Return to ContentsDEPARTMENT OF LABOUR
MINIMUM STANDARDS DIRECTORATE POLICY PROPOSALS FOR A NEW EMPLOYMENT STANDARDS STATUTE GREEN PAPER
13 FEBRUARY 1996
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CHAPTER A: INTRODUCTION
CHAPTER B: SCOPE OF THE NEW LEGISLATION
CHAPTER C: NON-STANDARD EMPLOYMENT
CHAPTER D: VARIATION OF EMPLOYMENT STANDARDS
CHAPTER E: EMPLOYMENT STANDARDS COMMISSION
CHAPTER F: WORKING TIME
CHAPTER G: MATERNITY LEAVE AND FAMILY RESPONSIBILITY
CHAPTER H: CHILD LABOUR
CHAPTER I: THE INDIVIDUAL EMPLOYMENT RELATIONSHIP
CHAPTER J: ENFORCEMENT
CHAPTER K: ADMINISTRATIVE OBLIGATIONS
ANNEXURE: HOW LONG DO SOUTH AFRICANS WORK?
The publication of this Green Paper is the first step taken by the Department of Labour in developing new legislation to regulate minimum employment standards in South Africa. The Department believes that the Basic Conditions of Employment Act 3 of 1983 (BCEA) and the Wage Act 5 of 1957 should be revised and replaced by a single law regulating statutory employment standards. This is needed to meet the country's social, political and economic goals as reflected in the Reconstruction and Development Programme (RDP) and adopted by the Government of National Unity.
The purpose of the Green Paper is to promote a debate on the development of the law. It contains proposals and options for discussion. It also briefly describes important aspects of these Acts for people who may not be familiar with their contents.
The Green Paper has been prepared by the Directorate: Minimum Standards of the Department of Labour which is responsible for enforcing the BCEA and the Wage Act. It does not represent an official government view. It has not been endorsed by the Cabinet. It awaits the outcome on certain issues of the Report of the Comprehensive Labour Market Commission. The Green Paper will be submitted to the social partners at the National Economic Development and Labour Advisory Council (NEDLAC) for consideration. It is published to obtain public comment and will be circulated to other government agencies to obtain their views.
The Green Paper concentrates on the principles that will form the basis for the development of the new legislation. It draws the attention of the public and the social partners to aspects of the existing laws that often do not receive adequate attention.
Once the initial negotiations at NEDLAC are concluded, and the public comment has been received and analysed, a draft Employment Standards Bill will be prepared and presented for consideration to the social partners at NEDLAC. It will then be tabled in Parliament.
This chapter looks at the laws that now regulate minimum standards and the problems with those laws. It then proposes themes for the development of new legislation.
The BCEA and the Wage Act set minimum employment standards for the majority of employees in South Africa. They are therefore the formal basis of the employment conditions of millions of South Africans employed in the private sector. The BCEA contains a "floor" of minimum rights for employees in the private sector. As Table 1 illustrates these rights apply to more than four million employees. The BCEA covers matters such as working time, overtime and overtime pay, annual leave, sick pay and maternity leave. It does not set minimum wages. The Act does not apply to employers and employees in sectors of the economy with wage-regulating measures (industrial council (bargaining council) agreements, wage determinations and labour orders). It covers all other employees, although some employees, such as managers and senior personnel, are excluded from some of its provisions.
The Wage Act established the Wage Board. The Board has the power to investigate standards of employment in sectors of the economy without industrial councils and make recommendations to the Minister to make wage determinations. These may contain minimum wages and other conditions of employment. The Wage Act still does not apply to farmworkers and domestic workers.
TABLE 1 - Approximate figures to show number of employees covered
| TOTAL WORKFORCE (PRIVATE SECTOR) | 6,300,000 |
|---|---|
| Employees covered by the BCEA | 4,600,000 |
| Employees covered by wage determinations | 730,000 |
| Employees covered by labour orders | 120,000 |
| Employees covered by the industrial council agreements | 850,000 |
| Domestic workers | 850,000 |
| Farmworkers | 950,000 |
The RDP White Paper states that "an active labour market policy must be geared towards maximising quality employment and minimising unemployment and underemployment, and while doing so improve efficiency, equity, growth and social justice" (paragraph 3.11.1,). Employment standards legislation is thus is an integral part of such a labour market policy.
