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Labour Relations Act 66 of 1995

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Labour Relations Act 66 of 1995 Powered By Docstoc
					1.   Title of the Act
     Labour Relations Act 66 of 1995.

2.   Last amendment date
     Labour Relations Amendment Act 12 of 2002.

3.   Date of summary

     February 2005

4.   Purpose
     To change the law governing labour relations and for that purpose –

     •   To give effect to section 27 of the Constitution;
     •   To regulate the organisational rights of trade unions;
     •   To promote and facilitate collective bargaining at the workplace and at sectoral
         level; conformity with the Constitution;
     •   To regulate the right to strike and the recourse to lock-out
     •   To promote employee participation in decision-making through the establishment
         of workplace forums;
     •   To provide simple procedures for the resolution of labour disputes through
         statutory conciliation, mediation, and arbitration (for which purpose the
         Commission for Conciliation, Mediation and Arbitration is established), and
         through independent alternative dispute resolution services accredited for that
         purpose;
     •   To establish the Labour Court and Labour Appeal Court as superior courts, with
         exclusive jurisdiction to decide matters arising from the Act;
     •   To provide for a simplified procedure for the registration of trade unions and
         employers’ organisations, and to provide for their regulation to ensure democratic
         practices and proper financial control;
     •   To give effect to the public international law obligations of the Republic relating to
         labour relations;
     •   To amend and repeal certain laws relating to labour relations; and
     •   To provide for incidental matters.

5.   Overview
     The Act does not apply to members of:
     - the National Defence Force
     - the National Intelligence Agency
     - the South African Secret Service

     For the purposes of this overview, the main sections will be dealt with under their
     respective headings below:




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    Freedom of Association
    Every employee has the right:

        o to participate in forming a trade union or federation of trade unions;
        o to join a trade union, subject to its lawful activities.

    The members of the trade union similarly have the right to participate in lawful activities,
    elect office bearers, officials or trade union representatives, and if elected, to carry out the
    functions of a trade union representative in terms of the Act or any collective agreement.
    Protection of employees and persons seeking employment: No person may discriminate
    against an employee for exercising a right conferred by the Act.
    Without limiting the general protection above, no person may do, or threaten to do, any of
    the following:

    a) require an employee or a person seeking employment not to be or become a member
        or cease to be a member of a trade union or workplace forum;
    b) prevent an employee or a person seeking employment from exercising a right
        conferred by the Act or from participating in any proceedings in terms of the Act;
    c) prejudice an employee or a person seeking employment because of past, present or
        anticipated:
-   membership of a trade union or workplace forum;
-   participation in forming a trade union, federation or workplace forum;
-   participation in the lawful activities of a trade union, federation or workplace forum;
-   failure or refusal to do something which an employer may not lawfully permit or require
    an employee to do;
-   disclosure of information which an employee is lawfully entitled or required to to give to
    another person;
-   exercise any right conferred by the Act; or
-   participation in any proceedings in terms of the Act.
    d) no person may advantage, or promise to advantage, an employee or a person seeking
        employment in exchange for that person not exercising a right conferred by the Act or
        not participating in any proceedings in terms of the Act.

Rights of Trade Unions and Employers’ Organisations: Rights are granted to allow for, inter
alia, the determination of their own constitutions and to elect their office bearers, officials and
representatives.

Collective Bargaining
Trade union representativeness: A “representative trade union” is defined in the Act as
meaning a registered trade union or two or more registered trade unions acting jointly, that
have as members the majority of the employees employed by an employer in the workplace.
Such a trade union has the right of access to a workplace. This entitles the union to enter the
premises in order to recruit members or communicate with them and also to hold meetings
and to vote at the premises outside working hours. These rights are subject to any conditions
as to time and place that are reasonable and necessary to safeguard life or property or to
prevent the undue disruption of work.

A representative trade union may also authorise the employer in writing to deduct
subscriptions or levies payable to that trade union from the employee’s wages. Various terms
and conditions are applicable in this regard. The above rights are also extended to a union

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which, although it has not got majority representation, nonetheless has
‘sufficient’representation in a workplace. A workplace is defined in the Act and does not
necessarily constitute one work site.

The minister, in consultation with NEDLAC, may publish guidelines to assist the
Registrar in determining whether a trade union or employers’organisation is genuine.
Thresholds of representativeness may be negotiated by unions whose members are in the
majority of the employees employed by the employer in a workplace, or the parties to a
Bargaining Council, may conclude collective agreements establishing a threshold of
representativeness in respect of one or more of the organisational rights. Such agreements will
not be binding unless the thresholds are applied equally to any registered union seeking
organsational rights.
A collective agreement may bind employees who are not members of the registered trade
union in the workplace.

