Labour Relations Amendment Bill [B16-2012]: proposed amendments to clauses 21, 22, 24, 43 & 44

Meeting report

The Chairperson noted the apology of Advocate A Alberts (FF+).

Consideration of the Labour Relations Amendment Bill
Ms Zuraya Williams, State Law Adviser advised that the legal advisers had met to agree on the matters that remained outstanding.  It was suggested that the Committee dealt with the outstanding issues before considering the Portfolio Committee Amendments to the Bill (i.e. the “A-list”).  The Committee had also requested the legal advisers to draft transitional provisions for consideration.

Mr Thembinkosi Mkalipi, Chief Director: Labour Relations, Department of Labour (DOL) explained that the provisions dealing with transitional arrangements were erroneously omitted from the Bill.  It was necessary to include provisions under clauses 1, 22, 24, 43 and 44 to clarify when the amended legislation would be applicable.  The intention of the proposed additional provisions was to avoid unnecessary litigation resulting from different interpretations of when the new legislation came into effect.  The proposed provisions were agreed by the various legal advisers.

Clause 1: Amendment of section 21 of Act 66 of 1995
The proposed amendment specified that sub-section 8C would be applicable if any dispute over a collective agreement arose after the date the Labour Relations Amendment Act, 2013 came into effect.

Ms Williams had drafted proposed amendments to the A list to accommodate the changes.  Her proposals would be submitted to the Committee for consideration.

Clause 22: Amendment of section 143 of Act 66 of 1995
The proposed amendment specified that the new legislation applied to all arbitration awards issued by the Commission for Conciliation, Mediation and Arbitration (CCMA) after the effective date of the Labour Relations Amendment Act, 2013, regardless of when the dispute had arisen.

Mr E Nyekemba (ANC) was not convinced that the additional provisions would prevent additional legal challenges.  He asked if adequate consultation had taken place on the issue of prior disputes.

Mr Mkalipi confirmed that lengthy discussions were held.  The relevant section dealt with arbitration awards that were not paid.  Arbitration awards issued by the CCMA were regarded to be equivalent to a decision of the Labour Court.

Clause 24: Amendment of section 145 of Act 66 of 1995
The Amendment Bill introduced new requirements concerning cases brought before the Labour Court, for example applicants having to lodge security with the Court.  The proposed amendment specified that only applications made to the Labour Court after the effective date of the Amendment Act would be subject to the new requirements.  The new requirements were not applicable to applications already before the Court on the date of enactment.

Mr S Motau (DA) verified that all the legal advisers were in agreement over the proposed new provisions.

Advocate Anthea Gordon, Parliamentary Legal Adviser confirmed that agreement was reached by the legal advisers.

Clause 43: Amendment of section 198 of Act 66 of 1995
The proposed amendment required a temporary employment service to provide an employee with a written employment contract within six months of the date of enactment.  It was noted that the six month period in relation to temporary employees remained a matter for further discussion by the Committee.

Mr A Williams (ANC) suggested that the proposed amendment was considered by the Committee when the amendments to section 198A were considered.

Mr Nyekemba agreed that issues on which agreement had not yet been reached should be flagged.  He was concerned that the proposed transitional provisions were not consistent with regard to when the new legislation would become applicable.

Professor Paul Benjamin, University of Cape Town, Legal Adviser to the DOL explained that the proposed provisions did not take away any rights or dealt with the implementation of the Act.  The provisions merely specified when certain provisions became applicable and helped to avoid disputes over the applicability of the legislation.

Mr Mkalipi added that section 198 dealt with the matter of written particulars of employment.  The proposed amendment confirmed that the provisions dealing with employment contracts also applied to temporary workers.

Prof Benjamin pointed out that section 198A included new provisions applicable to employees earning below a certain amount.  The intention was to ensure that lower-earning temporary workers were given written employment contracts as well as workers earning above the threshold amount.  The period of six months was intended to allow a reasonable time for temporary employment service employers to provide all temporary employees with employment contracts.  The Committee could consider if a period of six months was adequate.

Mr Mkalipi added that the period of six months was suggested for reasons of consistency.

Mr Chris Todd, a member of the National Economic Development Labour Advisory Council (NEDLAC) drafting team explained that it was necessary to consider what the impact of changed legislation would have on matters currently before the Labour Court when drafting transitional provisions.  It would be unfair to impose new legislation in cases where a valid application was made to the Court prior to the date of enactment.

The Chairperson said that, in general, new legislation became applicable on the effective date unless stated otherwise.

Prof Benjamin explained that the rule of substance was applied to cases occurring after a change in the legislation whilst the rule of procedure was applied with the change.  He cited the example of a case arising from a strike in 1987 (when there was no right of appeal.  Judgment was given in 1989, after the law was amended to allow the right of appeal.  The case was won on appeal.