Current employment standards and the development of new standards must be within the context of the economic, social and political goals of the Government of National Unity. These include:
The revision of employment standards is part of a broad developmental strategy in line with these goals. The Comprehensive Labour Market Commission, appointed by the President, has been investigating the employment related aspects of the RDP and will be reporting in June this year. In 1994, the Ministry of Labour published a five year plan. In addition, the proposals in this Green Paper need to be seen in the context of other reforms proposed by the Ministry of Labour's 1994 Five Year Plan. Employment Equity legislation is also planned for this year, while 1997 should see the revision of the Department's legislation in the area of human resources. Amendments have been proposed to the Insolvency Act to strengthen the claims of workers in the event of their employer's insolvency.
The success of aspects of the proposed legislation depend on other areas of social reform. For example, the provisions concerning sick pay will depend on reforms to the health system. The strategies to regulate child labour depend on the reconstruction of our education system. The proposals for improving the enforcement of employment standards are paralleled in the draft Mine Health and Safety Bill prepared by the Department of Mineral and Energy Affairs and mining unions and employers. The observance by small employers of employment standards is linked with the development of an enabling environment for emerging and expanding SMME's as proposed in the National Small Business Enabling Act.
The BCEA and the Wage Act do not meet the requirements of the country's new economic, social and political goals.
The BCEA was enacted in 1983. It merged the minimum conditions of employment in the Shops and Offices Act and the Factories Act. Many of the provisions in the BCEA have their origins in legislation introduced in the 1920s to 1940s. These reflect a rigid and outdated approach to the regulation of working hours and other conditions of employment.
Many workers are excluded from the scope of basic rights and work without legal protection. Others have very limited protection or have minimum standards that are harsh or excessive. Furthermore, the systems for enforcing rights and encouraging compliance with Acts' standards have become ineffective. The law does not protect the vulnerable and the unorganised. Many of the standards are also rigid and restrict the productive arrangement of work and working time which hampers productivity and efficiency. The more detailed reasons why a new law is required to give effect to comprehensive labour market policies are:
The new legislation must address both the new standards and the procedures and institutions to make the standards effective.
This Green Paper proposes a legislative model of "regulated flexibility". This is a policy approach that aims to balance the protection of minimum standards and the requirements of labour market flexibility.
"Regulated flexibility" has two main aspects:
The new legislation must provide for the variation of employment standards through collective bargaining, sectoral determination for unorganised sectors, administrative variation and individual contracts of employment.
In the remainder of this introduction we look at some of the principal aspects of the proposed new legislation:
5.1 Setting employment standards
The Green Paper makes proposals to develop a set of employment standards appropriate for current employment conditions. These are:
5.2 Allow greater labour market flexibility
The new legislation should:
5.3 Promote collective bargaining
The new legislation will promote the role of collective bargaining as a means of varying employment standards. In particular, the proposals stress the role of collective bargaining in introducing flexible working arrangements.
5.4 Support employment creation
"Employment creation is at the heart of efforts aimed at creating a democratic and prosperous society" (Ministry of Labour's programme of action 1994 to 1998 at page 3). The proposals in the Green Paper are compatible with employment creation and seek to avoid any consequence that may destroy jobs.
5.5 Encourage compliance with employment standards
Effective measures for encouraging compliance with employment standards need to be developed. It is proposed that the current use of criminal sanctions as the major means of enforcement be replaced by a range of mechanisms and incentives for compliance with employment standards.
5.6 Promote a healthy work environment
A central purpose of labour law is to promote a healthy work environment and the arrangement of working time is a crucial aspect of this. The new legislation should promote an approach which minimises the potential negative impact of the arrangement of working time on employees' health and safety and on the public. Important examples are the regulation of night work and work in sectors which affect the safety of the public.
5.7 Reduce administrative burdens
It is important to reduce the administrative burdens placed by current labour laws upon employers. Proposals are made to rationalise and simplify administrative obligations upon employers.
5.8 Establish a clear set of rights
The new employment standards legislation will be drafted in plain language and will aim to include a range of easily understood guides and schedules to assist employees and employers to understand the law. Provision is made for the drafting of Codes of Good Practice.