The Act makes provision for agency shop and closed shop agreements subject to certain
criteria. Monies deducted in terms of these agreements must be used for the pursuit or
protection of the socio-economic interests of employees.

Bargaining Councils:
One or more registered trade unions and one or more employers’organisations may establish a
bargaining council for a sector and area.
The powers and functions of a bargaining council are set out in the Act and include inter alia,
the power to conclude collective agreements and perform dispute resolution functions.

Statutory Councils:
Such councils may be formed with thirty percent representivity within the sector and area. It
has less powers and functions than that of a bargaining council. A statutory council that is not
sufficiently representative within its registered scope may submit a collective agreement to the
Minister who must treat the agreement as a recommendation made by the Employment
Conditions Commission in order to facilitate the Promulgation of a Sectoral Determination.

Strikes and lock-outs:
Every employee has the right to strike and every employer has the recourse to lock-out if
- the issue in dispute has been referred to a bargaining council or to the Commission for
    Conciliation Mediation and Arbitration as required by the Act, and
- a certificate stating that the dispute remains unresolved has been issued; or
- a period of 30 days, or any extension agreed to between the parties to the dispute, has
    elapsed since the referral was received by the council or commission.

At least 48 hours’ notice (in writing) must be given to the employer of a proposed strike,
unless:
- the issue in dispute relates to a collective agreement to be concluded in a council, in which
    case notice must be given to the council;
- the employer is a member of an employer’s organisation that is party to the dispute, in
    which case notice must be given to the employer’s organsation.

In the case of a proposed lock-out at least 48 hours notice (in writing) must be given to any
trade union that is party to the dispute, unless the dispute relates to a collective agreement to
be determined in a bargaining council, in which case the notice must be given to the council.
The Act sets out 5 instances when the above requirements would not apply, for example if it
were varied by a collective agreement.

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If the issue in dispute concerns a refusal to bargain, an advisory award must have been made
before notice is given. The Act also sets out exactly what constitutes a refusal to bargain.

Limitations on the right to strike:
The Act stipulates various instances when strikes and lock-outs are forbidden, for example if a
collective agreement were to prohibit it or if one of the parties has the right to refer the matter
to arbitration or to the Labour Court.

Secondary strikes:
A secondary strike is a strike that is in support of a strike by other employees against their
employer. Different notice periods are set down for secondary strikes and again the Act
prohibits such strikes in certain situations and if certain criteria are not fulfilled, for example,
the nature and extent of the secondary strike must be reasonable in relation to the possible
direct or indirect effect that it may have on the business of the primary employer.

Protected Strikes and lock-outs:
Strikes and lock-outs that comply with the provisions of the Act are ‘protected’. No delict or
breach of contract is committed by a person who takes part in a protected strike and an
employee may not be dismissed for doing so, although he/she is not entitled to be paid.

Strikes and Lock-outs not in compliance with the Act:
The Labour Court has exclusive jurisdiction to deal with such matters. Unprotected strike
action may constitute a fair reason for dismissal. In determining whether or not the dismissal
is fair, the Code of Good Practice: Dismissal in Schedule 8 must be taken into account.

Picketing:
A registered trade union may authorise a picket by its members and supporters for the
purposes of peacefully demonstrating in support of a protected strike and is also subject to
certain conditions.

Protest Action:
Employees who do not work in an essential or maintenance service have the right to take part
in protest action.

Workplace forums:
Such forums may be set up subject to certain requirements and have a wide range of functions
such as participative decision making with management on issues such as disciplinary codes
and procedures.

Commission for Conciliation, Mediation and Arbitration (CCMA):

The functions of the CCMA are:

•   to attempt to resolve, through conciliation, any dispute referred to it in terms of the Act;
•   to arbitrate any dispute referred to it which remains unresolved if the Act requires
    arbitration and any party to the dispute requests arbitration, or all the parties consent to
    arbitration under the auspices of the Commission;
•   to assist in the establishment of workplace forums;
•   to compile and publish statistics concerning its activities.



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The Commission also provides training and advice on a wide range of labour- related issues.
It may make rules to regulate itself on numerous issues set out in the Act. Arbitration awards
are final and binding may only be overturned on review to the Labour Court. (They may
however be varied or rescinded by the Commissioner under certain conditions.)

Councils and private agencies:
Any council or private agency may apply to the governing body of the Commission for
accreditation to resolve disputes though conciliation or arbitration.

The Labour Court:
The Labour Court is a superior court that has the authority, inherent powers and standing in
relation to matters under its jurisdiction equal to that which a court of a provincial division of
the Supreme Court has in relation to the matters under its jurisdiction. The Act stipulates what
orders the Labour Court may make.

