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Campaigns  |  Miscellaneous

August 2000    

Labour Law Amendments


“We shall resist this attack with every possible means within our power!”

The COSATU Executive Committee was stunned when they heard details of the amendments to labour laws proposed by the Minister of Labour. They are the biggest attack on workers' rights for years.

What the Government wants to do is:

  • Turn Sunday into an ordinary working day, with no premiums such as double time or time and a half;

  • Give the Minister of Labour the power to vary all rights, including core rights in the Basic Conditions of Employment Act (BCEA), downwards;

  • Extend employees' probationary employment period from three to six months and give employers the right to dismiss probationary workers easily;

  • Enable employers to extend the working week beyond the present 45 hour maximum;

  • Allow the Minister to refuse to extend collective agreements reached at the Bargaining Councils if not all employers, in particular small businesses, have been consulted. This will allow one maverick employer to sabotage an agreement;

  • Ignore the COSATU's demand for the ANC to honour its 1999 election manifesto commitment to change the Labour Relations Act (LRA), in order to introduce compulsory negotiations in case of retrenchments.

COSATU and its affiliated unions responded immediately and angrily. The National Union of Mineworkers (NUM) declared: “Obviously these are anti-labour amendments. It is not a neutral stance. It is a pro-business position.”

The SA Commercial, Catering and Allied Workers' Union (SACCAWU) wrote to the Minister: “Your recent announcement of proposed amendments to the labour Relations Act and the Basic Conditions of Employment Act have left a sour taste in our mouths.”

COSATU believes the labour market review process has gone horribly wrong. Instead of the relatively minor, technical amendments to fine-tune labour legislation, as had been suggested, many of the proposed amendments in fact completely upset the delicate balance achieved through years of negotiations, and threaten to seriously destabilise the degree of labour stability which has been achieved by the new dispensation.

It seems like the Minister and the task team has allowed itself to be stampeded by the hysteria generated by some in business and the media around the claim of 'labour market inflexibility', into introducing measures which threaten to plunge our country into a period of protracted conflict.

The effect of the proposed set of amendments, if introduced, will in fact be totally the opposite to what was promised:

  • It will facilitate and continue to promote the ongoing mass destruction of jobs;

  • It will seriously undermine the protection which vulnerable workers have under current legislation;

  • It will destabilise our current system of collective bargaining.

In most respects, the review team has ignored the concerns of workers and produced proposals which demonstrate contempt for millions who voted for this government, as well as for the ANC's own election manifesto. In some respects the proposals go beyond what even organised business has asked for.

There are just a few positive proposals which COSATU welcomes:

  • the amendment of the Insolvency Act to give workers more rights when companies are liquidated;

  • strengthening the Labour Court by allowing it to involve experts to assist with complex issues and providing for Labour Court judges to be judges of the High Court;

  • the extension of the definition of an employee to cover “independent contractors”, which recognises that they are workers and will improve their rights.

No right to negotiation or strike

COSATU has demanded compulsory negotiations with employers who propose to retrench workers and, if these negotiations are unsuccessful, workers must also have the right to strike. The government is proposing merely "facilitated consultation" during the process of retrenchment consultations when more than 500 employees may be dismissed in any 12-month period.

The proposed amendments only tinker with the current arrangement allowing employers to retrench workers after going through the motions of consultation. They fail to meet the demands of millions of workers in the jobs campaign led by COSATU around the above demands. The Department of Labour has therefore refused to give effect to the clear directive of the governing party's manifesto. In fact the proposal for "facilitated consultation" in the case of retrenchments involving over 500 workers, not only excludes the majority of retrenched workers, but also could have the "unintended consequence" of speeding up the retrenchment process.

In the absence of the obligation to negotiate over retrenchments, improved provisions around access to information, and court procedures, welcome though they are, do not address the fundamental problem which the team was supposed to correct.

The proposals relating to dismissals for operational requirements and the transfers of businesses do not adequately protect the interests of workers. Further, the latter proposals, when read together with Section 197A of the LRA are not only drafted in a confusing manner, but could potentially worsen the situation.

The team has therefore done nothing to improve the prospects of thousands of workers whose job security is threatened and who face the dismal prospect of joining unemployment lines alongside millions of others.

But these positive elements are overwhelmed, and virtually nullified by the destructive elements. To the extent that the review was intended to address the concerns of workers around job losses, and improve the protection afforded to vulnerable workers, it has totally failed. To those who are unfamiliar with the details of labour legislation, this may seem an exaggerated or overly emotional response on our side.

