South Africa after the elections: Labour law and trade unions1

South Africa after the elections: Labour law and trade unions1

1. The elections have maintained the political status quo, but with signs of change. The
   ruling African National Congress (ANC) has retained its position but with its majority
   reduced from a high point of 67% in 2004 to 62%. It also retains its alliance with the
   Congress of South African Trade Unions (COSATU – the largest trade union federation)
   and the South African Communist Party, but with growing tensions between and within
   these organisations.

2. Social inequality remains the greatest source of tension. South Africa has the fourth-
   highest GINI co-efficient in the world. The first-world opulence of the white and black
   elite and first-world remuneration paid to corporate executives is a cause of deepening
   anger among (black) workers and the (black) unemployed living in third-world
   conditions. This adds to the militancy of wage strikes and is an ongoing cause of
   industrial and social conflict as working people demand implementation of the promises
   of ‘equality’ and ‘restitution’ on which the ANC government has been elected since
   1994.

3. While remaining dependent on trade union support, the ANC government also remains
   committed to economic growth and promoting an economic environment conducive to
   investment – a balance between employers and labour which might be seen as a
   classical social-democratic position. However –

       a. There is deep dissatisfaction among trade union activists with what they perceive
          as government’s “neo-liberal” policies; and

       b. There are unprecedented divisions among trade union leaders, with some
          throwing their weight behind government and others more responsive to rank-
          and-file pressure. The largest COSATU affiliate, the National Union of
          Metalworkers of SA (NUMSA) has gone furthest in challenging government
          policies and is facing expulsion from COSATU.

       c. Employers, as in many other countries, are consistently campaigning for greater
          labour market liberalisation.

4. On the labour law front the two major developments are:

       a. Amendments to the most important labour statutes, the Labour Relations Act
          (LRA), the Basic Conditions of Employment Act (BCEA) and the Employment
          Equity Act (EEA), plus the enactment of a new Employment Services Act; and

1
 Summary of the presentation of Prof. Darcy Du Toit, University of the Western Cape
(UWC), South Africa.
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b. A constitutional challenge to the extension of sectoral collective agreements. The
          LRA currently provides for extension to all employers and workers in a sector
          provided the request for extension is supported by employers’ organisations and
          trade unions employing/organising a majority of workers in the sector.

   Though passed by Parliament, these amendments have not yet been promulgated.

5. Some of the key amendments to the LRA are outlined on pages 3ff below. The main
   purposes are

       a. Extending protection to non-standard employees (in the face of trade union
          demands for a ban on agency labour), and

       b. Dealing with problems of “majoritarianism” (rights and privileges given to trade
          unions with majority support in a workplace to encourage single-union
          bargaining). These problems were revealed most starkly in the massacre at
          Marikana platinum mine in 2012 where the majority union lost support and
          frustrated workers resorted to spontaneous action which bypassed the statutory
          institutions.

6. The constitutional challenge to sectoral bargaining has been launched by the Free
   Market Foundation (FMF), a liberal think-tank and lobbying group. Its basic argument is
   that the LRA violates government’s constitutional power to legislate by delegating that
   power to private parties (trade unions and employers’ organisations) who are allowed to
   impose legal obligations on non-parties.

7. It is also argued that extended sectoral agreements stifle economic activity and job
   creation by small employers.

8. The FMF proposes to (a) redefine the majority support required for extension of sectoral
   agreements with reference to the number of employers, not the number of workers that
   they employ (i.e., allowing large numbers of small employers to outweigh big companies
   employing a majority of workers); and (b) giving the Minister of Labour a discretion NOT
   to extend sectoral agreements even if the (redefined) conditions for extension are
   satisfied.

9. The FMF application is due to be heard in the North Gauteng High Court, possibly later in
   2014.

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The major amendments to the labour statutes

Labour Relations Act (LRA)

      a. Extending protection to non-standard employees

THE NEW SECTION198A: AGENCY WORKERS

(1)     In this section, a ‘‘temporary service’’ means work for a client by an employee—

(a)     for a period not exceeding three months;

(b)     as a substitute for an employee of the client who is temporarily absent; or

(c)    in a category of work and for any period of time which is determined to be a
temporary service by a collective agreement concluded in a bargaining council, a sectoral
determination or a notice published by the Minister, in accordance with the provisions of
subsections (6) to (8).

