As most employers are by now aware, in March 2012, the Minister of Labour published proposed amendments to the Labour Relations Act (LRA) and the Basic Conditions of Employment Act (BCEA) which introduce some very fundamental changes to employment laws and which will have far reaching implications for employees and employers alike, especially with regard to the practice of labour broking. 
Sean Snyman, litigation director for LabourNet, South Africa’s largest independent provider of human capital solutions, has provided some insight and commentary on these amendments and how they will affect employees, employers, labour brokers as well as the economy as a whole.
The first amendment to be considered relates to the striking of employees whereby trade union members must now first hold a ballot of all its members in good standing. A protected (legal) strike can now only take place once the majority of those members vote in favour of the strike.
The new legislation will also make it possible to sue striking employees for damages caused as a result of breaking set picketing agreements or rules which can be enforced or amended as necessary by the Labour Court.
The Labour Court can even stop the strike itself in such a case. This change aims to prevent militant minority groups from causing a strike using violence or intimidation which is most often the case.
The new amendments also aim to regulate employment in such cases as sham employment, whereby a “true employer”, or a company who uses third parties or other persons to employ staff in their stead to avoid legal provisions, can now be held jointly and severally liable in labour law cases.
Changes related to employment conditions state that employers can no longer use the retrenchment provisions in the LRA to give employees the choice of either agreeing to the change or being retrenched and replaced. This poses a major predicament to employers as it removes a very critical right of employers and completely prejudices flexibility in employment conditions which could result in a rise in unemployment.
It has also been proposed that employees earning in excess of a certain threshold (suggested at R1-million per annum) will now be excluded from the normal unfair dismissal provisions and protection of the LRA, meaning that they will no longer be able to sue for unfair dismissal, except in terms of special circumstances referred to as “automatically unfair dismissals”.
Also regulated in the proposed amendments is the issue of fixed term contract employees. A fixed term contract can no longer exceed six months unless the nature of the work can be proved to be of a limited or definite duration and the employer can demonstrate a “justifiable reason” for fixing the term of the contract.
Should the fixed term contract period exceed six months, with the services of the employee still required, and no justifiable reason being shown, the employment will then be considered permanent.
The fixed term contract provisions, however, go even further in terms of an amendment that provides that if the employee is not offered a permanent position upon the expiry of the fixed term contract, this in itself is considered a dismissal of an employee and such an employee can now claim against the employer for unfair dismissal.
Lastly, the amendments make significant changes to the issue of labour brokers, an issue that has sparked extensive controversial debate in the industry. The amendments greatly limit the practice of labour broking in that the client of the labour broker can essentially only use their services for six months before itself becoming the actual employer of the employee provided by the labour broker.
This means that, if a client still requires the work to be done by an employee of the labour broker after a period of six months, the client faces the choice of either becoming the employer of the employee and provide them with the same benefits and conditions enjoyed by their permanent staff complement, or terminate the labour broker contract and be faced with an unfair dismissal claim by the employees of the labour broker.
As an industry that is imperative to the creation and retention of employment and thereby sustaining the economy, this amendment would have a detrimental impact on businesses and the industry is therefore calling to government for a different approach in dealing with these issues.
“Labour broking plays a critical role in our economy and it is an industry issue that cannot be ignored. Proper regulation would ensure fair play for the employee, the labour broker and the client. Government should be addressing the issue of regulation rather than targeting the industry,” concludes Snyman.