It is currently expected that the amendments to the Basic Conditions of Employment Act (BCEA), Employment Equity Act (EEA), Labour Relations Act (LRA) and the new Employment Services Acts (ESA) will come into effect in March. There are, however, rumours of a three-month transition period for certain sections of the Bills.
Penalties for non-compliance have been substantially increased and could effectively bankrupt a small business. “Our advice would be to identify where you fall short and find cost effective solutions straight away,” says Diaz.
“There seems to be a misconception that the amendments will only impact Temporary Employment Services (TES) or labour brokers. This is not true. The amendments will, in fact, impact both the TES and employer (business owner),” warns Diaz. “TES and employers will need to work together to ensure that contracts and terms of employment and disciplinary processes are managed correctly and that dismissals are handled appropriately and legally,” she says.
Using a labour broker
When labour brokers are used, the amended LRA aims to protect employees by clearly specifying who the employer is – in the past this was always a grey area. After consideration of the Act and the statements made by the department, an employee will be deemed an employee of the client company and the TES after the three-month period for the purposes of the Labour Relations Act only.
What this means is that the employees remains on the TES’s books and can cite both the TES and their client company in a dispute. This amounts to joint and several liability and your risk area as a client is mainly around dismissals.
Similarly when the employee (subject to application being limited to those paid under the threshold amount R193 805) has completed three months of service, then the principles of equal treatment for work of equal value apply. That is only where you have an exact comparator in your permanent workforce. Issues like length of service, quantity and quality of output, qualification and experience and any other non-discriminatory factors will justify a differential.
Changes to fixed-term contracts
The amendments to fixed-term contracts aim to prevent employers from using contract workers on recurring contracts without justification. In fact contract workers will now be deemed “permanent” if the employer does not have a valid reason to justify the fixed-term if longer than three months, Diaz says.
These restrictions don’t apply to employees earning more than R193 805, to small businesses or start-ups, fixed term contracts permitted by statute, sectoral determination or collective agreement.
Employers who currently use fixed-term contracts to replace probation or as an “easy out” won’t be able to do so any longer. Proper references, aptitude tests and interviews are going to become have-to’s instead of nice-to-haves. Employers will have to revert to probation periods with proper reviews, which are actually conducted and performance appraisal systems are going to be more important than ever this year.
Equal pay for equal work
Changes to the EEA will require that employees performing the same or substantially the same work, or work of equal value, will have similar terms and conditions of employment, particularly when it comes to remuneration. This applies to fixed term, temporary, part-time, as well as permanent employees.
Diaz predicts that this will be one of the more contentious changes as “the concept of equal treatment has not been applied successfully globally and could result in unnecessary job losses as employers can generally not afford to pay for such an increase in cost, without passing it on to their clients, which may not be possible.”
The new provisions in the LRA will also require that employers provide all fixed-term employees with benefits of similar or equal value to those given to permanent employees. This may mean, for example, that fixed-term employees receive medical aid and pension/provident fund contributions, if these benefits are given to permanent employees.
Labour Court and CCMA overhaul
Diaz says the amendments will broaden the jurisdiction of the Labour Court and The Commission for Conciliation, Mediation and Arbitration (CCMA) to deal with contraventions. Measures have been introduced to improve the efficiency of the CCMA, and it will now be able to provide administrative assistance to lower paid employees and have the right to conciliate disputes if it is in the public interest.
According to Diaz, employers should be aware that the amendments strengthen the power of the Department of Labour, and the inspectorate may now approach the Labour Court to enforce compliance with the BCEA with or without first securing a written undertaking by the employer to comply.
Employment Services Bill introduced
The Employment Services Bill aims to increase the structures and enhance controls over ruthless operators in the employment arena. “It’s a positive move, but it will have to be enforced,” says Diaz.
The new legislation will also require that the Department of Labour provide a comprehensive range of employment services (free of charge) to members of the public. Whether the amended and new legislation will negatively impact productivity and our competitiveness – as many experts have predicted – remains to be seen.
“But forewarned is forearmed, so put yourself in a position to meet these changes head on in a positive manner by finding out more and instituting change where necessary,” Diaz concludes.
*Express Employment Professionals can be contacted on 0861 166 853 or visit. www.expresspros.co.za.