
locatio-conductio operis (the letting and hiring of a specific piece of work in
exchange for remuneration)
The forerunner of the contract of the independent contractor (“agency”).
The following three examples illustrate the difficulty that may arise in trying to
distinguish between a contract of employment and a contract of an independent contractor
(“agent”):
a) X, an attorney agrees to draft Y’s will in exchange for an agreed fee. Three
days later, X phones Y to advise him that his will is ready. Y collects the will
and pays X her fee.
Is X an independent contractor or is she Y’s employee?
b) A and B enter into an oral agreement in terms of which B, a bookkeeper, will
attend to A’s books. His working hours will be 8:30am – 4:30pm daily, with a one
hour lunch break between 12:30pm and 1:30pm. A will have the right to tell B
not only what work to do but also how he must do it. B agrees that he will not
work for anybody else and that he will only take leave with A’s permission. In
exchange for his services B will receive R6500.00 per month and will be placed
on A’s medical aid.
Is B an independent contractor or is he A’s employee?
c) S entered into a contract with an insurance company. S was remunerated on a
commission basis and could not perform certain acts without the company’s
written permission. Although he was not allowed to work for another company
at the same time, S did not have set office hours and was allowed to do other
work in his free time. S was given the use of an office and a company car
(although he had to pay for servicing and fuel). He had to report daily to a
manager but the manager did not have the right to supervise and control S.
Furthermore, there was nothing to prevent S from seeking the assistance of
other people to help him in performing his duties.
(Based on the facts of Smit v Workmen’s Compensation Commissioner 1979(1)
SA 51 (A))
What is the nature of the contractual arrangement between S and the
insurance company (contract of employment OR contract of an independent
contractor?)
While a) and b) are straight-forward, the facts in c) point us in different
directions. Certain factors point at S being an employee, yet others create the
impression that he is an independent contractor.
In Smit v Workmen’s Compensation Commissioner 1979(1) SA 51 (A) the
Appellate Division concluded that S was not an employee. The lack of control and
supervision over S by the company, the remuneration by commission, the non11
requirement of personal performance of his duties by S and S’s position of
independence were strong indicia that the contract was one of an independent
contractor.
The test used in our courts to determine whether a contract is one of employment or one
of an independent contractor is the multiple or dominant impression test. In terms of this
test, the court weighs up all the factors (multiple factors) in a given case and decides
whether the dominant impression created is that the worker is an employee or an
independent contractor.
Factors which a court would consider include the following:
the right to supervise the worker
how dependent the worker is on the “employer” in the performance of his
duties
whether the worker is permitted to work for another person
the manner in which the worker is paid (salary, commission, other)
whether the worker provides his own equipment and tools
whether the worker is obliged to fulfill his duties personally
whether the worker is required to devote a specific amount of time to his
work.
Consider the following CASE STUDY:
(I)
The department for Public works for Kwa-Zulu Natal decides to do extensive road
works. It envisages that the project will take ten years and enters into contracts
for that duration with, among others, ten highly regarded structural and civil
engineers in the province. Each contract is identical.
The following is agreed to between the parties:
The contracts are part-time contracts and the engineers are free to attend
to their private practices when not fulfilling their contractual duties
There will not be fixed hours of work
The engineers must be ‘at the beck and call’ of the administration and must
give priority to official duties over their private practices
The engineers are to be paid a contractual salary, which is payable at the
end of every month
Although the engineers will remain independent in the performance of their
work, once a month they have to report to the relevant authority and submit
progress reports
Each engineer is expected to supply his/her own equipment for the project,
although he/she will be reimbursed for all necessary expenses
Using the dominant impression test, decide whether the doctors are employees of the
state or whether they are independent contractors?
If it has been difficult to distinguish between an employee and an independent contractor
the matter has been further complicated by the recognition of other types of atypical
workers such as so-called dependent contractors, the self-employed and the informally
employed.
12
NB:
In an effort resolve the problem of identifying an employee and to shed
greater clarity, amendments to both the LRA and the BCEA have included provisions
in this regard:
The following, almost identical provisions, taken from the Labour Relations Amendment
Act, No 12 of 2002 and the Basic Conditions of Employment Amendment Act, No 11 of
2002 both introduce a rebuttable presumption as to who is an employee.
‘‘Presumption as to who is employee
200A. (1) Until the contrary is proved, a person who works for, or
renders services to, any other person is presumed, regardless of the form of
the contract, to be an employee, if any one or more of the following factors
are present:
(a) the manner in which the person works is subject to the control or
direction of another person;
(b) the person’s hours of work are subject to the control or direction of
another person;
(c) in the case of a person who works for an organisation, the person forms
part of that organisation;
(d) the person has worked for that other person for an average of at least
40 hours per month over the last three months;
(e) the person is economically dependent on the other person for whom he
or she works or renders services;
(f) the person is provided with tools of trade or work equipment by the
other person; or
(g) the person only works for or renders services to one person.
(2) 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.
(3) If a proposed or existing work arrangement involves persons who
earn amounts equal to or below the amounts determined by the Minister in
terms of section 6(3) of the Basic Conditions of Employment Act, any of
the contracting parties may approach the Commission for an advisory
award on whether the persons involved in the arrangement are employees.
(4) NEDLAC must prepare and issue a Code of Good Practice that sets
out guidelines for determining whether persons, including those who earn
in excess of the amount determined in subsection (2) are employees.’’
(S 51 of the Labour Relations Amendment Act No 12 of 2002)
‘‘Presumption as to who is employee
83A. (1)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:
(a) The manner in which the person works is subject to the control or
direction of another person;
(b) the person’s hours of work are subject to the control or direction of
another person;
(c) in the case of a person who works for an organisation, the person is a
part of that organisation;
(d) the person has worked for that other person for an average of at least
40 hours per month over the last three months;
13
(e) the person is economically dependent on the other person for whom
that person works or renders services;
(f) the person is provided with tools of trade or work equipment by the
other person; or
(g) the person only works for or renders services to one person.
(2) 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).
(3) If a proposed or existing work arrangement involves persons who
earn amounts equal to or below the amounts determined by the Minister in
terms of section 6(3), any of the contracting parties may approach the
CCMA for an advisory award about whether the persons involved in the
arrangement are employees.’’
(S21 of the Basic Conditions of Employment Amendment Act, No 11 of 2002)
The effect of the above provisions is that where one person works for another and any of
the factors in (1)(a)-(g) are present, the presumption is that the person working is an
employee, unless the employer can prove why that person should not be treated as an
employee.
In practice this means that if the employee shows that any of the factors are present in
the work relationship then s/he is immediately presumed to be an employee unless the
employer can rebut this i.e. the employer needs to discharge the burden of proving that a
worker is not an employee of the employer.
Note: This rebuttable presumption applies to persons who earn equal to or less than
R115 572.00 per annum. A party may approach the CCMA for an advisory award about
whether the person is an employee.
Since the presumption is rebuttable the courts will probably have to continue to use the
dominant impression test to determine the status of a person who works for another.
Why is it important to distinguish between an employee and an independent
contractor?
Determining who is an employee is the point of departure in Labour law. Labour law
governs and regulates the employer-employee relationship not the principal-independent
contractor relationship. The provisions of the LRA, BCEA, EEA, SDA, SDLA and other
labour-related legislation offer protection to employees but these protective
provisions do not extend to independent contractors
Disguising a contract of employment as a contract of an independent contractor and
the courts’ approach to this
In South Africa it has become fairly common for workers and “employers” to negotiate
contracts of independent contractor. There are two main reasons for this:
a)
‘Employers’ may prefer to structure the relationship with their workers in this way
to avoid the provisions of the LRA, the BCEA and other labour laws. Remember,
independent contractors are not protected by South African labour laws. In
practice this means, for example, that independent contractors are not protected
14
b)
against unfair dismissal, are not entitled to strike and cannot demand minimum
terms and conditions of employment.
‘Employees’ often prefer to call themselves independent contractors in order to
avoid/reduce income tax liability in terms of the Income Tax Act of 1962.
Unfortunately, in disguising their contract of employment as a contract of an
independent contractor these workers are unwittingly exempting themselves from
the protection of labour legislation. This usually becomes apparent when they are
‘dismissed unfairly’ and have no recourse.
Today, the courts are prepared to look beyond such an artificial arrangement to identify
the true nature of a work relationship. A person described in a contract as an
“independent contractor” will be protected by labour law if a court is of the opinion that
the person is in fact an employee.
The case of Briggs v CMS Support Services (Pty) Ltd (1997) 1 BLLR 62 (IC) illustrates this
point well. The facts were briefly as follows.
Briggs had been an employee of the JSE. In order to avoid the high rate of tax imposed
on married women, Briggs formed a close corporation and appointed herself as the sole
member. She then concluded a new agreement with the JSE, in terms of which she would
provide her services to the JSE as an independent contractor and in exchange the JSE
would pay her hourly-rate to the closed corporation. When Briggs left the JSE she
concluded the same type of contract with her new ‘employer’, CMS Support Services (Pty)
Ltd. When her contract was terminated without a valid reason she sued CMS Support
Services (Pty) Ltd for unfair dismissal. CMS alleged that since Briggs was not an employee
but an independent contractor she was not protected against unfair dismissal. The
industrial court found however that the contractual relationship between CMS and the
close corporation was a fictitious one and that the true intention of CMS had been to
employ Briggs as ‘a fully fledged employee’. Accordingly, the employer could not later hide
behind the fictitious agreement when it no longer required Briggs’ services.
In Shikwambana v Quantum Construction Holdings (Pty) Ltd (NH 11/2/2632) Quantum
Construction entered into a contract of agency with a closed corporation to perform
certain work. The CC had one member ,S, who was an ex-employee of Quantum
Construction and who now provided exactly the same services as as she did when she was
an employee. When the contract was terminated by Quantum Construction without good
cause, S sued the company for unfair dismissal. Quantum Construction’s defence was that
the CC was an independent contractor and that dismissal was therefore impossible.
In the interests of fairness the court pierced the “corporate veil” of the CC and held that
the contract of agency was in fact an artificial contract intended to disguise the real
employment relationship between QC and S. The court held that S was protected against
unfair dismissal.
In the recent case of Bezer v Cruises International CC (2003) 6BLLR 535 (LC) the Labour
Court decided that an ex-employee who formed a close corporation for the purposes of
avoiding liability for income tax and who then concluded a contract of agency with her exemployer, could no longer be regarded as an employee and could not claim that she had
been dismissed when her ex-employer decided not to use her services any longer. In
15
other words she was not entitled to the protection offered to dismissed employees under
the LRA.
Whereas the Briggs and Shikwambana cases indicate that the law will not allow employers
and employees to create fictitious contracts in order to avoid the provisions of the LRA or
any other law and that the court is prepared to look beyond the wording of the contract to
discover the true nature of the working relationship, the recent Bezer case indicates that
the court still has discretion in this regard.
When does the status of “employee” commence and when does it end?
Since labour laws protect employees it is critical to determine the point in time at which a
person may be regarded as an “employee” and when he/she no longer has this status.
The case of Wyeth SA (PTY) Ltd v Manqele & others (2003) 7 BLLR 734 (LC) concluded
that it is not only at the point that a person starts working that he/she may be regarded
as an ”employee”. A person becomes an “employee” and has protection under labour law
once he/she has concluded a contract of employment, even before he/she has commenced
working. Employers should therefore be cautioned that informing an appointed employee,
before work has commenced that his/her services will not be required constitutes
dismissal.
(Note: Leave to appeal has been granted in the Wyeth case)
Employment terminates, in the case of a fixed-term contract, on expiration of the period
or project for which the employee was employed (unless there is renewal) and in the case
of indefinite employment, upon lawful termination of the contract by either the employer
or the employee. Regarding the status of “employees” who have been dismissed but who
are challenging their dismissal, the Labour Appeal Court decided in Transport Fleet
Maintenance (Pty) Ltd v NUMSA (2003) 10 BLLR 975 (LAC) that pending the outcome of a
dispute regarding a dismissal, the dismissed employees may remain “employees”.
3. THE IMPORTANCE OF DISTINGUISHING
BETWEEN DIFFERENT TYPES OF
EMPLOYEES
We have established above that “employees” are governed and protected by labour laws in
South Africa and that a person who is not an “employee” but an “independent contractor”
does not have protection in this regard.
However, all employees are not equal! The extent to which employees are protected
differs depending on the type of employee and the specific piece of legislation that
applies. While the specific protections will be dealt with in greater detail in our discussion
of the different laws, the following is list of the main types of employees:
16
Fixed-term employee (temporary employee)
A temporary employee is one who is employed in terms of a fixed-term contract of
employment for a specific period of time or for the duration of a specific project. At the
end of the fixed-term the employment relationship automatically terminates. For this
reason, many employers have preferred fixed-term contracts of employment. They
provide an easy way to terminate the relationship with a worker at the end of a specified
period.
In the past employers would employ a worker in terms of a fixed-term contract of
employment and would decide at the end of the period whether or not to renew the
contract. This cycle would repeat itself indefinitely without the worker having the
security of permanent employment (“rolling over” the contract). Each time the contract
came up for renewal the worker would be at the complete mercy of the employer and
usually had no recourse if the employer decided not to renew the contract. This problem
has been addressed in the LRA under the chapter dealing with dismissal and employers
may no longer create such a pattern of insecurity for employees.
Permanent employee
This is an employee who is employed for an indefinite period of time, usually until either
party terminates the contract by giving notice. Permanent employment is the most
common form of employment and such employment may be full-time or part-time. An
example of part-time permanent employment would be the worker who works indefinitely
for the same employer for 4 days every week (i.e. s/he is permanent but not full-time).
Probationary employee
This is where a person is employed for a trial period in order for the employer to assess
the employee’s skills and abilities and to find out whether they are sufficiently compatible
to enjoy a healthy, more permanent working relationship. Legislation does not dictate the
specific duration for which a person may be placed on probation but the LRA states that
the probationary period should be of reasonable duration, which will depend on the nature
of the job and the time it will take to determine the employee’s suitability for continued
employment. If both parties are satisfied at the end of the period of probation the
employee may be offered permanent employment.
Senior managerial employee
A senior managerial employee is one who, by reason of his/her rank in the business, has
powers and functions, which are normally associated with those of the employer. S/he
usually has the power to hire and dismiss other workers and to take policy decisions on
behalf of the employer.
It should be noted however that notwithstanding his/her status, a senior managerial
employee is not to be confused with an employer and s/he remains subordinate to the
employer. Whereas a senior managerial employee is excluded from certain labour
17
legislation protections, such as being subject to maximum working hours or having the
right to form or participate in a workplace forum s/he is an employee for the purpose of
unfair dismissal.
Sales staff who travel to customers premises and who regulate their own hours
This type of employee is excluded from protections relating to working hours under the
BCEA
An employee who earn in excess of the amount determined by the Minister in terms
of Section 6(3) of the Basic Conditions of Employment Act.
The amount is currently R115 572.00 per annum (ref: Dept of Labour)
This employee is excluded from protections relating to working hours under the BCEA
Employee who works less than 24 hours a month for an employer
This employee is excluded from many of the protections under the BCEA.
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4. SALIENT FEATURES OF THE LABOUR
RELATIONS ACT, NO 66 OF 1995 (as
amended)
Note: The Labour Relations Act, No 66/1995 is the main Act. Since being passed it has
been amended 3 times:
 Labour Relations Amendment Act, No 42/1996
 Labour Relations Amendment Act, No 127/1998
 Labour Relations Amendment Act, No 12/2002
The LRA provides the general framework within which labour relations and labour law
operates in South Africa
Before embarking on a journey into the practical workings of the LRA it is important to
define what the term “labour law” means. For our purposes we can say that labour law is a
system of legal rules which govern and regulate various relationships in the work arena.
This system of legal rules provides a legal foundation for the following relationships:
. Employer – employee
. Employer – employees
. Trade union – member employees
. Employer/Employer organisations – trade unions
Without undermining the importance of any of the above relationships, only two are
important for our purposes:
1)
The relationship between employer – employee (called the employment relationship)
2) The relationship between employer/employer organisation – trade union (called the
collective bargaining relationship)
4.1 BASIC DISTINCTION BETWEEN INDIVIDUAL LABOUR LAW
AND COLLECTIVE LABOUR LAW
Labour law may be divided into two main branches:
(A)
Individual Labour Law
Individual labour law focuses on the relationship between the individual
employer and the individual employee (the employment relationship). This
relationship is the most basic and arguably the most important relationship
in the workplace. It is founded on the contract of employment.
The LRA regulates the following important aspects of the employment
relationship between employer and employee:
19





(B)
Methods for terminating a contract of employment,
Grounds for dismissal and procedures to follow
Unfair Labour Practice
Forums and procedures for resolving alleged unfair dismissal disputes
and unfair labour practices
Remedies for unfair dismissal and unfair labour practice
Collective Labour Law
Collective labour law focuses on the relationship between an
employer/employers’ organisation and a trade union. (An employers’
organisation is a collective entity which represents the interests of a group
of employers. It may be said that while trade unions emerged to give
greater bargaining power to workers, employers’ organisations emerged to
give employers more leverage against increasingly more powerful unions.)
As the term “collective labour law” denotes this branch of the law deals with
the relationship between collective entities. In a collective bargaining
relationship, employees will always be represented by a collective entity
(usually a trade union). The other party to this relationship, may however
be a single employer
The LRA regulates the following important aspects of the collective
bargaining relationship between employer/employer organisation and
employees/trade union:





