Labour law reforms introduced 6

Labour Minister, Mildred Oliphant will be introducing laws aimed at regulating contract work and addressing the raging issue of labour broking.

The far-reaching amendments also aim to facilitate the unionisation of workers and conclusion of sectoral collective agreements to cover vulnerable workers.

Additional amendments have also been effected to the Labour Relations Act, Basic Conditions of Employment Act and Employment Equity Act to bring them in line with labour law developments – improve the functioning of the Commission for Conciliation, Mediation and Arbitration and to fulfil South Africa’s obligations as a member state of the International Labour Organisation.

Oliphant said the Employment Services Bill will also be published simultaneously with other amendments.

“The significance of the Bill lies in the legal framework that it provides for the operation of employment services in the country. We require legislation in this area in the light of the transfer of the skills development functions to the Department of Higher Education and Training. Previously, the employment services were provided for in the Skills Development Act,’’ she said.

Oliphant said the Bills would be published for public comment until February 17, next year.

During this period, the Department will hold public consultations in the different areas of the country while at the same time, tabling them for discussion at the National Economic Development and Labour Council.

The bills are published for public comment with the closing date set for 17th February 2011. During this time the Department will hold public consultations in the different areas of the country and we will also be tabling the Bills for discussion at the National Economic Development and Labour Council (NEDLAC).

The current amendments have their origins in the growing “casualization” of work that has become a feature of the South African labour market over the past decade. The 2009 election manifesto of the ruling party gave urgency to the task of introducing amendments by noting the following;

“In order to avoid exploitation of workers and ensure decent work for all workers as well as to protect the employment relationship, introduce laws to regulate contract work, subcontracting and out- sourcing, address the problem of labour broking and prohibit certain abusive practices. Provisions will be introduced to facilitate unionisation of workers and conclusion of sectoral collective agreements to cover vulnerable workers in these different legal relationships and ensure the right to permanent employment for affected workers. Procurement policies and public incentives will include requirements to promote decent work.”

Amendments to the LRA, BCEA and EEA therefore have a major focus on addressing what is now commonly referred to as the phenomenon of labour broking.

Additional amendments have been effected to these acts to achieve the following:

  • To bring them in line with labour law developments;
  • To improve the functioning of the Commission for Conciliation Mediation and Arbitration (CCMA), and;
  • To fulfill our obligations as a member state of the International Labour Organisation (ILO).

The Employment Services Bill is also being published on 17th December 2010. The significance of the Employment Services Bill lies in the legal framework that it provides for the operation of employment services in South Africa. Legislation in this area is required in light of the transfer of the skills development functions to the Department of Higher Education and Training. Previously, the employment services were provided for in the Skills Development Act which is now the mandate of the Department of Higher Education and Training.

The Employment Services Bill also has relevance to labour broking as it makes provision for the regulation of temporary employment services by government.

The following are, in summary, the major areas of amendment in the bills.

  1. Labour Relations Amendment Bill, 2010
  • Regulating contract work – A proposed amendment aims to stop the practice of repeated contracting for short-term periods. The onus will be on employers to justify the use of short-term or fixed term contracts, in place of contracting employees on a permanent basis.
  • Addressing the problem of labour broking – The Labour Relations Amendment Bill proposes to repeal section 198 that deals with Temporary Employment Services in the Labour Relations Act (no 66 of 1995). The Department is introducing a new Employment Services Bill which will address both Private and Public Employment Services.
  • Defining the employer and employee – The Bill introduces a new definition of employer and employee to give greater certainty to the employment relationship. As a result of the new definition of employer, no temporary employment service will be able to be the employer of workers that it places in work.
  • Commission for Conciliation Mediation and Arbitration (CCMA) – The bill proposes a range of amendments to the provisions that deal with the CCMA to facilitate dispute resolution and enhance the efficiency of the CCMA’s operations.
  1. Basic Conditions of Employment Amendment Bill, 2010
  • Changes to the power of the Minister – Amendments are proposed to give the Minister the power to prescribe thresholds of representativeness of a trade union to have the organizational rights of access to employer premises. This is intended to apply to situations where unionization is difficult but where a more flexible threshold may facilitate unionization within a sector or area.

Further amendments in this regard propose that the Minister could set increases to actual wages instead of minimum wages for vulnerable workers in sectoral determinations

A proposed enabling provision in the Basic Conditions of Employment Act will provide the Minister with the power to determine the conditions of labour tenants.