But a dispassionate analysis of the problems the review team was supposed to address, compared with their actual proposals, reveals a complete failure to exercise the mandate which the President and the Minister had announced to the country: to fine-tune those aspects of labour legislation which were having “unintended consequences”, and to deal with various concerns being raised, including those around job loss, and protection of vulnerable workers.

In response to our Section 77 notice, and the jobs campaign by millions of workers, we were told that this labour market review would address our concerns. The country was also told that the fundamental architecture of our labour legislation would not be undermined, and that there would be no policy shifts.

Both these undertakings have been either ignored, or deliberately violated. The proposed amendments, if accepted, would reverse much of the progress, which has been made since 1994.The process has gone horribly wrong.

The positive elements of the proposals will have little impact on improving the situation, unless the problem areas, as outlined here, are addressed.

Variation of the BCEA's core rights

Most seriously of all, government is now proposing to change and make worse what is already an unacceptable variation model in the current BCEA. In effect this means that the existing floor of basic rights, even core rights currently protected in the BCEA, can be varied downwards, leaving the most vulnerable workers totally unprotected.

These core rights include such things as the maximum 45-hour week and bans on child labour, excessive night work and even forced labour. If accepted, this new proposal gives the minister the power to vary these conditions. For example he could give farmers the right to force children to work on his farm at harvest time for 60 hours a week, round the clock and without overtime pay - quite legally!

This proposal fundamentally reneges on agreements negotiated both with government and in the Alliance between August and October 1997. It is therefore in bad faith, and will never be accepted by ourselves.

Collective Bargaining Councils

The government propose to require bargaining councils to consult every employer in an industry before the Minister will extend the agreement to non-parties. This could seriously undermine our collective bargaining system, and threatens to unravel a lengthy and carefully negotiated compromise between the parties, aimed at protecting the integrity of our collective bargaining system. In response to labour's strong demand at the time to make collective bargaining compulsory, the final agreement to extend agreements to non-parties in the 1995 LRA, was a compromise which labour accepted as part of the overall package on the LRA.

The hysteria which has been generated around the negative effects of this provision on small business has completely ignored the provisions in the Act for representation of small business on bargaining councils, as well as provisions for exemption (which according to surveys are granted in over 80% of cases.)

If the proposals are accepted, we will now have the ludicrous situation where majority agreements could be held hostage by any employer in an industry who claims they weren't consulted. This proposal is therefore totally unacceptable to COSATU.

A political agreement exists in the Alliance for an even better variation model than in the current provisions of the Act. This would provide that variation of any rights could only happen if they left workers in at least as good a position as if those rights had not been varied. This has been ignored. Instead the variation model is being made even worse for vulnerable workers.

This proposal flies in the face of Government's ratification of ILO core conventions including the prohibition of forced labour and child labour, and will make us a laughing stock internationally.

The proposed amendments to the BCEA dealing with the variation of core rights in relation to reduction of working hours goes completely against the commitments made by government in the negotiations, as well as the spirit of the current Act.

They contradict government's commitment to reduce hours of work over time to a 40-hour working week. The proposals in fact move us in completely the opposite direction, by seeking to allow for downward variation of the 45- hour weekly maximum.

We therefore face the prospect of hundreds of thousands of workers in both the public and private sector now having their ordinary working hours increased above the current 45-hour limit.

This slap in the face comes on top of the determination for small business, introduced in November 1999 where the Minister willy-nilly excluded workers in companies who employ less than ten people, from certain provisions of the BCEA, unconditionally and without even looking at each company's economic circumstance.

Some in government have also wanted to exclude or exempt public servants from the provisions regulating overtime, working hours, Sunday work premiums, etc. Taken together, these proposals will reduce the BCEA to an empty shell.

Protect Sunday work

The proposal to completely get rid of the premium for Sunday work, such as double time or time and a half, and therefore get rid of Sunday as a protected day of rest for workers, is a massive step backwards, and totally unacceptable. If implemented, it will create a position which is even worse than that afforded to workers under the old apartheid BCEA.

The argument that Sunday is given preferential status in the BCEA on religious grounds, and is therefore against the constitution, is completely spurious, and is certainly not a view supported by the constitutional court.