Freedom of association
Organisational rights of trade -unions,
Collective agreements (including closed-shop and agency shop
agreements)
Bargaining Councils
Forms of industrial action (e.g strikes and lock-outs) as well as
procedures to be followed
Most provisions of the LRA focus on collective labour law and on the collective
bargaining relationship. Since most of the attendees at this CPE are from
organisations that do not have trade union participation, since there is no specific
bargaining council for the sector and based on the needs of the majority of SMMEs,
this CPE and the course material does not deal with collective labour law and
developments in any great detail (although basic information in this regard will be
included in this practitioner’s handbook).
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4.2 ASPECTS OF INDIVIDUAL LABOUR LAW
4.2.1
DISMISSAL AND UNFAIR LABOUR PRACTICE
The LRA contains very important provisions regulating the fair treatment of an employee
and the fair termination of his/her contract of employment. Chapter VIII and Schedule
8 of the Act deal specifically with Unfair Dismissal and Unfair Labour Practice. Since the
majority of cases that come before the CCMA are disputes concerning unfair dismissal
(82% of disputes referred between 1 April and 31 July 2004 concerned unfair dismissal)
and since the majority of the awards made have been in favour of the employee it is vital
to turn our attention to the rules (including recent amendments) that apply to dismissal
and unfair labour practice.
Before discussing “dismissal” in detail it is important to remember that not every
termination of a contract of employment will amount to a dismissal.
There are several ways in which a contract of employment may terminate:
4.2.1.1
Methods of terminating a contract of employment
There are several ways in which a contract of employment may be terminated:
a)
By Agreement
The employer and the employee may agree to terminate the contract. (unless there are
elements of duress or undue influence this will not amount to dismissal).
b)
Completion of a fixed-term contract
In the case of a temporary employee, once the period or project specified in the fixedterm contract expires or is completed, the contract automatically terminates. (Unless
there has been a repeated “rolling over” of the contract and the employee had a legitimate
expectation that the contract would be renewed, termination in this way will not amount to
dismissal)
c)
Termination on insolvency
A provisional order of insolvency of an employer will have the effect of suspending all
contracts of employment for a period of 45 days. Consultation with the provisional
liquidator/trustee will determine whether the business can be saved (in whole or in part)
or whether employment contracts need to be finally terminated or whether there will be a
transfer of the business in terms of S197A. S 197A of the LRA is important in this
regard and is dealt with below.
21
An employee’s insolvency will generally not affect the continuity of his contract of
employment.
d)
Impossibility of performance
If performance in terms of the employment contract was possible at the time that the
contract was concluded but later becomes objectively and permanently impossible, the
contract will terminate. This is referred to as supervening impossibility of performance
and an example of this would be the death of the employee or the banning of a workrelated activity by government. (Termination of the contract in this manner will usually
not amount to a dismissal).
Note: if performance was impossible at the outset, no valid contract comes into existence.
e)
Fundamental breach of contract
If either party commits a serious breach of contract, the aggrieved party has a right to
cancel the contract without giving notice (summary termination). A breach of contract
occurs where either party fails to perform in terms of the contract or does not perform
properly. Only a serious/fundamental breach of contract will justify summary termination
of a contract. Whether a breach is sufficiently serious to justify termination depends on
the facts of a particular case. An employer’s refusal to pay its employees’ wages or an
employee’s gross insubordination or gross dishonesty would in most cases justify
termination.
Termination of a contract of employment after there has been a serious breach of
contract usually amounts to a dismissal. For example where the employer terminates the
contract because of breach of contract by the employee (e.g. theft, gross insubordination,
assault, willful damage to property) this is always dismissal. Where it is the employee who
terminates the contract of employment because of serious breach of the contract by the
employer, this too may constitute dismissal (called “constructive dismissal”-see below). An
example would be termination of the contract by the employee because the employer
refuses to pay wages or to give the employee leave to which s/he is entitled.
f)
Termination by giving notice
Generally, contracts of employment (with the exception of fixed-terms contracts) may be
terminated by either party giving notice of intention to terminate the contract. Giving
notice does not immediately terminate the contract. Rather it indicates a party’s intention
to terminate the contract at a given time in the future. The period of notice is usually
specified in the contract yet if the contract is silent on the period of notice, “reasonable
notice” must be given. What is “reasonable” depends on the circumstances and the nature
of work which the employee performs. Remember, the BCEA contains minimum terms with
regard to notice.
22
Dismissal occurs when a contract of employment is terminated by the employer (or in
some instances, where the employee resigns but because the employer has made
continued employment intolerable-so called “constructive dismissal”).
According to Roman-Dutch law (common law), a dismissal must be LAWFUL. This means
that the employer must either:
a) give the employee proper notice, or
b) summarily dismiss the employee (i.e without notice) if the employee has committed a
fundamental breach of contract.
For many years South African law adhered only to the rule relating to lawfulness. A
dismissal would be upheld by a court as long as the employer could show that it had given
the employee proper notice or that it had summarily dismissed the employee following a
serious breach of contract.
The problem with relying solely upon the requirement of lawfulness meant that any
consideration of fairness was completely ignored. To illustrate this, an auditing firm could
validly dismiss an employee by giving him proper notice, even if the reason for the
dismissal was that the employer did not like the rugby team that the employee supported.
In other words, in the past the employer did not need to show that it had a good reason
for dismissal. Moreover, even if an employer did have a reason for dismissal, for example
it suspected that the employee was stealing, it did not have to follow any fair
steps/procedures in dismissing the worker.
The LRA has fully addressed this issue and requires that in addition to being LAWFUL a
dismissal must also be FAIR.
The requirement of LAWFULNESS is exactly the same as the Roman-Dutch requirement,
that is that the employer must give the employee proper notice or, failing notice, must
prove that the dismissal is in response to a serious breach of contract by the employee.
The requirement of FAIRNESS has two components:
a) The dismissal must be grounded on a valid and fair REASON, and
b)
The dismissal must be according to fair PROCEDURE/STEPS
The REASON for the dismissal must be valid and fair. Valid means that the reason upon
which the employer is relying to dismiss the employee must objectively exist and fair
means that dismissal must be the appropriate sanction under the circumstances. Fair
PROCEDURE means that the employer must follow the correct steps to dismiss the
employee. If the reason for a dismissal is valid and fair, we say that the dismissal is
SUBSTANTIVELY FAIR, (i.e. it is fair in substance). If the employer has followed the
correct steps in dismissing the employee, we say that the dismissal is PROCEDURALLY
FAIR.
23
A dismissal must be both SUBSTANTIVELY and PROCEDURALLY FAIR. If a dismissal
is either procedurally or substantively defective, the entire dismissal will be found to be
unfair.
The first section of chapter VIII states - “Every employee has the right not to be
unfairly dismissed or subjected to unfair labour practice” (S185). This basic right to
which every employee is entitled implies three questions:
1)
2)
3)
Who is an employee?
What is a dismissal or an unfair labour practice?
When is a dismissal fair or unfair?
1)
Who is an employee?
(This has already been discussed above).
2)
What is a dismissal or an unfair labour practice?
S186 of the LRA lists 6 forms of dismissal and 4 forms of unfair labour practice. Any
action on the part of the employer which does not fall within one of the following forms
does not constitute a dismissal or unfair labour practice:
4.2.1.2
Forms of Dismissal(S186)
(a)
Termination of the contract of employment by the employer with or without
notice;
(b)
Not renewing a fixed term contract of employment of a temporary employee or
renewing it on less favourable terms, where the employee reasonably expected it
to be renewed on the same or similar terms;
(c)
Refusing to allow an employee to resume work after she –
took maternity leave to which she was legally entitled; or
was absent from work for up to four weeks before the expected date, and up to
eight weeks after the actual date, of the birth of her child; (pregnancy);
(d)
Selectively re-employing one or more employees who have been dismissed for the
same or similar reasons and refusing to re-employ another/others;
(e)
Resignation from work by an employee because the employer has made continued
employment intolerable for the employee (constructive dismissal);
(f)
Resignation from work by an employee after the transfer of the business in terms
of S197 or S197A because the new employer (the employer to whom the business
was transferred) has provided the employee with work conditions or circumstances
that are substantially less favourable to the employee than those provided by the
old employer;
24
(b), (d) and (e) demand clarification.
In the past, fixed-term contracts of employment were an employer’s preferred type of
employment contract because they automatically expired at the end of a period or project.
On the expiration of the fixed-term the employer could simply part ways with the
employee, arguing that by the nature of the contract the employee had no expectation of
continued employment. It was common practice for an employer to enter into a fixed-term
contract of employment with an employee and, when it expired, decide whether or not to
renew the contract. Each time the contract came up for renewal the employee would be
completely at the employer’s mercy. In other words the employee had no job security.
Moreover if the employer chose not to renew the contract the employee had no recourse.
S186(c) was enacted to redress this unfair practice. In terms of this section, if an
employee has a reasonable expectation that his employer will renew his fixed-term
contract of employment, it will constitute a dismissal if the employer does not renew the
contract or renews it on less favourable terms. The test of whether the employee’s
expectation was reasonable is an objective test and looks at whether the employer
created the impression that it intended to renew the contract. Making representations to
the employee that the contract would be renewed, giving assurances that the contract
would be renewed or renewing fixed-term contracts in the past would create such an
impression.
Consider the following CASE STUDY:
X was employed on a one month, fixed-term contract of employment. His contract was
renewed for 8 months successively. Thereafter X was advised that his contract would not
be renewed in the future. He alleges that he had been given assurances by his supervisor
that his contract would be renewed and that non-renewal therefore constitutes a
dismissal. Does this constitute a dismissal in terms of S186?
Selective re-employment in terms of S186(d) is a form of dismissal which creates
confusion. Effectively, if an employer has dismissed several employees for the same or
similar reasons and then offers to re-employ some of those employees, the employees who
have been refused re-employment have technically been ‘dismissed’ in terms of this
section. For this form of ‘dismissal’ to take place, there must have been a prior dismissal.
This implies that the employees who have been excluded from selective re-employment
have been dismissed twice and this is problematic. In practice this is not always the case
and employers may at times re-employ dismissed employees.
The form of dismissal referred to in S186(e) is termed constructive dismissal. In the
past an employer who did not want to be accused of unfair dismissal would construct an
unbearable situation at work for an employer, indirectly forcing the employee to resign.
For example, it might not have given the employee work to do or it would thwart the
employee’s progress in the workplace or victimize the employee. If the employee did
finally resign for this reason s/he would usually have no recourse against the employer.
The injustice of this is clear.
25
Today, if an employee terminates or agrees to terminate his/her contract of employment
but this termination or agreement was prompted or caused by the conduct of the
employer, the employee is said to have been constructively dismissed and s/he may have
recourse against the employer. A crucial element of constructive dismissal is that the
employer must have made continued employment intolerable for the employee.
Constructive dismissal is clearly highlighted in the case of SALSTAFF v Swiss Port South
Africa (Pty) Ltd (2003) 3 BLLR 295 (LC) . In this case, the resignation by a pregnant
employee after the CEO of the business had insulted, threatened and humiliated her and
had also drawn up her letter of resignation was found to constitute constructive dismissal.
It should be noted that in determining whether the employment situation was
“intolerable”, the court cannot rely solely on the subjective perceptions of the employee.
For example in the earlier case of Goliath v Medscheme (Pty) Ltd (1996) 5 BLLR 603 (IC)
the court found, for example, that an employee’s incorrect perception that she was a
victim of malicious conduct did not constitute constructive dismissal. The court uses the
reasonable person test in terms of which it asks “would a reasonable person in the shoes of
the employee have found the situation to be intolerable”. The court needs to view the
employer’s conduct in its totality and determine whether it is conduct which a reasonable
employee cannot be expected to endure. In addition the court must be satisfied that the
“intolerable” conditions are within the employer’s control and that there is a causal
connection between the intolerable conditions and the employees resignation. In the case
of Mafomane v Rustenburg Platinum Mines Ltd (2003) 10 BLLR 999 (LC) the court held
that the employee who claimed constructive dismissal on the basis of racial discrimination
needed to prove that his resignation was causally related to direct or indirect race
discrimination.
The recent case of Mvamelo v AMG Engineering (MENT3853), seems to indicate that the
approach of the CCMA to cases where an employee is offered an opportunity to, and
chooses to resign, rather than face disciplinary action is more lenient than was previously
the case and that it does not necessarily amount to constructive dismissal.
In this case the applicant was presented with a tape of a conversation which implicated
him in stealing from the company. The applicant was offered an opportunity to resign or to
face a disciplinary enquiry. In order to ensure that his employment record remained clean
he chose to resign.
Since the applicant had the option to face disciplinary action and was not forced to resign
the CCMA decided that he had not been constructively dismissed.
Please remember that S186(a) – (f) lists the 6 forms of dismissal. Whether or not a
dismissal is fair or unfair is a separate enquiry. Do not assume that conduct which
amounts to a dismissal is necessarily unfair!
4.2.1.3
Forms of Unfair Labour Practice
The 2002 Amendment to the LRA has introduced 4 forms of unfair labour practice:
26
(a)
An employer’s unfair conduct/behaviour in relation to the promotion, demotion,
probation or training of an employee or in relation to the provision of benefits
to an employee; (note: dismissals relating to probation are not dealt with under
the provisions of unfair labour practice but rather under dismissal);
(b)
Unfair suspension or any other unfair disciplinary action (short of dismissal)
against an employee;
(c)
An employer’s failure to reinstate or re-employ a former employee in terms of
any agreement;
(d)
An occupational detriment (other than dismissal) in contravention of the
Protected Disclosures Act, No 26 of 2000, on account of the employee having
made a protected disclosure defined in that Act.
The last form of unfair labour practice refers to the situation where an employer
victimizes, intimidates or otherwise punishes an employee who has disclosed information
which s/he is permitted to disclose and in a manner in which is permitted in terms of the
Protected Disclosures Act. The recent case of Grieve v Denel (Pty) Ltd (2003) 4 BLLR
366 (LC) illustrates this form of unfair labour practice. In this case Grieve, who was an
employee of the defendant, disclosed information regarding alleged wrongful conduct by
his manager. Grieve was subsequently threatened with disciplinary action. The court
found that Grieve had not acted in bad faith and that the threat of disciplinary action
under the circumstances was an “occupational detriment”.
Conversely, in the case of CWU v Mobile Telephone Networks (Pty) Ltd (2003) 8 BLLR 741
(LC) the suspension of an employee after he had accused his superiors of corruption was
not held to be an unfair labour practice. In this case the court found that the employee’s
accusation (“disclosure”) was not protected and that it was “mere rumours”.
4.2.1.4
3)
Fairness
When is a dismissal fair or unfair?
Once it can be established that dismissal has occurred in any of the 6 forms listed in
S186, the second part of the enquiry is to establish whether the dismissal was fair or
unfair. The employee must prove that he/she has been dismissed, thereafter the onus
shifts onto the employer to prove that the dismissal was fair. For this reason it is critical
for employers and managers to know the law on fairness regarding dismissals.
4.2.1.4.1 Automatically unfair dismissals (S187)
S187 of the LRA lists the instances when a dismissal will be automatically unfair. If a
dismissal occurs based on any of the reasons listed in S187 the employee is automatically
presumed to have been dismissed unfairly and the employer will not have the opportunity
to try and prove that the dismissal was fair. Furthermore, the possible damages that an
27
employer may be ordered to pay the employee on account of an automatically unfair
dismissal are the highest for unfair dismissal.
According to S187 a dismissal is automatically unfair if the reason for the dismissal is any
of the following:
(i)
the employee has exercised freedom of association, or the employee is a member of
a workplace forum.
(ii)
the employee participated in or supported, or indicated an intention to participate
in or support, a strike or protest action that complies with the provisions of
Chapter IV (i.e. protected / “legal” industrial action). Please note that while an
employee may not be dismissed for reason of participation in protected industrial
action, he/she may legitimately be dismissed for misconduct during the protected
strike/protest action or based on operational requirements of the employer’s
business.
(iii)
the employee refused, or indicated an intention to refuse, to do any work normally
done by an employee who at the time was taking part in a strike that complies with
the provisions of Chapter IV or was locked out, unless the work is necessary to
prevent an actual danger to life, personal safety or health.
(iv)
to compel the employee to accept a demand in respect of any matter of mutual
interest between the employer and employee (this is referred to as a ‘dismissal
lock-out’. A matter of mutual interest would be any term and condition of
employment. Please note the subtle difference between a dismissal based on the
reason that an employee refused to accept a demand in respect of a matter of
mutual interest and a dismissal based on the operational requirements of the
employer’s business).
(v)
the employee took action, or indicated an intention to take action, against the
employer by –
(i)
exercising any right conferred by this Act; or
(ii)
participating in any proceedings in terms of this Act
(An employer may not use the threat of dismissal to intimidate an employee or to
punish him/her for taking action against the employer)
(vi)
the dismissal is for reasons of the employee’s pregnancy, intended pregnancy, or
any reason related to her pregnancy
(vii)
the dismissal is based on unfair discrimination against an employee, directly or
indirectly, on any arbitrary ground, including, but not limited to race, gender, sex,
ethnic or social origin, colour, sexual orientation, age, disability, religion, conscience,
belief, political opinion, culture, language, marital status or family responsibility
(viii)
the dismissal relates to a transfer of business contemplated in terms of S197 or
S197(A)
28
(ix)
The dismissal is on account that the employee made a protected disclosure in terms
of the Protected Disclosures Act No 26 of 2000;
Despite (vii) above, a dismissal may be fair if the reason for the dismissal is based on an
inherent requirement of the job or if the dismissal is based on age and the employee has
reached the normal or agreed retirement age for persons employed in that capacity.
In the past year there have been several cases dealing with automatically unfair dismissal.
The following examples highlight the court’s views on dismissal for reasons listed above:
In NUMSA v Zeuna-Starker Bop (Pty) Ltd (2003) 1 BLLR 72 (LC) the dismissal of
employees for reason that they refused to accept their employer’s final wage offer was
found to be automatically unfair.
In Solidarity obo McCabe v SA Institute for Medical Research (2003) 9 BLLR 927 (LC)
the non-renewal of an employees fixed-term contract because of her pregnancy was found
to be an automatically unfair dismissal.
In SACTWU v Rubin Sportswear (2003) 5 BLLR 505 (LC) the court found that the
dismissal of elderly employees (for reason of age) before they reached “normal retirement
age” constitutes an automatically unfair dismissal.
4.2.1.4.2
Other dismissals (S188)
A dismissal which is not automatically unfair may still be unfair if it is not grounded on a
valid and fair reason or if the employer has not followed fair procedure.
S188 of the LRA lays down the requirements which must be met for dismissals (with the
exclusion of automatically unfair dismissals) to be fair. A dismissal which is not
automatically unfair but which does not comply with the requirements in S188 will be found
to be unfair.
Our law recognises three grounds for dismissal (Schedule 8 of the LRA):
1) Misconduct
2) Incapacity
3) Operational Requirements of the Business
Misconduct refers to bad behaviour on the part of an employee.
Whenever an
employee breaks a workplace rule, s/he is guilty of misconduct and this may in certain
instances lead to dismissal (depending on the severity of the misconduct or on the number
of times that the offence has been committed).
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According to guidelines laid down in Schedule 8 of the LRA a dismissal based on
misconduct may be substantively fair if the following requirements are met:
a) The workplace rule which the employee has breached is a reasonable rule (for example,
a rule that employees may never use the bathroom except during lunchbreak would be
regarded as unreasonable and breach of the rule could never lead to dismissal).
b) The employee was aware of the rule or could reasonably be expected to have been
aware of the rule and must be further be aware that breaking the rule could lead to
dismissal. For this reason management is advised to distribute a copy of workplace
rules (a disciplinary code) to those employees who will be affected by them and to set
out the possible consequences for breaking the rules. This will avoid any uncertainty
later.
c) The rule has been consistently applied by management
management must treat its employees equally and fairly – Employees should be treated
the same for commission of the same offence (unless the circumstances are different).
Similarly, if the employer has elected not to dismiss employees for theft in the past, it
cannot dismiss Z for theft now since by not proceeding against thieves in the past, the
employer has created the impression that it does not regard the crime of theft as
misconduct warranting dismissal.
d) Dismissal is the appropriate punishment for the misconduct.
This would depend on several factors, inter alia, the form of misconduct (some are
more serious than others), the circumstances surrounding the misconduct (e.g. theft is
serious but the stolen item was of little value), the nature of the job, the employee’s
circumstances (e.g he had no previous disciplinary record or his child was very ill and he
therefore stole money to pay for medicine)
A dismissal must also be procedurally fair. Procedural fairness refers to the steps,
which must be followed to dismiss the employee.
Our courts have endorsed the concept of corrective or progressive discipline. This
ensures that dismissal is reserved as a drastic measure only. Efforts should first be made
to correct an employee’s behaviour through graduated disciplinary measures short of
dismissal such as warnings. Warnings may be oral or written, depending on the severity of
the misconduct. In certain instances more than one warning may be necessary to justify
dismissal, in other instances one final warning may be sufficient and in very serious cases
of misconduct no previous warning is necessary to justify dismissal. Although it is difficult
to say with certainty when one or more prior warnings are necessary to justify dismissal
one may be guided by the following (note: this is only a guide and employers are encouraged
to develop their own list of offences and possible sanctions, to be included in an
organisation disciplinary code)
For minor offences (e.g. late arrival for work, swearing at work, negligent, minor damage to
company property) –written warning by supervisor or manager for the first offence (a
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verbal warning may be sufficient), final written warning by manager for the second
offence, disciplinary enquiry and possible dismissal by the general manager for the third
offence.
For serious offences (e.g insubordination, insolence, intimidation or victimisation of coworkers, intoxication, refusal to carry out a reasonable instruction) – final written warning
by manager for the first offence, disciplinary enquiry and possible dismissal by general
manager for the second offence.
For very serious offences (e.g physical assault on the employer, a fellow employee, client
or customer gross dishonesty, theft, unauthorised possession or use of company property,
fraud, unauthorised possession of drugs, wilful damage to company property, willful
endangering of the safety of others, giving a false identity, gross insubordination,
unauthorised possession of a lethal weapon at the workplace, working against the
company’s interests) the disciplinary code may specify that an employee be dismissed by
the general manager following a disciplinary enquiry after the first offence.
(THE DISCIPLINARY CODE of a company must specify the penalty which a form of
misconduct may attract in relation to the number of occurrences).
The Disciplinary Enquiry/Hearing
An employee may not be dismissed for misconduct without first holding a disciplinary
hearing. The reason for this is to attempt to establish the employee’s guilt and to ensure
that s/he is given a fair opportunity to respond to the charges. The hearing is fairly
informal and no legal representation is allowed at the hearing (unless by agreement). The
main purpose of a disciplinary enquiry is to establish whether or not there are grounds for
a dismissal. The following are procedural guidelines:
1
The employer must give the employee notice of the allegations and of the
investigation.
This means that before the hearing the employer must inform the employee of the
charge/s against him/her.
–The charge/s are usually recorded in writing and the employee signs an
acknowledgment of receipt thereof.
–The employer must use a form and language which the employee can understand
(e.g. simple English)
NB: notification must take place before the investigation. How long before the
investigation depends on the circumstances (Approx 3 or 4 working days, unless
employee committed a very serious offence, in which case less notice would be
required).
2
The employee must be given reasonable time to prepare his/her response.
This relates closely to no: 1) above, and again, what constitutes reasonable time
depends on the circumstances.
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3
During the hearing the employee must be given an opportunity to state a case in
response to the allegations against him/her.
The employee may, for example, deny the charge or give a reason for the
misconduct.
4
The employee is entitled to assistance of a trade union representative or fellow
employee during the hearing. (No legal representation for either side, unless
agreed!)
A trade union representative is a person who has been elected to represent
employees in the workplace (for example, a shop steward)
5
After the enquiry the employer must communicate the decision taken and
preferably furnish the employee with written notification of the decision.
6
The employer must inform the employee of the reason for dismissal.
7
If an employee is dismissed the employer must remind him/her that he/she can
refer the matter to the Commission for Conciliation, Mediation and Arbitration (the
CCMA)
8
If the disciplinary code makes provision for appeal to a higher level of management,
the employee will be able to appeal to this level.
(The LRA provides that the only instances when the employer may dispense with a
disciplinary enquiry are in cases where it cannot reasonably be expected to hold an enquiry
(e.g. during a violent, unprotected strike where lives are endangered) or where the
employee waives his right to a dismissal enquiry)
The following people will be present at a disciplinary enquiry:
- Employer/manager
- Employee without or without a representative
- Chairperson (this is usually a member of management who must remain as impartial as
possible)
(According to the LRA the above steps are not rules but guidelines. This means that if
management does not follow every step the dismissal will not necessarily be unfair.
However, to avoid problems later management should attempt to follow LRA guidelines as
closely as possible).
Disciplinary records
The LRA suggests that employers keep records for each employee specifying:
- the nature of any disciplinary infractions;
- the action taken by the employer.
- the reasons for such action.
The disciplinary record will serve as proof of previous offences if the employee is later
dismissed.
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Incapacity is the second ground for dismissal.
An employee may be dismissed for
incapacity when s/he is incapable of doing the work which s/he was employed to do. Like
misconduct dismissals, a dismissal based on incapacity must be substantively and
procedurally fair (the reason must be valid and fair and the employer must follow the
correct steps).
There are various factors which may result in incapacity (inter alia):
- A terminal illness which renders the employee unable to perform his tasks e.g advanced
stages of cancer
- a severe medical condition which affects the employees capacity to work e.g a weak
heart, severe asthma, deteriorating eyesight.
- A motor-vehicle accident
- Drug addiction
Incompetence.
Unlike misconduct an employee who is incapable is usually not to blame for his/her
incapacity and there is therefore a greater onus on the employer to accommodate this
employee. Dismissal should really be the last resort. Efforts should be made for example
to transfer an employee to an alternative position in the company, to give him/her
reasonable time off for treatment or to assist the employee in whichever other way
possible.
Essentially, incapacity is caused by two main factors:
A)
B)
Ill-health or injury
Incompetence / Poor work performance
A)
INCAPACITY CAUSED BY ILL-HEALTH OR INJURY
In order to justify that the employer has a good reason (i.e. that the dismissal is
substantively fair) the employer will need to show that the employee’s illness or injury has
rendered him/her incapable of meeting the required work standard and that having regard
to all the circumstances dismissal is the appropriate sanction. According to the guidelines
in Schedule 8 of the LRA the employer should have regard to the following in making a
decision to dismiss based on ill-health or injury:
 whether the illness or injury is temporary or permanent
 the period for which the employee is likely to be absent from work
 the nature and seriousness of the illness or injury
 the nature of the employee’s job
 the possibility of securing a temporary replacement for the employee
 whether the employer can accommodate the employee’s disability (for example by
securing alternative employment for him/her in the business or by adapting his
work circumstances or duties)
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Please note that there is a greater onus to accommodate employees who are incapacitated
by a work-related illness or injury).
Procedural fairness
1.
an investigation must be held to determine the extent of the incapacity. If an
employee is temporarily unable to work the employer should investigate the extent
of the incapacity. If the employee is likely to be absent for a time that is
unreasonably long in the circumstances, the employer should investigate all the
possible alternatives short of dismissal. Where the incapacity is permanent, the
employer should ascertain the possibility of securing alternative employment or
adapting the duties or work circumstances of the employer to accommodate the
employee’s disability.
2.
The employee must be given an opportunity to state a case in response and to be
assisted by a trade union representative or fellow employee.
3.
If the employer cannot accommodate the employee’s incapacity he must investigate
whether alternative employment is available.
4.
In the case of alcoholism or drug abuse the employer should consider whether
counseling and rehabilitation may be appropriate as a step short of dismissal.
NOTE: The purpose of the enquiry/hearing is not to enable the employee to defend
himself (remember, this is a no-fault dismissal) but to give him a opportunity to tell
his/her side of the story and to establish facts.
B) INCAPACITY CAUSED BY INCOMPETENCE/POOR WORK PERFORMANCE
It may happen that an employee is incapable of performing his/her work, not because of
illness or injury but because he/she is simply incompetent or unable to meet the required
work standard/s. Where the incapacity is a result of poor work performance the
employer should make sure that it has given the employee in question
reasonable/appropriate “evaluation, instruction, training, guidance or counseling”
(SS8(1)(e) and8(2)(a) of Schedule 8 of the LRA) before dismissing him/her. (In other
words, an employee cannot be dismissed for incompetence if it is found that the reason
for his/her incompetence is that the employer did not in fact give the requisite
evaluation, instruction, training, guidance or counseling.
If there is any doubt as to the competence of a prospective employee the LRA permits
the employer to employ the employee for a probationary period in order to assess
his/her competence before confirming the appointment.
In terms of S8(1) of the Schedule the period of probation must be “reasonable” with
reference to the nature of the job and the time it would take to evaluate the employee’s
suitability. The Act is insistent that probation must not be used to deprive employees
of the status of permanent employment or to create a situation of unnecessary
insecurity for the employee.
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(1)
Dismissal for poor work performance during probation
It is simpler to dismiss an employee for poor work performance during or immediately
upon expiry of the probationary period then it is once the employee becomes a
permanent employee.
The following are guidelines:
Where an employer finds during or on expiry of a probationary period that the
employee’s performance is below standard (notwithstanding reasonable evaluation,
instruction, training, guidance or counselling) the employer needs to advise the employee
of the aspects in which he/she is failing to meet the required standards and if he/she
believes the employee to be incompetent, the respects in which the employee is not
competent. The employer may then decide to either extend the probationary period or
dismiss the employee. Whether the employer decides to dismiss the employee or to
extend the probationary period he/she cannot make this decision without first inviting
the employee (or a trade union representative/fellow employee) to make representations
and considering those representations. If the employer decides to extend the
probationary period or to dismiss, it should advise the employee that he/she may refer
the matter to the CCMA or bargaining council (if one exists).
The purpose of the investigation is to establish whether in fact there is poor work
performance (not inadequate evaluation, instruction, training, guidance or counseling on
the part of the employer), to ensure that the employee was aware of the required work
standard and to decide on the appropriate action. The investigation may result in some
form of corrective action being taken and/or the period of probation being extended or
it may be a pre-cursor to dismissal. The important thing is that the employee or his/her
representative must be given an opportunity to make representations.
(2)
Dismissal for poor work performance after probation
After probation, once s/he becomes permanent, an employee may not be dismissed for
poor work performance unless:a) s/he has been given appropriate evaluation, instruction, training, guidance or
counselling;
b) s/he was aware or could reasonably be expected to have been aware of the work
standard;
c) he/she has been given a reasonable period of time for improvement and he/she
continues to perform unsatisfactorily;
d) an investigation is held in which the employee is given an opportunity to respond
and in which s/he may be assisted by a trade union representative or fellow
employee;
e) alternatives to dismissal have been considered;
f) dismissal is the appropriate sanction for not meeting the work standard
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It is clear from the above that after probation the requirements for dismissal based on
poor work performance become more stringent. The employer not only needs to establish,
