Labour Amendment Bills: Confidential draft legislation will destroy jobs

Four key draft amendment bills to our existing labour legislation are currently before cabinet. Importantly, they include amendments to the Labour Relations Act and the Basic Conditions of Employment Act (see Rapport report). The DA is in possession of all four bills, as well as the explanatory memoranda that accompanies each bill (and which is designed to explain each bill's basic purpose). Copies are available on request.

Individually and jointly they propose a series of changes that are, in a number of cases, profoundly problematic and, if left in their current form, will have the effect of destroying rather than creating jobs, on the one hand, and further centralising power in the hands of the executive, on the other. The DA is deeply concerned about some of the amendments contained in them and the poor and irregular process which has defined their passage through government to date. It appears that they have been drafted to fulfil a political promise, but not with any intention of better shaping the regulations and rules that define our labour legislation.

In view of the poorly formulated nature of the bills, of their problematic content and of a number of concerns with the procedure followed in their conception to date, the DA believes these drafts need to be sent back and redrafted by competent labour specialists.

Key changes include the following:

• Section 198 of the Labour Relations Act will be repealed (this is the section of the Act that makes provision for labour brokering). However, no substitute clause is suggested. In other words, by merely deleting the clause, we will move from a situation where Labour Brokering is poorly regulated (the DA believes it needs to be better regulated, not banned) to one in which there will be no regulation at all! This is baffling.
• Amendments to section 64 propose that the jurisdiction and powers of the Labour Court will be significantly expanded to include even "constitutional matters arising from employment or labour relations". In other words, the amendments seek to give the Labour Court powers equivalent to those vested in the Constitutional Court. This is profoundly problematic. One of the many reasons why we have a Constitutional Court is because the Constitution is foundational, and its provisions need to be interpreted and protected by a single court dedicated to that purpose. If any court is allowed to rule on constitutional matters, issues of appeal, of interpretation and of jurisdiction are all confused or blurred.
• Amendments to Section 64 will allow labour inspectors to enter private property without a warrant or prior notice, together with police protection and any other staff deemed necessary to their work (such as interpreters). Not even the Police Force enjoys this kind of power, they require a warrant.
• Statutory Councils (Section 43) and Bargaining Councils' (Section 51) role and powers are to be expanded and (with the approval of the minister) to extend into industries previously not covered by agreements.
• A proposed new Section 200B will make most forms of temporary employment permanent (Unless the employer can justify the need for temporary contracts)

In recent Cabinet press briefings the government has confirmed that cabinet has declined to give their approval to these bills as yet, due to the possible impact on the economy, which the DA believes will be severe and damaging, particularly in the current economic climate.

Instead, all four bills have been referred for Regulatory Impact Assessments. It is unusual for this to be done so early in the process, and suggests a concern that jobs may be lost and the economy adversely affected if the legislation, in its current form, were to be approved. 

The raft of draft legislation will lead to a severe curtailment of temporary employment, onerous burdens being unnecessarily placed on small business in particular, inappropriate powers being given to labour courts and increased difficulty in hiring and firing of employees. It does not appropriately address labour brokering, as simply repealing section 198 does nothing to regulate that industry. These measures will however lead to job losses as a number of key industries and small businesses will be unable to implement many of these new proposals or will be forced into not renewing contracts of non-permanent staff. Almost all temporary or contract workers will be adversely affected by this legislation.

The DA will be studying all of the available documents and providing a comprehensive analysis and recommendations on the way forward with regard to this new proposed legislation, in the near future.

Statement issued by Ian Ollis MP, Democratic Alliance Shadow Deputy Minister of Labour, August 8 2010

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