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Labour legislationWhile the proposed amendments to labour legislation have attracted significant media attention, many refinements can still be introduced before the amendments reach the statute book. Even so, employers should be mindful that they will be facing far-reaching changes to the current labour law dispensation. So what could and should employers do at this stage to be better prepared for these changes?

Amendments to the Labour Relations Act (LRA), the Basic Conditions of Employment Act (BCEA) and the Employment Equity Act (EEA) will come into effect in the not too distant future. A new Employment Services Bill contains provisions that regulate the activities of labour brokers. While it is unlikely that we shall see the total demise of labour brokers, there will most certainly be extensive debate about the issue before the Bill is enacted.

 

Of the proposed amendments to the LRA, BCEA and EEA, several are cosmetic, others are technical, but some are of a more substantial nature. Of these substantial amendments, there are those that employers can do something about at this stage. Below are some of the steps employers can take in anticipation of the amendments..

 

Fixed-term contracts: The Labour Relations Amendment Bill proposes that an employer should only employ someone for a fixed term if the employer can justify it. If not, the employer should employ the person permanently. Employers should therefore be very particular about the operational reason for a fixed-term contract and to specifically include these in fixed-term contracts, for example linking it to a project of a temporary nature. Meaningless provisions such as “fluctuating operational needs” are unacceptable..

 

High earners excluded from protection: Employees earning more than the threshold determined by the Minister in the Government Gazette (presumably the current threshold referred to in the section 6(3) of the BCEA) will be excluded from referring dismissal and unfair labour practice disputes to the CCMA and Labour Court (with the exception of automatically unfair dismissals). When appointing senior managers or highly-paid staff, or renewing or extending their contracts, employers should pay more attention to the termination, breach and dispute resolution provisions in the contract of employment.

 

Liability of client company: Where an unfair labour practice is committed by a subcontractor, both the subcontractor and the client could be held liable. This means that a “client company” should be mindful of the labour practices of those who provide services to it. If not, the client company could be held liable. Employers should therefore give consideration to obtaining appropriate assurances/ indemnity from the service providers they contract with.

 

Benefits of equal value for fixed-term employees: The Basic Conditions of Employment Bill proposes that employers must contribute benefits of similar or equal value to employees employed on a fixed-term contract. They cannot be treated less favourably than permanent employees. Where it is not practicable to afford employees on fixed-term contracts certain benefits (e.g. pension and medical aid), the employer will have to pay them the cash value thereof. This should be taken into account in the financial planning of employers that make extensive use of employees on fixed-term contracts.

 

Enforcement procedures: Several of the current enforcement provisions (labour inspectors securing undertakings, compliance orders, objections and appeals against compliance orders) will fall away. While this might appear innocuous at first glance, it seems that, consequently, non-compliance issues can be referred directly to the Labour Court. Employers could therefore lose the opportunity they have at the moment to become compliant. In addition, non-compliance with most of the provisions of the BCEA that are currently not criminalised will become criminal offences. Furthermore, the penalties, even for minor transgressions, will include minimum fines and possible prison sentences. Employers are therefore encouraged to ensure that they are fully compliant with the provisions of the Basic Conditions of Employment Act. Otherwise they could suffer costly embarrassment.

 

Work of equal value: According to the Employment Equity Amendment Bill it could be regarded as unfair discrimination if there is a difference in terms and conditions of employment between employees of the same employer who perform the same or substantially the same work or work of equal value. The discrimination would be regarded as unfair if the differentiation is based on of the grounds of unfair discrimination listed in Section 6(1) of the Employment Equity Act or any of the additional grounds added. It is possible that some exceptions will be provided for in the proposed code of good practice referred to in the Amendment Bill. However, employers should re-evaluate their conditions of employment so that they do not fall foul of this form of discrimination.

 

Assessment of compliance with employment equity requirements: Currently the Employment Equity Act lists several factors that must be taken into account in assessing whether a designated employer is implementing employment equity in compliance with the Act. In terms of the proposed amendment, it is now stated that certain factors may be taken into account, but several of the existing factors have been left out and new ones added. The new ones are “reasonable steps taken by an employer to train suitably qualified people from the designated groups” and “….. to appoint and promote suitably qualified people from the designated groups”. Although the implication is that there may be several others factors (not listed) that the Labour Court can take into account, employers should at least take note of the (new) listed factors when drafting and implementing their employment equity plans.