via an investigation, poor work performance, ensure that the employee was aware of the
required standards and received appropriate evaluation, instruction, training, guidance or
counseling but once this has been established, the employer needs to give the employee a
reasonable time for improvement and must consider alternatives to dismissal more
carefully. Giving the employee a reasonable time for improvement will necessitate having
another meeting at a later date with the employee to determine whether his/her
performance has improved and what the appropriate action is to take. The reason that the
rules for dismissing an employee for poor work performance are more onerous after
probation is obvious. A permanent employee has an expectation of continued employment.
A probationary employee does not have this expectation.
The main differences between dismissal for poor work performance during/on expiry of
probation and dismissal for poor work performance after probation are two-fold:
i.
once an employee is no longer a probationary employee, s/he may not be
dismissed without first being given a reasonable period of time for improvement
after being made aware that s/he is not meeting the required work standard.
This is not necessary for dismissal during/on expiry of the probationary period;
ii.
S8(1)(j) of Schedule 8 indicates that reasons for dismissal during the
probationary period do not need to be as compelling than would be the case for
dismissal based on poor work performance after completion of the probationary
period.
ESSENTIALLY: Where a dismissal is based on poor work performance, the essential
questions to ask are:a)
b)
c)
d)
e)
f)
Did the employee fail to meet the required work performance?
Did the employee know (or could s/he reasonably have been aware of) the required
work standard
Had the employer given adequate evaluation, instruction, training, guidance or
counselling?
Was the employee given a fair opportunity to improve (this only applies for
dismissals after the probationary period)?
Was an investigation held
Is dismissal the only viable alternative?
Agreement for pre-dismissal arbitration - S188A
As we will see later, where an employee has been dismissed and s/he wishes to contest the
fairness of the dismissal s/he may take the dispute to the CCMA (or council, if applicable)
for resolution.
S188A has been introduced into the LRA. In terms of this section, the employer, upon
payment of a fee and with the employee’s consent, may request a pre-dismissal arbitration.
36
An accredited agency, a council or the CCMA will conduct an arbitration prior to dismissal
into allegations about the conduct or capacity of the employee.
Pre-dismissal arbitration will avoid duplication of hearings.
The outcome of a pre-dismissal arbitration is final but may be reviewed by the Labour
Court.
Pre-dismissal arbitration has not been used frequently by employers.
The third ground for dismissal in South African law is
Operational Requirements
of the Business
These dismissals are often referred to as “no fault” dismissals in that they are not related
to any fault on the part of the employee. The reason for dismissal here lies in the needs
of the business (for example, it is merging with another company, it is downsizing, it is
implementing new technology and does not need all its workforce, it is closing down, it
cannot afford to keep all its workers).
The most common type of dismissal falling under this heading is retrenchment. This
occurs where employee/s become redundant in the workplace.
An employer may only dismiss staff based on operational requirements if it can prove that
a valid reason exists for the retrenchment. In other words, the courts want to be certain
that the employer has a legitimate commercial rationale for these dismissals. If a bona
fide reason does exist the employer must follow the steps (procedure) laid down in S189
or S189A of the LRA:
S189 Deals with Dismissals based on operational requirements for employers with less
than 50 employees or small-scale dismissals based on operational requirements by big
employers
According to this section, where the employer’s business needs justify dismissal, it needs
to ensure that the following criteria are satisfied before dismissing any employees:
1.
prior consultation
This means that at the earliest opportunity, once the employer contemplates dismissing
one or more employees based on operational requirements (before he/she has reached a
final decision to dismiss!) he/she must engage in a process of consultation about the
possibility of the dismissal/s. Consultation must take place between the employer and:
- Person/s with whom the employer is required to consult in terms of a
collective agreement (if one exists);
- (if no collective agreement exists), the workplace forum, (if one exists in
the organization) and any trade union, whose members are likely to be
affected by the proposed dismissals (if there is one);
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- (if there is no workplace forum in the workplace), any trade union (if there
is one) whose members are likely to be affected by the proposed dismissals;
- (if there is no such trade union) then consultation must occur at the very
least with the employees who may be affected by the proposed dismissals
or their representatives that have been nominated for the purpose of
consultation.
The meaning of “consultation” differs from “negotiation”. Whereas “negotiation” requires
compromise and a mutually acceptable arrangement, the Labour Court has suggested that
the process of consultation requires both parties to hear and consider the other’s
suggestions and to act in good faith. The Labour Court requires that the process of
consultation be meaningful and exhaustive. It should not be superficial or a sham and the
other consulting party must have a fair opportunity to make meaningful suggestions which
must be considered in earnest by the employer.
2.
Attempt to reach consensus on certain matters
The amended S189 requires that during consultation, the employer and the other
consulting party must “engage in a meaningful joint consensus-seeking process” and must
“attempt to reach consensus” on certain issues, inter alia, appropriate measures to avoid
the dismissals, to minimise the number of dismissals, to change the timing of the
dismissals, to mitigate the adverse effects of the dismissals, the method for selecting the
employees to be dismissed and the severance pay for dismissed employees.
The following are examples of measures that may be considered to avoid the dismissals:
- the reduction of wages;
- the granting of paid or unpaid leave;
- the spreading of dismissals over a period of time to allow for a natural
reduction in personnel numbers to occur;
- the implementation of short-time;
- where a division needs to be closed down, the retraining of staff in that
division to enable them to be employed in other divisions of the business;
- The reduction or elimination of overtime, work on Sundays or work on Public
Holidays.
Where dismissals are inevitable, the following are examples of measures that may be
considered to minimize the number of dismissals:
- allowing employees to volunteer for retrenchment;
- where a division needs to be closed down, retraining employees to enable
them to be employed in other divisions of the business
Where dismissals are inevitable the following are examples of measures that may be
considered to mitigate the adverse (harsh) effects of the dismissals:
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- giving employees access to a computer, telephone etc to enable them to
update CVs and/or apply for alternative employment;
- giving employees time off work without loss of pay to attend interviews;
- providing letters of reference to give employees a better chance of seeking
alternative employment;
Where dismissals are inevitable the following are examples of selection criteria that may
be used for deciding which employees will be dismissed:
- LIFO
- Early retirement
- Bumping
- Prior conduct
- Efficiency, ability, skills, capacity, experience, attitude to work and
productivity
Using FIFO or the criterion of selecting employees for dismissal based on the fact that
they are part of a double income family is not permissible.
Severance pay is payable in the case of dismissals based on operational requirements of
the business and the parties must attempt to reach consensus on the amount payable.
The minimum amount of severance pay payable is 1 week for every completed year of
service and is regulated by S41 of the BCEA. The parties can agree to an amount greater
than this, in which case the agreed amount applies.
Severance pay is an amount over and above any other amount which is payable in law e.g.
leave pay, notice pay.
An employee who refuses a reasonable offer of alternative employment loses the right to
severance pay. If, for example, the employer offers the employee an alternative position
which is similar in pay, job security and status and this is refused the employee will not be
entitled to severance pay. An offer that amounts to a demotion may however not be
deemed to be a reasonable offer of alternative employment.
In Freshmark (Pty) Ltd v CCMA (2003) 6 BLLR 521 (LAC) the court decided that a
retrenched employee who refused her own position on new terms had refused a reasonable
offer of alternative employment and was therefore not entitled to severance pay.
The section of the Act indicates that the employer must not have made up his/her mind on
the issues and must consult meaningfully with the other party in a bona fide attempt to
reach consensus. Ultimately though the meaning of the word “attempt” to reach consensus
indicates that if consensus cannot be reached despite a meaningful joint consensusseeking process then the employer will have the final decision on the issues (Atlantis
Diesel Engines (Pty) Ltd v NUM (1994) 15 ILJ 1247 (A)).
The requirement that the process of consultation be a meaningful joint consensus-seeking
process means that the employer and the other consulting party must, as far as is possible,
try to reach agreement on the above issues.
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3.
written notice of invitation to consult and written disclosure of relevant
information
The employer must notify the other consulting party in writing that it is contemplating
dismissals based on operational requirements and must, in the same written notice, invite
the other party to engage in consultation in this regard.
In order to prove the truthfulness of the need to dismiss based on operational
requirements, and to ensure that the process of joint consensus-seeking is meaningful, the
notice must disclose all relevant information to the other consulting party.
The type of information which the employer must disclose is information relating to; the
reasons for the proposed dismissals, the alternatives which the employer considered
before proposing dismissals and the reasons for rejecting these alternatives, the number
of employees who are likely to be affected as well as the job categories in which they are
employed, the proposed method for selecting employees to be dismissed (selection
criteria), the time or period during which the dismissals are likely to take effect, the
severance pay proposed, assistance which the employer proposes offering the affected
employees, the possibility of future re-employment, the number of employees employed by
the employer and the number of employees that have been dismissed in the organisation
due to operational requirements in the past year. Effectively, the employer must disclose
all relevant info which will enable the other party to engage effectively in consultation.
The notice must be reasonable, giving the other consulting party sufficient time to
prepare for the consultation.
Information which is legally privileged, information which the employer cannot disclose
without contravening a law or a court order, information which is confidential and which if
disclosed may cause substantial harm to an employee or to the employer and information
which is private personal information relating to an employee need not be disclosed by the
employer.
Where the employer and the other consulting party are in dispute regarding the relevance
of information and the need to disclose/not disclose it and the dispute is referred to
Arbitration or to the Labour Court the burden rests on the employer to prove that the
information sought, which he/she does not wish to disclose, is not relevant.
4.
During the consultation the employer must afford the other consulting party an
opportunity to make representations.
(about any issue on which they are consulting or relating to the proposed dismissals).
5.
employer must consider and respond to the representations made by the other
consulting party.
For example, if the trade union/employees make suggestions regarding the time of the
retrenchments or the selection of employees to be retrenched, the employer must listen
to these suggestions and respond to them. If the employer does not agree with the
suggestions/representations he/she must give a reason/s. If the representations have
been made in writing then the employer must respond in writing.
40
6.
A final decision must be made and communicated to the consulting party.
After consultation, consideration of and responding to the other party’s representations
the employer must make a final decision on whether or not to retrench. The employer
must give written notice of its decision to the other party, and if the decision is to
retrench, the employer must provide the reasons, advise of the selection criteria that
will be used and of the severance pay that will be paid.
With regards selection criteria, these must preferably be those that have been agreed
to or, failing agreement, selection criteria that are fair and objective.
With regards severance pay, the amount may not be less than that specified in S41 of
the BCEA.
Note: A dismissal based on operational requirements of the business does not always
amount to a retrenchment. The following might also lead to dismissals based on
operational requirements of the business:
1.
Special operational needs of the business ( for example during tax season in a large
accounting practice it may be essential for employees to work overtime, a refusal of
which may justify dismissal).
2.
The employee’s action or presence negatively affects the business (for example,
the employee’s actions create disharmony amongst co-workers or s/he is
antagonising the customers or incompatibility exists between employer and
employee). Please note: with incompatibility, incapacity as a ground for dismissal
may be used rather than operational requirements of the business.
3.
The employee’s conduct has led to a breakdown of the trust relationship
The facts of Food & Allied Workers Union & Others v Amalgamated Beverage
Industries Ltd (1994) 15 ILJ 630 (IC) illustrate dismissal based on a breakdown of
the trust relationship:
AMI introduced a new delivery system, to which the drivers and assistants
objected. These particular employees showed their discontent by, among other
things, refusing to do certain deliveries and by arriving at work late. Upon request
by the employer one of the drivers tried to help the employer overcome the
backlog in deliveries. This driver was then seriously assaulted by his co-employees.
AMI, despite a mass enquiry could not identify which of the other drivers and
assistants had committed the assault (they refused to give evidence) and dismissed
them all. Based on the finding by the court that the assault had the effect of
destroying the trust relationship between them and the employer, the dismissal
based on operational requirements was found to be fair
4.
The business requirements demand that changes must be made to the employee’s
terms and conditions of employment ( for example a merger between two auditing
firms may require that changes be made to an employee’s terms and conditions of
41
employment. If the employee is unwilling to accept these changes s/he may be
dismissed for operational reasons).
Naturally a dismissal based on operational requirements must be substantively and
procedurally fair. Substantive fairness means that the reason upon which the employer is
relying to justify dismissal must actually exist, is the real reason for dismissal (not a
“smoke-screen”), has commercial rationale, and indeed justifies dismissal. Procedural
fairness means that the employer must follow the correct steps.
S189A Deals with Dismissals based on operational requirements by employers with
more than 50 employees (This section of the LRA was introduced by the 2002
Amendment to the Act)
According to the LRA
“189A. (1) This section applies to employers employing more than 50
employees if—
(a) the employer contemplates dismissing by reason of the employer’s
operational requirements, at least—
(i) 10 employees, if the employer employs up to 200 employees;
(ii) 20 employees, if the employer employs more than 200, but not
more than 300, employees;
(iii) 30 employees, if the employer employs more than 300, but not
more than 400, employees;
(iv) 40 employees, if the employer employs more than 400, but not
more than 500, employees; or
(v) 50 employees, if the employer employs more than 500 employees;
or
(b) the number of employees that the employer contemplates dismissing
together with the number of employees that have been dismissed by
reason of the employer’s operational requirements in the 12 months
prior to the employer issuing a notice in terms of section 189(3), is
equal to or exceeds the relevant number specified in paragraph (a)”
The section makes provision for a facilitation process.
The process is as follows:
S189A(3) Notice
In terms of Section 189A(3) the employer with more than 50 employees who contemplates
dismissal must give notice of its contemplation based on operational requirements and must
invite parties to consult.
The employer may, in its notice, request a facilitator from the CCMA to assist with the
consultation OR the consulting party representing the majority of employees who may be
dismissed may, within 15 days of receipt of the S189(3) Notice, request a facilitator from
the CCMA OR the parties can agree to appoint a facilitator.
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Facilitation begins with the appointment of the facilitator
Unless the parties agree to vary the timeframe, at least 60 days must elapse from the
date of the employer’s notice inviting consulation to allow for proper consultation and
facilitation. During this period the procedures prescribed by the Act must be followed
and the employer may not give notice to terminate the contracts of employment. Similarly,
during the 60 day period the registered trade union or the employees may not give notice
of a strike unless the employer gives premature notice of termination of employment.
(Doing either of the above would naturally sabotage the intended process of consultation
and facilitation).
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Expiration of the facilitation period
Once 60 days (from date of notice) have elapsed the employer may give notice to
terminate the contracts of employment and a registered trade union or the employees
receiving the notice of termination may either give notice of a strike or refer a dispute
regarding the substantive fairness of the dismissals to the Labour Court, in which case the
employees may not call for strike action.
If a facilitator is not appointed
If a facilitator was not appointed then, provided that a period of 30 days have elapsed
from the date of the employer’s notice inviting consultation, a party may refer a dispute to
the CCMA or bargaining council. From date of referral of the dispute a further 30 days
must elapse before the employer may give notice to terminate any contracts of
employment or the employees may give notice of a strike.
In terms of S189A(13) the Labour Court has the power to make an order where the
employer does not comply with fair procedure in terms of the Section.
Note: With regards to dismissals based on operational requirements, particularly
retrenchments, our courts have been careful to establish that there is in fact a reason
based on operational requirements of the business and that the “retrenchments” are not a
“smoke-screen” for dismissals based on any other reason, e.g. unfair discrimination. In the
past however, once the court was satisfied that the dismissal was based on the operational
requirements of the business, it was generally reluctant to question the commercial
rationale of the employer’s decision to retrench. The recent case of CWIU & Others v
Algorax (Pty) Ltd 2003 11 BLLR 1081 (LAC) however indicates that the court is prepared
to “second-guess” the employer’s decision to retrench. In this case the employer
introduced a new shift system, which the employees refused to adhere to. Based on the
operational requirements of its business the employer dismissed these employees. The
Labour Appeal Court, being of the opinion that there was an alternative to the dismissals
ordered that the employees be re-instated.
44
4.2.1.5
Forums and Procedures for resolving disputes about
unfair dismissals and unfair labour practices
There are essentially three forums where labour disputes may be resolved and three
possible processes for resolving these disputes:
FORUM
CCMA
(Commission for Conciliation, Mediation
and Arbitration):
The CCMA was set up in terms of the LRA to ease
the bottleneck of labour disputes. Most disputes in
terms of the LRA need to be referred to the CCMA
as a first stop.
BARGAINING (OR OTHER) COUNCIL:
Certain sectors have their own bargaining (or
statutory) council. Apart from having the power to
negotiate collective agreements for their sector,
bargaining councils have similar powers to the
CCMA to resolve disputes that arise within their
sector. Where a dispute arises within a sector and
a council exists, the parties will need to refer the
dispute to the council (not the CCMA)
PROCESS
CONCILIATION:
Conciliation is a process whereby a
commissioner of the CCMA or a member of
the bargaining council hears both parties
to the dispute and attempts to help them
arrive at a mutually suitable agreement.
The person conducting the conciliation may
make suggestions to the parties in an
attempt to help them resolve the dispute
but s/he may not impose a decision on the
parties.
ARBITRATION:
In terms of this process after there has
been an attempt at conciliation and this
has failed an arbitrator (a commissioner at
the CCMA or a member of the bargaining
council) hears both parties’ evidence and
after consideration of both sides imposes
a decision. Although arbitration is not as
formal as adjudication rules of evidence do
apply.
The decision of the arbitrator is final and
there is no right to appeal (although review
of the decision is possible if there was any
irregularity)
Note: legal representation is not
permitted at conciliation. Although
generally not permitted at arbitration for
common dismissal disputes (i.e. misconduct
or incapacity) the commissioner does have
45
discretion in this regard, which s/he must
exercise judicially.
CON-ARB:
There is usually a delay between
conciliation and arbitration taking place,
but in terms of the “new” process of conarb, a party may request that arbitration
occur immediately after conciliation has
failed. Con-arb must be used where the
dispute concerns dismissal during
probation.
COURT:
ADJUDICATION:
(i)
Labour Court: hears matters falling
within its jurisdiction.
(ii)
Labour Appeal Court: hears
appeals from the Labour Court
Note: The Superior Courts Bill of 2003 provides
for the abolition of both the Labour Court and the
Labour Appeal Court. If passed into law this law
grants the High Court jurisdiction in labour
matters, whilst labour appeals will be heard in the
Supreme Court of Appeal. A panel of specially
selected judges will be appointed to hear labour
matters.
This process only applies in a court. The
parties to the dispute are both given an
opportunity to present their side of the
dispute and a third party (judge), after
considering the evidence, makes/imposes a
decision.
During the process of adjudication
disputing parties are entitled to have legal
representatives.
The provisions of the LRA dictate which forum and which process must be used. This
is determined with reference to the nature of the dispute:
(1)
Automatically unfair dismissals and dismissals for operational requirements
(i)
the dispute must be referred within 30 days of dismissal (or of receiving
notice of termination of employment) to a council or to the CCMA. The
referral must be in writing and a copy thereof must be served on the
employer.
(ii)
Within 30 days of receiving the referral, the council or CCMA must attempt
to resolve the dispute via conciliation. Although the employee is entitled to
be represented, neither party is entitled to legal representation. If
conciliation fails, a certificate must be issued to this effect.
46
(iii)
Once a certificate that the matter has not been resolved via conciliation has
been issued or 30 days have elapsed from the date of referral, the employee
may approach the Labour court for adjudication on the matter. A dismissal
dispute must be referred to the Labour Court within 90 days after a
certificate that the dispute remains unresolved has been issued or within 90
days from the expiry of the 30 day period of conciliation. Either party may
be represented by a legal practitioner.
(iv)
The decision of the labour court may be taken on appeal to the Labour
Appeal Court
As an alternative to steps (iii) and (iv) above, the parties may agree to having the matter
resolved by the CCMA via arbitration. This is referred to as ‘voluntary arbitration’ .
(2)
Dismissal for misconduct or incapacity or constructive dismissal
(i)
the dispute must be referred within 30 days of dismissal (or of receiving
notice of termination of employment) to a council or to the CCMA. The
referral must be in writing and a copy thereof must be served on the
employer.
(ii)
Within 30 days of receiving the referral, the council or CCMA must attempt
to resolve the dispute via conciliation. Although the employee is entitled to
be represented, neither party is entitled to legal representation. If
conciliation fails, a certificate must be issued to this effect.
(iii)
Once a certificate that the matter has not been resolved via conciliation has
been issued or 30 days have elapsed from the date of referral there will be
compulsory arbitration by a council or by the CCMA. An exception to this is
where an employee is being dismissed for participating in an unprotected
strike. In this instance the matter is referred to the labour court for
adjudication, unless the parties agree to arbitration (i.e voluntary
arbitration).
Remember, where the dismissal is for any reason relating to probation the
arbitration must commence immediately after a certificate is issued that
the dispute remains unresolved (con-arb).
The arbitration award is final.
(3)
Disputes concerning unfair labour practice
If there is a dispute regarding an unfair labour practice or the employee is alleging an
unfair labour practice then the following must occur:
(i)
the dispute must be referred within 90 days of occurrence of the alleged
unfair labour practice(or of the employee becoming aware of it-if this is
longer than 90 days) to a council or to the CCMA. The referral must be in
writing and a copy thereof must be served on the employer.
47
(ii)
Within 30 days of receiving the referral, the council or CCMA must
attempt to resolve the dispute via conciliation. Although the employee is
entitled to be represented, neither party is entitled to legal
representation. If conciliation fails, a certificate must be issued to this
effect.
(iii)
Once a certificate that the matter has not been resolved via conciliation
has been issued or 30 days have elapsed from the date of referral there
will be compulsory arbitration by a council or by the CCMA. An exception
to this is where an employee is being dismissed for participating in an
unprotected strike. In this instance the matter is referred to the labour
court for adjudication, unless the parties agree to arbitration (i.e
voluntary arbitration).
Remember, where the dispute concerns an unfair labour practice relating to
probation the arbitration must commence immediately after a certificate is
issued that the dispute remains unresolved.
The arbitration award is final.
Comply with an order of the Labour Court or the CCMA!
In the case of Bruckner v Department of Health (2003) 12 BLLR 1229 (LC) an employer
who did not comply with an order to re-instate a dismissed employee to her former
position in the organisation was held to be in contempt of court and was sentenced to 15
days’ imprisonment, suspended for 60 days to enable it to comply with the order.
4.2.1.6 “Con-Arb”
Ordinarily there is a delay between conciliation and arbitration. The procedure of ConArb is now available whereby arbitration of a dispute takes place immediately after
conciliation has failed i.e. on the same day.
4.2.1.7 Remedies for unfair dismissal and unfair labour practices
In terms of S193(1) of the LRA there are three remedies for unfair dismissal or unfair
labour practice.
(1)
Reinstatement
A reinstatement order restores the contract of employment as if it had never been
broken. This means that the employee’s terms and conditions of employment are
restored and s/he retains any right s to which s/he was entitled under the original
contract of employment (for example the right to pension benefits). The employee
may be reinstated from a date not earlier than the date of dismissal.
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(2)
Re-employment
Re-employment implies that the employee be employed in terms of a new contract
of employment. The employee may be re-employed in the work in which he was
previously employed or he may be re-employed In other ‘reasonably suitable’ work.
(3)
Compensation
An arbitrator or the labour court may order that the employer pay the employee
compensation for unfair dismissal. S194 of the LRA lays down the maximum
compensation which an employer may be ordered to pay:
a)
If a dismissal based on misconduct, incapacity or operational requirements
of the business is found to be unfair because the employer did not prove
that it had a fair reason for dismissal or the employer did not follow fair
procedure or both, the compensation payable must be ‘just and equitable’ in
the circumstances, but may not be more than the equivalent of 12 months
remuneration (calculated at the employee’s rate of remuneration on the date
of dismissal).
b)
If the dismissal is automatically unfair the compensation payable must be
‘just and equitable’ in the circumstances, but not more than 24 months
remuneration (calculated at the employee’s rate of remuneration on the date
of dismissal).
c)
The compensation payable to an employee who has suffered an unfair labour
practice must be ‘just and equitable’ in the circumstances but may not be
more than the equivalent of 12 months remuneration.
Although the judge or arbitrator does have a measure of discretion in determining
what is ‘just and equitable’, the compensation may not be more than the stipulated
maximum amount.
Reinstatement and re-employment are the primary remedies for unfair dismissal.
There are four instances however when a court or arbitrator may choose not to
order either of these remedies in the case of unfair dismissal:
i)
Where the employee does not wish to be reinstated or re-employed.
ii)
Where the circumstances surrounding the dismissal would make a continued
employment relationship intolerable.
iii)
Where it would not be reasonably practicable for the employer to reinstate
or re-employ the employee
iv)
Where the dismissal is unfair only because the employer did not follow a fair
procedure.
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4.2.2
Sections 197 and 197A: Transfer of contract of
employment and Transfer of contract of employment in
circumstances of insolvency
Both these sections were introduced into the LRA with the 2002 amendment.
S197 provides that where a business is transferred (in whole or part) the new employer is
automatically substituted for the old employer and the transfer does not interrupt an
employee/s continuity of employment. The rights and obligations between the employee/s
and new employer remain the same as they were between the employee/s and the old
employer and terms and conditions of employment may only be changed if they are not less
favourable than they were previously. The section implies further that if an employee
resigns due to terms and conditions being made less favourable it could amount to
constructive dismissal. The new and old employer must agree to values as at the date of
transfer of leave pay, severance pay (that would have been payable to the transferred
employees had there been dismisals based o operational requirements of the business) and
any other payments that have accrued to the transferred employees but have not been
paid. The old and new employers must also enter into a written agreement specifying
which employer is liable for paying any amount/s (apportionment is possible). The section
provides that for 12 months after the date of transfer both employers are jointly and
severally liable to any employee who becomes entitled to receive any payments (mentioned
above) as a result of the employee/s dismissal based on operational requirements of the
business or based on the employer’s insolvency.
S197A deals with transfer of contracts of employment where the old employer is
insolvent or where a scheme of arrangement or compromise is being entered into to avoid
sequestration or liquidation. In these instances the new employer is automatically
substituted for the old employer and the employee/s continuity of service is not
interrupted but rights and obligations between the employee/s and the old employer are
not transferred.
4.3 ASPECTS OF COLLECTIVE LABOUR LAW
Because of the inequality in bargaining power between an employer and an individual
employee, employees form and join trade unions. The establishment of trade unions has
gone a far way to creating greater parity in the employment relationship and towards
protecting the rights and interests of workers. Employees pay a small percentage of their
wages to the trade union to which they belong. In exchange for this fee, the trade union
undertakes to negotiate better terms and conditions of employment on behalf of its
members and to assist or represent its members in workplace disputes.
Negotiation which take place between an employer and a trade union/s is called collective
bargaining.
This handbook does not deal with issues of and developments in collective labour law
in detail. The following brief outline is included for the purpose of completeness and
may be referred to as a basic reference on the topics below:
50
4.3.1
Freedom of Association
In the context of labour law, freedom of association refers to an employee’s right to form,
join and participate in the lawful activities of a trade union as well as the right to elect or
to stand for election as a trade union official or representative.
Freedom of association is a prerequisite for collective bargaining and this right is
protected in Sections 4 & 5 of the LRA. S4 sets out what the right entails and S5
prohibits an employer from discriminating against an employee for exercising freedom of
association. Examples of discrimination in this context would be dismissing an employee,
refusing to give an employee a bonus or a promotion or victimising an employee in any other
way because of his trade union affiliation. S5 goes further than simply disallowing
discrimination on this ground. It prohibits an employer from taking any action that would
undermine freedom of association. An employer may not for example promise a reward to
a prospective employee in exchange for not joining a particular trade union. Any contract
in which an employee undertakes not to join a trade union will be null and void.
The bottom line is that an employer may not prejudice an employee for trade union
affiliation, may not promise advantage to any employee in exchange for surrendering
freedom of association and may not prevent an employee from exercising any rights
conferred by the LRA. (Remember dismissal for trade union affiliation constitutes an
automatically unfair dismissal).
So fundamental is freedom of association, that this right has been entrenched in the Bill
of Rights in Chapter 2 of our Constitution.
Employers also have freedom of association. The right of every employer to form, join and
participate in the lawful activities of employer organisations is guaranteed in S7 of the
LRA.
4.3.2
Trade Unions – Registration and Representation
Registration:
It is not essential for a trade union to register with the department of
labour. However, the LRA encourages registration by granting certain rights to registered
unions only. For example, only registered trade unions may exercise organisational rights
(see below), conclude collective agreements, apply for the establishment of a bargaining
council or statutory council, apply for the establishment of a workplace forum or authorise
a picket. Every trade union draws up its own constitution, which will set out its rules and
regulations. The constitution will, for example, provide who is eligible for membership to
the union.
Representation:
The representativeness of a trade union is determined by how many
employees that trade union represents in a workplace. A trade union is said to have
majority representation in a workplace if it represents 50%+1 of the total number of
employees in that workplace. Similarly, if it represents 50%+1 of a category of workers in
the workplace it is said to have majority representation in respect of that category.
Where a trade union does not enjoy majority support in a workplace but does enjoy
51
substantial support, we say that the union is sufficiently representative in that workplace.
Unfortunately the Act does not define ‘sufficient representation’. This becomes
particularly problematic when we are dealing with rights which trade unions with
‘sufficient representation’ enjoy. Since the term is not qualified, it is possible for an
employer to dispute that a union is sufficiently representative. The Act provides for a
dispute procedure via conciliation and arbitration to resolve these disputes. It is also
possible for a majority trade union and employer to conclude a collective agreement
establishing a specific threshold of representativeness. The following cases illustrate the
discretion which can be applied in determining the percentage of membership which will
qualify as ‘sufficiently representative’:
In SACTWU v WN Eachus & Co (Pty) Ltd it was held that 15.6% was not sufficiently
representative despite the union being very prominent in the industry and representing
83% of employees at sectoral level.
In UPUSA v Komming Knitting the CCMA found that 22.5% representation was sufficient
because the union showed that it was capable of recruiting the majority of employees in
the organization as members but that many members had been lost as the business had a
very high staff turnover.
4.3.3
Organisational Rights
The right to belong to a trade union would be meaningless if trade unions had no power. An
important way in which trade unions are empowered is through them being afforded
certain basic organisational rights.
Only registered and representative trade unions may exercise the following organisational
rights:
(i)
Access to the workplace (S12)
A registered trade union that is sufficiently representative (or is a party to a bargaining
council) has a legal right –

