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‘Rushed’ labour Bills under fire

The state is pushing ahead with labour reform despite a private sector warning that “irrational” labour law amendments will be catastrophic for the creation of jobs.

The labour law amendments aim to end the exploitation of workers and govern employment. It introduces laws to regulate contract work, address labour broking and prohibit abusive practices.

Provisions have also been introduced to facilitate the unionisation of workers and sectoral collective agreements for vulnerable workers and, in some cases, to ensure the right to permanent employment.

But the private sector has claimed it will adversely affect the cost of doing business and the creation of employment.

The department of labour and representatives of organised business and labour have discussed the issues extensively in the National Economic Development and Labour Advisory Council (Nedlac) for the past year. But, last week, Bills to amend the Labour Relations Act and the Basic Conditions of Employment Act were passed by the Cabinet.

In a statement released this week, Business Unity South Africa (Busa) said it was disappointed that the Bills were approved without a regulatory impact assessment or waiting for a final Nedlac report on these matters.

Some amendments would regulate labour brokers more effectively but they would not ban them, as called for by the labour unions.

In a statement by the Confed­eration of Associations in the Private Employment Sector, John Botha, its chief operations officer, said that labour broking was the only part of the labour market that had created jobs in the past 10 years, although the umbrella union body Cosatu had denounced the practice as wage slavery. Cosatu spokesperson Patrick Craven said this week that they were still ­studying the Bills and would issue a statement later.

But according to a statement by the Federation of Unions of South Africa (Fedusa), it was satisfied with the process followed at Nedlac and was “overly pleased” with the inclusion of its proposals about the regulation of labour brokers and temporary work in general.

The contentious proposals include:

  • Temporary work thresholds — temporary employees, defined as those earning less than R172 000 a year, must be made permanent after working for six months in a particular job.

    According to a statement by the department of labour, an employee could be employed on a fixed-term contract for longer than six months only if the work was of a limited duration or the employer could demonstrate a justifiable reason for fixing the term of the contract.

    But Botha said these “arbitrary thresholds” would curtail employers’ flexibility and they would be forced to either rehire or retrench temporary workers after six months.

    The department said these provisions did not apply to an employer that employed fewer than 10 workers, or one that employed fewer than 50 workers and whose business had been in operation for less than two years.

  • Equal treatment — all workers, whether temporary or permanent, must be paid at the same rate.

    Botha said it would have a dramatic effect on the cost of doing business. “It will not be a comparable race to the highest paid but — businesses will restructure in order to ensure that there is a race to the bottom of a pay category.”

    Busa agreed that employers would resort to paying the minimum wage, which would undermine collective bargaining and weaken the trade unions. It also said the proposals “will require complex and administratively onerous processes to be put in place”.

  • The amendments relating to strikes and lock-outs — the department said the changes were intended to address unacceptable levels of unprotected industrial action and unlawful acts in support of industrial action, including violence and intimidation.

    Busa said the amendments were weak, misdirected and would not protect people and property. “This will increase the risks and costs associated with doing business and diminish business confidence around fair labour practices.”

  • Unfair dismissal — some changes will make a dismissal automatically unfair if an employee refused to accept a change brought about by the employer’s operational requirements. Proposed amendments will also extend the time period for facilitation prior to retrenchment to more than the current 60 days.

    “We are concerned that these amendments will limit the employer’s ability to adjust and adapt consistently to changing market conditions,” Busa said.

  • Power in the minister’s hands — the Bills propose that the labour minister will determine wages in sectors not covered by sectoral determination or a centralised bargaining council agreement.

    The Democratic Alliance has declared that it will challenge this in particular. Botha said there were several other regulations amendments that placed too much power in the minister’s hands. “They give the minister of labour unprecedented powers to make ad hoc, makeshift rulings affecting entire sectors of the economy.”

    Once the Bills pass through Parliament, there will be public hearings to discuss them. But Busa and the confederation of associations have called for the government to submit the amendments for an independent and comprehensive regulatory impact assessment.

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