 

What is of some concern is the removal of the words “national and regional” where reference is made to the demographic profile of the economically active population. The implication is that, when assessing compliance, the national (rather than regional) demographic profile will be taken into account by labour inspectors. The problem is that the regional profile can in some cases differ to a great extent from the national profile. It is our view that employers, when drafting their employment equity plans, should in fairness be able to argue that the regional demographic profile is a more important consideration than the national demographic profile.

 

There are other important changes that have not been discussed, as there is probably not much that employers can do in response to those at this stage -we shall have to wait until the proposed amendments in the Bills have been further refined and implemented.

 

Jan Truter of www.labourwise.co.za

www.labourwise.co.za is an on-line labour relations service aimed at assisting employers with the implementation of effective labour relations. They can be contacted via the website or This email address is being protected from spambots. You need JavaScript enabled to view it..

 

Published in Human Resources

Consumer ProtectionThe Consumer Protection Act of 2008 in South Africa will be responsible to guide the implementation of promotional competitions from 31 March 2011 (New date). This will replace the previous role of the lotteries act.

Also see article: Consumer Protection Act a Heads Up

Affordable, Immediate Online Entry Solution - free for consumer, publish your rules: iEntry.co.za


General Changes to Running Competitions as set out in the Consumer Protection Act - South Africa

  • The act Specifies what a competition is and it does not require Companies to ask a question to complete the competition as previously required by the Lotteries act.
  • The Promotion can include chance and skill
  • Consumers are not allowed to be required to offer further consideration for a prize after they were told they have won it (Hopefully putting an end to timeshare phone call's)

 

Check List Before Running a Promotional Competition
  • You may not require payment to enter a competition, except for the reasonable cost of sending the competition or transmitting the entry. (Cell phone and postage)
  • You may not supply a consumer a prize if it is unlawful for them to have it
  • Director's, members, partners, employee's, consultants, promoters directly or indirectly involved may not win the prize
  • Suppliers of the goods may not win the prize
  • You have to prepare rules before the competition and have it available free of charge, during and after the promotion.

An Offer to Participate in a Promotional Competition Must Clearly Communicate The Following:
  • The Benefit of the Competition (Prize)
  • The Steps required to win it
  • How the winner will be chosen
  • The Closing Date of the competition
  • How the results will be communicated (The Winner)
  • A Person from who, a place where, and a date and time. Where competition rules can be obtained and the prize may be obtained.
  • These may be stated on the promotional material, a document where the prize is stipulated and the media during the promotion and where the competition is running.
  • Once a person has completed the steps to enter the promotion as set out in your communication they have the right to be included in the draw without further payment or extra complications.

You can find the full Document here

or Buy this eBook(PDF) online from Kalahari

The Consumer Protection Act Made Easy

 

Published in South Africa
Wednesday, 22 December 2010 11:08

Foresight 2011 - South Africa

Investment 2011Thought leaders in politics, economics and business recently gathered at the Gordon Institute of Business Science (GIBS) to forecast how the world will change in the year ahead. They concluded that the global economy will continue to tremble and the South African political arena will once again endure many highs and lows.

Adrian Saville, CEO of Cannon Asset Managers and a senior lecturer at GIBS, identified the greatest challenge for the world in 2011 as being whether or not the traditional powers could break free from the fetters of the recession. 

In Saville’s view the developed economies, the US and the EU in particular, had failed to see that this is “no ordinary recession.” The ever-increasing mountain of debt these countries are having to pay off will eventually lead them into a situation similar to that experienced by Japan in the 1990s and 2000s, where endless debt obligations hampered long-term growth.

“The fact that our three largest trading partners, and our three largest investment partners, Japan, Western Europe and North America are going to continue to stutter causes headwinds for South Africa,” he cautioned.