to enter the employer’s premises for recruiting and other union purposes

to hold meetings with employees at the employer’s premises outside their working
hours

to hold a ballot at the employer’s premises.
This right is however subject to reasonable time and place conditions imposed by the
employer. The condition must be necessary to protect life, property or to prevent undue
disruption of work.
(ii)
Deduction of trade union subscriptions or levies (S13)
A member of a registered trade union that is sufficiently representative (or which is
party to a bargaining council) has a legal right to require an employer to deduct union
52
subscriptions or levies from its members’ wages. Once the authorisation has been
received in writing, the employer must start making the deductions and paying them to the
trade union on or before the 15th of every month. (No provision is made for an employer
to retain a collection fee).
With each remittance an employer must supply the trade union with.
the name of every member from whose wages it has made deduction
.
details of the deducted amount and the relevant period
.
a copy of every revocation notice it has received.
An employee may withdraw authorisation on one month’s written notice.
(iii)
Election of trade union representatives (S14)
A registered trade union that enjoys majority representation and has at least 10 members
in the workplace may elect trade union representatives (shop stewards) in that workplace.
The number of shop stewards which it may elect per workplace is determine with
reference to the number of members it has in the workplace
Number of members
Number of union representatives (shop stewards)
10
1
11-50
2
51-100
3
101-150
4
151-200
5
And so on…. (the maximum number of shop stewards which a union may elect is 20)
The functions of a trade union representative are set out in S14(4) of the LRA. A
representative is entitled to reasonable time off during working hours without loss of pay
to perform these functions and to receive training relevant to any of these functions. The
employer may impose reasonable conditions for paid time off. What constitutes a
reasonable condition is not specified in the Act and will depend on the circumstances.
(iv)
Leave for trade union activities (S15)
This right applies to office bearers of registered, sufficiently representative trade
unions. These office bearers are entitled to “reasonable leave during working hours” for
the purpose of performing their functions. The number of days leave as well as the
conditions attached to payment for such leave are to be negotiated with the employer.
Any dispute in this regard may be submitted for conciliation and if necessary arbitration.
An arbitration award will remain valid for 12 months.
53
(v)
Disclosure of information (S16)
A trade union may need information from the employer. For example, a member may be
facing disciplinary action by the employer and the shop steward needs that member’s
previous disciplinary record. Another example would be where a trade union needs
information from the employer to enable it to engage in effective consultation with the
employer. The information which the trade union requests may be highly confidential or of
a very sensitive nature. There may, in other words, be a conflict of interests between the
trade union’s need to access the information and the employer’s concern about keeping it
private. S16 attempts to reconcile these two considerations.
Only a registered trade union with majority representation in the workplace may require
an employer to disclose “all relevant information” that will enable a trade union
representative to perform its functions effectively. Inter alia, the functions referred to
are:
-
assisting and representing employees in grievance and disciplinary procedures
-
monitoring employees’ compliance with statute, collective agreements and any law
regulating terms and conditions of employment
-
reporting alleged contraventions
-
performing any other functions
An employer is also required to disclose relevant information to a trade union to enable the
trade union to engage in effective consultation with the employer.
Information which is not relevant need not be disclosed. A clear link must be established
between the information and the function which the representative is performing.
S16(5) lists 4 types of information that an employer is not required to disclose:
a)
information that is legally privileged
b)
information which the employer cannot disclose without contravening a prohibition
imposed on the employer by any law or order of any court
c)
information that is confidential and, if disclosed may cause substantial harm to an
employee or to the employer; or
d)
information that is private personal information relating to an employee, unless that
employee consents to the disclosure of that information
Disputes about disclosure of information must be referred to the CCMA for conciliation
and if conciliation fails the CCMA must make an arbitration finding. The CCMA may never
order disclosure of information which falls under categories a) and b). The CCMA does
however have discretion to order disclosure of information which falls under categories c)
or d).
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A trade union can acquire organisational rights in one of three ways:
(i)
via a collective agreement concluded with the employer
(ii)
if it is a member of a bargaining council or statutory council
(iii)
by using the procedure in S21 of the LRA
In terms of S21 a trade union that wishes to exercise organisational rights must take the
following steps:
a)
notify the employer in writing and attach a copy of its registration certificate. The
notice must specify the workplace in respect of which the union seeks to exercise
organisational rights, the trade union’s representativeness, the rights which its
wishes to exercise and the manner in which it seeks to do so
b)
the employer must meet with the trade union within 30 days of receiving the notice.
The parties must attempt to reach an agreement at this meeting.
c)
If the parties deadlock, either party may refer the dispute in writing to the CCMA.
d)
The CCMA must attempt to resolve the dispute via conciliation
e)
If conciliation fails, the CCMA must make an arbitration finding. During arbitration
the commissioner must seek to minimize the number of trade unions in a workplace
as well as the financial and administrative burden incumbent on the employer. The
commissioner may make any inquiries in order to decide whether the trade union is
representative
4.3.4
Collective Agreements
The process of negotiation between employer and trade union about terms and conditions
of employment or other matters of mutual interest is referred to as collective bargaining.
The aim of collective bargaining is for the parties to reach agreement on the issues under
negotiation and to record the agreement in a document called a collective agreement.
Collective bargaining may be a lengthy and sensitive process and it requires commitment,
compromise and extreme good faith on the part of both parties.
A collective agreement is defined in S213 of the LRA as‘a written agreement concerning terms and conditions of employment or any other matter
of mutual interest concluded by one or more registered trade unions, on the one hand and,
on the other hand(a) one or more employers;
(b) one or more registered employers’ organisations; or,
(c) one or more employers and one or more registered employers’ organisations.’
55
who is bound by a collective agreement?
In terms of S23 of the LRA the parties to the agreement, the members of the parties to
the agreement and employees who are not members of the trade union that is party to the
agreement may be bound by a collective agreement. The third category of persons bound
by a collective agreement demands attention.
Consider the following example:
Trade union ABC concludes a collective agreement with company XYZ (Pty) Ltd in terms of
which the members of ABC who are employed by XYZ (Pty) Ltd will receive a 10% wage
increase. In terms of S23(1)(a) and (b) this agreement will bind the employer, the trade
union and members of the trade union who are employee of the construction Co. It will not
cover employees who are not members of ABC.
In the interests of maintaining uniformity and harmony in the workplace, XYZ (Pty) Ltd
decides to extend the 10% wage increase to its employees who are not members of ABC.
According to common law contractual principles this could present problems. Unless ABC
agrees to the extension, XYZ (Pty) Ltd would be guilty of breach of contract. However, if
extending the collective agreement to non-union members is advantageous to all the
employees it is unlikely that ABC would sue the employer for breach of contract. (ABC
may however demand that an agency shop agreement be concluded – see later).
Typically, extending a collective agreement to non-union members would create a problem
where the agreement imposes liabilities on employees. Non-union members may be
unwilling to accept the terms of the agreement.
S23(1)(d) provides that an employer may extend a collective agreement to non-union
members provided the following requirements are met:
a)
the agreement identifies those employees
b)
the agreement expressly binds those employees; and
c)
the trade union enjoys majority support in the workplace.
The duration of a collective agreement
A collective agreement binds the relevant parties for the entire duration of the contract.
If a trade union is party to a collective agreement, any employees who were members of
the trade union at the time that the agreement becomes binding or who become members
after the agreement became binding will be bound by the agreement. An employee who is a
member of a trade union which is party to a collective agreement cannot escape the
agreement by resigning from the trade union. Similarly, an employer who withdraws
membership from an employer organisation that was party to a collective agreement
remains bound by the collective agreement until the agreement lapses.
56
Where no time period is specified, the agreement remains in force until either party gives
notice. The agreement usually stipulates the notice period. If it does not, reasonable
notice must be given.
The effect of a collective agreement which regulates terms and conditions of
employment
If a collective agreement contains terms and conditions of employment, these terms and
conditions will be incorporated in the contracts of employment of employees who are
covered by the collective agreement. Employer and employee may not agree to lesser
payment, benefit or treatment than that prescribed by a collective agreement. A
provision in a contract of employment permitting lesser pay, benefits or treatment is
invalid.
Specific collective agreements
There are three specific collective agreements, namely, closed-shop, agency-shop
agreements and collective agreements concluded in a bargaining council. Since no
bargaining council exists within the financial services sector, a discussion of this type of
collective agreement will not be dealt with (but note: there have been amendments to this
area of law in SS 31-34)
Closed-shop agreements (S26)
A closed-shop agreement is an agreement between an employer or employer organisation
and a registered, majority trade union/s requiring all employees covered by the agreement
to be members of the trade union. The effect of this agreement is that all employees who
are currently employed or who become employed by the employer (or members of the
employer organisation) have to join the trade union, even if they do not wish to. Employees
covered by the agreement who do not become members of the union may face dismissal.
The purpose of a closed-shop agreement is to encourage strong, single union presence in
the workplace, to alleviate the burden that may be placed on employers in having to
bargain with several unions and to solve the problem of “free riders” (employees who
derive the benefits of a collective agreement negotiated by a trade union, without having
to be a member of the trade union that negotiated the benefits)
Because of the benefits which a closed-shop agreement has for employer and trade union
alike, government regards this type of collective agreement as a legitimate limitation on
employees’ freedom of association.
A closed –shop agreement between a registered trade union and an employer will only be
binding if a ballot is held in which two-thirds of the employees who voted vote in favour of
the agreement. (Similarly, a closed-shop agreement between a registered trade union and
a registered employer organisation (in respect of an industry and area) will only be binding
if a ballot is held in which two-thirds of the employees who voted vote in favour of the
agreement).
57
Once a closed-shop agreement has been concluded, a trade union that is party to the
agreement may not refuse an employee membership or expel an employee from the trade
union, unless the reason for the refusal or expulsion is fair and the refusal or expulsion is
in accordance with the trade union’s constitution. An employer may however dismiss an
employee if the employee refuses to join the trade union or if he is refused membership
of the union (in terms of the unions constitution) or is expelled from the union for a fair
reason.
It is important to note that employees who were already in the employer’s service at the
time the closed-shop agreement came into effect may not be dismissed if they refuse to
become members of the union.
If one-third of the employees covered by the agreement sign a petition calling for the
termination of the agreement or if three years have elapsed since the agreement came
into effect or the last ballot was held, the trade union must conduct a ballot. If the
majority of the voters vote to terminate the closed-shop agreement, it will terminate.
Agency-shop agreements
An agency-shop agreement is an agreement between an employer or an employer
organisation and a registered majority trade union requiring all employees who are covered
by the agreement and who are not members of the trade union to pay an ‘agency fee’ to
the trade union. Where there is an agency-shop agreement the employer must make
these deductions from the employee’s wages and to pay them to the trade union. The
agency fee, which is the same or less than the normal membership fee, must be put into a
separate account and used to advance the socio-economic needs of the employees.
An agency-shop agreement does not force an employee to become members of a specific
union. However it forces employees who are not members of the trade union but are
eligible for membership thereof to pay a fee to the trade union who is party to the
agreement. The reason for this is to compel employees who are not members of the union
and who benefit from collective bargaining, to share the costs. A problem arises however
where an employee is a member of a minority union and is forced to pay agency fees to the
majority union that is party to the agency-shop agreement. This employee will effectively
have to pay membership fees to his trade union as well as an agency fee to the trade union
which is party to the agreement (unless s/he resigns as a member of the minority trade
union).
An agency –shop agreement will end if the parties agree to terminate it or where the
trade union no longer complies with the requirements (for example where it loses majority
support).
4.3.5
Industrial Action
The process of collective bargaining is not always smooth. Parties may reach a deadlock in
negotiations, where neither party is prepared to make concessions. Where this occurs, a
party may decide to embark on industrial action to back up it’s demand. In this way,
industrial action may be regarded as ammunition that is available to either party in the
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collective bargaining process. For example, a trade union that is bargaining for better
terms and conditions of employment for it’s members may decide to strike or picket where
the employer is not prepared to meet those demands. Similarly, an employer may lock-out
its employees if they do not heed its demand to work overtime.
Industrial action is usually drastic and has severe repercussions not only on an employer’s
business but also on the economy as a whole. For this reason, strict requirements must be
met before industrial action is permitted in terms of the law.
Strike and Lock-out
‘Every employee has the right to strike and every employer has recourse to lock-out’
(S64(1) of the LRA)
What is a strike?
A strike is a form of industrial action where several employees act jointly in order to
remedy a grievance which they have with their employer or in order to resolve a dispute in
respect of any matter of mutual interest between themselves and their employer

A strike may constitute a complete or partial work stoppage or a retardation of
work (go-slow) or an obstruction of work. (Reference to “work” includes overtime.
Overtime bans are a powerful forms of strike).

A strike is always a collective action. It is not possible to have one employee on a
strike. The action must taken by two or more employees ‘who are or have been
employed by the same employer or by different employers’ (S213) and the strikers
must have a common purpose.