The Labour Appeal Court:
The Labour Appeal Court is a court of law and equity. It is the final court of appeal in respect
of all judgments and orders made by the Labour Court in respect of matters within its
exclusive jurisdiction. Its inherent powers are equal to the Appellate Division of the Supreme
Court in relation to matters under its jurisdiction.
The Labour Appeal Court has exclusive jurisdiction :
    • to hear and determine all appeals against final judgments or final orders of the Labour
         Court; and
    • to decide on any question arising from proceedings in the Labour Court, reserved for
         its decision.

   Unfair Dismissal and Unfair Labour Practice:

   Section 185 provides that every employee has the right not to be :

                   1. unfairly dismissed, and
                   2. subjected to unfair labour practices.

The Act sets out no less than eight situations which would constitute a dismissal. It also
defines an automatically unfair dismissal and sets out various scenarios in this regard.

A dismissal may be deemed fair if the reason for the dismissal is based on the inherent
requirement of the particular job or, if the dismissal is based on age, the employee has reached
the normal or agreed retirement age for persons employed in that capacity.

In considering whether or not the reason for a dismissal was fair, or whether the dismissal was
in accordance with a fair procedure, account must be taken of any relevant code of good
practice issued in terms of the Act.
An employer may, with the consent of the employee, request a bargaining council, an
accredited agency or the CCMA to conduct a pre-dismissal arbitration into allegations about
the conduct or capacity of the employee.

Dismissal based on operational requirements:
The Act sets out the procedure which needs to be followed when contemplating an operational
requirements dismissal. It clearly stipulates who must be consulted and the topics which
should be discussed. The type of information to be disclosed is also stipulated as well as the
form of such disclosure. An operational requirements dismissal could be for reasons relating

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to the economic, technical, structural, or similar issues of a business. The right to strike over
operational requirements dismissal is granted subject to certain conditions and scenarios.

Unfair Labour Practice:
The Act defines an unfair labour practice as any unfair act or omission that arises between an
employer and an employee and which involves numerous factors, which it again sets out in
detail.
Various penalties are imposed on employers by the CCMA who commit unfair labour
practices or dismiss unfairly.

Transfer of a contract of employment:
Section 197 firstly defines a business and then sets out the effects of the transfer of such a
business as a going concern. Various consequences arise and the old and new employer are
liable for these consequences. Amongst other things, the new employer (“buyer”) is
substituted for the old employer (“seller”) and becomes liable for everything done by that
previous employer to the employee. The transfer has no effect on the employee’s continuity of
service and the terms and conditions of employment must remain on the whole substantially
the same.

Presumption as to who is an employee:
Section 200 A states that until the contrary is proved, a person who works for, or renders
services to, any person is presumed, regardless of the form of the contract, to be an employee,
if one of seven factors is present. This presumption does not apply to employees who earn
more than the amounts set by the Minister of Labour in terms of section 6 (3) of the Basic
Conditions of Employment Act. A Code of Good Practice has also been issued setting out
guidelines for determining whether persons, including those who earn in excess of the amount
set by the Minister, are employees or not.

Codes of Good Practice:
The Act makes provision for NEDLAC to prepare and issue codes of good practice and
change or replace any code of good practice. Any person in interpreting or applying the Act
must take into account any relevant code of good practice.
Schedule 8 of the Act is the Code of Good Practice on Dismissals and is taken into account by
Commissioners and Judges and is of extreme importance when determining the fairness or
otherwise of a dismissal.

Some other codes issued:

               Balloting for closed shop agreements
               Conciliation proceedings
               Dismissal
               Handling of Sexual Harassment cases
               Picketing
               Dismissals based on operational requirement




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6.   Implications for Affected Parties

     Employers have various rights and obligations, as do employees, whose collective and
     individual rights are regulated by the Act. Amongst others, they are protected against
     unfair labour practices and unfair dismissal.

     Trade unions too, have rights granted in terms of this Act. However, conditions must
     be fulfilled for the exercising of such rights and should this not be done, there are
     again, consequences which flow from this.

     The ultimate implication for parties is that fair labour practices must be practiced.

     Liability

     The main parties affected by this Act are employers, employees, trade unions, and
     employer organisations.
     Employers are obliged to follow the Act in order to avoid the penalties which flow
     from it.

     Risk

     In particular, the dismissal sections can have the largest impact for employers. The
     impact of non-compliance could range from industrial action to awards and judgments
     with large financial consequences. Conversely, compliance with the Act could bring
     industrial peace as well as the legal termination of wayward or incapacitated
     employees. Employers have a duty to act fairly and consistently in the application of
     discipline.

     Costs

     The most common cost for employers is in the form of compensation for unfair
     dismissals which range from a maximum of twelve month’s remuneration for a
     ‘normal’ unfair dismissal, to twenty four months for an automatically unfair dismissal.




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