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Labour Laws

Labour Relations and Skills Development

New labour laws have been introduced in South Africa to:

• Regulate the relationship between employers and employees;
• Provide basic employment standards for employees;
• Advance historically disadvantaged employees in the workplace; and
• Improve the skills of employees.

Labour Relations Act

The new Labour Relations Act (LRA) applies to all employees in South Africa, except members of the Defence Force and National Intelligence Agency. The LRA encourages and regulates collective bargaining between employers and trade unions. Bargaining councils can be formed by agreement between registered trade unions and registered employers’ organisations.

A bargaining council’s primary function is the conclusion of collective agreements between employers’ organisations and trade unions. Employees have the right to strike on matters of mutual interest, such as wages and conditions of work. They cannot strike on dismissals. The Act also sets down a process which needs to be followed before the right to strike can be exercised. These strikes are then regarded as procedural and workers who strike cannot be dismissed for striking.

The LRA regulates unfair dismissal and sets up the Commission for Conciliation, Mediation and Arbitration (CCMA) and the Labour Court as dispute resolution bodies. The CCMA handles the bulk of dispute resolution, as almost all disputes have to be mediated by the CCMA first. The Labour Court, on the other hand, has exclusive jurisdiction to deal with matters such as retrenchments, strike interdicts and the review of CCMA decisions. Appeals against decisions of the Labour Court lie with the Labour Appeal Court.

Dismissal of Employees

In South Africa an employee can be dismissed if there is a fair reason for the dismissal and a fair procedure is followed before the employee is dismissed.

Fair Reason

Fair reasons for dismissal include:
• Misconduct on the part of the employee;
• Incapacity of the employee (unable to perform duties properly owing to illness, ill-health or inability); and
• Operational reasons (retrenchment).

In all the above instances, the procedures contained in the LRA as well as in the company’s own disciplinary procedures must be followed before an employee may be dismissed.

Retrenchment

Before an employer can retrench employees, the employer must consult with the employees concerned or their trade unions on, amongst other things, the reasons for the dismissals, the number of employees affected, the proposed methods of selecting the employees to be retrenched and severance pay.

Severance Pay

With regard to severance pay, an employer must pay a retrenched employee a minimum of one week’s wages for each year of completed service.

Disputes about Dismissals

Disputes over unfair dismissals must first be referred to the relevant bargaining council or the CCMA for conciliation. If conciliation fails, the dispute may be referred for arbitration or to the Labour Court, depending on the type of dispute. The process of dispute resolution is speedy: disputes must be referred within thirty days of their occurrence and are usually also set down for conciliation within thirty days.

Basic Conditions of Employment Act

The new Basic Conditions of Employment Act (BCEA) covers the basic rights of South African employees. These conditions are the minimum conditions and can be varied and improved upon by collective bargaining through plant or company-level collective agreements or sectoral bargaining councils. They can also be varied through ministerial determination. The BCEA places obligations on employers in respect of working hours, annual leave, leave pay, maternity leave, family responsibility leave and overtime pay for employees. The LRA provides special protection to night workers and shift workers. It also prohibits child and forced labour.

 

Key Provisions of the Basic Conditions of Employment Act

Normal time: The maximum ordinary hours of work that an employee may work in any week or on any day are as follows:
• 45 hours in any week;
• Nine hours a day for employees who work five or fewer days a week; and
• Eight hours per day for employees working more than five days per week.

Any time worked in excess of these limits is regarded as overtime. An employee’s ordinary hours of work may, by agreement, be extended by up to 15 minutes a day to enable the employee to continue serving members of the public after the completion of ordinary hours of work. This is subject to a weekly limit of one hour.

Overtime

An employee may not be required or permitted to work overtime unless there is an agreement between the employer and employee, either in an employment contract for compulsory overtime or in an ad hoc agreement for voluntary overtime. An employee who works overtime must be paid one-and-a-half times the employee’s ordinary hourly wage (time and a half). An employee may, however, agree to take paid time off instead of being paid for overtime work. The paid time off must be granted to the employee within one month of the employee becoming entitled to it.

Work on Sundays

An employee may only work on a Sunday if there is an agreement to this effect. Such an agreement may be general or apply to a particular Sunday only. An employee who normally works on Sundays must be paid one-and-a-half times his or her normal hourly wage. If an employee does not normally work on a Sunday, the employee must be paid double his or her normal wage.

At a minimum, however, an employee who works on a Sunday must receive at least his or her ordinary daily wage. In other words, an employee who works for one or two hours on a Sunday must be paid at least his or her ordinary daily wage for that work. An employer and employee may agree that the employee be granted paid time off rather than being paid for Sunday work.

Work on Public Holidays

In the absence of an agreement, an employer may not require an employee to work on a public holiday. An agreement, or contract of employment, may provide that an employee will work on some or all public holidays. If there is no such agreement, the employer will have to secure the employee’s agreement for work on any public holiday.

