SA’s labour laws are set for a major facelift, a move that will have implications for high-paid workers and the way retrenchments are carried out should proposals from the National Economic Development and Labour Council (Nedlac) become law.
The proposals cover wide-ranging amendments to the Labour Relations Act and associated Codes of Good Practice, the Basic Conditions of Employment Act, the National Minimum Wage Act and Employment Equity Act.
The social partners who make up Nedlac have proposed an amendment to the country’s labour law regime that would limit the ability of high-paid employees to refer unfair cases to the Commission for Conciliation, Mediation and Arbitration (CCMA). The government argues that this leads to lengthy disputes and overwhelms the CCMA.
The proposal on the table is that high-paid employees should only be entitled to reinstatement in cases of automatically unfair dismissal and in other dismissals should be restricted to compensation as a remedy.
The high-paid earners’ income threshold of R 1.8m per annum would be adjusted annually in line with inflation — a proposal that was agreed by all Nedlac partners, namely labour, business and government.
Another proposal is to amend laws that govern large-scale retrenchments. Labour pushed for amendments to make it more difficult to retrench, including extending the facilitation period from 60 to 120 days “to ensure that retrenchment is undertaken as a measure of last resort”.
The parties agreed to propose a new law that enables the CCMA to make rules relating to facilitations held in terms of the section rather than for the minister of labour to make regulations which is the current position.
Labour is also pushing for higher severance pay from one to four weeks per year of service. Business pushed for SMMEs to be excluded from the provisions of section 189 of the Labour Relations Act.
The proposed amendments, if they carry the day, will see statutory severance pay increase from one weeks’ pay per annum to two weeks. The government agreed with this proposal, while business disagreed.
The government proposed a new section that would empower the CCMA to charge a fee payable by a party that unreasonably causes the postponement of a hearing — a proposal business agreed to, but opposed by labour.
Labour argued that postponements should be dealt with on a case-by-case basis. In a move that is likely to be welcomed by small business owners, the government has proposed excluding start-up businesses from bargaining council agreements
The proposal, if accepted, would provide that new employers employing less than 50 employees would be exempt from conditions of employment set by extended bargaining council collective agreements.
Business supported this proposal, while labour disagreed with the government’s proposed blanket exemptions.
To close any potential loopholes, several options would be considered including a requirement that directors of start-ups should not have been registered previously for the past two years to avoid people trying to close and reregister new companies to qualify as new companies.
Another proposal is that there needs to be a financial threshold to avoid a wealthy SMME qualifying.
One the proposals would see amendments to the Labour Relations Act, which would require representative trade unions to conduct a secret ballot of the employees covered by a closed shop agreement to determine whether that agreement should be terminated. It would also provide that if three years have elapsed since the commencement of the agreement or the last ballot was conducted, the agreement will lapse.
This proposal received support from all social partners. The proposal would be subjected to the normal lawmaking processes, including public participation.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.