  • Child labour – Amendments are proposed to align the Basic Conditions of Employment Act with South Africa’s international law obligations in terms of the International Labour Organisation Convention (No. 182) on the Worst Forms of Child Labour.
  • Strengthening the power of the inspectorate – Contraventions of certain provisions in monitoring and enforcement of the Act are criminalised which will enhance the effectiveness of the inspectorate. The Bill further seeks to impose heavy penalties for offences and contraventions of the provisions of the Act as well as increased prison terms for employers that do not comply.
  1. Employment Equity Amendment Bill, 2010
  • Equal pay for work of equal value – A new clause is introduced which seeks to prohibit abusive practices by ensuring that employees who work for the same employer receive the same pay as other employees doing the same or substantially the same work. This amendment is necessary to ensure compliance with the International Labour Organisation’s conventions that deal with discrimination, namely Convention 100 Equal Remuneration Convention and Convention 111 Discrimination (Employment and Occupation) Convention.
  • Strengthening enforcement and compliance – To strengthen the enforcement mechanisms of the Act, amendments are proposed which empower the Director General to impose fines on non-complying employers as a percentage of the annual turnover of the company, at two percent for first contraventions, escalating to a maximum of ten percent for repeated contraventions.
  1. Employment Services Bill, 2010
  • Legal status for Employment Services – The Bill seeks to provide a legal status for Employment Services after the transfer to of the Skills Development functions to the Department of Higher Education and Training (DHET). The Bill also provides a legal status for the Sheltered Employment Factories administered by the Department and Productivity SA.
  • Role and function of public employment services – The Bill defines the role and core functions of public employment services including governance arrangements via an Employment Services Board.
    • Decent work schemes to promote youth employment;
    • Promotion of employment of people with disabilities;
    • Employment promotion schemes to respond to economic recession, company closures and pending retrenchments or lay-offs;
    • Regulation of employment of foreign workers.
  • Private Employment Agencies – Provision is made for the registration and licensing of Private Employment Agencies for placement and their regulation by the Department.

All of the above four bills were subjected to a Regulatory Impact Assessment (RIA) during July and August 2010. The RIA has highlighted a number of options and cost implications relating to the bills. Some issues have been taken into account in the bills that will be published, but others are likely to be explored in more detail during the NEDLAC process.

Already there are different positions among the social partners on the issue of labour broking. The proposed deletion of section 198 of the Labour Relations Act is a contested area. I will watch with keen interest the robust engagement during the NEDLAC consultation phase.

“The amendments to our labour legislation seek to address critical issues in the South African labour market that have important implications for stakeholders. I therefore call on social partners to constructively engage in the process in the interests of all parties,” said the Labour Minister.

The Department is seeking constructive engagement on the bills and recognises the important role that the media plays in this regard. We look forward to your cooperation in ensuring that information on the bills is disseminated in an objective and accurate manner and that there will be an informed debate during 2011.

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6 thoughts on “Labour law reforms introduced

  • Ashwell Glasson

    Hi Bosole and others. To ensure that my interpretation of what a learnership is, I thought I would clarify it further. It is a short term legal contract (+- 12 months) in length and the ‘active-learning’ component in the worplace means that the learner has to engage and be part of the process of production, taking a marxist perspective. True workplace learning is not about being a slave to the production process, but rather a key component of the means of production and within that, learning from the productive process to enhance the individuals expertise and competency.


    Following Ian’s perspective, the learner also enhances the production process as a vital component through what he has learnt and in many cases improves it. Bosole, there have been cases of abuse of learners registered on a learnership, there can be no doubts about that. Where learners have been purely utilised as cheap labour. My interest within the context of labour broking and the legal status of the learnership contract is to establish how the Department of Labour (DoL) will view the learnership concept in the changing labour broking context because it is still considered a short term permanent contract of employment.


    Bosole your input on the need to ensure that there is a creative and enabling space for learning to take place in the workplace is the key for me. To have private enterprises, social/community organisations, public sector institutions and other bodies be learning and knowledge management organisations. To embrace the concept of learning and people development as a key success driver. Thank you very much all for your inputs. My best, Ashwell

  • Bosole Chidi

    Ian, thanks for your comment. I mean if a learner is exposed to a world of work and aquire some skills he/she must not be there to make a production but for him/her to learn so that in future he/she must be able to add value when he/she is employed on full time basis.