Clause 44: Amendment to sections 198A, 198B and 198C of Act 66 of 1995
Mr Mkalipi advised that the Parliamentary Legal Advisers and the State Law Advisers disagreed on the proposed transitional provisions.  The concern was that the provisions would have the effect of extending the term of pre-existing temporary employment contracts by an additional six months.  This was not the intention of the Department’s proposal.  The other area of disagreement was over whether or not employees with contracts signed before the date of enactment should have the option to re-negotiate their contracts to ensure the contract complied with the new legislation.

Advocate Gordon referred the Committee to the document headed “Transitional Arrangements: Options”.  Alternative proposals to the provisions concerning sections 198A, 198B and 198C that were proposed by the DOL were made.  The Department’s proposals included the phrase “deemed to have been” but it is not clear what the impact would be on the employer.  The Parliamentary Legal Advisers felt that the provisions suggested by the DOL would not address the problem of non-compliant contracts signed before the date of enactment.  Temporary employees with fixed term contracts should be allowed the opportunity to re-negotiate their contracts in accordance with the new legal requirements.  The proposal was to allow a window period of six months for temporary employment service employers to ensure that all employment contracts were compliant.

Mr Todd said that it would appear that a substantive rather than a procedural change was being introduced.  The concern was that the new legislation would have an impact on the contractual arrangements that were agreed to between the parties prior to the date of enactment.  There was the risk that agreement was not reached during a process of re-negotiation and it was not clear what would happen in such cases.  This could be dealt with by allowing parties the option to re-negotiate.  The main consideration was the provision of legislative certainty - all parties needed to know where they stood six months after the effective date of the new legislation.

Prof Benjamin said that provision had already been made under the sections to confer rights on employees after six months.  It was not desirable to defer the acquisition of these rights by allowing a window period.  It was necessary to avoid the anomalous situation where persons employed before the effective date of the Amendment Act had fewer rights than persons hired after the effective date.  Such a situation would have serious political and constitutional implications.  He agreed that it should not be left up to a re-negotiation process to bring pre-existing contracts in line with the legislation.  The obligation to comply with applicable legislation must remain with the employer.  The intention of the transitional arrangements was to ensure that everyone was given their rights within six months of the date of enactment.  The relevant clauses should be worded in such a way that the intention was clear.

Mr Mkalipi agreed that the provisions should not have the effect of extending the term of any pre-existing employment contracts by a further six months.  The provisions should require all temporary employment contracts to comply with labour legislation requirements within six months of the effective date of the legislation and no longer.

The Chairperson summarised that the Committee would need to decide on the number of months specified in the provisions, whether the provisions would take effect from the date of enactment or if the effective date could be negotiated between the parties.

Ms Williams suggested that provision was made for a transitional period as well as for a default position.

Mr Motau said that the point of departure was that the section dealt with vulnerable workers.  Workers derived a measure of comfort from having an employment contract and it should be taken into consideration what the impact would be on the employee if the existing contract could be affected by new legislation.

Mr D Kganare (COPE) understood the rationale for the amendments.  It was necessary to allow a certain period of time for implementation but the same period should be applicable to everyone.

Mr Williams pointed out that clause 44 referred to the commencement of the Amendment Act.  On that date, the employee was considered to be employed.  The discussion around what number of months should be applicable was confusing.

Mr Nyekemba noted that there were different interpretations of the proposed provisions by the legal advisers.  The Committee had heard the arguments put forward by both sides.  He suggested that the Committee proceeded with considering the proposals and adopted the version that would result in an improvement of the current legislation.

Mr A van der Westhuizen (DA) referred the Committee to the principal Act.  Section 22 dealt with disputes.  He wondered if the proposed amendments should not be included under section 22.

The Chairperson said that it could not be assumed that all workers were represented by trade unions and subject to collective agreements.

Mr Nyekemba pointed out that the amendments to sections 21 and 22 were already dealt with.  The proposals referred to amendments to section 198, which currently did not include any restrictions on how long a person could be employed on a temporary basis.

The Chairperson suggested that the legal advisers were allowed time to reconsider their differing views on the proposed amendments to section 198.  He announced a break in the proceedings to allow time for consultation.

Advocate Gordon proposed that consideration was given to the impact of the transitional arrangements on each sub-section of section 198 rather than a single blanket provision.

When the meeting was reconvened, Mr Mkalipi announced that agreement had been reached although there had not been time to prepare a written proposal.

