DEPARTMENT OF LABOUR
EXPLANATORY MEMORANDUM ON THE LABOUR RELATIONS AMENDMENT BILL, 1998
INTRODUCTION
The objectives of the Bill to amend the Labour Relations Act, no 66 of 1995 (hereinafter referred to as the principal Act), are to improve the institutional functioning of the Commission for Conciliation, Mediation and Arbitration (CCMA) and bargaining councils as well as to close down the Industrial Count and to effect certain technical amendments.
The CCMA is currently experiencing capacity and case management problems owing to the unexpectedly high volume of disputes referred to it.
The amendments relating to the CCMA essentially propose procedural changes aimed at expediting the case flow.
Section 32(3)(e) of the principal Act requires bargaining councils to set up an independent body to adjudicate non-panty mainly small and new businesses applications for exemption from collective agreements. The proposed amendment changes this body to one of appeal which should expedite the processing of such applications.
The industrial Count is being finally closed down. The amendment enables cases that have been referred to the Count to be transferred by way of notice in the Government Gazette to the CCMA for disposal as if the relevant labour relations laws had not been repealed.
The Bill was unanimously agreed to by the social partners in Nedlac who reported accordingly to the Minister of Labour in terms of section 8 of the Nedlac Act, 1994.
CLAUSE ONE
Amendment of section 28
Presently provident and pension funds established in terms of a collective agreement of a bargaining council are excluded from the scope of the Pension Funds Act, 1956. The same applies to medical aid schemes which can similarly be excluded from the Medical Schemes Act, 1967. The magnitude of the funds and schemes has grown to such an extent as against the position when the exclusion was effected in 1956 that it has become necessary that they should now fall under the relevant Acts.
The objective of adding section 28(2) and (3), is to provide for all new pension and provident funds as well as medical aid schemes which are so established after the amendment comes into operation, to register under and comply with the Pensions Act, 1956, and the Medical Schemes, Act, 1967.
This will place the oversight of the funds or schemes under the Registrars provided for under the latter two Acts who have greater specialised capacity. It is the intention that such existing funds established or continued in terms of the exclusion under section 2 of the Pension Funds Act, 1956, will, once transitional arrangements have been worked out with the Registrar of Pension Funds, also be required to register under this Act.
CLAUSE TWO
Amendment of section 32 of Act 66 of 1995, as amended by section 7 of Act 42 of 1996
Under the 1956 LPA all applications for exemption from a bargaining council collective agreement were dealt with by the council. The 1995 LRA required a council to establish an independent body to consider non-panty applications in accordance with criteria set by a council. It became clear that the former process in terms of which the bulk of the applications were approved by the council should be restored and that only where a council declines an application would the aggrieved panty need a right of appeal. In consequence the independent body is being converted into a body of appeal. This will reduce expenses and expedite the process for applicants.
Section 34(4) is being repealed as the two organisations specified in the gazetted Schedule 10 list are not the appropriate organisations to nominate people to sit on such a large number of independent bodies. By virtue of the repeal of section 34(4), Schedule 10 will fall away.
CLAUSE THREE
Amendment of section 43 of Act 66 of 1995, as amended by section 10 of Act 42 of 1996
Subsection (4) merely makes the same provisions provided for in section 28(3) and (4) also applicable to pension, provident or medical aid schemes established by a statutory council.
CLAUSE FOUR
Amendment of section 59
There are some bargaining councils which over the years have built up large pension or provident funds and also operate medical aid schemes but which now find that they are no longer "sufficiently representative" for the purposes of section 32(5) to have their agreements extended to non-parties and consequently could decide to dissolve. In the future statutory councils may also decide to discontinue. This amendment makes provision that where the panties agree that they would want such funds or schemes to continue to operate despite the winding-up of the council, they can apply to the Minister of Labour for the continuation of the fund or scheme, provided that it has registered in terms of the applicable law. The Minister can by notice in the Government Gazette declare the rules of the fund binding on the employers and employees who fall within the jurisdiction of the Council as from the date on which the council is wound-up, so as to preserve such funds or schemes.
CLAUSE FIVE
Amendment of section 70
The Act was silent on who should appoint the chairperson of the Essential Services Committee. The amendment provides for the Minister of Labour to appoint the chairperson from among the members of the committee.