The purpose of the strike must be to remedy a grievance with the employer or to
resolve a dispute in respect of any matter of mutual interest between themselves
and their employer.
Any action which does not comprise all above three elements does not constitute a strike.
Consider the following CASE STUDIES:
1)
Employees A, B and C embark on a go-slow. A does so because she wants higher
wages, B is demanding longer annual leave and C is angry about recent
retrenchments in the business.
2)
30 employees, who all work for the same employer are generally unhappy with the
situation in the workplace. They embark on an overtime –ban.
3)
All the employees of XYZ(Pty)Ltd are angry about the government’s decision to
increase the price of bread. In support of their demand that the bread price not
be increased they embark on a complete work stoppage.
4)
Employees employed by employer A take concerted action against A (in the form of
barricading the delivery area so that A’s suppliers cannot off-load stock) in support
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of a strike by other employees who are striking for better wages against their own
employer, B.
What is lock-out?
A lock-out is an employer’s exclusion of employees from its workplace to force them to
accept a demand concerning a matter of mutual interest between employer and employee.
A distinction should be drawn between a lock-out initiated by an employer during the
collective bargaining process to compel employees to accept a demand, and a lock-out
which takes place after employees have already embarked on a strike, to compel employees
to accept a demand.
Prohibitions on the right to strike and recourse to lock-out
In terms of S65 of the LRA a strike or lock-out is not permitted under the following
circumstances:(i)
Where a collective agreement prohibits a strike or lock-out in respect of the issue
in dispute.
(ii)
Where there is an agreement that requires the issue in dispute to be referred to
arbitration.
(iii)
Where in terms of the LRA, the dispute in issue must be referred to arbitration or
the labour court (the following are examples of such disputes:- disputes about the
alleged unfair dismissal of employees, disputes about alleged unfair discrimination
or disputes about freedom of association)
(iv)
Where employees are engaged in an essential or maintenance service.
In terms of S213 of the LRA an essential service is ‘a service the interruption of
which endangers the life, personal safety or health of the whole or any part of the
population’ . The Parliamentary service and the South African Police Services also
fall under essential services. The Essential Services Committee decides which
services are to be classified as essential services. (The focus with regards an
essential service is on personal safety and health)
Since the right to strike is an entrenched right and one of which an employee may
not easily be deprived, S72 of the LRA provides that employers and employees
falling under an essential service may conclude a collective agreement that provides
for the maintenance of a minimum service in a service classified as an essential
service. If such an agreement is ratified by the Essential Services Committee the
employees in that essential service may strike or be locked-out, provided that the
employees who provide the minimum service may not strike or be locked-out.
In terms of S75(1) of the LRA, a maintenance service is a service the interruption
of which has ‘the effect of material physical destruction of any working area, plant
or machinery’.
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If a service has been designated a maintenance service by the Essential Services
Committee or by agreement between employer and trade union, the effect is that
employees in that service may not be locked-out and will be required to provide
maintenance if the rest of the employees are on strike. The amended S75(5),(6)
and (7) of the LRA set out certain rules which the essential services committee
should adhere to in arriving at a determination as to whether the whole or part of
the employer’s business or service is a maintenance service and in referring any
dispute to arbitration.
If a part of a business has been designated a maintenance service the employer is
not permitted to employ ‘replacement labour’ in any part of the business during the
strike.
(v)
Where a collective agreement or arbitration award regulates the issue in dispute.
Strikes and lock-outs are prohibited here so as not to undermine the arbitrator’s
final decision or the settlement agreed to in the collective agreement. Where a
collective agreement or arbitration award provides for minimum wages only,
employees may strike in support of a demand that the employer negotiate with
them over a wage increase. In Black Allied Workers Union & Others v Asoka Hotel
(1989) 10 ILJ 167 (IC) the court held that since the agreement did not make
provision for actual wages to be paid by the employer to the employee, and since it
contained no prohibition against actual wages being negotiated between the
employer and its employees, the employees were not prohibited from striking.
(vi)
Where the issue has been resolved by a determination. A determination here
usually refers to a determination made in terms of the Wage Act, 1957 or a
sectoral determination made by the Minister of Labour on the advice of the
Employment Conditions Commission.
Procedural requirements for a “protected” strike or lock-out
A strike or lock-out will be “protected” if it complies with the following procedures (S64
of the LRA).
Step 1
The issue in dispute must be referred to the CCMA or to a bargaining or
statutory council for conciliation.
Step 2
If conciliation fails (either 30 days have elapsed since the date of referral
and the issue remains unresolved or a certificate has been issued by the
council or the CCMA, stating that the dispute remains unresolved) 48 hours
written notice of the commencement of the strike or lock-out must be given.
In the case of a proposed strike, notice must be given to - the employer or
to the council, if the dispute relates to a collective agreement concluded in
the council or to the employers’ organisation, if the employer is a member of
an employers’ organisation that is party to the dispute.
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In the case of a proposed lock-out, notice must be given to the trade union
or to the employees, if there is no trade union. If the dispute relates to a
collective agreement concluded in a council, notice must be given to the
council.
Notwithstanding the above, there are five circumstances in which a strike or lock-out does
not have to comply with the prescribed procedures (S64(3)):
(i)
Where the parties to the dispute are members of a council and the dispute has
been dealt with by the council in accordance with its constitution
(ii)
Where a strike or lock-out complies with procedures in a collective agreement
(iii)
Where a strike is in response to an unprotected lock-out
(iv)
Where a lock-out is in response to an unprotected strike
(v)
Where a strike takes place after the employer has unilaterally changed the
employees’ terms and conditions of employment or proposes to do so.
Where an employer changes, or indicates an intention to change it’s employees’
terms and conditions of employment without their consent (unilateral amendment),
the employees or their trade union may refer the matter to the CCMA or council
for conciliation. Within 48 hours of receiving notice of the referral, the employer
is required to restore or maintain the status quo for a period of 30 days. If the
employer fails to do so, the employees may strike, without following the prescribed
procedures. (The 30 day period referred to above is used to try resolve the
dispute through conciliation).
Consequences of a “protected” strike or lock-out (S67, LRA)

Employees and employers who take part in or who contemplate a “protected”
strike or lock-out does not commit a delict or a breach of contract and cannot
incur liability in this regard. This protection does not however cover offences
committed in anticipation of or during a “protected“ strike or lock-out. For
example, employees who vandalise property and who assault co-workers during a
protected strike, may be interdicted and sued for damages. A criminal charge
may also be laid.

Employees may not be dismissed for participating in or supporting a “protected”
strike. Employees may however be dismissed for misconduct during the strike
(for example assault, malicious damage to employer’s property, intimidation of
co-workers) or for a reason based on the employer’s operational requirements
(where, for example, the strike continues for a considerable length of time,
causing extreme damage to the employer’s business).

An employer is not obliged to remunerate an employee for services that the
employee does not render during a “protected” strike or lock-out. An exception
to this is that if the employee normally receives payment in kind in respect of
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accommodation, food and other basic amenities of life, the employer must
continue to provide this payment in kind on the employee’s request. At the end
of the strike or lock-out, the employer has a claim against the employee for the
monetary value of the payment in kind made at the request of the employee.
Consequences of an “unprotected” strike or lock-out (S68, LRA)

The Labour Court has exclusive jurisdiction to grant an interdict restraining the
employees from striking or the employer from locking-out.

The Labour Court has exclusive jurisdiction to order the payment of just and
equitable compensation for any loss caused by the strike or lock-out or conduct.
(Note: The 2002 Amendment to S68 ensures that employees are not only liable
for loss caused by the unprotected strike but also for loss that is attributable
to conduct during the strike).

Employees may be dismissed for participation in or for certain forms of conduct
in contemplation of or furtherance of an “unprotected” strike.
The case of FAWU v Earlybird Farm (Pty) Ltd 2003 1 BLLR 20 (LC) confirmed that the
ordinary principles of fairness (as laid down in Schedule 8) apply to the dismissal of
unprotected strikers.
Replacement labour during a strike or lock-out (S76, LRA)
-
An employer may not employ replacement labour during a lock-out, unless it is a
defensive lock-out
-
An employer may not use replacement labour during a protected strike, if the whole or
part of the employer’s business has been designated as a maintenance service
“Replacement labour” includes engaging the services of a temporary employment service or
an independent contractor.
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5. THE CONTRACT OF EMPLOYMENT–TERMS
AND CONDITIONS: PRACTICAL
IMPLICATIONS OF THE BASIC
CONDITIONS OF EMPLOYMENT ACT, NO
75 OF 1997(as amended)
Note: The Basic Conditions of Employment Act, No 75/1997 is the main Act. Since being
passed it has been amended once:
 Basic Conditions of Employment Amendment Act, No 11/2002
The BCEA, which came into effect at noon on 1 December 1998 has tremendous practical
implications for all employers and employees in South Africa.
5.1 WHAT THE ACT DOES
-
-
establishes basic terms and conditions of employment
regulates when and how basic terms and conditions may be varied, replaced or
excluded
prohibits the employment of children (under 15 years) and forced labour 1
sets out the manner in which the compliance with the Act will be monitored and
enforced
sets out procedures for the progressive reduction of maximum working hours to 40
hours per week
Contains transitional provisions
Contains other general provisions
the BCEA does permit the employment of children in the performance of
advertising, sport, artistic or cultural activities, but to protect them against
exploitation, the Employment Conditions Commission has recommended that
employers should obtain a permit to employ children for this purpose
1
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5.2 EMPLOYEES WHO ARE COVERED BY THE ACT
a)
-
Unlike its predecessor the Act covers all employees in South Africa, except:
members of the NDF, the NIA and the SASS,
unpaid volunteers working for charity organisations and
persons employed at sea and who are covered by the Merchant Shipping Act.
Most notably, domestic workers, farm workers, apprentices and other labourers,
previously not covered by the BCEA, were promised basic terms and conditions of
employment with the introduction of the 1997 BCEA. (Please note: on 1 September 2002 a
Sectoral Determination was published, establishing minimum wage for domestic workers
and also including other minimum terms and conditions of employment for domestic
workers. Sectoral Determinations are explained and discussed below). The practical
implication of all employees being covered by the Act is that many employees who were
previously excluded from the ambit of the Act are now entitled to minimum or pro rata
terms and conditions of employment. These employees must therefore be factored into
the additional costs which the Act creates for employers. For example, employees, who
work even one day a week for an employer must be given written contracts of employment
and are entitled to pro rata paid annual leave and sick leave, notice pay, severance
packages and other employment benefits.
b)
Not all employees are equal! Certain minimum terms and conditions of
employment do not apply to certain categories of employees. For example, senior
managerial employees, travelling salespersons and employees working less than 24
hours per month are excluded in certain instances.
c)
Employees who earn in excess of R115 572.00 gross per annum are excluded
from most of the provisions regulating working time. (Note: in terms of S6(3) of
the BCEA the Minister of Labour has the power, on the advice of the Employment
Conditions Commission to make a determination excluding employees earning more
than a certain amount from the application of basic conditions of employment
relating to working hours. The amount is currently R115 572.00) This earnings
threshold is significantly higher than was previously the case and means that many
more employees are now protected by maximum working hours, overtime pay,
compulsory meal intervals, rest periods, night work and higher pay for work on
Sundays and Public Holidays.
5.3 MINIMUM TERMS ONLY!
A basic condition of employment as contained in the BCEA will constitute a term of an
employment contract, unless another law, a collective agreement, a sectoral determination
or the contract itself provides a more favourable term. This means that if an employment
contract is silent on a specific term or provides a term which is less favourable than the
BCEA, the term in the Act will automatically fill in or replace the agreed term. Parties are
65
however free to agree to terms and conditions that are more favourable to the employee
and these will take precedence over the Act.
5.4 BASIC TERMS AND CONDITIONS OF EMPLOYMENT
5.4.1
WORKING TIME
NB: The following minimum standards do not apply to:
-
senior managerial employees (employees who have the power to hire and fire and
who are authorised to represent the employer internally and externally)
travelling salespersons, who regulate their own hours of work
employees who work less than 24 hours per month for an employer
employees who earn more than R115 572.00 gross per annum
5.4.1.1
Ordinary Working Hours
Maximum 45 hours per week: maximum 9 hours per day for a 5 or less day week
maximum 8 hours per day for a 6 or more day week
Note: According to Schedule 1 of the BCEA the ultimate aim is to reduce working hours to
a maximum of 40 hours per week via collective bargaining and sectoral determinations. In
practical terms this means that when an employer is negotiating with a trade union about
terms and conditions of employment and the trade union raises the topic of reducing
maximum working hours, the employer must negotiate on this issue (This is strange, since
the LRA explains that employers do not have a duty to bargain). The Employment
Conditions Commission and the Department of Labour are also compelled to investigate
ways in which the maximum weekly working hours may be reduced in particular sectors and
areas.
Prior to the BCEA of 1997 the maximum working week was 46 hours. The obvious cost
implication associated with the reduced working week is that overtime “kicks in” for most
employees 1 hour earlier than under the “old” BCEA.
Working hours for security guards are governed by the Sectoral Determination for the
private security sector.
5.4.1.2
Overtime and formula for payment
By agreement only and is limited to 10 hours per week or 3 hours in any day. The 2002
Amendment to the BCEA stipulates that an agreement to work overtime may not permit an
employee to work more than 12 hours on any day (this is calculated with reference to
ordinary hours of work plus overtime).
Pay for overtime is currently 1,5 times an employee’s ordinary wage (under the “old” BCEA
it was 1-and-a third)
OR
the employer and employee may agree to give the employee paid time off for overtime
worked. In this regard the BCEA stipulates the following time off work for overtime
worked:
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at least the ordinary hourly wage for each hour of overtime worked plus 30 minutes
paid time off work for each hour of overtime worked, or;
 90 minutes paid time off for each hour of overtime worked (in which case the
employee is not paid at all for overtime worked)
When opting to give an employee paid time off work in exchange for overtime worked, this
must be given within 1 month of the employee becoming entitled to it (although this may be
extended to 12 months by written agreement)
Government is hoping that the increase in overtime pay will lead to employees doing less
overtime and will be an incentive to employers to employ more workers rather than pay
them for overtime.

