Labour Law Update 2008

1. Labour Law Update 2008 August & September 2008

2. Introduction • The Constitution • The Basic Conditions of Employment Act (“BCEA”) • The Labour Relations Act (“LRA”) • The Employment Equity Act (“EEA”) • The Compensation for Occupational Injuries and Diseases Act (“COIDA”) 2

3. Introduction • The Occupational Health and Safety Act (“OSHA”) • The Protected Disclosures Act (“PDA”) • Unemployment Insurance • Immigration Law • The Prevention and Combating of Corrupt Activities Act (“PCCA”) 3

4. Introduction • Simplified Court Structure • Constitutional Court (“CC”) • Labour Appeal Court (“LAC”) • Labour Court (“LC”) • CCMA/Bargaining Council 4

5. Introduction • Unfair Dismissal Disputes • Conciliation at the CCMA/Bargaining Council • Depending on the type of dismissal • Arbitration at the CCMA/Bargaining Council; or • Labour Court for adjudication 5

6. The Constitution • General Characteristics of Constitutionality • Constitutional Supremacy • Entrenched Bill of Rights • Extensive powers of interpretation of statutes and enforcement of rights granted to the courts • Importance of human rights 6

7. The Constitution • The Bill of Rights contains several provisions relevant to labour law including: • Protection against discrimination • Protection against forced labour and servitude • The right to pursue an occupation • The right to freedom of association • Protection of children against exploitative labour practices 7

8. The Constitution • Section 23 • Everyone has the right to fair labour practices • Every worker has the right to form and join a trade union, participate in union activities and strike • Every trade union, employer’s organisation and employer has the right to engage in collective bargaining • The Impact of the Constitution on Labour Law – See p1 of the handbook 8

9. Basic Conditions of Employment Act • Overview – see p 3 of the handbook • The Regulation of Working Time • Exclusions from this provision: • Senior managerial employees • Sales reps who regulate their own hours • Employees who work less than 24 hours per month • Employees who earn in excess of R149 736 per annum 9

10. Basic Conditions of Employment Act • The Regulation of Working Time • An employer must regulate working time of employees • In accordance with health and safety provisions • With due regard to the Code of Good practice • With due regard for family responsibility leave 10

11. Basic Conditions of Employment Act • Ordinary Hours of Work • Employee cannot work for more than 45 hours per week • Employee cannot work more than 9 hours in a day if he/she works 5 days in a week • Employee cannot work more than 8 hours in a day if he/she works more than 5 days in a week • Extension of ordinary hours up to 15 minutes per day but not more than 60 minutes per week 11

12. Basic Conditions of Employment Act • Overtime • Only applies if earning less than R149 736 per annum • Must be by agreement • Can’t agree to work more than 12 consecutive hours per day • Can’t agree to work more than 10 hours of overtime per week • One and a half times ordinary wage / paid time off within 1 month of becoming entitled to it 12

13. Basic Conditions of Employment Act • Meal Intervals • Only applies if earning less than R149 736 per annum • Employees who work continuously for more than 5 hours entitled to meal interval of 1 continuous hour • During meal interval, only required to perform those duties that can’t be left unattended 13

14. Basic Conditions of Employment Act • Meal Intervals • Employee who works during meal interval entitled to be remunerated • Can agree in writing to reduce meal interval to 30 minutes • Dispense with meal interval if less than 6 hours per day 14

15. Basic Conditions of Employment Act • Pay for work on Sundays • Entitled to double the wage if don’t normally work • If normally work then entitled to one and a half times • Paid time off to be granted within 1 month 15

16. Basic Conditions of Employment Act • Daily and weekly rest period • Daily rest period of at least 12 consecutive hours • Can reduce to 10 hours if employee works on premises and gets 3 hour meal interval • Weekly rest period of at least 36 consecutive hours including Sunday, unless otherwise agreed • Can agree to reduce weekly rest period provided rest period in following week is extended • Can agree on 60 consecutive hours every 2 weeks 16

17. Basic Conditions of Employment Act • Night Work • Only applies if earning less than R149 736 per annum • Between 18h00 and 06h00 • Must be by agreement • Shift allowance / reduction of working hours • Transport 17

18. Basic Conditions of Employment Act • Night Work • Entitled to request medical examination in certain circumstances • Inform employees of health and safety hazards and of entitlement to medical exam • Maintain confidentiality of results of medical exam • Transfer employee to day work if employee’s health is suffering because of night work 18

19. Basic Conditions of Employment Act • Public Holidays • Only applies if earning less than R149 736 per annum • Employee not required to work unless agreed • If public holiday falls from Monday to Friday, pay employee ordinary wage • If employee works, employer to pay double • Case law – see p 7 of the handbook 19