Sunday work was protected in the current BCEA through premiums, as a preferred day of rest and family day, not for religious reasons, but because it makes more sense to protect a day that traditionally has been used by most families as a family day, for sports, for stokvel gatherings, for union activities, etc.

We are concerned that on this issue the Minister of Labour is acting narrowly on behalf of the government as employer who measures the value of things in respect of its cost in rands and cents rather than in the interests of the populace as a whole.

This amendment is driven by the narrow fiscal concerns of the Department of Finance, and ignores the social impact of encouraging employers to deny thousands of parent's access to their children, without the disincentive provided by the current premium on Sunday work.

This vindicates the position that COSATU consistently took in opposing the variation model, that once you start varying some rights, your basic floor of rights will ultimately completely disappear, as all rights will be varied downwards, through pressure particularly on vulnerable workers.

Atypical workers

The proposed amendments do not deal adequately with atypical forms of work, including casualisation, although the proposed amendment to close the loophole around 'independent contractors' is welcome. Many workers are perpetually regarded as temporary workers. This has serious implications for their job security, benefits and basic conditions of employment.

Probationary employees

The proposal to allow probationary employees to be dismissed for poor work performance without fair and substantive grounds is extreme and necessary, and will be opposed by COSATU. We are also concerned that the length of the probationary period, which is six months, is excessive for many categories of workers.

Procedural fairness

While there are many aspects of the proposed amendments relating to procedural fairness that we agree with, we are perturbed about a number of them. These include the provisions relating to compensation for workers whose dismissal are found to be procedurally unfair and the apparent attempt to informalise disciplinary procedures for all employers regardless of their size.

Political implications of the proposed amendments

These proposals, far from being technical fine-tuning of labour legislation, threaten to plunge the country into a major political crisis. The worst proposals, particularly on retrenchments, downward variation, Sunday work, bargaining councils, and probation, represent the most serious attack on hard-won workers rights and gains since the 1988 attempt of PW Botha's regime's to roll back workers' rights.

This is the “unintended consequence” of the proposed amendments, which will create both political and labour instability, if allowed to go forward.

COSATU has been upbeat about gains workers have made since 1994 following the transformation of the labour market, and mobilised workers for the ANC 1999 elections victory partly on this achievement. Today we don't know what to think. There appears to be an obsession with what the mythical 'investor' is supposed to think about our labour market, and a blocking out of the realities facing millions of vulnerable workers, still oppressed by the apartheid legacy.

The current proposals completely undermine the logic of government's labour market transformation programme. COSATU wishes to warn the Department of Labour that the hard-won rights of mainly black workers will not willy-nilly be taken away. We shall resist this attack with every possible means within our power.

President Mandela told the COSATU Congress that if any future government tries to do to workers what the apartheid regime did, “you must do to them what you did to that regime”. It appears that the drafters of these proposals are oblivious to that reality. Our members must prepare for a battle even bigger than the one that helped to block the PW Botha amendments to the LRA in 1988. We are calling on the government to inject some sanity into the proposals emanating from the Department of Labour, and to meet its commitments in terms of the 1999 elections manifesto.

We are calling on every local of COSATU and every affiliate structure, as well as all friends of workers, to discuss this serious attack on our rights. It represents an attack on the gains that organised labour has made in the past five years. We shall not take this lying down; the government if it takes forward these amendments must realise that they will set us on a real collision course.

The political crisis is particularly serious because it raises fundamental questions about the integrity of agreements reached in Nedlac, with the government, and in the Alliance. This poses major problems for COSATU leaders in the run up to our Congress and the local government elections, as to how we manage the political ramifications of this crisis. What do we say to our members?

Finally, although this looming crisis has the potential to get out of hand, we will obviously seek a political solution, which must in the final instance be resolved by the leadership structures of the Alliance and the President. It would be a disaster for this country if the progress, which has been made in the last few years, were to be reversed by these ill-considered and destructive proposals.

Insolvency legislation

COSATU demanded that workers be notified of potential and actual liquidation , to afford them the opportunity to make representations to save the company from liquidation. In the past there was no requirement for a notice to be served on workers in the event of liquidation. Further COSATU raised a concern about the automatic termination of workers' employment contracts in terms of the Insolvency Act. The proposed amendment will address this problem by making it compulsory for a notice to be served on workers in the event of liquidation.

Upon sequestration, workers' contracts will be suspended rather than terminated. Workers will then negotiate with the trustees on the appropriate way forward. During suspension workers can claim their UIF unemployment benefits.