CLAUSE SIX
Amendment of section 115 of Act 66 of 1995, as amended by section 3 of Act 42 of 1996
Currently the proceedings and procedures for the conduct of the resolution of disputes under the auspices of the CCMA are regulated by Pant C of Chapter VII of the Act and the proceedings of the governing body meetings are dealt with in item 4 of Schedule 3 to the Act.
A consequence of regulating in this way is that the "rules" are fixed and can only be changed by amending the Act. The amendment gives the CCMA the power to make rules to regulate the proceeding of governing body meetings and the practice and procedure for the conduct of dispute resolution proceedings, which gives the CCMA a flexible means to develop and change the rules governing such proceedings, which will help this new institution to deal more quickly with unforeseen circumstances. The CCMA must publish any rules made in the Government Gazette.
CLAUSE SEVEN
Amendment of section 118
The large volume of work as well as the geographical location of the CCMAs provincial offices makes it imperative that the Director of the CCMA should be able to delegate certain functions such as for instance signing subpoenas. The amendment in section 118(6) makes delegation possible, in consultation with the CCMA Governing Body, but excludes the appointment of staff and the extension of the period within which an arbitration award is served and filed.
CLAUSE EIGHT
Amendment of section 135 of Act 66 of 1995, as amended by section 36 of Act 42 of 1996
A CCMA commissioner when hearing more than one dispute involving the same parties has to set down separate conciliation dates for each dispute, which is time consuming and limits such commissioner's availability to conciliate other disputes. The new subsection (3A) permits of the joining of such disputes so that they may be dealt with in the same proceedings.
As the representation in conciliation proceedings of a party to a dispute by a co-employee went too wide and led to abuse, subclause (4) is being amended to remove the power of co-employees to represent a party in conciliation. Only registered trade unions and employers' organisations will be able to represent members in future. Similar amendments are made to sections 138 and 191.
CLAUSE NINE
Amendment of section 136
At present there is no time limit within which any party to a dispute may request that a dispute not resolved through conciliation should be referred for arbitration. This is unsatisfactory as if a long time elapses the circumstances surrounding the dispute could become vague, making arbitration more difficult.
The amendment provides that a request for a dispute to be arbitrated must be made within 90 days of the date on which a certificate is issued that conciliation has failed. However, a commissioner may condone a late request on good cause shown.
So as to expedite dispute resolution the Act promotes the concept of the process moving from conciliation direct to arbitration by the same commissioner. A panty to the dispute may not like the way a referral has been handled and rather want another commissioner to do the arbitration and in such an instance may object. Problems have been experienced where a date has been set down for arbitration to take place and just before the proceedings are due to commence an objection is lodged, which means that another commissioner has to be appointed and a new hearing date has to be set.
To avoid this kind of delay. inconvenience to the other panty and the expense attached to the commissioner's time, the amendment to subsection (3) provides that the objection must be made within seven days of the dispute being certified as unresolved through conciliation.
CLAUSE TEN
Amendment of section 138
The amendments to section 135 relating to a co-employee and registered trade unions and employers organisations are also effected in respect of arbitration proceedings.
CLAUSE ELEVEN
Amendment of section 151
In section 167(1) the Labour Appeal Court is established as a court of law ad equity. The amendment to section 151(1) brings the Labour Court into line by also specifying that it is a count of equity.
CLAUSE TWELVE
Amendment of section 153 of Act 66 of 1995, as amended by section 42 of Act 42 of 1996
The amendment brings section 153 into line with the provisions of the Constitution of the Republic of South Africa, Act no 108 of 1996 relating to the Judicial Services Commission and substitutes "High Count" for "Supreme Count".
CLAUSE THIRTEEN
Amendment of section 154 of Act 66 of 1995, as amended by section 43 of Act 42 of 1996
"High Count" is substituted for "Supreme Count" to bring the section into line with the 1996 Constitution
CLAUSE FOURTEEN
Amendment of section 157
Section 157(2) is problematic in that it applies to any fundamental right entrenched in Chapter 2 of the Constitution of the Republic of South Africa, 1996, which goes too wide and only applies to the state in its capacity as employer. The amendment narrows the jurisdiction of the Labour Count and the High Count to fundamental rights arising from any of the laws for which the Minister of Labour is responsible for the administration and from employment and labour relations and give the section general application.
CLAUSE FIFTEEN
Amendment of section 159 of Act 66 of 1995, as amended by section 45 of Act 42 of 1996
"High Count" is substituted for "Supreme Court" to bring the section into line with the 1996 Constitution.
