21 Aug 2013

Employment & Pension Law Update

Practice Area(s): Employment |

MPs pass Labour Relations Amendment Bill

On 20 August 2013, the National Assembly adopted the Labour Relations Amendment Bill.  The Bill which will bring significant changes to labour laws has been hotly debated. COSATU have demanded a ban on labour broking however the new provisions stop short of a ban. 

The most recent amendments to the Bill include:

  • The period of temporary service by labour brokers has been reduced from 6 to 3 months.
  • The requirement for a strike ballot to be conducted has been removed.

Employers need to conduct an audit of their temporary workers including fixed term employees and employees engaged through labour brokers. The Bill will introduce tough new laws which will aim to regulate the industry and reduce abuse of labour broker employees.  Those engaged through labour brokers will be entitled to be remunerated as their colleagues who are permanent employees. They will also have recourse against the client as well as their employer (the labour broker). 

It is difficult to predict when the Bill will be passed into law. Having been passed by the MPs – it is currently before the National Council of Provinces. This is the final stage before the Bill is officially passed and sent for assent. However, if any issues arise, the Bill will return to the Portfolio Committee for further debate.

Recourse for employers in fraud cases 

In a recent case Rand Water v Stoop and others the employees were dismissed for their part in a fraud which amounted to about R7.8 million. The dismissed employees referred an unfair dismissal dispute to the CCMA. The matter was referred to the Labour Court in accordance with section 191(6) of the Labour Relations Act (LRA) which allows a party to make an application to the CCMA director to refer the dispute to the Labour Court if it is appropriate after considering factors such as the complexity of the dispute. The employer included a damages claim in the statement of defence against the employees under section 77 of the Basic Conditions of Employment Act 1997 (BCEA).

The Labour Court held it lacked jurisdiction to determine Rand Water's claim for damages as it was not based on the employment contract. The LAC disagreed and held that the employer's claim arose from the same set of facts which resulted in the dismissals. Rand Water's claim for damages did in fact arise from the contractual relationship and the employees' failure to act in good faith and exercise reasonable diligence. The LAC rejected the employees' argument that the BCEA only permitted claims by employees. The purpose of the BCEA is to promote fair labour practices for both employers and employees. 

This is an important judgment for employers who face unfair dismissal referrals from employees dismissed for fraud and gross negligence.