20. Basic Conditions of Employment Act • Leave • Only applies if work more than 24 hours per month • Provisions don’t apply to leave granted in excess of minimum • Different types of leave • Employer can grant unpaid leave (must be reasonable) 20

21. Basic Conditions of Employment Act • Annual Leave • Leave cycle: 12 months following commencement of employment or completion of previous cycle • Employee to be granted at least: • 21 consecutive days • 1 day for every 17 days worked • 1 hour for every 17 hours worked • To be granted not later than 6 months after the end of the annual leave cycle 21

22. Basic Conditions of Employment Act • Annual Leave • Accumulation of leave – see p8 of the handbook • Not required or permitted to take annual leave during any period of notice • Grant additional day of leave if public holiday falls on day employee would ordinarily work • Can’t pay employee in lieu of leave except on termination of employment 22

23. Basic Conditions of Employment Act • Sick Leave • Sick leave cycle: the period of 36 months’ employment following commencement of employment or completion of the previous sick leave cycle • Entitled to the amount of days employee would normally work during a period of 6 weeks • But, during the first 6 months, employee entitled to 1 day for every 26 days worked • Entitled to wage would ordinarily have received 23

24. Basic Conditions of Employment Act • Sick Leave • More than 2 consecutive days or on more than 2 occasions during an 8 week period AND doesn’t produce a medical certificate – not required to pay • Issued and signed by a medical practitioner or person certified to diagnose patients and registered with a professional council • Traditional Health Practitioner’s Bill • Not reasonably practicable to obtain certificate - can’t withhold payment unless assist employee in obtaining certificate 24

25. Basic Conditions of Employment Act • Maternity Leave • Entitled to at least 4 consecutive months • Commence leave 4 weeks before expected date of birth unless otherwise agreed • Cannot work for 6 weeks after birth unless certified fit to do so • Entitled to 6 weeks if miscarriage during 3rd trimester or stillborn child • Employee to notify employer in writing of dates 25

26. Basic Conditions of Employment Act • Maternity Leave • Not required to pay employee for maternity leave unless policy of doing so • Policy may provide for payment of 60% of normal salary • Employee entitled to claim remaining 40% from the Unemployment Insurance Fund • Total cannot amount to more than 100% of normal salary • Protection of employees before and after child birth 26

27. Basic Conditions of Employment Act • Family Responsibility Leave • Only applies to those employed for more than 4 months who work more than 4 days per week • Entitled to 3 days’ paid leave in the event that: • Employee’s child is born • Employee’s child is sick • Employee’s spouse, life partner, parent, grandparent, child, grandchild or sibling dies 27

28. Basic Conditions of Employment Act • Particulars of employment and remuneration • Only applies if work more than 24 hours per month • Employer to provide employee with certain information in writing – see p10 of handbook • If information changes, employee to be provided with copy of revised document • Employers not permitted unilaterally to change terms and conditions – must consult 28

29. Basic Conditions of Employment Act • Particulars of employment and remuneration • Statement of employees rights in prescribed form to be displayed at workplace • Written particulars to be kept by employer for 3 years post termination • Payment of remuneration by way of cheque, cash or direct deposit • Employer obliged to give certain information when paying an employee – see p11-12 of handbook 29

30. Basic Conditions of Employment Act • Deductions • Only by written agreement or where permitted by law, court order or arbitration award • Deduction for loss or damage suffered by employer if: • Employee’s fault and during course of employment • Opportunity to show why deductions should not be made • Total amount of debt does not exceed actual amount of damage • Total deductions do not exceed ¼ of remuneration • Debt to be specified by employer in separate agreement 30

31. Basic Conditions of Employment Act • Termination of employment • Only applies if work more than 24 hours per month • Notice of termination of not less than: • 1 week if employed for 6 months or less • 2 weeks if employed for between 6 months and 1 year • 4 weeks if employed for 1 year or more or if a domestic or farm worker employed for more than 6 months 31

32. Basic Conditions of Employment Act • Termination of employment • Notice to be given in writing • Employer can’t give notice during any period of leave • Employer can pay employee the remuneration he would have received had he worked in lieu of notice 32

33. Basic Conditions of Employment Act • Termination of employment • Pay for any annual leave accrued and not taken and for any paid time off not taken • Dismissal for operational requirements: severance pay of at least 1 week for each completed year of service • No severance pay if refuses to accept reasonable alternative offer of employment • Certificate of service – see p13 of handbook 33

34. The Labour Relations Act • Primary Objects – see p 14 of handbook • Employees v Independent Contractors • Independent contractors are not employees – do not enjoy the protections afforded by labour legislation • Relationship with independent contractors - purely contractual • Substance over form of the contract 34