CLAUSE SIXTEEN
Amendment of section 161
The amendment brings the provisions relating to who may represent a panty before the Labour Count into line with similar amendments to sections 135 and 138 relating to conciliation and arbitration proceedings before the CCMA.
CLAUSE SEVENTEEN
Amendment of section 163
"High Count" is substituted for "Supreme Court" to bring the section into line with the 1996 Constitution.
CLAUSE EIGHTEEN
Amendment of section 167
"Supreme Count of Appeal" is substituted for "Appellate Division of the Supreme Count" to bring the section into line with the 1996 Constitution.
CLAUSE NINETEEN
Amendment of section 168 of Act 66 of 1995, as amended by section 46 of Act 42 of 1996
"High Count" is substituted for "Supreme Count" to bring the section into line with the 1996 Constitution.
CLAUSE TWENTY
Amendment of section 169 of Act 66 of 1995, as substituted by section 47 of Act 42 of 1996
The reference to the definition of the Judicial Services Commission in the interim Constitution is being deleted and "High Count" is being substituted for "Supreme Count".
CLAUSE TWENTY ONE
Amendment of section 170 of Act 66 of 1995, as amended by section 48 of Act 42 of 1996
"High Count" is substituted for "Supreme Count" to bring it into line with the 1996 Constitution.
CLAUSE TWENTY TWO
Amendment of section 173
The references to the interim Constitution are being deleted and "Supreme Count of Appeal" is being substituted for "Appellate Division of the Supreme Count".
CLAUSES TWENTY THREE AND TWENTY FOUR
Amendment of sections 177 and 180
"High Count" is substituted for "Supreme Count" to bring it into line with the 1996 Constitution.
CLAUSE TWENTY FIVE
Amendment of section 191
The amendment is to bring section 191 into line with the amendment of section 136 50 as also to provide that where unfair dismissal disputes such as those that are automatically unfair or those based on an employers operational requirements etc which are not resolved through conciliation must be referred ,by any panty who makes a request for arbitration to the Labour Count within 90 days of it being certified that they remain unresolved. The Labour Count can condone late referrals for good cause shown.
CLAUSE TWENTY SIX
Amendment of section 207 of Act 66 of 1995, as amended by section 50 of Act 42 of 1996
This amendment deletes the provision for the Ministers to add to Schedules 1 and 7 as the Constitutional Count has ruled that Acts and such Schedules can only be amended by Parliament. The power to list institutions referred to in section 32(4), which is being repealed, is being deleted.
CLAUSE TWENTY SEVEN
Amendment of Schedule 5 of Act 66 of 1995, as amended by section 55 of Act 42 of 1996
Sub-clause (a)
The amendment ties into the addition of section 28(2) (see clause 1) section 43 (see clause 3) and provides for the exclusion of existing provident and pension funds from the scope of the Pension Funds Act, 1956, in respect of such funds continued in a collective agreement concluded in a council registered under the principal Act. A similar amendment is effected in respect of the. Medical Schemes Act, 1967.
Sub-clause (b)
These are consequential amendments which replace the reference to the 1956 LRA with a reference to the 1995 LPA in the Insurance Act, 1943, and the Friendly Societies Act. 1956.
CLAUSE TWENTY EIGHT
Addition to Schedule 7 of Act 66 of 1995, as amended by section 59 of Act 42 of 1996
The objective of clause 28(1) is to insulate the amendments to Schedule 7 made by the Minister in the Gazette from attack in the Constitutional Count in the light of the Constitutional Count decision that Acts and such Schedules can only be amended by Parliament. It is done by way of the validation of the contents of the Gazette notices which are repeated in Annexures A, B and C to the Bill.
The Industrial Count is being closed down. A new item 22A is being added to empower the Minister after consultation with the CCMA, to authorise the CCMA by way of a notice in the Government Gazette, to perform the Industrial Court's functions which will mean that pending cases will be disposed of by the CCMA as if the relevant labour relations laws had not been repealed. This does not affect the competence of the Industrial Count to finalise all pending matters that are partly heard as at the date on which the authorisation takes effect. The rules governing proceedings before the Industrial Court will apply to proceedings of all matters to be decided by the Commission.
CLAUSE TWENTY NINE
Amendment of table of contents of Act 66 of 1995
The amendments are consequential so as to bring the contents of the Act into line with the amendments effected to the Act.
CLAUSE THIRTY
Short title and commencement.
The Act will come into operation on a date determined by the President by proclamation in the gazette.