(2)    This section does not apply to employees earning in excess of the threshold
prescribed by the Minister in terms of section 6(3) of the Basic Conditions of Employment
Act.

(3)     For the purposes of this Act, an employee—

(a)   performing a temporary service as contemplated in subsection (1) for the client is
the employee of the temporary employment services in terms of section 198(2); or

(b)     not performing such temporary service for the client is—

(i)   deemed to be the employee of that client and the client is deemed to be the
employer; and

(ii)    subject to the provisions of section 198B, employed on an indefinite basis by the
client.

(4)     The termination by the temporary employment services of an employee’s service
with a client ... for the purpose of avoiding the operation of subsection (3)(b) … is a
dismissal.

(5)    An employee deemed to be an employee of the client in terms of subsection (3)(b)
must be treated on the whole not less favourably than an employee of the client performing
the same or similar work, unless there is a justifiable reason for different treatment.

        …

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THE NEW SECTION 198D.

(1)     Any dispute arising from the interpretation or application of sections 198A, 198B and
198C may be referred to the Commission or a bargaining council with jurisdiction for
conciliation and, if not resolved, to arbitration.

(2)    For the purposes of sections 198A(5), 198B(8) and 198C(3)(a), a justifiable reason
includes that the different treatment is a result of the application of a system that takes into
account—

(a)    seniority, experience or length of service;

(b)    merit;

(c)    the quality or quantity of work performed; or

(d)    any other criteria of a similar nature,

and such reason is not prohibited by section 6(1) of the Employment Equity Act, 1998 (Act
No. 55 of 1998).

…

THE NEW SECTION 198B: TEMPORARY WORKERS

(1) For the purpose of this section, a ‘fixed term contract’ means a contract of employment
that terminates on—

(a)    the occurrence of a specified event;

(b)    the completion of a specified task or project; or

(c)    a fixed date, other than an employee’s normal or agreed retirement age, subject to
subsection (3).

(2)    This section does not apply to—

(a)    employees earning in excess of the threshold prescribed by the Minister in terms of
section 6(3) of the Basic Conditions of Employment Act;

(b)   an employer that employs less than 10 employees, or that employs less than 50
employees and whose business has been in operation for less than two years, (unless …) and

(c)    an employee employed in terms of a fixed term contract which is permitted by any
statute, sectoral determination or collective agreement.

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(3)    An employer may employ an employee on a fixed term contract or successive fixed
term contracts for longer than three months of employment only if—

(a)    the nature of the work for which the employee is employed is of a limited or definite
duration; or

(b)    the employer can demonstrate any other justifiable reason for fixing the term of the
contract.

(4)    Without limiting the generality of subsection (3), the conclusion of a fixed term
contract will be justified if the employee—

(a)    is replacing another employee who is temporarily absent from work;

(b)   is employed on account of a temporary increase in the volume of work which is not
expected to endure beyond 12 months;

(c)     is a student or recent graduate who is employed for the purpose of being trained
or gaining work experience in order to enter a job or profession;

(d)    is employed to work exclusively on a specific project that has a limited or defined
duration;

(e)    is a non-citizen who has been granted a work permit for a defined period;

(f)    is employed to perform seasonal work;

(g)    is employed for the purpose of an official public works scheme or similar public job
creation scheme;

(h)    is employed in a position which is funded by an external source for a limited
period; or

(i)    has reached the normal or agreed retirement age applicable in the employer’s
business.

(5)    Employment in terms of a fixed term contract concluded or renewed in
contravention of subsection (3) is deemed to be of indefinite duration.

…

(8)     (a)    An employee employed in terms of a fixed term contract for longer than
three months must not be treated less favourably than an employee employed on a
permanent basis performing the same or similar work, unless there is a justifiable reason for
different treatment.

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(b)    Paragraph (a) applies, three months after the commencement of the Labour
Relations Amendment Act, 2014, to fixed term contracts of employment entered into
before the commencement of the Labour Relations Amendment Act, 2014. …

THE NEW SECTION 198C: PART-TIME WORKERS

(1)       …

(2)       This section does not apply—

(a)   to employees earning in excess of the threshold determined by the Minister in
terms of section 6(3) of the Basic Conditions of Employment Act;

(b)   to an employer that employs less than 10 employees or that employs less than 50
employees and whose business has been in operation for less than two years, (unless….)

