Amendments to labour legislation signed into law by the President

UPDATE: Labour Relations Amendment Act (8/2018): Commencement of the Act is 1 January 2019.

Broadly, the amendments will introduce new law (eg a national minimum wage) and change existing law (eg mechanisms for dispute resolution during strike action). The amendments are covered in four different pieces of legislation as follows:

 

The amendments deal with a range of labour issues summarised as follows:

 

National Minimum Wage Act (NMWA)

The NMWA aims to address the massive income disparities in the South African labour market by introducing a national minimum wage. The focus is therefore on low-earning employees. Deliberations on this topic began four years ago at the National Economic Development and Labour Council. This represents an historic moment in South Africa’s labour dispensation as it is the first time that a national minimum wage has been introduced into the system.

What is the National Minimum Wage?

Read together with certain sections of the Basic Conditions of Employment Amendment Act, a national minimum wage has been introduced. Through this Act, employees will be entitled to R20 for each ordinary hour worked. Different hourly rates apply to agricultural/farm workers (R18 per hour) and domestic workers (R15 per hour).

National Minimum Wage Commission

The NMWA establishes the National Minimum Wage Commission. The Commission will inter alia be responsible for reviewing the national minimum wage on an annual basis. In deciding on the annual adjustment, the following factors will be considered:

• cost of living;
• minimum living levels;
• alleviation of poverty;
• wage differentials and inequality;
• conditions of employment;
• health, safety and welfare of workers;
• employment levels;
• inflation;
• Gross Domestic Product growth;
• state of collective bargaining.

After the review process is complete, the Commission will be responsible for submitting written recommendations to the Minister of Labour regarding the proposed adjustment.

Exemptions

Employers who are unable to pay the minimum wage, due to business or financial constraints, will be able to apply for exemptions under the NMWA.

Basic Conditions of Employment Amendment Act (BCEAA)

Due to the introduction of a national minimum wage, certain provisions of the Basic Conditions of Employment Act, No 75 of 1997 (BCEA) have been affected. Therefore, the BCEAA inter alia incorporates certain provisions of the NMWA. The important provisions are highlighted below.

Failure to pay in terms of NMWA

In terms of the BCEAA, employers who fail to pay employees in line with the NMWA may be subject to a fine. The fine is calculated per employee as the greater amount of twice the value of the underpayment or twice the employee’s monthly wage.

Employment Conditions Commission

The BCEAA disestablishes the Employment Conditions Commission and replaces it with the National Minimum Wage Commission.

Claim by employee for outstanding payments

The BCEAA provides a new mechanism to employees if an employer fails to pay any amount due to them. Such an employee can now institute a claim [at the Commission for Conciliation, Mediation and Arbitration (CCMA)] for such failure.

Labour Relations Amendment Act (LRAA)

The LRAA changes various provisions of the Labour Relations Act, No 66 of 1995 (LRA). These changes mainly concern collective bargaining. The LRAA provides for the following:

• extension of bargaining council agreements to non-parties by the Minister of Labour;
• extension of funding agreements of bargaining councils;
• picketing through collective agreement or through prescribed picketing rules;
• extension of the meaning of ballot for a strike or lock-out to include a secret vote;
• creation of an advisory arbitration panel.

Advisory Arbitration Panel

The advisory arbitration panel has been established to resolve strikes (or lockouts) that are obstinate or violent. The panel may also intervene if there is potential for the strike (or lockout) to cause a local or national crisis. The panel will have the power to investigate the cause and circumstances of the strike (or lockout) and release an advisory arbitration award to assist the parties in resolving the dispute. The panel may only be established if this is directed by the Minister of Labour or Labour Court. Importantly, the appointment of the panel does not interrupt or suspend the right to strike or recourse to a lockout (in accordance with the provisions of the LRA).

Picketing Regulations

On the issue of picketing, the Minister of Labour released proposed picketing regulations for public comment. These regulations were released in September 2018.

In its current form, the regulations provide that trade unions may not engage in a picket unless there is agreement on picketing rules. Such agreement can take the form of a collective agreement or the parties can engage in conciliation proceedings before the CCMA with a view to reaching an agreement on picketing. Alternatively, the CCMA can determine picketing rules to be followed by the parties.

The regulations include a set of “default picketing rules” which cover various issues relating to a specific picket including practical details, location, control, employer conduct, dispute resolution and police involvement. These rules will apply in the absence of a collective agreement (which covers picketing) or if the parties fail to reach agreement on picketing rules at the CCMA.

The revised picketing regulations have not yet been released by the Minister of Labour. However, this will not delay the promulgation of the LRAA.

Labour Laws Amendment Act (LLAA)

The LLAA amends the BCEA by introducing new forms of leave into the South African labour system. Parental leave, adoption leave and commissioning parental leave is now available to employees as follows:

• an employee, who is a parent of a child, is entitled to ten consecutive days of parental leave;
• an employee, who is an adoptive parent of a child below the age of two, is entitled to:

o    adoption leave of at least ten consecutive weeks; or

o    at least ten consecutive days of parental leave.

• an employee, who is a commissioning parent in a surrogate motherhood agreement, is entitled to:

o    commissioning parental leave of ten consecutive weeks; or

o    at least ten consecutive days of parental leave.

The LRAA also provides for unemployment insurance benefits to be paid to parents who take parental leave, adoption leave and/or commissioning parental leave.

The LRAA represents a progressive step for South Africa’s labour system, particularly from the perspective of the quest to achieve gender equality in the workplace.

Next stage of legislative process

These Acts have been signed into law by the President of the Republic of South Africa. The Acts will become enforceable on the commencement dates announced in the Government Gazette.

It is anticipated that the commencement date for the Acts will be 1 January 2019.