But potential openings also existed for South Africa out of the re-alignment in the international political economy. “We tend to be enamoured with the China and India story, yet Sub-Saharan Africa is growing almost as fast as India and the per capita incomes of Sub-Saharan Africa are higher than India.” he noted. “So we are imbedded in an incredible opportunity.”

Dr. Lyal White, a lecturer at GIBS, echoed this view and noted that 2011 would mark the start of the decade of the Dynamic Markets. He predicted that mature markets would grow by 1.7% (at best), while dynamic markets would grow at an average of about 6.5%. “In short, growth has really shifted from the North and the West, to the South and the East and debt has moved decisively to the North,” he said.

Phuthuma Nhleko, Group President and CEO of MTN, also marvelled at how the tectonic plates of the global economy were shifting. Like Saville, Nhleko saw a chance for SA, Inc to take advantage of this crisis, especially as corporations begin to engage more actively in the continent (as MTN had done to great success). "Africa is in effect the best-kept open secret from an investment perspective - and a return perspective," he said.

Nhleko also commented on the decline of some of the formerly venerable institutions of the West. “If you had said five years ago that some of the sovereign funds would be taking over Citibank and UBS and so on, somebody would have said ‘you’re smoking something’, but the reality is that this has happened and I think for me that is a fundamental change.”

For Nhleko, demography was a key barometer of future competitiveness, with Europe and Japan rapidly ageing, and the youthful populations of India and China swelling the size of their workforces at a remarkable rate.

Focusing on the public sector and the political realm back home, executive director of FeverTree Consulting, Roelf Meyer argued that the issue of service delivery would be one of the defining points of the coming year and beyond.

“There are huge, huge problems in this area, and they are not decreasing,” he said. “On a daily basis there are more and more local authorities that can’t supply some sort of service that is desperately needed by the people that they are supposed to deliver to.”

Water, electricity and sanitation were all affected, he noted, and those who suffer the most are those who cannot afford to pay for alternative services.

Meyer also observed that this deterioration was not confined to remote areas, pointing to the supposedly developed town of Stellenbosch in the Western Cape, which is experiencing severe capacity problems. Meyer speculated that campaigning for the local elections in 2011 would lead to even greater delivery shortfalls.

Gauteng MEC for Education, Barbara Creecy discussed some of the immense challenges that have arisen in education, particularly following the prolonged public sector strike that gripped the country in August.

Creecy explained that although the question of “redress, access and equity” in the education system had largely been resolved since 1994, the issue of learner performance needed to be addressed, particularly in maths, sciences and literacy. 

Creecy said that institutional factors and the impact of poverty were affecting the state’s ability to make these improvements, and that internal migration and deteriorating facilities were taking their toll. “So not only have we not managed to address historical back-logs, but the back-logs in fact get greater and greater.”

Compounding the problem, approximately 60% of this year’s curriculum simply wasn’t covered owing to an inability on the part of teachers to fully engage with course material. The problem is teacher understanding and knowledge of curriculum content, the MEC said, and not teachers’ level of qualifications, which are relatively high. As an illustrative example, Creecy admitted that in 2008 the department had a sample of matric maths teachers write the grade 6 maths exam and only 60% of them passed.

Shaka Sisulu of Cheesekids argued that young people would react strongly to the increasingly more testing and rapidly evolving environment bestowed upon them by their elders. Sisulu warned that the current establishment will resist some of the pressures of this transition.

“Even though we have always seen the youth being vigorous, and vigorously challenging the status quo, there is [now] a lot more at stake for the status quo globally, but particularly in South Africa.”

Gary Morolo, Chairman of Datacentrix, spoke about the general feelings of anxiety in the country when looking to the future. “As South Africans we have extreme sentiment swings. We are either wildly euphoric or we are deeply pessimistic and we are in one of those phases where we say ‘this country is going to the dogs’.”

While many of these problems are cause for concern, Morolo said it is possible to be vigilant in guarding against abuses of power without resorting to hysteria. To do this the country needs strong checks and balances.

“What we have to ensure is that those important structures of state that are constitutionally protected continue to be that way, that we don’t find ourselves in a position where our institutions are perverted…where we allow the Constitution to be subverted in any way. So long as people are not touching those institutions then we have recourse to do something about it,” he said.
Published in South Africa