(c)       to an employee who ordinarily works less than 24 hours a month for an employer;
and

(d)   during an employee’s first three months of continuous employment with an
employer.

(3)    Taking into account the working hours of a part-time employee, irrespective of when
the part-time employee was employed, an employer must—

(a)     treat a part-time employee on the whole not less favourably than a comparable full-
time employee doing the same or similar work, unless there is a justifiable reason for
different treatment; and

(b)   provide a part-time employee with access to training and skills development on
the whole not less favourable than the access applicable to a comparable full-time
employee. ….

      b. Addressing problems of majoritarianism

1. Section 21(8A)(a) deals with the right to the election of trade union representatives (shop
      stewards) in the workplace. This very important right has been reserved for majority unions.

2. This amendment now authorises the CCMA to grant this right to a minority union, provided it
      has already acquired basic organisational rights (access to the workplace etc.) and no other
      union has acquired the right to the election of shop stewards in the workplace.

3. This means that the minority union must be “sufficiently representative” (without having

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majority status) in order to acquire the basic rights in question. However, it will still be excluded
      from the right to workplace representation if a majority union is present

4. Section 21(8A)(b) repeats the provisions of section 21(8A)(a) in respect of the right of trade
      unions to disclosure of relevant information. This, too, is a right that has been reserved for
      majority trade unions.

5. Again, the new provision will only apply in workplaces where no majority union is present. This
      means that it will do nothing to defuse the problems that may arise where a minority union
      seeks to represent its members effectively in a workplace where a majority union is present but
      a significant number of workers do not wish to be represented by it.

6. In sum, the principle of majoritarianism is being relaxed only to the extent that “the most
      representative trade union in the workplace” may step into the place of a majority union where
      no majority union exists.

7. Section 21(8C) deals with cases where the employer and the majority union have entered into a
      collective agreement to set thresholds for organisational rights which the minority union is
      unable to meet. It does this by empowering CCMA arbitrators to overrule such thresholds in
      disputes where a minority union is seeking to acquire organisational rights.

8. However, this only applies in respect of the right of access to the workplace, the deduction of
      membership dues and the right of union office-bearers to leave for trade union activities. It also
      applies only if the minority union represents “a significant interest, or a substantial number of
      employees, in the workplace”.

      c. The constitutional challenge

THE NEW SECTION 32(3)(dA) and 32(3)(e)

(3)       A collective agreement may not be extended … unless the Minister is satisfied that –

        (dA) the bargaining council has in place an effective procedure to deal with
applications by non-parties for exemptions from the provisions of the collective agreement
and is able to decide an application for an exemption within 30 days;

       (e)    provision is made in the collective agreement for an independent body to
hear and decide, as soon as possible and not later than 30 days after the appeal is lodged,
any appeal brought against—

(i)           the bargaining council’s refusal of a non-party’s application for exemption
from the provisions of the collective agreement;

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(ii)           the withdrawal of such an exemption by the bargaining council

THE NEW SECTION 32(3A)

(3A) No representative, office-bearer or official of a trade union or employers’ organisation
party to the bargaining council may be a member of, or participate in the deliberations of,
the appeal body …

THE NEW SECTION 32(5)(c), 32(5)(d) and 32(5A)

(5)    [The Minister may exercise her/his discretion to extend a collective agreement if (a)
the parties to the bargaining council are sufficiently representative (b) failure to extend the
agreement may undermine collective bargaining at sectoral level, and]

(c)     the Minister has published a notice in the Government Gazette stating that an
application for an extension in terms of this subsection has been received, stating
where a copy may be inspected or obtained, and inviting comment within a period of not
less than 21 days from the date of the publication of the notice; and

(d)    the Minister has considered all comments received …

(5A) When determining whether the parties to the bargaining council are sufficiently
representative …, the Minister may take into account the composition of the
workforce in the sector, including the extent to which there are employees assigned
to work by temporary employment services, employees employed on fixed term
contracts, part-time employees or employees in other categories of non-standard
employment.

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