5.9 Discrimination against women
South Africa has recently ratified the "Convention on the Elimination of all Forms of Discrimination Against Women" of 1979. The new legislation gives effects to obligations that affect employment standards.
5.10 International standards
The BCEA and the Wage Act do not comply with many international standards reflected in International Labour Organisation Conventions. These Conventions are indications of what government, employers and trade unions consider appropriate minimum international norms and standards. The proposals for new legislation are guided by these standards where they are appropriate for South Africa.
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This chapter lists the categories of employees who are not covered by the BCEA and Wage Act and examines whether they should be covered by the new legislation.
Problem statement
The RDP calls for "equal rights for all workers, embodied in a single set of labour statutes". (paragraph 4.8.2)
Significant groups of employees (eg state employees) are excluded from the BCEA. The Constitution states all workers are entitled to fair labour practices. Farmworkers and domestic workers are not covered by the Wage Act.
Discussion
The LRA of 1995 will be the first labour relations law to apply to both the public and private sector. It covers all employees except members of the security forces and intelligence services. The harmonisation of aspects of the law of collective bargaining, dispute resolution and unfair dismissal is one of the most significant reforms introduced by the LRA of 1995. The provisions concerning unfair dismissal and the residual unfair labour practice are to be moved to the proposed employment standards legislation.
State employees. The most significant exclusion from both the BCEA and the Wage Act is that of employees of the state (both national and provincial) and employees of state-funded educational institutions. The law of unfair dismissal and the residual unfair labour practice which will apply to these employees is to be transferred from the new LRA to the new employment standards legislation. The extent to which the remainder of the proposed new legislation should similarly include the public and private sectors requires careful consideration.
The arguments in favour of this approach include the benefits of standardisation and consistency. Increasingly, the distinction between the private sector and public service is becoming blurred. Internationally, many public administrations have used private sector approaches to improve efficiency. This has led to corresponding changes in employment standards.
The employment standards legislation prescribes substantive minimum conditions of employment. The sources of substantive conditions of employment in the public service are found in the Public Service Act and the legislation regulating the police and the educational sector, the various staff codes and bargaining council agreements (under the new LRA). In sectors in which bargaining councils are established these agreements will take precedence over the proposed legislation. The direct effect of inclusion of the public service under the new law will be that many of its provisions will not apply to the public service.
Farmworkers and domestic workers. Farmworkers and domestic workers remain excluded from the Wage Act. These employees require the protection of all aspects of new employment standards legislation.
Parastatal and statutory bodies. The continued total exclusion of a variety of parastatal organisations, marketing control boards and state-aided welfare organisation, children's welfare institutions and cultural institutions established under particular enabling legislation is no longer appropriate.
Temporary employees employed for agricultural and industrial shows. Temporary employees employed for agricultural, industrial or similar shows are excluded. Exclusion is not appropriate. Any need to vary employment standards for the duration of a show should be regulated by variation.
Employees on vessels at sea covered by the Merchant Shipping Act 57 of 1951. It may be appropriate for the full extent of this exclusion to be reviewed and appropriate conditions for this sector (or parts of this sector) to be regulated by a proposed Sectoral Employment Standard (wage determination).
Trainees and university students. Employees in training whose conditions of employment are regulated by conditions of apprenticeship under the Manpower Training Act 56 of 1981 are excluded from the operation of the BCEA to the extent that their conditions of employment are regulated by that Act. This approach should continue. If specific employment standards are developed for trainees under legislation regulating human resources development and training, those standards should take precedence on the matters that they regulate.
University students performing work required for their degrees should continue to be exempt from the BCEA.
Voluntary charity workers. The exclusion of voluntary workers should continue as these employees do not require the protection of employment standards.
Partial exclusions. The BCEA applies in a limited fashion to several significant categories of employees:
The partial exclusion of sales personnel and travellers requires consideration. The continued exclusion of high-paid employees should continue. The Minister should exercise these powers on the advice of the Employment Standards Commission.
Proposal
The legislation should cover all employees except:
The Minister of Labour should have the power, in consultation with the relevant Minister, to exclude the application of any provision of the Act to employees of the state, the South African Police Services and employees of educational institutions.