35. The Labour Relations Act • Employees v Independent Contractors - Common Law • Control Test: extent to which work controlled by the employer • Organisation Test: part and parcel of the organisation? • Dominant Impression Test: relationship and contract as a whole • Economic Test: who profits from the work done • Case law - see p16 of the handbook 35

36. The Labour Relations Act • Employees v Independent Contractors - Definition of an “Employee” • Any person, excluding an independent contractor, who works for another person or for the state and who receives or is entitled to receive any remuneration • Any person who in any manner assists in the carrying on or conducting the business of an employer 36

37. The Labour Relations Act • Employees v Independent Contractors - s200A of the LRA and s83A of the BCEA • Burden is on the individual to prove that he is an employee • Rebuttable presumption – if triggered shifts the burden of proving that an individual is not an employee to the employer • The presumption is activated if any one of the listed factors is present • Factors – see p16-17 of the handbook 37

38. The Labour Relations Act • Employees v Independent Contractors - s200A of the LRA and 83A of the BCEA • Does not apply to persons earning in excess of R149 736 per annum – onus on the individual to prove he is an employee • Procedural rather than substantive change – only modifies the burden of proof 38

39. The Labour Relations Act • Employees v Independent Contractors • Legal Principles – Independent Contracting • Not protected by the labour legislation • Relationship is governed by contract • Pacta sunt servanda – the content of the contract is the determining factor • Termination – determined exclusively by provisions of the contract 39

40. The Labour Relations Act • Employees v Independent Contractors • Legal Principles – Employees • Protected by labour legislation • Termination must be on statutorily recognised ground – misconduct, incapacity or operational requirements • Substantively and procedurally fair • Tax Implications – see p18 of handbook 40

41. The Labour Relations Act • Dismissal • Right not to be unfairly dismissed • Substantive and procedural fairness • Substantive – only 3 statutorily recognised grounds • Misconduct • Incapacity (poor work performance, ill health or injury and possibly incompatibility) • Operational requirements (retrenchment) 41

42. The Labour Relations Act • Dismissal • Procedural fairness – depends on the reason • Employer bears the onus of showing dismissal was substantively and procedurally fair • Schedule 8 to the LRA: Code of Good Practice: Dismissal (“the Code”) sets out guidelines 42

43. The Labour Relations Act • Dismissal – Section 186 - Meaning • Failure to renew a fixed term contract or renewal on less favourable terms where there is a reasonable expectation of renewal • Refusal to allow an employee to resume work after maternity leave • Selective re-employment after dismissal of a group of employees for the same/similar reasons 43

44. The Labour Relations Act • Dismissal - Section 186 - Meaning • Termination by the employee because continued employment was intolerable • Termination by the employee because of substantially less favourable terms and conditions following a transfer 44

45. The Labour Relations Act • Dismissal - Misconduct • Substantive fairness • On a balance of probabilities the employee committed the misconduct • Dismissal must be the appropriate sanction – all circumstances • Misconduct must be so serious that it renders the continued employment relationship intolerable 45

46. The Labour Relations Act • Dismissal - Misconduct • Substantive fairness – Item 7 of the Code • Did the employee contravene a rule or standard regulating conduct in the workplace? • Was the employee aware or could he reasonably be expected to have been aware of the rule or standard? • Has the rule or standard been consistently by the employer? • Is dismissal the appropriate sanction in all the circumstances? 46

47. The Labour Relations Act • Dismissal - Misconduct • Procedural fairness • Employee made aware of the allegations and given proper opportunity to state case in response • Doesn’t have to be formal disciplinary enquiry or “mini trial” - natural justice must be observed • Case law - see p21 of the handbook 47

48. The Labour Relations Act • Dismissal - Misconduct • Procedural fairness - Item 4(1) of the Code • Conduct an investigation to determine if there are grounds for dismissal – does not have to be a formal enquiry • Notify the employee of the allegations • Allow the employee an opportunity to state a case in response 48

49. The Labour Relations Act • Dismissal - Misconduct • Procedural fairness - Item 4(1) of the Code • Give the employee reasonable time to prepare and allow the assistance of a fellow employee or trade union representative • Communicate the decision – preferably written notification • Written disciplinary codes - guideline only • Case law - see p21 of the handbook 49

50. The Labour Relations Act • Dismissal - Misconduct • Other guidelines contained in the Code • Only acts of misconduct that are sufficiently serious or repeated are dismissible offences • Discipline should be progressive • Not sufficient to simply give notice of termination in terms of contract where employee has committed misconduct 50