Leave

There are four categories of leave to which employees are entitled:
• Annual leave;
• Sick leave;
• Maternity leave; and
• Family responsibility leave.

With the exception of employees who work for an employer for less than twenty-four hours a month, all employees have the right to annual leave, sick leave and maternity leave. Family responsibility leave is only for employees who work for an employer for four or more days a week.

Annual Leave

An employee is entitled to at least twenty-one consecutive days’ (three weeks’) leave in respect of each year of employment. An employee is entitled to consecutive days and can insist on a three-week period of unbroken leave each year. Annual leave must be granted within six months after the end of each annual leave cycle. The timing of leave should be agreed upon between the employer and employee. If no agreement can be reached, the employer is entitled to decide when leave must be taken. An employee may not take annual leave during any other period of paid leave in terms of the BCEA, such as sick leave, or during any period of notice of termination.

Sick Leave

An employee’s sick leave is calculated over a three-year sick-leave cycle. During each cycle an employee is entitled to receive paid sick leave for the number of days that the employee normally works during a six-week period. For example, an employee who works five days a week for an employer is entitled to thirty days’ paid sick leave over the three-year cycle.

Maternity Leave

Employees have the right to four consecutive months’ maternity leave. Maternity leave may be taken at any time from four weeks before the expected date of birth of the child. An employee is not required to stay away from work for the full four-month period and may choose to return earlier. However, she may not work within six weeks of the birth of her child unless a medical practitioner or midwife certifies that she is fit to do so.

An employee must give an employer at least four weeks’ notice before she starts her maternity leave of when she intends to take the maternity leave and return to work.

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A pregnant or breastfeeding employee may not be required to perform work that is hazardous to the health of the employee or the child.

Family Responsibility Leave

An employee is entitled to three days’ paid family responsibility leave during each annual leave cycle. Family responsibility leave may be taken:
• When the employee’s child is born;
• When the employee’s child is sick; and
• In the event of the death of a member of the employee’s immediate family.

Family responsibility leave must be paid at the employee’s ordinary wage and on the employee’s usual payday.

Age of Employment

The BCEA prohibits the employment of any child under 15 years of age. In addition, a child between the ages of 15 and 18 may not be in employment:
• That is inappropriate for the child; and
• That places at risk the child’s well-being, education, physical or mental health or spiritual, moral or social development.
It is a criminal offence to employ a child in contravention of the BCEA.

Employment Equity Act

The Employment Equity Act prohibits discrimination at the workplace and promotes employment equity. Employees who are discriminated against on a wide range of grounds, including race, gender and disability, are entitled to declare a dispute against their employer. Such disputes are conciliated and, if not resolved, can be either arbitrated or sent to the Labour Court for adjudication.

Employers who employ over 150 employees are obliged to report to the Department of Labour on an annual basis and are obliged to develop employment equity or affirmative action plans. Employers who employ between 50 and 150 employees are expected to report every second year. In the South African environment, the promotion of employment equity will enable enterprises to take maximum advantage of the opportunities offered by diversity.

Skills Development Act/Skills Development Levies Act

The Skills Development and Skills Development Levies Act oblige all employers to look at the issue of training and education. All employers are obliged to contribute an amount equivalent to 1% of their payroll to an assigned industry-controlled Sector Education and Training Authority (Seta). Employers who submit a sensible training plan will be eligible to receive back a percentage of their contributions.

A national skills fund has been established and may, in some cases, be accessed to train local people to benefit from new employment opportunities linked to new investments. In addition to the above legal requirements, foreign investors are also expected to import new technologies in order to raise the productive capacity of the South African economy.

Recommendations for Investors

Though not required by law, it is strongly recommended that investors consult with the relevant industry union(s) during the start-up phase. Investors should consider that union interests reach far beyond the bread-and-butter issues of wages and benefits.

Consultations should include a discussion of:
• The enterprise’s human resource strategy, including plans for skills and technology transfer;
• Plans to address affirmative action;
• Possible stakeholding/profit-sharing agreements for employees; and
• The enterprise’s market plans.

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Once the enterprise is in operation, unions also have the right to be consulted on such matters as:
• Proposed restructuring of the workplace;
• Planned mergers and acquisitions that would affect labour; and
• Proposed retrenchments.

For more information, please contact:

The Ministry of Labour
Postal address: Private Bag X499, Pretoria 0001
Tel.: +27 (12) 309 4000
Fax: +27 (12) 309 4082/320 2059
Website: www.labour.gov.za

 Labour Union Federations Congress of South African Trade Unions (Cosatu)
Tel.: +27 (11) 339 4911
Fax: +27 (11) 339 5080
Website: www.cosatu.org.za8

Federation of Unions of South Africa (Fedusa)
Tel.: +27 (11) 279 1800
Fax: +27 (11) 279 1821
Website: www.fedusa.org.za

National Council of Trade Unions (Nactu)
Tel.: +27 (11) 833 1040
Fax: +27 (11) 833 1032
Website: www.nactu.org.za

 
Ms. TSD Nxumalo Consul-General
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