/ 30 January 2015

New laws will reshape South African sectors

New Laws Will Reshape South African Sectors

This year will see a number of Acts, previously subjected to a lot of debate, coming into effect. They include legislation relating to land reform, employment conditions and banking regulations, intended to avoid collapses such as that of African Bank. 

Land reform has always been an emotive subject and, in July last year, the Property Valuation Act was signed into law, although it has yet to come into force. Under the Act, a valuer general will be appointed who will set the value of a property.

Critics are concerned that the Act will see landowners choosing litigation because of a lack of opportunity to negotiate prices, slowing down the land reform process. 

The Act was amended from a version released in 2013. Landowner, in terms of the new Act, cannot negotiate and can, in effect, choose only to take or leave an offer. The government has attributed delays in land restitution to the “willing buyer, willing seller” system, which is still in place for the moment. 

Richard Spoor, a public interest lawyer, has warned that the Act may exacerbate delays if landowners turn to litigation rather than accepting a payout at below their estimation of market value. 

“The mandate for the valuer general is to value land to be acquired by the state for land reform (which includes land restitution) purposes. The market value of the land is only one consideration he must take into account when determining value. The other considerations … include the history of the land, its use and the purpose of acquisition, tend to mitigate for a value lower than market value.”

The state also has no opportunity to negotiate on the price of the land. “[This] will most certainly mean that fewer land claims are settled by agreement and that many more will have to be litigated to a conclusion,” said Spoor. 

Chantelle Gladwin, of Schindlers Attorneys, expressed concern about the lack of a truly independent body in the process. She said the first round of objections should be made to a body such as the Professional Valuers’ Board rather than a state office or an independent review panel also on the government’s payroll. 

“It will, in most instances — but will foreseeably not always — shortcut the timeframes concerned, and will further give the landowner a more equitable chance of being handed a decision that truly is ‘just as equitable’ as provided for in the Constitution,” she said.

Environmental protection

Last year’s ruling relating to environmental management has increased accountability by key individuals for damage done to the environment. 

Matome Mapona, the managing director of Blue Platinum Venture, which mined clay, became the first senior manager to be held criminally liable and was sentenced to five years in jail without an option of a fine. The jail sentence was suspended for five years on condition that his company rehabilitated the area within three months. 

Residents in the area had complained for some time about the company’s mining activities outside Batlhabine in Limpopo. 

Justin Truter, a director at Werksmans, said: “[The] Blue Platinum judgment will result in company executives paying more attention to the conduct of employees and the risk of damage to the environment caused by their activities.”

It is also likely to see executives placing more emphasis on having environmental management systems in place and that they are monitored and enforced, he said. 

The ruling empowers residents to lay criminal charges against offending companies.

Work conditions

Last year a number of significant changes to employment laws came into effect, in particular the Employment Equity Amendment Act and the Basic Conditions of Employment Act.

Dhevarsha Ramjettan, a director at Webber Wentzel, said the amendments to the Employment Equity Act, the first since the Act became effective in 1998, adds new grounds for unfair discrimination, requiring the employer to show that differences in wages or other conditions of employment were based on fair criteria such as experience or skills. 

The Act has increased its penalties for failing to comply. The employer is required to provide a defence against unfair discrimination claims but if the discrimination allegations are on arbitrary grounds, then the burden of proof falls on the employee. 

The Basic Conditions of Employment Amendment Act, which came into force in September last year, prohibits an employee from being compelled to pay money to secure employment or has to buy goods, services or products from the employer. It also gives the minister of labour the right to determine the terms and conditions of employment in regulated sectors. 

The Labour Relations Act, which comes into effect this year, affords greater protection to workers employed by labour brokers, fixed-term contract workers and part-time employees, particularly those who earn an amount equal to R205?433.30 or less a year, Webber Wentzel said in a statement. 

The debate around the Act has largely been about efforts to reduce the use of labour brokers and the power of the majority unions to control the organisational rights of other unions. 

Chris Todd, of Bowman & Gilfillan, said this Act, which came into effect in January, has “been a long time in coming”. 

The amendments have changed substantially since the first draft was published for comment in December 2010. This Act focuses largely on the protection of lower-income employees. “In this Act, employers have a three-month window in which the staff are seen to be employees of the broker; after that period they are seen as permanent employees of the company where they are working,” Todd said.

 “Until now employers could use labour brokers to cater for rising and falling demand for employees. But a employer might decide to use fewer workers, deciding he can make do with 75 instead of 100 workers.” 

The Act could also be considered to apply to domestic workers sourced through a labour broker, but would still have to be tested, Todd added. 

Aadill Patel, director of employment law at Cliffe Dekker Hofmeyr, said the amendments are aimed at protecting the rights of nonstandard employees (part-time, temporary or fixed-term contracts) and including them in the collective bargaining framework. 

“This will effectively expand the employee pool in a workplace for purposes of procuring organisational rights. The amendments will have the effect of creating a more inclusive collective bargaining arena in the workplace.”

Banked up

The banking sector is another area that has seen changes in legislation. 

The sudden collapse of African Bank, an unsecured lender, led to questions about how the sector was monitored and whether there was sufficient oversight. 

The Banks Amendment Bill was then tabled. 

This legislation is intended to strengthen the curatorship of banks to ensure a safer financial sector, provide better protection for depositors and enhance the powers of the curator of a bank under curatorship. 

Minerals and energy

The Mineral and Petroleum Resources Development and Amendment Bill, passed in March last year, but still to be approved by President Jacob Zuma, has been received with much trepidation by businesses concerned about the power given to the minister of mineral resources. 

Webber Wentzel said the Bill obliges the minister to “initiate or promote the beneficiation of mineral resources” and “designate any mineral or mineral product for local beneficiation”. 

The prices, under which minerals are to be sold, are no longer prescribed but are based on the price of minerals at the time they leave the gate, excluding VAT or costs such as delivery. 

For the oil and gas sector, the Bill gives the state an automatic 20% interest in all new exploration and production rights — a move the Offshore Petroleum Association of South Africa has said would have a “chilling” effect on the sector.