The Minister should have the power to exclude the application of any provision of the Act to employees earning above a defined level of earnings.
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This chapter looks at the need for the new legislation to protect vulnerable employees in non-standard employment.
The current labour market has many forms of employment relationships that differ from full-time employment. These include part-time employees, temporary employees, employees supplied by employment agencies, casual employees, home workers and workers engaged under a range of contracting relationships. They are usually described as non-standard or atypical employees.
Most of these employees are particularly vulnerable to exploitation because they are unskilled or work in sectors with little or no trade union organisation or little or no coverage by collective bargaining. A high proportion are women. Frequently, they have less favourable terms of employment than other employees performing the same work and have less security of employment. Often they do not receive "social wage" benefits such as medical aid or pension or provident funds.
These employees therefore depend upon statutory employment standards for basic working conditions. Most have, in theory, the protection of current legislation, but in practice the circumstances of their employment make the enforcement of rights extremely difficult. Others are excluded and consideration must be given to their inclusion. This section identifies the main categories of non-standard employment and makes proposals for greater protection.
The proposals must be viewed in the context of the changes introduced by the LRA of 1995 which will significantly improve the employment security of these employees. This must also be seen in the context of the proposals to achieve greater compliance with employment standards set out in Chapter I.
Problem statement
Part-time employees are inadequately protected by the BCEA and the Wage Act.
Discussion
Part-time employees are employees who regularly work less than the ordinary hours of work in the sector in which they are employed. While there appears to be relatively low levels of part-time employment (approximately 2% of the workforce) in South Africa, most part-time employees are women [October 1994 Household Survey].
The BCEA incorrectly uses the term "casual employees" to describe part-time employees. It classifies employees who work for an employer on three or less days a week as "casual employees". The BCEA denies them the right to paid leave, paid sick pay and notice of termination. A 1996 ILO study reveals that approximately half of part-time employees in the manufacturing sector do not receive paid leave or paid sick leave. (ILO Country Review).
The BCEA defines domestic workers who work for an employer for three days or less in a week as "regular day workers". They receive all the protections in the BCEA on a proportional basis, except the right to notice of termination. This new approach was necessary because many domestic workers work part-time for several employers. This more inclusive approach suggests the direction for future reforms.
The basic norm should be that all employees, including part-time employees, should be protected by employment standards. Where appropriate, these employees should receive benefits on a proportional basis.
Employees who enter employment on a part-time basis and who remain in regular employment should acquire the right to fill appropriate vacancies that arise in the full-time work-force. Provisions of this type encourage part-time employment as a "bridge" into permanent full-time employment.
Proposals
Part-time employees should be entitled to all protections in the Act, where appropriate on a proportional basis.
A part-time employee who has been employed for two years or longer is entitled to be considered in preference to any person not in employment for a vacancy for which the employee is adequately qualified and has sufficient experience.
Problem statement
Many employees in regular employment are classified by their employers as temporary employees although they are in ongoing employment.
Discussion
The practice of incorrectly classifying employees as "temporary" is used by some employers to pay them lower benefits than other employees performing similar tasks. The unfair dismissal provisions and the residual unfair labour practice will offer protection against this type of abuse.
Problem Statement
Employers who engage contractors have no liability for violation of employment standards by the contractors. Certain contractors are able to evade their obligations in terms of labour legislation.
Discussion
Employers are increasingly using contractors and sub-contractors to supply goods or services. There is significant use of contractors in many sectors of the economy, especially the mining industry. Considerable use is made of contractors to perform tasks formerly performed by employees.
Three parties are involved in a contracting relationship: the contractor, its employees and the user (the business that engages the contractor). The terms "contractor" and "sub-contractor" are sometimes used interchangeably and usage varies from sector to sector. (In this discussion the term "contractor" is used to cover both categories.)
The LRA of 1995 protects employees engaged by temporary employment services by imposing joint and several liability for violation of employment standards on both the employment service and the client to whom the employees are supplied. (This means that both parties are liable in the event of a violation of labour legislation.) This approach should be adopted in the proposed legislation to protect employees of certain types of contractors.