    If you make a learner to make product 100% the learning process became minimal.We must make a space for learning at the workplace.

    From : Bosole  Chidi

  • Ian Webster

    Perhaps I am misunderstanding Bosole Chidi but how can you add value to an organisation without being productive? Too many employees and applicants for employment focus on getting: getting educated, getting experience, getting a job, getting social benefits. The focus desperately required is on adding value. “How can I add value to the organisation that employs me, the industry I belong to, the institution I study in?” Adding value has to be measured by my productivity–whatever that might mean in the environment in which I work, whether it’s a business, an NGO, a Government Department or a trade union.

  • Bosole Chidi

    The Bill might be an issue of influencing the municipality elections or 2012 elections but I dout.If you saw or listerned to the speeches and echoes of Pan Africanist Congress of Azania and the AZAPO they were long time in the forefront of the idea.They may not be voted in power but their ideas are rich as the ruling party is trying to get on their footsteps.


    If you read the founding document of PAC you will find this ideas and they have been there since 1959.The Black Conciousness Movement did the same in their document of economic policy.Check as well the PAC Land Policy document it addresses the same.

  • Bosole Chidi

    I think the Bill will adress the Trade Union issue of becomming viable in terms of membership and the question of sector.I also want to differ with Ashwell on the issue of  learnership. Learnership is not meant for making production, but to expose a learner in an environment of work and to enable the learner to be skilled and ready to add value not to be a slave of productivity.

    The Bill is in deed deals with poverty irradication because workers will enjoy social benefits compare to the situation we are in at this pointing time.It will reduce exploitation and the freedom to form a trde union or to belong to a union will be enjoyed as well.

    From : Bosole  Chidi

  • Ashwell Glasson

    This legislative intervention will no doubts provide the alliance with a clear perspective on the future of labour broking in South Africa and the impact on the labour market. As there has been a fair amount of abuse in the existing labour broking system, both in the private and public sector environment, some form of regulatory intervention was inevitable. The creation of yet another state-owned-enterprise (SOE) as a government labour broker will certainly bear watching, this does bring concerns to the the labour broking sector no doubt, as there future definitely seems to have a short-term ceiling. Executive search and head-hunting agencies that focus on permanent placements seem to have slipped through the cracks unless I am mistaken. This might be accounted for in a different sense, where permanent placement agencies might be seen as ‘promoters’ of gainful permanent employment. Although quite a frightening prospect for some, from a positive perspective I can see opportunities for the SMME business sector to step in and provide key services in a ‘non-traditional’ labour broking context. Contractually providing specialised services from a small company perspective, where the human labour or input component will be part of a specialised service. For many of us these form the core of many of our existing ETD services, such as conducting skills-audits, training needs analyses and the development and production of workplace skills plans (WSP). Beyond the ETD landscape this raft of legislation might just provide the right push and catalyst for small business expansion to provide key primary services that even well-resourced medium-to-large enterprises might not be able to adequately manage or deliver themselves.


    If the new bill package defines our primary ETD service as a pure labour aspect, well then we are going to be in a bit of a pickle. As the bill focuses on defining who the employer actually is, I think that the latter aspect will not be a problem for us all. Some of the challenge areas are going to be learnerships and public projects that utilise temporary or short-term contractual workers.


    For me the following key questions need to be addressed though:


    1. Project specific programmes such as the EPWP uses the temporary or contract labour model to develop skills.Thus creating short-term income-opportunities in primarily rural areas for poverty-stricken individuals.
    2. Learnerships are a form of short-term contract of employment. How is the legislation going to support the learnership concept. Which also emphasises a period of structured learning, with the employer essentially acting as designated host employer paying the learners a monthly stipend for the duration of the learnership. Would learnerships and learnership host employers be exempt as per the lesgislation?
    3. Which leads to the final the question. What would the criteria be for the basis of obtaining exemption  to be able to utilise temporary labour. This I would imagine would have significant impacts in the mining, agriculture, hospitality and construction industries. Which either have strong seasonal influences on the dynamics of their labour markets, or specific project-type work with a start and end date tie dto the life-span and objectives of their projects.

    This range of labour reforms will no doubts be one of the key pieces of legislation that will have a lasting influence on the existing organised labour, ANC and SACP alliance leading into the next election. It will take time to transition and I do see some significant painful structural change of the temporary labour broking industry. Though there may be significant opportunities for structured skilled service provision from the SMME sector as part of broader specialised service offerings.