5.4.1.3
Compressed Working Week and Averaging Hours of Work
Notwithstanding the law regulating ordinary working hours and overtime, the BCEA makes
provision for employees to work, by written agreement, and subject to certain conditions
up to 12 hours per day without receiving overtime. The practical implication here is that
on a given day an employee may, by work up to 12 hours without receiving overtime pay, as
long as his/her ordinary weekly working hours do not exceed 45 hours, he/she does not
work more than 10 hours overtime in a week and he/she does not work more than 5 days in
a week (this may be useful for organisations during tax period or when working on a short,
pressured deadline).
It is also possible, subject to certain conditions for an employer and a trade union to
conclude a collective agreement that provides that ordinary working hours and overtime be
averaged over a period of up to 4 months. Furthermore, by collective agreement an
employee may work in excess of 45 ordinary working hours in a week as long as he/she
does not work more than an average of 45 hours a week and more than an average of 5
hours overtime in a week over the agreed period. (Averaging hours of work over a 4 month
period will not apply in the financial services sector due to no trade union presence in the
workplace and hence no possibility of concluding a collective agreement).
These provisions certainly do promote greater flexibility for the employer.
5.4.1.4
Meal Intervals and Rest Periods
Employees are entitled to daily lunch break of 1 hour, after 5 hours of work. During this
hour they may not be asked or permitted to work, unless the work cannot be left
unattended and no other employee can do the work (in which case the employee must be
remunerated).
The lunch break may be reduced to 30 minutes by written agreement between the
employer and employee. In addition, if an employee works less than 6 hours on a day, a
written agreement between him/herself and the employer may dispense with the lunch
break altogether.
Furthermore, employees are entitled to a daily rest period of 12 hours between ending and
recommencing work and a weekly rest period of 36 hours, which unless otherwise agreed
to, must include a Sunday.
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These compulsory rest periods are a departure from the past when employees could be
required to work endlessly without rest. Employees can also not be forced to give up their
Sundays.
5.4.1.5
Pay for Work on Sundays and Public Holidays
An employee who occasionally works on a Sunday is entitled to double his/her hourly wages
for each hour worked and is deemed to work overtime on this day. An employee who
ordinarily works on a Sunday must be paid 1,5 wages for each hour worked. Paid time off
in exchange for working on a Sunday may be agreed upon.
Employees must be paid for any public holiday that falls on a working day. An employee
who agrees to work on a public holiday must be paid double wages. A public holiday is
exchangeable by agreement.
5.4.1.6
Night Work and Shift Work
The Act is extremely sensitive to the plight of shift workers and employees who work at
night (between 18:00 and 06:00). Employees who perform regular night work are afforded
even greater protection. (An employee who works longer than 1 hour after 23:00 at least
5 times a month or 50 times a year is deemed to do regular night work).
In addition to the provisions in the Act, the Minister of Labour has issued a Code of
good practice on the arrangement of working time and this code is particularly concerned
with the health and safety of and with the family responsibilities of shift and night
workers. The practical implications of the Act and the code is that employees who work
between 18:00 and 06:00 must be compensated by an allowance or by a reduction of
working hours and transport must be made available between the employees’ places of
residence and the workplace at the beginning and at the end of the shift. Employees who
regularly work between 23:00 and 06:00 must, in addition to the above, be informed of any
health and safety risks associated with the work and have the right to undergo a medical
examination before or within a reasonable period of starting the night work and at regular
intervals thereafter. The examination should include counselling on the health risks
associated with night work and coping strategies that may assist the employees concerned.
If an examination shows that an employee has a health condition associated with regular
night work the employer must, if possible, transfer the employee to suitable day work.
Psychological, emotional and social stresses, including irritability and chronic fatigue are
relevant in this regard.
When designing a shift roster, an employer must be sensitive to the impact of the roster
on the employees and their families and must consult with the employees as much as
possible. An employer must consider how the roster may affect the health and safety of
its workers as well as their childcare needs. The availability and cost of transport
between the workers’ residences and workplace as well as the personal security of the
workers while commuting must be considered. Employers must attempt to limit the
frequency of night work, weekend work and work on public holidays as much as possible and
should take account of the difficulties that employees may have in adapting to night work.
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Shifts should be rotated in a forward direction (morning, afternoon, night) and where
possible employees should be given a long period of rest after long spells of night shifts.
A night shift should not be longer than morning and afternoon shifts and if this is not
possible, employers should investigate ways to avoid extreme fatigue. Shift workers
should have rest periods that fall on weekends a certain minimum number of times in a
given period. (The Code does not offer any guidelines on how often and over what period).
Shift schedules should be displayed or distributed to all workers and workers should be
able to exchange a shift with each other. A worker should be given reasonable notice of a
change in the schedule and the employer should attempt to consider the special needs of
workers; particularly pregnant or nursing mothers, elderly workers and workers with
special family responsibilities. Overtime and double shifts should be avoided where the
work involves special hazards or heavy physical or mental strain. The Code highlights that
shift workers should not perform safety-critical tasks when they are fatigued, especially
when the tasks have a direct impact upon the public.
Employers should also make the following services and amenities available to employees
who work outside ordinary hours:
first aid services, safety supervision, health services to cope with nutrition and
fatigue-related problems and emergency services in the event of accidents
security at the workplace, eating facilities, rest-rooms and change-rooms and safe,
affordable transportation between home and work
administrative services, such as the wages or personnel department should be made
available to employees at the start or end of their shifts where employees regularly
work night and do not have access to these services during the day
Regular rest periods should also be given to workers who are involved in physically and
mentally strenuous work, repetitive work, monotonous work and shifts that are longer than
eight hours.
Shift workers and employees who work at night should be counselled on strategies that
may assist them both at home and at work. Coping strategies may include ways to maintain
a regular sleeping routine, a healthy diet, exercise and relaxation strategies and taking
steps to block out noise and light for employees who sleep in the day.
Clearly, the cost and other implications of this code are tremendous. Employers will have
to bear the costs of the medical examinations as well as the costs associated with setting
up infrastructures to provided the services and amenities referred to in the code. The
time factor involved in consulting with employees and in designing and revising shift
rosters cannot be ignored nor can employers ignore the duty incumbent on them to
accommodate employees who for whatever reason are found to be unfit for regular night
work.
PLEASE NOTE: THE CODE OF GOOD PRACTICE ON THE ARRANGEMENT OF
WORKING TIME APPLIES TO ALL EMPLOYEES COVERED BY THE BCEA BUT HAS
PARTICULAR SIGNIFICANCE TO SHIFT AND NIGHT WORKERS AND HAS
THEREFORE BE DEALT WITH UNDER THIS HEADING.
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5.4.2
LEAVE
The following provisions apply to all employees, except employees who work less than 24
hours per month for an employer
5.4.2.1
Annual Leave
In respect of each annual leave cycle (a period of 12 months) an employee is entitled to 21
consecutive days’ annual leave on full remuneration OR, by agreement, 1 day leave on full
remuneration for every 17 days worked OR, by agreement, 1 hour leave on full
remuneration for every 17 days’ worked. This ensures that temporary, part-time and
domestic employees also have pro rata annual leave on full remuneration.
Leave should be granted no later than 6 months after the end of a leave cycle and an
employer may not pay an employee instead of granting leave (except on termination of
employment). The employer may stipulate when an employee may take annual leave, but
may not grant annual leave during any other period of leave to which the employee is
entitled. An employee may not be permitted or required to work for the employer during
annual leave.
Public holidays which fall within annual leave are additional to the annual leave entitlement.
Any occasional leave that may be granted is deductible from the annual leave entitlement.
The following two cases dealing with annual leave are worth noting:
In Jardine v Tongaat-Hulett Sugar Ltd (2003) 7 BLLR 717 (LC) the court held that the
employer has a duty to ensure that employees take their annual leave and that employees
will not forfeit leave that is not taken in a particular period.
Conversely, in Jooste v Kohler Packaging Ltd (2003) 12 BLLR 1251 (LC) the court held that
an employee must take annual leave in the period to which it corresponds, failing which,
s/he loses the right to take that leave. Moreover the court held that if an employee
resigns s/he is not entitled to receive payment for leave that has accumulated but not
been taken.
The Jooste case is controversial and bound to invoke debate since nowhere in the BCEA
does it state that after the expiry of a certain time period will an employee forfeit unused
annual leave, nor does the Act permit employers to adopt a “use it or lose it” policy in
relation to annual leave.
An employee must be paid annual leave pay before going on leave or, by agreement, on the
employee’s usual pay day.
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REMUNERATION for the purpose of calculating annual leave pay S35 of the BCEA and
the “new” Schedule which came into operation with effect from 1 July 2003 must be
considered:
“remuneration” covers more than an employee’s basic wage and includes the following:
 any cash payments made to an employee (except those excluded below);
 the value of a housing or accommodation allowance or subsidy or housing or
accommodation received as a benefit in kind;
 the value of a car allowance, except to the extent that the car is provided to
enable the employee to work;
 employer’s contributions to medical aid, pension, provident fund or similar scheme;
 employer’s contribution to a funeral or death benefit scheme;
 any other payment in kind received by the employee (except those excluded below).
The value of a payment in kind must be determined with reference to either the value
agreed to in the contract of employment (or the collective agreement, if applicable), as
long as the agreed value is not less than the cost to the employer of providing the payment
in kind or the cost to the employer of providing the payment in kind.
Essentially when calculating the employee’s “remuneration” to be paid during the annual
leave period, the employee’s cost-to-company is utilised. However the Schedule contains
the following proviso: “(If) the employee received the payment or enjoyed, or was entitled
to enjoy the payment in kind during the relevant period then these will not form part of
the calculation of remuneration”. This seems to indicate that if the employee has or is
entitled to use/enjoyment of the payment in kind during his/her annual leave then its value
for this period is not included in the calculation of remuneration. So, for example, if the
employee has use of the car (to which the car allowance relates) during the annual leave
period then the car allowance will not be applied in the calculation of remuneration.
The Schedule also excludes the following items for the purpose of calculating
remuneration:
 Any cash payment or payment in kind provided to enable the employee to work (for
example, a tool of trade/equipment (such as a laptop) which the employee uses to
perform his/her work, the provision of transport or the payment of a transport
allowance to enable the employee to travel to and from work);
 A relocation allowance;
 Gratuities (e.g. customer tips) and gifts from the employer;
 Share incentive schemes;
 Discretionary payments not related to an employee’s hours of work or performance
(e.g. a discretionary profit sharing scheme);
 An entertainment allowance;
 An education or schooling allowance.
(Note: “remuneration” has the same meaning for the purposes of calculating an
employee’s notice pay or severance pay. For the purpose of calculating annual leave
pay it applies to annual leave which accrued from 1 July 2003).
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5.4.2.2
Sick Leave
An employee is entitled to paid sick leave. In respect of each 36 month cycle, s/he is
entitled to the number of days that s/he works in a 6 week period. This means that an
employee who works 5 days a week will be entitled to 30 days paid sick leave each 3 years
under the “new” Act. (an employee who works a 6 day week will be entitled to 36 days paid
sick leave each 3 years). Employees become entitled to their full sick leave quota after
only 6 months of work (under the “old” Act, employees had to be employed for a year
before they were entitled to the sick leave quota). In the first 6 months of employment
an employee is entitled to 1 day’s paid sick leave for every 26 days worked, but the sick
leave granted to an employee during this time may be deducted from the quota.
If an employee is absent for 3 or more consecutive days or 3 or more times in 2 months
and does not produce a medical certificate on the employer’s request, the employer is not
required to pay the employee sick leave for those days.
Note: Absence on a Friday and a Monday is not “consecutive”.
The pay that an employee is entitled to receive when on sick leave is the wage that the
employee would ordinarily have received if s/he had worked on that day. The calculation of
remuneration as defined above does not apply to sick leave. (Pay for sick leave only
includes the amount of money paid or payable to an employee in respect of ordinary hours
of work, i.e his/her basic wage only).
The employee must be paid for sick leave on the usual pay day.
At the end of a 3 year cycle, any unused sick leave is forfeited and the cycle starts
afresh.
5.4.2.3
Maternity Leave and the Protection of female employees
before and after the Birth of a child
Women are entitled to 4 months maternity leave (previously 12 weeks under the “old” Act).
Unless employer and employee agree otherwise an employee need not be paid while on
maternity leave. The rationale is that she will receive social benefits from UIF during this
period.
Maternity leave may commence any time in the month preceeding the expected birth date
or earlier if a medical practitioner or midwife deems it necessary. Under the “old” Act a
pregnant employee was compelled to commence maternity leave a month before the
expected date of birth. A mother may not work for at least 6 weeks after the birth,
unless a medical practitioner or midwife certifies that she is fit to do so. Women who
miscarry in the last trimester or who give birth to a stillborn baby are, unlike before,
allowed 6 weeks to recover.
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Female employees should notify their employers at least 4 weeks before intending to go on
maternity leave of the date they intend commencing maternity leave as well as the date
they intend returning to work.
Note: It may be argued that annual leave does not accrue to an employee while she is on
maternity leave.
As with children, shift and night workers, pregnant and nursing mothers are placed high on
the agenda of employees who must be protected. Accordingly, the Minister of Labour has
issued a Code of good practice on the protection of employees during pregnancy and after
the birth of a child. In terms of his guidelines, the Minister emphasises that no person
may be discriminated against or dismissed on account of pregnancy. Employers are
required to protect pregnant and nursing mothers by ensuring that they do not perform
work, during pregnancy or for 6 months after the birth, that may harm herself or her
child. Employers should identify potential physical, ergonomic, chemical and biological
hazards in the workplace and should take steps to eliminate or control such hazards and to
inform affected employees of the risks and the measures taken to eliminate or minimise
them.
Potential physical hazards include – noise, vibration, radiation, radioactive substances,
electric and electromagnetic fields as well as extreme hot or cold conditions.
Potential ergonomic hazards include – heavy physical work, static work posture, frequent
bending and twisting, lifting heavy objects and movements requiring force, repetitive work
and standing or sitting for long periods.
Potential chemical hazards that may cause infertility or foetal abnormalities include –
anaesthetic gases, carbon monoxide, antimitotic drugs, ehylene oxide, lead , mercury, PCBs,
alcohol, tobacco smoke and pesticides.
Potential biological hazards include – cytomegalovirus, hepatitis, HIV, German measles and
chicken pox.
The code of good practice highlights the risks associated with exposure to these hazards
and suggests measures to prevent or control them.
Where appropriate, pregnant and nursing mothers should be transferred to other work or
their working arrangements should be adapted. Alternative employment must be on terms
that are no less favourable than the employee’s ordinary terms and conditions of
employment.
Employers should give nursing mothers at least 2 breaks twice a day of 30 minutes each to
feed or express milk and efforts should be made for employees to attend pre-natal and
post-natal clinics during pregnancy and after the birth. Employers should anticipate
morning sickness and be sensitive to this, not exposing pregnant employees to nauseating
smells. Employers should also be sensitive to the fact that pregnant employees may need
the toilet regularly and that they may become tired during pregnancy. Pregnant employees
should, where possible, not have to work on wet or slippery floors (balance may be
affected) or have to work in confined spaces or do work which requires speed agility or coordination if these abilities are affected by her pregnancy.
Employers’ should also attempt to keep records of an employee’s pregnancies and of the
outcome of the births and whether there were any complications during the birth.
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As with shift and regular night workers, the onus on an employer and the financial, time
and social costs associated with accommodating pregnant and nursing employees may be
tremendous. Notwithstanding these practical implications employers must be advised not
to lightly refuse employment to women or to dismiss them for any reason associated with
their pregnancies. In terms of the Employment Equity Act employers should be
attempting to improve the representation of women in their workforce and are at risk of
being accused of an unfair labour practice or automatically unfair dismissal if they
discriminate unfairly against women.
5.4.2.4
Family Responsibility Leave
The Act has introduced 3 days’ paid family leave per year for employees who wish to be
present when their child is born or ill or on the death of immediate family members.
Employees may request this leave if they are employed at least 4 days per week with an
employer and have been so employed for at least 4 months.
Before paying an employee his/her wage for family responsibility leave an employer may
request reasonable proof of the event for which the employee needs leave.
Unused family responsibility leave falls away at the end of the year.
Since an employee must work at least 4 times a week for an employer to qualify for this
leave many employees will be excluded from this provision.
5.4.3
PARTICULARS OF EMPLOYMENT AND REMUNERATION
The following provisions apply to all employees except employees who work less than 24
hours per month for an employer
5.4.3.1
Written Particulars of Employment (Contract of
Employment or Letter of Appointment)
When an employee commences employment the employer must furnish him/her with
written particulars of employment. Effectively, this means that all employees must be
supplied with written letters of appointment or contracts of employment, which contain
specific details of employment as listed in S29 of the Act. The list of particulars in S29
is not an exhaustive list and employers are free to include additional particulars of
employment, for example a restraint of trade.
If an employee’s employment terms change, particulars must be revised accordingly.
NOTE: THE 2 SUB-TOPICS BELOW DO NOT APPLY TO EMPLOYERS THAT EMPLOY
LESS THAN 5 EMPLOYEES.
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5.4.3.2
Informing employees of their rights
Employers must display a statement of employees’ rights at the workplace in the official
languages used at the workplace. This statement should inform employees of their rights
under the Act with regard to working time, leave, their entitlement to written contracts
of employment, when and the manner in which they will be remunerated, how the
employment contract may be terminated and the amount and circumstances under which
notice pay and severance pay may be claimed. The statement should also highlight that it
is a criminal offence to employ children under 15 years or require children under 18 years
to do work which places them at risk or which is inappropriate for their age. Employees
should also be notified of the circumstances under which their basic terms and conditions
of employment may be replaced or excluded as well as of the ways in which the employer’s
compliance with the Act can be monitored and enforced. It is also extremely important
that employers notify employees that they may not be discriminated against for exercising
any of their rights under the Act.
A POSTER SETTING OUT THE INFORMATION TO BE DISPLAYED IS AVAILABLE
FROM THE GOVERNMENT PRINTERS (COST APPROX R4)
5.4.3.3
Keeping Records
Employers must keep records for each employee, detailing the employee’s name,
occupation, time worked, remuneration paid and date of birth (if the employer is younger
than 18 years). The records must also comprise (i) a wages register, which must be filled
in by the employer and which must set out how the employee’s wages are calculated and
any authorised deductions and (ii) an attendance register
Records must be kept for 3 years
Note: time-cards may be used in place of attendance registers.
5.4.3.4
Payment of Remuneration, Information about
Remuneration, Deductions and payment of contributions
to benefit funds
Employees must be paid in S.A currency in cash, cheque or by direct deposit. Cash and
cheque payment must be made during working hours and employees must be paid no later
than 7 days after the completion of the period for which the remuneration is payable.
S33 sets out that the information must be presented to an employee every pay day:
 Employer’s name and address;
 Employee’s name and occupation;
 The period for which the payment is made;
 The employee’s remuneration in money;
 The amount and purpose of any deduction made from the remuneration;
 The actual amount paid to the employee, and
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
If relevant to the calculation of that employee’s remuneration- The employee’s rate of remuneration and overtime rate;
- The number of ordinary and overtime hours worked by the employee during
the period;
- The number of hours worked during the period by the employee on a Sunday
or Public holiday;
- If there is an agreement to average working time, the total number of
ordinary and overtime hours worked by the employee in the period of
averaging
In terms of S34 employers must be warned not to make any deductions from an
employee’s remuneration unless this is legally authorised or the employee has consented to
the deduction in writing. An employer may not, for example, loan money to an employee and
then simply deduct this from the employee’s next pay cheque. Trade union dues may be
deducted if there is a collective agreement to this effect. The Act also lays down
requirement for deducting amounts from an employee’s salary in respect of loss or damage
to goods or in relation to goods purchased by the employee.
The recently introduced S34A compels an employer to pay any contributions that are to
be made to a pension, provident, retirement, medical aid or similar fund within 7 days. In
the case of the contribution being deducted from the employee’s remuneration, the
payment must be made to the fund within 7 days of the deduction being made and in the
case of any contribution that is not deducted from the employee’s remuneration the
payment must be made to the fund within 7 days of the end of the period in respect of
which the payment is made.
An employer’s duties to supply written contracts of employment to all employees, to keep
records and to keep employees informed of their rights under the Act increases the
administrative burden for employers. The cost implications involved in having formal
letters of appointments drafted for all employees is especially relevant for domestic,
farm, mine and casual workers who in most instances do not currently have written
employment contracts. Essentially, the Act ensures that relationships with all workers be
formalised.
5.4.4
TERMINATION OF EMPLOYMENT
The following provisions apply to all employees, except employees who work less than 24
hours per month for an employer.
5.4.4.1
Notice, Severance Pay and Certificates of Service
Notice – must be in writing (unless the employee is illiterate).
In accordance with the
2002 amendment to the BCEA the periods of notice are as follows:
 In the first 6 months of employment, the minimum period of notice is 1 week;
 After the first 6 months but within the first year of employment, an employer
must give or is entitled to receive at least 2 weeks’ notice;
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
After a year of employment the period of notice is at least 4 weeks.
Notice of termination may not be given by an employer during any other period of leave to
which the employee is entitled (e.g. annual leave), except sick leave.
Employees may be paid the remuneration they would have received had they worked the
notice period, in lieu of notice (NB: remember the calculation of remuneration for the
purpose of remuneration in lieu of notice is the same as for annual leave pay discussed above)
.
Severance Pay – must be paid to an employee who is dismissed for operational
requirements of the business or whose contract of employment is terminated in terms of
S38 of the Insolvency Act. The minimum severance pay is 1 weeks’ remuneration for each
completed year of continuous service with the employer.
(NB: remember the calculation of remuneration for the purpose of severance pay is
the same as for annual leave pay - discussed above)
Note: that an employer is only released of the duty to pay severance pay if it offers
alternative employment to the employee and the employee unreasonably refuses this. (the
offer of alternative employment may be with that employer or any other employer).
Certificate of Service – must be presented to an employee on termination of a
contract of employment and must set out:
 the employee’s full name;
 the name and address of the employer;
 (if any) the council or sectoral employment standard that covers the employer’s
business;
 the date of commencement and date of termination of employment (the length of
service with the employer);
 the job performed by the employee;
 the employee’s earnings (remuneration) at the date of termination.
Note: The reason for termination should only be given if requested by the employee.
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5.5





5.6
REPLACING OR EXCLUDING BASIC TERMS AND
CONDITIONS OF EMPLOYMENT
Since the terms and conditions of employment as laid down in the BCEA (and as
described above) are minimum terms and conditions any terms and conditions may
be replaced by agreement between an employer and an employee with more
favourable terms and conditions;
Where an employer’s workplace falls under the jurisdiction of a bargaining council
and a collective agreement has been concluded in the bargaining council, terms and
conditions of employment in that workplace will be governed by the collective
agreement, not the BCEA. ( employers/managers who are interested may consult
S49(1) for a list of criteria with which the collective agreement must comply);
The Minister may make a determination to replace or exclude a basic condition/s of
employment in respect of a category of employees or employers OR any employer or
employee in respect of whom an application is made in terms of S50(1).
Where a sectoral determination has been published in respect of a specific sector
terms and conditions of employment for employees who fall within the sector will be
governed by the sectoral determination, not the BCEA. The Sectoral
Determination for Domestic Workers is an example of this. Domestic workers will
be subject to terms and conditions of employment as set out in the Determination,
not the BCEA. S57 of the BCEA states clearly “if a matter regulated in this Act is
also regulated in terms of a sectoral determination, the provision in the sectoral
determination prevails.”
Schedule three of the BCEA (which was amended in 2002) states that any wage
determination that was in force immediately before the 2002 Amendment is
deemed to be a sectoral determination and employees covered by it will be subject
to the terms and conditions of employment included in the wage determination.
MONITORING AND ENFORCING COMPLIANCE WITH
THE ACT
Like all Acts of Parliament, the Act would be “toothless” if it did not provide for
mechanisms for monitoring and enforcing compliance.
In terms of the BCEA the Minister of Labour has appointed Labour inspectors who must
advise employers and employees of their rights and obligations in terms of employment
laws. Labour inspectors are empowered to enforce compliance with the Act and have
reasonable rights of access to an employer’s premises to conduct investigations, question
employers and/or remove records and/or other documents. These labour inspectors may
be contacted by phone at the Dept of Labour.
Where a labour inspector has reasonable grounds to believe that an employer is not
complying with any provision of the BCEA s/he must try to secure a written undertaking
from the employer to comply with the relevant provision/s. The inspector may do this
either by meeting with the employer (or a representative) or by serving a document on the
employer.
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An inspector is also authorised to serve an employer with a compliance order where
he/she has reasonable grounds to suspect that an employer is contravening the Act. The
compliance order will state the Sections of the Act or sectoral determination that the
employer has not complied with and may state that the employer failed to fulfill it’s
previous undertaking. In terms of the 2002 Amendment to the BCEA the inspector must
serve a copy of the compliance order on the employer and on each employee affected by it
(unless it is not practical to do so) and on a representative of the employees. A compliance
order may compel an employer to pay a fine which will increase each time the employer
contravenes the law.
An employer has 21 days from receipt of the compliance order to object against it to the
Director-General: Labour, who may then confirm, modify or set aside the order.
If a compliance order is confirmed, an employer has 21 days to appeal to the Labour Court
against the order. Similarly, the Director-General may apply to the Labour Court to have
the order made an order of court where the employer does not comply with it and does not
object or appeal against the order.
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6. THE EMPLOYMENT EQUITY ACT, NO 55
OF 1998 AND ITS IMPACT ON SMMEs
The EEA 55 of 1998 was designed to redress the legacy of unfair discrimination left
behind by Apartheid. The Act and its practical implications for employers are discussed in
detail below.
6.1
THE PURPOSE OF THE ACT
The purpose of the EEA is two-fold:
1.
Eliminate unfair discrimination in the workplace, thereby promoting equal
opportunity and fair treatment.
2.
Proactively advance workers who were discriminated against in the past via
affirmative action measures. The aim of this is to ensure that these workers are
equitably represented in all job categories and at each level in the workplace.
It must be stressed that whereas the prohibition on unfair discrimination applies to all
employers in respect of every employee, the obligation to implement affirmative action
measures to advance employees in the workplace only applies to certain employers in
respect of certain employees.
Put another way, the prohibition on unfair discrimination applies to every employer and
employee in South Africa while affirmative action only applies to certain employers
(“designated employers”) and certain employees (employees from “designated groups”).
The Act is divided into 6 Chapters, set out as follows:
 Chapter I – Definitions, Purpose, Interpretation and Application (as the title denotes,
this Chapter defines certain terms in the Act, explains the purpose of the Act as well
as how it is to be interpreted and applied)
 Chapter II – Prohibition on Unfair Discrimination (NB!)
 Chapter III – Affirmative Action (NB!)
 Chapter IV – Commission for Employment Equity (this Chapter establishes a Commission
for Employment Equity (“CEE”) to advise the Minister of Labour . The CEE will play a
role in the drafting of Codes of Good Practice and Regulations and in monitoring that
there is speedy progress in South Africa in the area of employment equity. The CEE
may also make awards recognising employers’ achievements towards achieving
employment equity in South Africa)
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 Chapter V – Monitoring, Enforcement and Legal Proceedings (this Chapter is divided
into 3 parts and deals with the ways in which employment equity progress will be
monitored and enforced by the authorities as well as the jurisdiction and powers of the
various bodies and the procedures to be followed in the event of a dispute)
 Chapter VI – General Provisions
Note: Because of their practical implications, Chapters II and III will be dealt with in
detail. Chapter V and certain general provisions in Chapter VI will also be addressed in
this seminar.
6.2 THE PROHIBITION OF UNFAIR DISCRIMINATION
Chapter II prohibits all employers from discriminating unfairly against any worker or
applicant for employment. The prohibition on unfair discrimination extends to any
employment policy or practice and therefore extends to virtually every aspect of the
employment relationship. In practice this means that the following must be free of unfair
discrimination:- recruitment procedures, advertising and selection criteria, interviewing
applicants for employment, appointments and the appointment process, job classification
and grading, remuneration, employment benefits and terms and conditions of employment,
job assignments, the working environment and facilities, training and development,
performance evaluation systems, promotion, transfer, demotion, disciplinary measures
other than dismissal and dismissal.
6.2.1
Forms of Unfair Discrimination
According to Chapter II the following forms of unfair discrimination are identified and
prohibited:-
Direct or indirect discrimination against an employee in any employment policy or
practice on grounds, including; race, gender, sex, pregnancy, marital status, family
responsibility, ethnic or social origin, colour, sexual orientation, age, disability religion,
HIV status, conscience, belief, political opinion, culture, language and birth.
Note: unfair discrimination means differential treatment of employees on an arbitrary
ground (on a ground that is capricious and without commercial rationale).
Note: It is irrelevant that the employer does not have intention to discriminate.
Note: indirect discrimination is often difficult to recognise. Indirect discrimination
occurs where the employer imposes an apparently neutral criterion to all employees but
the application of that criterion has a disproportional effect on a certain group of
employees. For example, a minimum height or weight as a condition of employment will
have a disproportionate effect on women as a group and therefore constitutes indirect
discrimination.
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Note: discrimination in the form of affirmative action is not regarded as unfair, nor is it
unfair to discriminate against an employee on the basis of an inherent requirement of the
job
Harassment
of an employee (in particular sexual and racial harassment)
Note: A Code of Good Practice on the Handling of Sexual Harassment cases was published
to supplement the bare statutory prohibition in the EEA. The objective of the Code is to
eliminate sexual harassment in the workplace and states that sexual harassment covers
sexual attention that is (a) persisted in, (b) that the recipient has clearly indicated is
offensive and that (c) the perpetrator should have known is unacceptable.
The court, recognising that sexual harassment may be subtle and often in the eye of the
beholder has stated that evidence in such cases must be carefully weighed.
The following forms of conduct are covered by the term “sexual harassment”:Physical contact, verbal innuendoes, suggestions, hints, comments with sexual overtones,
sex-related jokes or “unwelcome graphic comments about a person’s body made in their
presence or directed at them”, inappropriate inquiries about a person’s sex life, unwelcome
gestures, indecent exposure and the unwelcome display of sexually explicit pictures and
objects.
The following forms of sexual harassment are unique to the workplace:(i)
“quid pro quo harassment” - refers to the situation where an employer,
supervisor, manager or co-employee “undertakes or attempts to influence the
process of employment, promotion, training, discipline, dismissal, salary
increment or other benefit of an employee or job applicant in exchange for
sexual favours.
(ii)
Ignoring an employee – this can constitute sexual harassment where a person in
authority rewards only those who respond to his/her sexual advances with
promotion or increases and ignores those who don’t.
(iii)
Dismissing an employee once an affair is over on the ground that the employee’s
presence is a source of embarassment to the other person
The Code emphasises that employers and employees should not only refrain from sexual
harassment in any of the above forms but should also discourage such conduct by others
who have any dealings with the workplace (e.g customers, suppliers, job applicants etc).
Notwithstanding this, employers do not have authority to take disciplinary action against
non-employees for sexual harassment. Customers, suppliers, job applicants and
contractors have a right to be treated with human dignity and may however be included as
possible victims of sexual harassment.
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Management must take active steps towards eliminating sexual harassment in the
workplace by issuing policy statements and procedures on sexual harassment. A policy
statement on sexual harassment must state that all employees, job applicants and other
persons who have dealings with the business have a right to be treated with dignity and
due respect for their privacy and integrity and that sexual harassment is prohibited. The
statement must state further that victims of sexual harassment have a right to raise a
grievance with the guarantee that appropriate action will be taken and that managers are
obliged to take disciplinary action against any employee who does not comply with the
policy.
Management should also implement orientation, education and training programmes to
communicate the policy and procedures to employees and to state that grievances will be
treated seriously, sensitively and quickly.
WHAT ACTION SHOULD AN EMPLOYER TAKE WHEN A CASE OF SEXUAL
HARASSMENT IS BROUGHT TO HIS/HER ATTENTION?
The Code of Good Practice suggests that the company should appoint a person in the
company to whom victims can turn on a confidential basis (e.g. a shop steward) or if there
is no such suitable person, an outside professional. A complainant must be given two
options:(i)
An informal attempt to resolve the problem – this procedure involves explaining to
the perpetrator that his/her conduct is unwelcome and is offensive, making the
victim feel uncomfortable at work.
(ii)
Formal proceedings – this involves an investigation into the conduct of the
perpetrator, and if necessary, disciplinary action against the perpetrator. (The
only difference between this disciplinary action and other disciplinary action is
that special steps must be taken to ensure confidentiality. Accordingly, only the
victim, the offender, witnesses, an interpreter (if necessary) and an “appropriate
member of management” should be present).
If the victim is not satisfied with the outcome of the internal disciplinary proceedings,
he/she may refer the dispute to the CCMA for conciliation. In the event of settlement
not being reached the Labour Court will resolve the matter and has the power to order the
employer to compensate the aggrieved employee, and / or to take steps to ensure that the
situation is rectified.
Testing an employee for any medical condition
is prohibited unless either
legislation permits or requires the testing or if it is justifiable to do so “in the light of
medical facts, employment conditions, social policy, the fair distribution of employee
benefits or the inherent requirements of a job.” Furthermore, the Act prohibits HIV
testing unless the Labour Court in a given case determines such testing to be justifiable.
In making a determination, the court may make any order that it deems appropriate in the
circumstances and may impose conditions relating to counselling HIV+ employees,
maintaining confidence, the period during which testing is permissible and the categories
of employees that may be tested.
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Notwithstanding that the EEA prohibits HIV testing without authorization from the
Labour Court, the case of Irvin & Johnson Ltd v Trawler & Line Fishing Union (2003) 4
BLLR 379 (LC), heard before the Labour Court concluded that the Labour Court’s
permission is not required where the HIV test/s are both voluntary and anonymous
Note: A Code of Good Practice on Key Aspects of HIV/AIDS and Employment and the
HIV/AIDS Technical Assistance Guidelines have been produced to assist employers in the
area of HIV/AIDS testing and in implementation of an HIV/AIDS policy and programme.
Organisations who do not have an HIV/AIDS policy should utilize the guidelines laid down
in the documentation towards this end.
Psychological testing and other similar assessments
have been prohibited
unless it can be shown that the test or assessment is valid and reliable, can be applied
fairly to all employees and is not biased against any employee or group. It follows that the
test or assessment may not be racially or culturally unfair.
6.2.2
Interviewing applicants for employment in terms of the
Employment Equity Act
Applicants for employment are also protected under the EEA against unfair discrimination.
This implies that recruitment and interviewing processes must be free of unfair
discrimination. Several cases brought before the CCMA and the Labour Courts have been
instigated by unsuccessful applicants for employment who allege that they were
discriminated against unfairly in the recruitment and/or interviewing process.
Employers/managers need to understand the provisions of Chapter II of the Act, in as far
as it relates to interviewing candidates for employment.
Applicants may never be discriminated against on any arbitrary ground such as race,
gender, sex, pregnancy, marital status, family responsibility, ethnic or social origin, colour,
sexual orentation, age, disability, religion, HIV status, conscience, belief, political opinion,
culture, language or birth.
According to the Act the only lawful grounds for differential treatment of applicants are
the following:



Affirmative action. Employers may choose a black person over a white person, a woman
over a man or a disabled person over a physically fit person if the employer has
identified in his/her employment equity analysis that he/she does not have a sufficient
number of these employees in the workplace. (NOTE: this does not preclude
employers from employing white males if they are more competent for the job!)
Age. If an employee/applicant has reached retirement age, an employer need not
employ such a person.
Inherent requirements of the job NB!! An employer may choose one applicant over
another if the chosen applicant displays competencies more suitable to the job. This
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means that an employer must identify the required competencies for the job and may
then choose the applicant who would be most competent to perform the job
description. An employer who chooses one applicant over another based on this, would
not be guilty of unfair discrimination and would be able to justify the appointment
based on commercial rationale and the inherent job requirements.
Consider the following hypothetical example
An auditing firm wishes to employ a qualified accountant to join the firm
The employer identifies the following competencies which are required for the job:
Bilinguilism, since the firm has many Afrikaans and English speaking clients
Accreditation with a professional body or other requisite
qualification/accreditation
A technical understanding of tax, accounting and auditing principles
Ability to liase with clients and to get on with people
Good administration, organizational and time-keeping skills
A driver’s licence, since the chosen candidate may be required to drive to
clients premises
Computer skills
ETC ETC
Once the employer has identified that the chosen candidate would need to have the above
competencies the employer will phrase the questions during the interview in such a way as
to find out whether the applicant has these competencies. Any arbitrary questions,
which in no way relate to the above competencies would be considered arbitrary and
discriminatory. In the above example it would be discriminatory to ask a woman applicant
whether she is married or has children as this in no way relates to the competencies
identified. Asking her if she has a driver’s licence or a car however is not discriminatory
as being able to drive is a competency identified (i.e. the question has commercial
rationale).
THEREFORE: asking questions during the interview which are not relevant to the job will
be discriminatory. However, asking questions which may be aimed at finding out whether a
candidate will be competent to do the job is not discriminatory and must be done.
DO:


Before interviewing, identify the competencies required for the job (i.e. what the ideal
candidate will need to display in order to do the job properly)
Identify competencies, which although a candidate may not fully have, would be
relatively easy to train him/her in. For example it would be relatively easy to develop a
trainee accountant’s competency to return client phone calls promptly. If a
competency is identified for the job which would be relatively easy to train the
applicant to do, then questions in this regard should be asked to the candidate simply
to find out whether he/she is trainable in that competency. Certain competencies are
however non-negotiable and not easy to train a candidate for (e.g. fluency in Spanish or
a mathematical aptitude). With these, an employer cannot be expected to train the
candidate and the candidate either has the competency or not!
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





Once competencies have been identified for the job the employer must identify the
level of competency needed for the job. For example although computer literacy may
be a competency identified for a secretarial position, the level of competency required
would not be as high as for the position of a software engineer.
The employer/interviewer must now prepare a set of questions, which will be put to the
candidate. Remember, the questions must be aimed at finding out whether the
candidate possesses the competencies required for the job and also to determine
his/her level of competency. Using our original example: The employer has identified
that the chosen candidate (trainee accountant) must have computer skills (a
competency identified above). The question “have you ever worked on caseware /excel
before?” would let the interviewer know whether the candidate possesses the I.T
competency or not and should be asked. Inviting the candidate to share his/her past
experiences regarding use of the computer software would also be relevant because it
would help the interviewer assess the level of competence the candidate has.
During the interview ask only questions which are related to the identified
competencies and which will help the interviewer assess the candidate’s level of
competence.
Questions should, as far as possible, be open-ended. It is better, for example, to ask a
candidate to relate his/her past experience regarding relationships with clients then
to ask him whether he/she regularly argued with clients. This relates more to the
style of interviewing than strictly to the law but punchy, direct questions may be
threatening and may be perceived as discriminatory. Of course direct questions are
often necessary and may be used, depending on the circumstances. (simply a word of
caution).
Job application forms (if used) should only pose questions that relate to the identified
competencies.
If an unsuccessful applicant asks why his/her application was refused, the employer
must be able to provide a reason based on the applicant’s competency in relation to the
inherent requirements of the job. In other words, any refusal should be based on
commercial rationale and not on an arbitrary, discriminatory ground.
DO NOT:


The interviewer should not pose questions that do not relate to the identified
competencies. This is often problematic and may lead to a very sterile interaction. It
is understandable to have a measure of informality during an interview, especially if
interviewer and candidate have a comfortable connection. However, a friendly, affable
candidate may become unhappy or even resentful if his/her application is refused,
especially if he/she feels discriminated against. It is therefore advisable that the
interviewer not ask irrelevant, potentially discriminatory questions that do not relate
to the job (e.g. relating to the candidate’s religion, ethnic background, marital status or
sexual orientation).
The Act prohibits both direct and indirect discrimination. Be careful therefore not to
ask questions, which are either directly or indirectly discriminatory. For example,
asking a candidate about the area in which he/she lives, may be perceived as indirect
discrimination based on ethnic background, religion or race.
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The interviewer should be cautioned that an employer may incur liability where
discriminatory questions are asked, even if the interviewer did not intend to discriminate
or did not think that the questions were discriminatory. The interviewer must not be
unprepared. He/she must prepare questions carefully, having regard to the competencies
identified for the job.
6.2.3
Unfair Discrimination Disputes
Disputes about alleged unfair discrimination under the EEA must be referred to the CCMA
within 6 months of the act or omission that allegedly constitutes unfair discrimination.
The CCMA must attempt to resolve the dispute via conciliation. If conciliation fails, either
party may refer the dispute to the Labour Court for adjudication, unless all parties
consent to arbitration of the dispute. The case of NEHAWU v Charlotte Theron
Children’s Home (2003) 8 BLLR 781 (LC) decided that there is a 90-day time limit for
referring unfair discrimination disputes to the Labour Court.
It must be noted that disputes about unfair dismissal are excluded from the ambit of the
Act. This means that if a dismissal constitutes an act of discrimination it must be dealt
with under the LRA.
6.3 AFFIRMATIVE ACTION
Chapter III compels “designated employees” to implement affirmative action measures to
redress the employment disadvantages experienced by “designated groups”
Designated employer means:
 “an employer who employs 50 or more employees” OR
“an employer who employs fewer than 50 employees, but has a total annual
turnover that is equal to or above the applicable annual turnover of a business in
terms of Schedule 4 to this Act” (the annual turnovers listed in the Schedule range
from R2 million to R25 million). The turnover requirement was probably included in
the Act to ensure that employers do not escape responsibility under the Act by
bogus outsourcing and hiring through labour brokers to avoid employing 50
employees
 “a municipality, as referred to in Chapter 7 of the Constitution”
 “an organ of state as defined in section 239 of the Constitution, but excluding
local spheres of government, the NDF, the NIA and the SASS”
 “an employer bound by a collective agreement in terms of section 23 or 31 of the
Labour Relations Act, which appoints it as a designated employer in terms of this
Act, to the extent provided for in the agreement”
Note: An employer who is not a designated employer may notify the director-general of
Labour that it wishes to comply with Chapter III (voluntary compliance).
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Designated groups means – black people, women and people with disabilities
Note: Black people includes Africans, Coloureds and Indians
Note: People with disabilities means people who have a long-term recurring physical or
mental impairment that substantially limits their prospects of entry into or advancement in
employment.
The Act envisages that every designated employer must do the following towards achieving
employment equity:
1. Conduct an analysis of its existing policies, practices, procedures and the working
environment. The analysis should identify any employment barriers, which adversely
affect people from the designated groups (i.e. which create obstacles to the
employment and/or promotion of black people, women, people with disabilities) . The
analysis must include a profile of the employer’s workforce within each occupational
category and at each level to determine the degree of under-representation of
workers from the designated groups within those categories and at those levels.
2. Prepare and implement an employment equity plan that will achieve “reasonable
progress towards employment equity in that employer’s workforce” . The equity plan
must state the following:
 The objectives to be achieved for each year of the plan
 The affirmative action measures that will be implemented in the workplace. The
Act defines affirmative action measures as “measures designed to ensure that
suitably qualified people from designated groups have equal employment
opportunities and are equitably represented in all occupational categories and levels
in the workplace of a designated employer”. “Suitably qualified people” are persons
who are qualified for a job because of any one of, or any combination of formal
qualifications, prior learning, relevant experience, or capacity to acquire within a
reasonable time, the ability to do the job. When determining whether an employee
is suitably qualified to do the job an employer may not unfairly discriminate against
a person only on the ground of that person’s lack of work experience.
The following affirmative action measures must be implemented by a designated
employer:(i)
measures to identify and eliminate employment barriers, which adversely
affect people from the designated groups;
(ii)
Measures to further diversity in the workplace based on equal dignity and
respect of all people;
(iii)
Reasonable accommodation for people from designated groups in order to
ensure that they enjoy equal opportunities and are equitably represented in
the workforce;
(iv)
Measures to ensure equitable representation of people from the designated
groups in all occupational categories and levels in the workforce and to
retain and develop people from designated groups and to implement
appropriate training measures
It must be stressed that in implementing affirmative action measures, a designated
employer is not required to take any decision about an employment practice or
policy that would establish an absolute barrier to the employment or advancement
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





of people who are not from designated groups. Note also that while designated
employers are required to adopt preferential treatment of people from the
designated groups, the Act does not lay down any quotas.
Where the analysis identifies underrepresentation of people from designated
groups, the plan should state the numerical goals to achieve equitable
representation of people from designated groups in each category and at each level
in the workplace. The plan must also state the timetable within which these goals
are to be achieved and the strategies intended to achieve these goals. In setting
numerical goals, a designated employer must aim to ensure that representation of
people from the designated groups reflects the demographic profile of the national
and regional economically active population, taking into account the pool of “suitably
qualified” people from designated groups from which the employer can reasonably
be expected to appoint of promote. The economic and financial factors in the
sector in which the employer operates, the present and anticipated financial
circumstances of the employer, the number of present and planned vacancies in the
employer’s workplace and the employer’s annual turnover will be taken into account
by the Director-General of Labour in assessing the employer’s numerical goals.
The timetable and plan for the achievement of goals other than numerical goals;
The duration of the plan. This may not be less than 1 year or more than 5 years;
The procedures that will be used to monitor the employment equity plan and
whether progress is being made towards achieving employment equity;
The internal procedures that will be used to resolve disputes concerning the
interpretation or implementation of the plan;
The persons in the workforce who will be responsible for monitoring and
implementing the plan
3. Report to the Director-General on progress made in implementing its employment
equity plan. The period within which a designated employer needed to submit its first
report depended on the number of employees employed by that employer. Those who
employ fewer than 150 employees had to submit the first report within 12 months
after the date of commencement of the Act (1 December 2000), or within 12 months
of the date on which the employer became a designated employer. Subsequent reports
must be submitted once every two years on the first working day of October.
Designated employers who employ 150 or more employees had to submit the first
report within 6 months of commencement of the Act (1 June 2000), or within 6 months
of the date on which the employer became a designated employer. Subsequent reports
must be submitted once every year on the first working day of October.
The CEO must sign the report and, if the designated employer is a public company, a
summary of the report must be included in the company’s annual report.
Note: The first report must refer to the initial development of and content of an
employment equity plan. Subsequent reports must give details of progress made in
implementing the employment equity plan.
The Act requires that in taking the above steps towards achieving employment equity a
designated employer must consult and attempt to reach consensus with a
representative trade union representing a sufficient number of employees at the
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workplace and its employees or representatives or if there is no representative trade
union, with the employees or their representatives (nominated by them).
The consulting group must represent the interest of all workers in the workplace.
Therefore it must be made up of employees from all occupational categories and levels
of the employer’s workforce (both from designated and non-designated groups). The
rationale behind this is that all employees must be considered and consulted with.
The Act does not afford a workplace forum the right to be consulted by the employer
in this regard.
In consulting with a trade union and/or employees or their representatives the
employer has a duty to disclose all relevant information to the consulting group that
will permit effective consultation.
The requirement of consultation is not intended to deprive employers of their power
but to ensure that all involved parties are committed to workplace transformation and
to foster democracy and productivity in the workplace.
6.3.1
Income differentials
Designated employers are also required to submit a statement to the Employment
Conditions Commission on the remuneration and benefits received in each occupational
category and level of the employer’s workforce and to take steps progressively to
reduce “disproportionate” differentials (a term that the Act has left to the
Employment Conditions to define).
The Employment Conditions Commission must advise the Minister on appropriate
measures for reducing disproportional incomes.
6.3.2
Miscellaneous duties of designated employers
1. Before the end of term of its current equity plan an employer must prepare a
subsequent equity plan.
2. A designated employer must assign one or more senior managers whose
responsibility it will be to implement and monitor the plan.
3. A designated employer must display the following at its workplace:(i)
a statement informing employees of the provisions of the Act. (A poster is
available from the Govt Printers, cost approx R4)
(ii)
A copy of the most recent report sent to the Director-General.
(iii)
Any compliance order, arbitration award or order of the Labour Court issued
in terms of this Act
4. A designated employer must keep records of its workforce and of its employment
equity plan.
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6.4
MONITORING, ENFORCEMENT AND LEGAL
PROCEEDINGS
Compliance with the EEA will be policed at various levels:
a) Within the workplace
The designated employer must consult with the consulting parties and must attempt
to reach consensus on the analysis of existing policies and procedures, the
preparation of an employment equity plan and reports thereon. The employment
equity plan must be displayed at the workplace.
(A)
b) By the Department of Labour
-
-
-
Labour inspectors have powers of entry into an employer’s workplace and
may question and inspect any relevant documents.
An inspector may secure a written undertaking from the employer to comply
with any duty under the Act (see S36).
An inspector may issue a compliance order if the employer refuses to sign
the undertaking or does not comply with the written undertaking. The
compliance order must set out what the employer is required to do, when
he/she must comply as well as the fine that may be imposed if the employer
does not comply. (Schedule 1 sets out the maximum permissible fine).
The employer must display the compliance order at the workplace. If he
wishes to object to it he must do so to the Director-General within 21 days
after receiving the order.
The director-general may confirm, cancel or vary the order (whole or part)
and must specify a date for compliance.
After receiving the director-general’s order the designated employer must
either comply with it or appeal against it to the Labour Court.
If the employer appeals to the labour court, the operation of the compliance
order will be suspended, pending the decision of the labour court.
If the employer does not comply with or appeal the order, the directorgeneral may apply to the Labour Court to have the order made an order of
court.
In assessing whether a designated employer is implementing employment equity in the
workplace, the director-general or any person applying the Act must take the following
into account:
 The extent to which suitably qualified people from the designated groups are
represented in the workplace in relation to:
- The nationally and regionally economically active population
- The pool of suitably qualified people from designated groups from which the
employer can reasonably be expected to appoint or promote people
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Financial factors relevant to the particular sector in which the employer
operates
- The employer’s present and anticipated financial circumstances
- The employer’s present and planned turnover with regard to vacancies
 Progress made in implementing employment equity by other designated employers
operating under comparable circumstances and in the same sector.
 Reasonable efforts made by the designated employer to implement employment
equity
 The extent to which the designated employer has eliminated employment barriers
-
(B)
-
-
-
6.5
In terms of S43 the director-general may conduct a “review” to determine
whether an employer is complying with the Act.
The director-general may ask the employer to submit a copy of its current
analysis or plan and may also invite the employer to meet with him. The purpose
of the review is to ascertain whether the employer is complying with the Act.
After reviewing the situation, the director-general may approve the designated
employer’s equity plan or he may make a “ recommendation” to the employer
stating the steps he must take and the period within which the steps must be
taken.
If a designated employer does not comply with the director-general’s
recommendation the director-general may refer the matter to the Labour
Court.
DOES NOT IMPLEMENTING AFFIRMATIVE ACTION
AMOUNT TO UNFAIR DISCRIMINATION?
We have established that designated employers must take appropriate steps towards
achieving a workplace that is more equitably representative of employees from the
designated groups (including the implementation of Affirmative Action). We have
established that employees (including applicants for employment) have a right not to be
unfairly discriminated against and we have established further that affirmative action is
not regarded as unfair discrimination.
The question that all this poses is whether a black employee can argue that s/he has been
unfairly discriminated against where the employee does not implement affirmative action
measures.
Over the past year the Labour Court passed two conflicting decisions in this regard:
In Harmse v City of Cape Town (2003) 6 BLLR 557(LC) the Court held that since a
designated employer has a duty to implement affirmative action measures, failure to do so
violates “the right of an employee who falls within one of the designated groups not to be
unfairly discriminated against”.
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Conversely, in the more recent case of Dudley v City of Cape Town Tip AJ indicated that
unfair discrimination dealt with in Chapter II of the EEA must be seen separately from
the duty of a designated employer to implement affirmative action measures, which is
dealt with in Chapter III of the Act. Accordingly he concluded that failure to implement
affirmative action measures does not amount to unfair discrimination.
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7. AN UPDATE OF SKILLS DEVELOPMENT
LEGISLATION
Note: In relation to skills development in South Africa there are 3 distinct but
interrelated, relevant laws:
 The Skills Development Act, No 97 of 1998
 The Skills Development Levies Act, No 9 of 1999
 The South African Qualifications Authority Act, No 58 of 1995
 The Skills Development Act (a labour law) has been amended recently by The
Skills Development Amendment Act, No 31 of 2003
The Skills Development Act is also aimed at redressing the legacy of apartheid. The Act
was designed to develop the skills of the South African workforce and the main purpose of
the Act may be summarised as follows:
 To improve the quality of working life for workers, their prospects of work and labour
mobility
 To improve productivity in the workplace
 To promote self-employment
 To improve the delivery of social services
 To encourage employers to use the workplace as an active learning environment and to
provide opportunities to new entrants to the labour market to gain work experience
 To improve the employment prospects of previously disadvantaged persons through
education and training
 To promote the quality of learning in and for the labour market (via alignment with the
SAQA Act and via giving employers and workers greater responsibility for ensuring the
relevance of training)
 To assist workers to find work, retrenched workers to re-enter the labour market and
employers to find qualified employees (via the establishment of employment services)
To fully appreciate and understand the practical implications of the SDA, the Act
must be viewed in the context of the “new” system of education in South Africa and
the South African Qualification Authority Act of 1995 (SAQAA).
Unlike the Skills Development Act, which was initiated by the department of labour, the
South African Qualifications Authority Act was initiated by the department of education.
Notwithstanding the difference of focus in each Act, the Acts share common objectives,
namely to
 facilitate access to and mobility and progression within education, training and career
paths
 redress past unfair discrimination in education, training and employment opportunities
 improve the overall skills of South African learners and workers, thereby aligning
South Africa with international standards in this regard.
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The department of education recognised that the “old” system of education in South
Africa did not suit the needs of post-apartheid South Africa. The “old” formal system of
education was not easily accessed by the majority of South Africans and this resulted in
many workers and other persons in South Africa, who fell outside the formal education
structures, being thwarted in career development and employment opportunities.
The SAQAA provided for the establishment of an eight level National Qualifications
Framework (NQF) which covers all types of learning and achievement in South Africa by
setting standards for learning and establishing a quality management system. In terms of
the system every qualification in South Africa fits into one of the 8 levels, depending on
complexity of the qualification. The “currency” of learning is unit standards, which
combined in different ways, depending on the needs of the learner, form recognised
qualifications. Each unit standard is quantified in terms of credits (each credit based on
10 hours of notional learning). The more difficult a unit standard, the more credits
needed by a learner to meet and achieve the standard. A system of credit accumulation
allows for flexibility of movement and progression through the system. Unit standards are
developed by Standards Generating boards (SGB’s) who decide how many credits make up
each unit standard, depending on how long it thinks the average learner would take to
acquire the skills and knowledge specified in each unit standard. The standard setters are
expected to conduct research and interviews with key-players in each field of learning,
including employers to identify learning outcomes and assessment criteria for jobs and
career opportunities. Developed unit standards need to be endorsed by a National
Standards Body (NSB), after which the unit standard is registered by SAQA on the NQF
and is then advertised in the public domain
Learners can work towards credits, unit standards and indeed qualifications in the formal
education system or on-the-job in the workplace. Education has become accessible and
inclusive. It can be accessed through the formal education system and in the workplace, it
recognises prior learning (RPL), it recognises formal education as well as skills and
qualifications may be obtained at any time and at any age. To ensure quality of education,
the “new” education system requires and provides for the accreditation of education
providers. Responsibility for quality assurance and quality control vests in Education and
Training Quality Assurers (ETQA’s). Having regard to the fact that learning towards
credits and unit standards will often occur on-the-job rather than in the “classroom”,
there have to be assessors in the workplace to assess and award credits for units and
qualifications. These assessors have to be accredited to ensure that the standard and
quality of education is maintained.
The Skills Development Act establishes the National Skills Authority (NSA), which is an
advisory body to the Minister of Labour and is responsible for ensuring that national skills
development strategies, plans, priorities and targets are adhered to. 27 Sector Education
and Training Authorities (SETAs) e.g. Fasset have been set up which are responsible for
developing sector/industry skills plans that align to the national skills strategies and plans.
Each SETA also has an ETQA function within the sector in which it operates and has to
ensure that workplace training providers, assessors and moderators are accredited.
SETAs are also responsible for the development and registration of learnerships and
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Skills Programmes. Learnership programmes incorporate traditional apprenticeships and
include structured learning and work experience that will lead to nationally registered
qualifications. They are intended to assist unemployed persons to enter employment and
help existing employees to improve their skills level. A learnership agreement is entered
into between a learner, employer and an accredited training provider. The agreement
obliges the employer to employ the learner for the period specified in the agreement, to
provide the learner with the requisite practical experience and to release the learner to
attend the education specified in the agreement. The agreement obliges the learner to
work for the employer and to attend the specified training. The agreement obliges the
training provider to provide the education and training specified in the agreement
Skills programmes are programmes that are occupationally based and when completed will
constitute a credit towards a registered national qualification. A skills programme uses
accredited training providers.
In terms of the Skills Development Levies Act A compulsory monthly levy equal to 1% of
the payroll of every organisation is collected by SETAs and a national collection agency.
20% of the funds collected is paid into the National Skills Fund and the remaining 80% is
paid to the relevant SETA. Save for 10%, which a SETA may retain for operational costs,
SETAs are obliged to use the remaining portion of levy collected inter alia, to develop
skills within the Sector, to register learnerships and to refund organisations that carry
out (accredited) training that meets the requirements of a sector’s skills plan.
The Skills Development Amendment Act, No 31 of 2003 was passed to strengthen skills
development and gives the Minister of Labour greater influence over the SETAs. In terms
of the amendment each SETA is obliged to conclude an annual Service Level Agreement
with the Department of Labour. The agreement will set targets regarding implementation
of the National Skills Development Strategy and will also prescribe requirements for
reporting. The Minister of Labour can issue instructions to SETAs who do not meet their
obligations. These amendments are intended to ensure that the SETAs are accountable.
The Amendment also provides for the establishment of Employment and Skills
Development Agencies (ESDAs). ESDAs are intended to facilitate the uptake of learners
on learnership programmes. Despite significant tax advantages (SARS) and other financial
incentives (from the SETA) offered to organisations that implement learnerships, many
organisations are overwhelmed by the administrative functions that are associated.
ESDAs can “take away the pain” by performing the employer and administrative functions
and by assisting employers (particularly SMMEs) through proper implementation.
Fasset keeps its members abreast of skills development grant applications and other
benefits and updates via newsletters, its website and other media.
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8. EMPLOYMENT POLICIES AND
INDUCTION
We have already established that in terms of S29 of the BCEA, upon commencing
employment, an employee must be supplied with a written contract of employment or
letter of appointment setting out terms and conditions of employment.
Employers are also advised to compile an employee handbook/organisation manual which
sets out company policies and procedures. In addition to policies and procedures it may
also include, inter alia, a mission statement for the company and an explanation of the
company/corporate culture.
The following is a list of possible policies and procedures. It is not an exhaustive list:
 Disciplinary Code (this is an extremely important document since it sets out the
rules of the organisation as well as the consequences for breaking the rules. This
document is especially relevant when an employee is accused of misconduct).
EVERY COMPANY SHOULD HAVE A DISCIPLINARY CODE AND PROCEDURE!
 Grievance Policy (this is also extremely important as it outlines the
procedures/steps that an employee needs to follow if s/he wants to institute a
grievance relating to his/her employment). EVERY COMPANY SHOULD HAVE A
GRIEVANCE POLICY AND PROCEDURE!
 Performance Management Policy
 HIV/AIDS Policy
 Sexual Harassment Policy (or a General Harassment Policy)
 Policy regarding Travel Expenses, Rental Cars, Business Mileage
Reimbursement
 Preferential Recruitment Policy
 Policy regarding Computer Usage and Electronic Communications (to regulate
email and internet usage)
 Health and Safety Policy
 Career Advancement and Promotion Policy
 Leave Policy (includes the company’s policy on annual leave, sick leave, family
responsibility leave, maternity leave, unpaid leave, study leave, leave for religious
holidays etc)
New employees must be made aware of company policies procedures and copies must be
made available for inspection and to enable the employees to become familiarized.
Company policies and procedures are usually “tailored” depending on the needs and
culture of the specific organisation. A professional will be able to assess which
policies and procedures your organisation needs and also the content thereof.
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ANNEXURE “A” HANDLING MISCONDUCT: STEPS TO FOLLOW
Where an employee commits an offence in the workplace the employer must adopt a
corrective and progressive approach to disciplining the employee (not punitive). This
means that before resorting to dismissal, the employer should first try to correct the
employee’s behavior through warnings. The number and type of warnings (verbal / written
/ final written) will depend on the seriousness of the offence and the employer’s
disciplinary code will list and grade offences from minor to serious and inform the
employee of the disciplinary action in the event of a specific offence being committed.
Written warnings must be properly served on the employee concerned and s/he should be
asked to sign acceptance of receipt. If s/he refuses to do so the employer should record
this fact on the warning and state the time, date and place that it was handed to the
employee.
The employer should keep a record for each employee specifying disciplinary offences and
action taken. File copies of any written or final written warnings!
Where dismissal is a possible sanction for a disciplinary offence an employee must be given
a disciplinary enquiry. The reason for this is to attempt to establish his/her guilt and to
give him/her a fair opportunity to respond to the charges. The hearing is relatively
informal and neither the employer nor the employee may have legal representation present
(unless by agreement).
The following guidelines should be followed to ensure that the hearing is procedurally fair:






The employee must be given prior notice of the charge and of the investigation.
This means that before the enquiry the employee must be informed of the charges
against him so that he can prepare to defend himself. The charge and notification
must be in simple English and the employee must sign an acknowledgement of receipt.
(Give the employee reasonable time to prepare for the enquiry).
The employee is entitled to the assistance of a trade union representative or fellow
employee and must be informed of this right.
If necessary an interpreter should be used.
Both employer and employee are entitled to call witnesses and to lead evidence and to
cross-examine any evidence given by the other party. The employee must be informed
of this right.
The following people will be present at the hearing: An impartial chairperson, the
employee (with or without his representative), the employer (or management
representative). The chair must be a person who has not been involved with
investigating the employee or who is representing the employer at the hearing.
During the hearing the chairperson should start by re-informing the employee of
his/her right to have a representative and should explain the process that will be
followed to the employee. The chairperson must also make sure that the employee
understands the charges made against him/her by management.
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
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

The employer presents its case first and will lead evidence against the employee to
try to establish the employee’s guilt on the charges. The employer may present
relevant documentary and oral evidence. The employee must be given an opportunity to
cross-examine the employer on the evidence.
The employee will then present his/her case in the same manner as the employer.
Witnesses may be called for each side and may be cross-examined by the other side.
After both employer and employee have given evidence and called witnesses, the
chairperson must adjourn/postpone the enquiry to consider all the evidence and
decide whether the employee is guilty or not guilty. (The chairperson must consider
whether: the employee broke a rule, whether the rule was reasonable; whether the
employee knew or should have known about the rule and whether the employer has been
consistent in applying the rule)
If the chairperson finds the employee guilty, aggravating and mitigating factors will
be heard. The employer is given an opportunity to give reasons why the employee
should be dismissed (aggravating factors) and the employee is given an opportunity to
give reasons why dismissal should not be imposed (mitigating factors)
After hearing aggravating and mitigating arguments, the chairperson should adjourn
again to consider the appropriate penalty. The chairperson must consider whether
dismissal is the appropriate penalty or whether a less severe sanction, such a final
written warning or suspension is more appropriate
After the enquiry the decision must be communicated to the employee (in writing).
If the employee is dismissed, s/he must be informed of the reason for dismissal and
must be reminded that /she can refer the matter to the CCMA.
Note: If the organisation has an internal appeal procedure this must be followed.
the chairperson should keep proper minutes of the hearing and of the evidence heard and
considered and of the mitigating and aggravating arguments.
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Note: use the wording in brackets if it is a final written warning
ANNEXURE “B” (FINAL) WRITTEN WARNING
NAME OF EMPLOYEE: ___________________
POSITION: ______________________________
LENGTH OF SERVICE: ___________________
DATE: __________________________________
DESCRIPTION OF THE OFFENCE:
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
(You were previously found guilty of this offence on ________(date)). (only insert if
necessary)
AGREED CORRECTIVE ACTION:
(Final) Written Warning.
CONSEQUENCES OF REPETITION:
(Dismissal) Final Written Warning
Owing to the seriousness of this offence this warning will remain in force for _____
months
SIGNED:
………………………………………………..
C.E.O
……………………………………………
EMPLOYEE
DATE:
100
ANNEXURE “C” NOTICE BEFORE DISCIPLINARY HEARING
ATTENTION:
FROM
:
DATE
:
Dear______________________________
NOTICE OF DISCIPLINARY HEARING
1.
This notice serves to advise you that you are to attend a disciplinary hearing to respond to the
following charges:
DETAILS OF THE CHARGES:
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
___________________________
______________________________________________________________________________
2.
3.
This hearing will take place as follows:
DATE: _____/_______/________ TIME:_______HR________ PLACE:_________
Should you require to be represented by a trade union representative or co-employee, you must on
receiving this notice or very soon thereafter, advise _________________________of who the
Witnesses are and the name of your Representative, in order that arrangements may be made in time
for their presence at the hearing.
NAME OF REPRESENTATIVE______________________________
NAME OF WITNESS(ES)
______________________________
______________________________
4.
You have the right to:
4.1
Put your version of the events to the hearing.
4.2
4.3
4.4
4.5
4.6
4.7
Call Witnesses to testify.
Be represented at this hearing by a trade union representative or by a co-employee.
Cross question the Complainant and any Witness(es).
An interpreter, if needed.
Be advised of the charges in writing at least 24 hours in advance of the hearing.
Be advised of the outcome of the hearing and be furnished with written notification of the decision as
well as the reason/s for the decision.
If dismissed, refer this matter to the Commission for Conciliation, Mediation and Arbitration – CCMA.
4.8
5.
you are also herewith notified that should you not attend the disciplinary hearing on the aforesaid
date that management will seriously consider proceeding with the disciplinary hearing in your
absence.
6.
Kindly sign this letter as acknowledgement of having received same.
Yours faithfully
_____________________________
Acknowledge receipt:
______________________________
SIGNATURE
________________________
DATE
101
ANNEXURE “D” HANDLING POOR WORK PERFORMANCE: STEPS TO
FOLLOW: Amended from the CCMA Website (This procedure does not apply
to probationary employees)
STEP 1
Supply the employee with written reasons why it is necessary to initiate this procedure.
STEP 2
Meet with the employee (and, if the employee wishes, with his/her trade union
representative or co-employee). During the meeting:
 Explain the job requirements, grade, skills and the nature of the job;
 Evaluate the employee’s performance in relation to the job requirements;
 Indicate reasons for perceived poor performance;
 Give the employee (or representative) an opportunity to make representations
regarding whether the employee has performed according to the requirements
and whether s/he agrees that performance is not up to standard.
STEP 3
Develop and initiate a programme of counseling, instruction and guidance to enable the
employee to reach the required standard of performance. This programme must include
assessing with the employee the time it would take for an employee to overcome the poor
work performance; realistic time frames within which the employer expects the
employee to meet the performance standard; appropriate training (if necessary); factors
affecting performance that are beyond the employee’s control.
STEP 4
If poor performance is not remedied within the time frames established by the
programme the employer must give the employee a written report of the outcome and
consult with him/her to explain the outcome of the procedure.
STEP 5
After the consultation (step 4) the employer must consider whether to continue giving
the employee appropriate counseling, instruction and guidance and give the employee
more time to improve OR to mentor the employee OR to convene a poor performance
hearing to consider what action should be taken, which may include transferring the
employee to another job or dismissing him/her.
Note: the employer should keep a record of all the above counseling sessions
STEP 6 (if the decision is to convene a Poor performance hearing)
If the employer feels that action stronger than a final written notice may be warranted
the employer/appropriate manager must give the employee not less than 3 working days
notice of the time and date of the hearing and details of the performance standard the
employee is alleged not to have met.
A chairperson (director/general manager or his/her nominee), employer representative,
the employee, the employee’s representative (shop steward or co-employee), any
102
witnesses which the employer or employee wish to call and an interpreter (if the
employee requests) may be present at the hearing.
At the hearing the chairperson must give the employer an opportunity to explain the
procedure that has already been followed in counselling the employee who has failed to
meet the work standard, in what respects the employee’s performance is unsatisfactory,
the steps taken to assist the employee to remedy the situation and the time period that
has been granted to the employee to remedy the defects.
The chairperson must then give the employee (and his/her representative) an
opportunity to present the employee’s case.
At the conclusion of the hearing the chairperson must make a decision as to whether the
employee is able to meet the required work performance standard or not. If s/he feels
that the employee is not able to meet the required work standard, the chairperson may
ask the employer and the employee and his/her representative for submissions on the
appropriate outcome.
The chairperson must then make a decision on the outcome. S/he must consider whether
there are any alternatives to dismissal. If there are not, then the employee may be
dismissed with notice. In the case of dismissal the employee must be remined of his/her
right to refer the matter to the CCMA.
103
ANNEXURE “E” STEPS TO FOLLOW IF CONTEMPLATING
RETRENCHMENT IN TERMS OF S189 (Note this is different from steps in
terms of S189A)
Remember: S189 Deals with Dismissals based on operational requirements for employers
with less than 50 employees or small-scale dismissals based on operational requirements by
big employers. The steps below should be read together with the explanatory notes set
out in this handbook under the section dealing with S189.
STEP 1
The employer contemplates the possibility of retrenching staff.
STEP 2
Send written notice to the consulting party that retrenchment is contemplated and
that they are invited to consult in this regard. The notice must set out the date,
time and place of the initial consultation and must disclose relevant information
(the information which must be disclosed is set out in the handbook under S189
under the heading “3. Written notice of invitation to consult and written disclosure
of relevant information”)
STEP 3
Engage in initial consultation with the other consulting party (see the notes regarding who
must be consulted). Explain that the purpose of consultation is to attempt to reach
consensus on the topics listed under heading “2. Attempt to reach consensus on certain
matters” (set out in the handbook under the notes on S189) and disclose all relevant
information to the consulting parties in order to facilitate an effective joint consensusseeking process. Remember: parties must attempt to reach consensus on certain issues,
specified in S189(2) of the LRA
STEP 4
Allow the other consulting party an opportunity to make representations. (At the initial
and/or subsequent consultations regarding the contemplated retrenchments)
STEP 5
Consider and respond to the representations of the other consulting party
STEP 6
Make a final decision regarding retrenchment and give written notice of the decision and
reasons to the other consulting party.
NB: Remember Severance Pay!
104
ANNEXURE “F” GUIDELINES FOR DRAFTING THE CONTRACT OF
EMPLOYMENT/LETTER OF APPOINTMENT
According to S29 of the BCEA a contract of employment/letter of appointment must, at least
contain the following information:
“(a) the full name and address of the employer;
(b) the name and occupation of the employee, or a brief description of the work
for which the employee is employed;
(c) the place of work, and, where the employee is required or permitted to work
at various places, an indication of this;
(d) the date on which the employment began;
(e) the employee’s ordinary hours of work and days of work;
(f) the employee’s wage or the rate and method of calculating wages;
(g) the rate of pay for overtime work;
(h) any other cash payments that the employee is entitled to;
(i) any payment in kind that the employee is entitled to and the value of the
payment in kind;
(j) how frequently remuneration will be paid;
(k) any deductions to be made from the employee’s remuneration;
(l) the leave to which the employee is entitled;
(m) the period of notice required to terminate employment, or if employment is for
a specified period, the date when employment is to terminate;
(n) a description of any council or sectoral determination which covers the
employer’s business;
(o) any period of employment with a previous employer that counts towards the
employee’s period of employment;
(p) a list of any other documents that form part of the contract of employment,
indicating a place that is reasonably accessible to the employee where a copy
of each may be obtained.”
(S29 Basic Conditions of Employment Act, No 75 of 1997)
In addition to the above information there are various other clauses which a contract of
employment/letter of appointment may contain. Inter alia:











Dress code
Extraneous employment
Training paid for by the employer
Confidentiality
Discretionary bonus/Annual incentive
Restraint of trade
Intellectual property
Company property
Miscellaneous matters (postal address and address for service of legal documents)
Medical aid//Pension/Other employee benefits
ETC ETC
A professional will be able to determine the clauses to be contained in your specific
contracts of employment.
Note: Remember that the provisions in the BCEA regarding working hours and leave apply
differently to different types of employee. Also remember that temporary and part-time
employees are entitled to pro rata annual leave and that there is a formula for sick leave.
Check the CCMA and Dept Labour Websites for examples of contracts!
105
ANNEXURE “G” PRACTICAL STEPS FOR DEVELOPING AND IMPLEMENTING
AN EMPLOYMENT EQUITY PLAN
The Employment Equity Act highlights that there are four main duties imposed on an
employer towards achieving employment equity in the workplace:

Consult with representative trade unions and employees in the workplace.

Analyse the existing policies, practices and procedures in the workplace to identify
barriers that adversely affect employees from the designated groups and prepare a
Profile of the existing workplace to ascertain the degree of under-representation of
employees from the designated groups in the workplace.

Prepare and implement an Employment Equity Plan setting out affirmative action
measures, objectives and numerical goals for each year of the plan.

Report to the Department of Labour on the implementation of the plan and on progress
made in achieving employment equity in the workplace.

Display a summary of the Employment Equity Act in the workplace.
The Department of Labour has published a Code of Good Practice: Preparation,
implementation and monitoring of employment equity plans and a booklet “Preparing an
Employment Equity Plan: Based on the Guidelines laid down in both documents, employers
may use the following ten steps in preparing and implementing an employment equity plan:
(The first 4 steps are concerned with preparing the plan, the next 4 steps deal with
developing and implementing the plan and the final 2 steps cover monitoring the plan and
reporting thereon. Although the steps, which are set out and discussed below, are not law,
they provide concrete guidelines for employers in the process of transformation towards
employment equity).

PREPARATION
 Step 1:
Assigning responsibility to one or more senior manager/s
The task of transforming the workplace into one that has equitable
representation of employees from the designated groups ultimately rests
with one or more senior manager/s in the workplace. Every designated
employer should therefore appoint at least one senior manager to actively
engineer and oversee the process. The appointed person must be a
permanent employee, who reports directly to the CEO. Although he or she
need not spend all working time devoted to this project, he or she must be
given authority, a budget, adequate resources and reasonable time off work
to make this project a meaningful one.
106
 Step 2:
Communication and awareness
It is essential that all employees be made aware of the employment equity
process and of the Employment Equity Act in general. It is therefore
imperative to begin by sensitising employees with regard to the main
provisions and purpose of the Act. They should be familiar with the antidiscrimination provisions in Chapter II of the Act and should learn what
constitutes unfair discrimination as well as the mechanisms for preventing
and handling this. Employees should also become familiar with the
employment equity process, the needs, aims and objectives of the Act in this
regard. The main reason for this level of communication and awareness is to
encourage employees to “buy into” the process.
Employees can be made aware of the above through training sessions,
workshops or newsletters.
 Step 3:
Consultation (establishing the employment equity committee)
The employer, represented by the appointed senior manager/s may not
engineer the employment equity process alone. The preparation and
implementation of the plan should be done together with a consultative
forum, which should be set up as early as possible. An effective method for
setting up the committee is for employees to nominate members to the
committee. The forum should consist of members from representative
trade unions (if any) and of employees from designated and non-designated
groups from all levels and occupational categories in the workplace. The
forum should meet regularly (depending on the size and sophistication of the
workplace). Although the forum is led by the appointed senior manager/s, it
is essentially the forum as a unit that is responsible for preparing and
implementing the process in the workplace.
Members of the forum must be given time off ordinary work duties to
consult on the process and members must be given opportunities to make
representations and for report back. To promote effective consultation
relevant information should be disclosed regarding the following:
The employer’s business
The sector/industry
The national and provincial demographics
The anticipated growth or reduction of the workforce
The turnover within the workforce
Internal employees from designated groups available for promotion
External people from the designated groups available for employment
and for promotion
The degree of representation of employees from the designated
groups within the workplace
Available resources for training bursaries etc
Current employment policies and practices
 Step 4:
Conducting the analysis
An analysis must be conducted for two reasons:
107
i)
ii)
i)
to assess current policies and practices in order to identify barriers
which adversely affect employment and promotion of employees from
the designated groups, and
to determine the degree of under-representation of employees from
the designated groups.
Assessment of current policies and practices to identify employment
and promotion barriers
The following policies and practices should be reviewed:
- Recruitment, selection, pre-employment testing and induction (e.g
are they competency based and how and by whom are they
conducted?)
- Succession and experience planning
- Promotions and transfers
- Job assignments
- Current training and development methodologies and strategies
and access to training
- Remuneration structures and practices
- Employee benefits
- Disciplinary practices
- Working conditions
- Number and nature of dismissals
- Corporate culture
- Management of HIV/Aids in the workplace (any discrimination)
- Any other practices or conditions tabled by the forum
The forum should look for factors which may adversely affect
employees from the designated groups and should be particularly
sensitive to practices which may be subtly discriminatory. Good
methods for identifying these factors are to brainstorm (within the
forum) or to prepare and conduct a questionaire, which may be filled
in by all employees and then considered by the forum. The
questionaire should contain questions relating to how the employees
perceive current employment policies and practices, whether they
regard them as discriminatory or not and employees should be given
space on the questionaire to suggest possible solutions to barriers
which they identify.
ii)
Assessment of under-representation of members from the
designated groups
Designated employers should conduct an audit, counting the number
of employees in the workplace from the designated and from the nondesignated groups. This workforce profile may be established by
asking the employees themselves to fill in the form EEA1 of the
Employment Equity Act Regulations.
108
Once the audit is complete the workplace profile should be compared
with the provincial and national demographics and with the workforce
profiles of other organisations of similar size and structure within
the sector.
The business’s workforce profile and subsequent comparisons will
enable the employer to determine its degree of under-representation
of employees from the designated groups and its numerical goals for
the plan.

DEVELOPMENT AND IMPLEMENTATION
 Step 5:
Setting objectives and formulating affirmative action measures
Designated employers should now prepare the employment equity plan, using the analysis
as the point of departure. The ultimate purpose of the plan is to set progressive,
realistic and achievable objectives, goals and affirmative action measures that will
transform the workplace into one which has due regard for employment equity. In
other words the objectives, goals and AA measures should aim towards achieving a
workplace profile that is equitably representative of employees from the designated
groups at all levels and within all occupational categories.
The analysis should provide the consultative forum with valuable information regarding:
-
The workplace profile
Practices or policies which adversely affect members of the designated
groups
Internal statistics
Demographic statistics
Comparisons between the organisation’s workplace profile and that of
similar organisations
The consultative forum should implement affirmative action measures, which will
address the barriers identified in the analysis. Affirmative action measures
should be implemented for each adverse policy and practice identified.
-
Examples of affirmative action measures would be:
training and/or shadow posting for employees from the designated groups.
Introducing competency based tests where pre-employment psychological tests
are found to be discriminatory.
Advertising vacant positions appropriately where they are poorly advertised to
the designated groups.
Using bursaries to bring members from the designated groups into the
workplace.
Using community organisations to offer career counseling and information
regarding opportunities and career paths within the industry.
109
 Step 6: Establishing a time frame
The duration of the plan may be anything between 1 and 5 years. The duration of the plan
should be decided with reference to the size and the sophistication of the business and
due regard should be had to the length of time that is necessary to make meaningful
progress in employment equity. The plan should specify milestones and target dates.
 Step 7: Allocating resources
Adequate resources should be allocated to the project. These include time, people,
infrastructure, money and training.
 Step 8: Communicating the plan
All employees should be kept informed of the employment equity plan. Employees should
be informed of whom is responsible for implementation of the plan, of the dispute
resolution procedure, of the role and responsibility of key-persons and of any other
relevant information.

MONITORING AND REPORTING
 Step 9: Monitoring and evaluating the plan
The consultative forum should keep all records of the plan and of the objectives, goals and
affirmative action measures to be implemented. Progress should be evaluated at regular
intervals and reports on progress made should be made to all employees.
 Step 10: Reporting to the Department of Labour
Designated employers are required to submit an employment equity report (form
EEA 2 (or EEA 2A, for smaller employers)). At the same time designated employers must
submit an income differential statement (form EEA 4 (or EEA 4A, for smaller employers)).
Forms may be obtained from the Department of Labour or by accessing the website
www.labour.gov.za.
The first report, since promulgation of the EEA was the actual employment equity plan and
had to be submitted by 1 June 2000 if the employer has 150 or more employees and by 1
December 2000 if the employer has fewer than 150 employees.
Subsequent progress reports must be submitted every year by 1 October each year for
employers with more than 150 employees and every second year by 1 October for
employers with less than 150 employees.
110
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