Ms Williams read the draft proposal to insert a new sub-section (9) at the end of section 198A.  It was proposed to split the provisions regarding (a) the rights that had to be given to employees within a (to be specified) number of months of the commencement of the Amendment Act and (b) the rights that were given immediately on the date of commencement of the Amendment Act.  The written proposal would be submitted to the Committee for consideration as soon as possible after the meeting.

Mr Williams asked for confirmation that there was consensus amongst the legal advisers on the proposed draft provision.  He suggested that the rationale behind the proposed clause was provided as well.

Mr Motau verified that the phrase “deemed to have been” was omitted.

Mr Mkalipi advised that the proposed amendments to sections 198B and 198C would be changed in line with the proposal concerning section 198A

Joint meeting of the Portfolio Committees on Labour and on Justice and Constitutional Development
Three members of the Portfolio Committee on Labour attended the joint meeting with the Portfolio Committee on Justice and Constitutional Development on 16 April 2013.  The purpose of the meeting was to discuss areas where the proposed amendments to the Labour Relations Act impacted on the mandate of the Department of Justice and Constitutional Development (DOJ&CD)

Advocate Gordon referred the Committee to the “Clause Summary” document.

Mr Mkalipi advised that clauses 27, 28 and 34 were rejected by the Committee as the provisions were dealt with in the Superior Courts Bill.  Clauses 31 and 33 were discussed in the joint meeting.

Clause 31: Amendment of section 159 of Act 66 of 195
Currently, the DOJ&CD was responsible for the Labour Court.  NEDLAC was of the opinion that the DOL should be responsible for all labour-related matters.  The proposed amendment to section 159 of the Act was to allow the Rules Board for the Labour Court to be appointed by the Minister of Labour, in consultation with NEDLAC.  The DOJ&CD argued that the Minister of Justice and Constitutional Development could not be left out of the process.  Clause 31 (a) was rejected.  The DOJ&CD had no problem with the proposed provision in clause 31 (b), which remained.

Clause 33: Amendment of section 168 of Act 66 of 1995
Currently only High Court judges could act as judges in the Labour Court.  The proposed amendment allowed Labour Court judges to act in the Labour Court as well.  There was no objection to the proposed amendment by the DOJ&CD.  The issue of requesting judges in the Labour Court to hand down judgments sooner was debated at length but was not regarded by the DOJ&CD as a matter requiring further attention.

Ms Williams advised that the Chairperson of the joint meeting had requested the State Law Advisers to make the necessary amendments to the A-list.

Portfolio Committee amendments to the Labour Relations Amendment Bill [B16A-2012]
Ms Williams advised that the Committee needed to decide on certain issues.  These issues were not included in the current version of the A-list.

Ms Williams took the Committee through the amendments agreed to date.  Clauses 1, 3, 17, 23, 25, 31, 23, 35, 31, 35, 43, 44, 48 and 50 were amended.  Clauses 27, 28, 31(a), 34 and 38 were rejected.  New clauses to amend section 3, section 193, section 194 and the long title of Act 66 of 1995 were inserted.

Advocate Gordon advised that a decision concerning the six month period referred to in clause 44 was outstanding and the relevant amendment had been omitted from the A-list.

Mr Williams observed that the A-list included changes that had not been discussed by the Committee, for example the new clauses to amend sections 193 and 194.

The Chairperson explained that the Committee had deferred discussions on certain problematic sections.  The amendments to other sections needed to be re-drafted and were included in the A-list.  The A-list was intended to assist the Committee during the formal deliberations on the Bill.  He suggested that the additional changes agreed to be the Committee during the current proceedings were included in a new version of the A-list.

Mr Mkalipi agreed that the Committee had not yet dealt with all the proposed amendments and that the following version of the A-list would also be incomplete.  A list of all the outstanding issues would be compiled.  He asked for authorisation from the Committee to include minor spelling and grammatical corrections.

Consideration and adoption of minutes of Committee meetings
The Committee considered the minutes of meetings held on 14, 21 and 28 February 2012; 13 and 18 March 2012; 24 April 2012; 15 May 2012; 9 and 10 October 2012 and 26 and 27 March 2013.  The minutes were adopted, subject to corrections to the spelling of certain Members’ names being made.

Adoption of Committee Programme for the Second Term 2013
The Committee decided to postpone the briefing on the strategic plans of the Department of Labour and its subordinate entities to 2 and 3 May 2013.

Mr Williams suggested that the Auditor-General was invited to brief the Committee on the audit findings for the Department.  The draft programme omitted the legislative work the Committee was engaged in.  He suggested that the legislative work was given priority and that the Committee met more frequently.

The Committee would consider and adopt the revised Programme during the meeting scheduled for 2 May 2013.

The meeting was adjourned.