Labour legislation commonly distinguishes contractors who supply goods or services from contractors who supply labour. The potential for abuse in labour contracting is recognised internationally; several countries prohibit labour contracting or require authorisation. To the extent that labour contractors fall outside the definition of a temporary employment service, the new legislation should impose joint and several liability.
Many contracts for services are in effect contracts for labour. This is particularly true when employees are engaged through a cascading series of contracting relationships, for example, in the construction industry or where the contractor has minimal infrastructure as in the security industry. These contractors sometimes avoid their obligations by simply changing their identity or location. It is therefore proposed that the term labour contractors should include contractors who, while supplying a service:
Much contracting work is performed in respect of work formerly performed by the user's employees. This is very controversial because these arrangements are often preceded by retrenchments. It also leads to situations in which employees performing similar or the same work may receive different benefits. For this reason, many countries have sought to regulate this type of contracting by placing joint and several liability on users where the contractor's employees are performing work that forms a part of the employer's principal or core business or by requiring equality of treatment. The regulation of this form of contracting requires careful consideration.
Proposal
An employer who engages a labour only contractor is jointly and severally liable if the contractor violates any employment standard.
Problem statement
Some workers are excluded from employment standards because they are not classified as "employees".
Discussion
Labour law traditionally distinguishes employees (who enter into a contract of service with their employer) from independent contractors. The South African courts look at the contract as a whole to determine whether a person is an "employee" or an "independent contractor". This distinction excludes "classic" independent contractors (such as a plumber hired to perform a particular task) from the ambit of labour legislation.
The development of new working arrangements has led to an increasing number of workers being excluded from the protection of labour legislation because of the terms of their contract which do not meet the traditional employment test. Sectors where this is present include home working, transport and agriculture. These workers are potentially subject to extremely exploitative working conditions and are often referred to as "dependent contractors".
Certain countries extend labour protection to "dependent contractors". It is proposed that this should be done in South Africa by empowering the Employment Standards Commission to recommend to the Minister to extend particular sectoral employment standards to "dependent contractors".
Proposal
The Employment Standards Commission should have the power to recommend the extension of employment standards to workers who fall outside the formal definition of an "employee" but who are engaged in a dependent contracting relationship.
Problem statement
Many vulnerable workers are paid on a piece rate basis. There is no general protection against the abuses associated with piece-rate work.
Discussion
There is no general protection of employees engaged on a piece-rate basis. The BCEA provides some protection for piece workers in agriculture (s.19(3)); a number of wage determinations and industrial council agreements either prohibit payment other than for time worked, or prescribe specific minimum payments for time worked by employees doing piece work, with the piece work payments being treated as productivity bonuses. Task-based work has been used on labour-intensive job creation schemes in the civil engineering industry.
Payment of blanket piece work rates often undermines the provisions on working hours effectively compelling employees to work excessive hours. It is suggested that the provisions applicable in certain wage determinations and the BCEA approach regarding farmworkers be made generally applicable. Consideration must be given to the inclusion of appropriate general protections for piece-rate workers.
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Employment standards legislation must provide for variation from the statutory standards in certain circumstances. Under the existing law variation from employment standards is permitted by an administrative procedure for exemption or by the replacement of the standards by those contained in wage regulating measures. Wage regulating measures include wage determinations, industrial council agreements, labour orders and conditions of apprenticeship. These methods of variation have been criticised for their rigidity and lack of responsiveness to the needs of the modern enterprise in an increasingly global economy.
Any new legislation must seek to balance the demands of international competitiveness and the protection of basic rights of workers in order to give effect to the goals and principles of the RDP. These include high productivity, improved efficiency, equity and social justice (paragraph 3.1.1 of the White Paper) and the promotion of collective bargaining at industrial and workplace levels (paragraphs 3.11.1 and 3.11.13 of the White Paper). New legislation must recognise that South Africa's return to the international economy demands that enterprises compete with countries whose employment standards and social costs of production vary considerably. It must therefore avoid the imposition of legal rigidities in the labour market, provide greater flexibility and introduce more responsive mechanisms for variation from statutory standards. The new law envisages four methods to give effect to this idea of "regulated flexibility":
Collective bargaining is the preferred method of regulating the labour market. One of the purposes of any employment standards legislation must be to encourage collective bargaining. It can do this by permitting collective bargaining to vary basic employment standards by collective agreement. It can promote collective bargaining in workplaces where there are representative trade unions by requiring agreement as a necessary condition for administrative exemption or ratification.
