Media briefing on the Bills Amending the Labour Relations Act, The Basic Conditions of Employment Act, Employment Equity Act and the Employment Services Bill, 2010

15 Dec 2010

The Department of Labour will be publishing amendment bills for the Labour Relations Act (LRA), the Employment Equity Act (EEA), the Basic Conditions of Employment Act (BCEA) and a new Employment Services Bill, 2010 on Friday 17 December 2010. Each bill is accompanied by an Explanatory Memorandum. 

The bills are published for public comment with the closing date set for 17 February 2011.  During this time the department will hold public consultations in the different areas of the country and we will also be tabling the Bills for discussion at the National Economic Development and Labour Council (NEDLAC). 

The current amendments have their origins in the growing "casualisation" of work that has become a feature of the South African labour market over the past decade. The 2009 election manifesto of the ruling party gave urgency to the task of introducing amendments by noting the following;

"In order to avoid exploitation of workers and ensure decent work for all workers as well as to protect the employment relationship, introduce laws to regulate contract work, subcontracting and out- sourcing, address the problem of labour broking and prohibit certain abusive practices. Provisions will be introduced to facilitate unionisation of workers and conclusion of sectoral collective agreements to cover vulnerable workers in these different legal relationships and ensure the right to permanent employment for affected workers. Procurement policies and public incentives will include requirements to promote decent work."

Amendments to the LRA, BCEA and EEA therefore have a major focus on addressing what is now commonly referred to as the phenomenon of labour broking. 

Additional amendments have been effected to these acts to achieve the following:

• To bring them in line with labour law developments
• To improve the functioning of the Commission for Conciliation Mediation and Arbitration (CCMA) and
• To fulfill our obligations as a member state of the International Labour Organisation (ILO).

The Employment Services Bill is also being published on 17 December 2010. The significance of the Employment Services Bill lies in the legal framework that it provides for the operation of employment services in South Africa. Legislation in this area is required in light of the transfer of the skills development functions to the Department of Higher Education and Training. Previously, the employment services were provided for in the Skills Development Act which is now the mandate of the Department of Higher Education and Training.

The Employment Services Bill also has relevance to labour broking as it makes provision for the regulation of temporary employment services by government.

The following are, in summary, the major areas of amendment in the bills. 

1.  Labour Relations Amendment Bill, 2010

• Regulating contract work -  A proposed amendment aims to stop the practice of repeated contracting for short-term periods. The onus will be on employers to justify the use of short-term or fixed term contracts, in place of contracting employees on a permanent basis. 
• Addressing the problem of labour broking - The Labour Relations Amendment Bill proposes to repeal section 198 that deals with Temporary Employment Services in the Labour Relations Act (no 66 of 1995). The department is introducing a new Employment Services Bill which will address both Private and Public Employment Services.
• Defining the employer and employee - The Bill introduces a new definition of employer and employee to give greater certainty to the employment relationship.  As a result of the new definition of employer, no temporary employment service will be able to be the employer of workers that it places in work.
• Commission for Conciliation Mediation and Arbitration (CCMA) - The bill proposes a range of amendments to the provisions that deal with the CCMA to facilitate dispute resolution and enhance the efficiency of the CCMA's operations.

2.  Basic Conditions of Employment Amendment Bill, 2010

• Changes to the power of the Minister - Amendments are proposed to give the minister the power to prescribe thresholds of representativeness of a trade union to have the organizational rights of access to employer premises. This is intended to apply to situations where unionisation is difficult but where a more flexible threshold may facilitate unionisation within a sector or area.

Further amendments in this regard propose that the minister could set increases to actual wages instead of minimum wages for vulnerable workers in sectoral determinations

A proposed enabling provision in the Basic Conditions of Employment Act will provide the Minister with the power to determine the conditions of labour tenants.

• Child labour - Amendments are proposed to align the Basic Conditions of Employment Act with South Africa's international law obligations in terms of the International Labour Organisation Convention (No. 182) on the Worst Forms of Child Labour.
• Strengthening the power of the inspectorate  -  Contraventions of certain provisions in monitoring and enforcement of the Act are criminalised which will enhance the effectiveness of the inspectorate. The Bill further seeks to impose heavy penalties for offences and contraventions of the provisions of the Act as well as increased prison terms for employers that do not comply. 

 3.  Employment Equity Amendment Bill, 2010

• Equal pay for work of equal value - A new clause is introduced which seeks to prohibit abusive practices by ensuring that employees who work for the same employer receive the same pay as other employees doing the same or substantially the same work. This amendment is necessary to ensure compliance with the International Labour Organisation's conventions that deal with discrimination, namely Convention 100 Equal Remuneration Convention and  Convention 111 Discrimination (Employment and Occupation) Convention.
• Strengthening enforcement and compliance - To strengthen the enforcement mechanisms of the Act, amendments are proposed which empower the Director-General to impose fines on non-complying employers as a percentage of the annual turnover of the company, at two percent for first contraventions, escalating to a maximum of ten percent for repeated contraventions. 

4.  Employment Services Bill, 2010

• Legal status for Employment Services - The Bill seeks to provide a legal status for Employment Services after the transfer to of the Skills Development functions to the Department of Higher Education and Training (DHET). The Bill also provides a legal status for the Sheltered Employment Factories administered by the Department and Productivity SA. 
• Role and function of public employment services - The Bill defines the role and core functions of public employment services including governance arrangements via an Employment Services Board.
  • Decent work schemes to promote youth employment
  • Promotion of employment of people with disabilities
  • Employment promotion schemes to respond to economic recession, company closures and pending retrenchments or lay-offs
  • Regulation of employment of foreign workers.
• Private Employment Agencies - provision is made for the registration and licensing of Private Employment Agencies for placement and their regulation by the department. 

All of the above four bills were subjected to a Regulatory Impact Assessment (RIA) during July and August 2010. The RIA has highlighted a number of options and cost implications relating to the bills. Some issues have been taken into account in the bills that will be published, but others are likely to be explored in more detail during the NEDLAC process. 

Already there are different positions among the social partners on the issue of labour broking. The proposed deletion of section 198 of the Labour Relations Act is a contested area. I will watch with keen interest the robust engagement during the NEDLAC consultation phase. 

The amendments to our labour legislation seek to address critical issues in the South African labour market that have important implications for stakeholders. I therefore call on social partners to constructively engage in the process in the interests of all parties. 

The department is seeking constructive engagement on the bills and recognises the important role that the media plays in this regard. We look forward to your cooperation in ensuring that information on the bills is disseminated in an objective and accurate manner and that there will be an informed debate during 2011. 

Statement issued by Department of Labour, December 15 2010

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