However there are limitations that should be placed on the outcomes of collective bargaining to ensure that the broad policy goals of the statute are not undermined.
1.1 Fundamental rights
Collective agreements should not be able to vary - to the detriment of employees - fundamental rights and protections. The precise ambit of the fundamental rights that merit this form of protection requires debate. The question for debate is which rights are so fundamental that the state must guarantee them to all employees. The Constitution and the state's public law obligations may provide the starting point to this enquiry. The following rights and standards may constitute the core of this category:
1.2 Variations not against the public interest
The second reason for limiting collective bargaining is the effect that a variation may have on third parties. For instance, the right to sick pay illustrates an area of potential controversy. Should a bargaining council be able to strike an agreement in terms of which employees do not have the right to paid sick leave? This may represent trade-off for another benefit such as a higher wage increases. But this will have adverse social costs. Employees working while they are sick results in a transfer of costs from the enterprise to the health system. The Australian Industrial Relations Commission ruled that an agreement of this kind was not in the public interest.
The approach to this category of rights and standards should be to permit variation by collective bargaining subject to exemption or ratification. The new legislation ought to provide a fast-track procedure for exemptions based on collective agreements or provide for the ratification of collective agreements that vary rights and standards in this category by the Employment Standards Commission. Consideration must be given in the debate to what the test for ratification or exemption should be. The tests that are generally employed are whether or not the variations from the standards are: (a) in the "public interest"; or (b) "on the whole not less favourable". The rights and protections that may fall into this class are:
1.3 Variation within statutory limits
The new legislation should also specify the instances in which collective agreements are able to vary employment standards within defined limits but without exemption or ratification. This would include the capacity to make arrangements to promote flexible working patterns. Proposals in this regard are included in this Green Paper. This approach has been adopted in respect of the following:
It is necessary to distinguish between agreements concluded by the parties to bargaining councils and other collective agreements. The LRA of 1995 significantly alters the inter-play between the bargaining council agreements and minimum standards. Under the Labour Relations Act 28 of 1956 an agreement concluded by the parties to an industrial council acquired the force of subordinate legislation once promulgated by the Minister of Labour. The promulgated agreement, like any other wage-regulating measure, took precedence over the provisions of the BCEA by virtue of section 1(3) of the BCEA. The Minister's right to exercise a discretion as to whether or not to promulgate an individual agreement allowed the Minister to examine the agreement concluded by the parties to a council in the light of the BCEA and to determine whether or not the conditions of employment were acceptable.
In terms of the LRA, all collective agreements, including those concluded at bargaining councils, acquire legal force in terms of section 23 of the Act. Agreements are no longer transformed into subordinate legislation. The role of the Minister is confined to the extension of an agreement to non-parties within the registered scope of the council (s. 32). The Minister does not consider the substantive conditions of employment in deciding on an extension other than whether or not they discriminate against non-parties.
The LRA of 1956 accords no special status to collective agreements that are not promulgated in the Government Gazette. Their provisions cannot deviate from the Basic Conditions of Employment Act unless an administrative exemption is obtained.
The new legislation should maintain the distinction that has been traditionally drawn between bargaining council agreements and other collective agreements. There are issues on which it is appropriate to permit bargaining councils to vary employment standards but on which it may not be appropriate to permit individual employers and trade unions to do so. For instance, it is not consistent with the purpose of the legislation for individual employers to seek to compete with each other through extending the ordinary working day or reducing the overtime rate. Bargaining council agreements however, should be entitled to do just this. Not only because it sets a floor for competition, but also because it is in keeping with the goal of the Labour Relations Act which has as one of its primary objects the promotion of collective bargaining at sectoral level. Accordingly in the debate on what the statutory limits ought to be in respect of this category of standards, consideration ought to be given to the expanded horizons that ought to be accorded to bargaining councils.
1.4 Variation without limits
The new legislation should permit collective bargaining agreements to vary employment standards without a requirement for administrative exemption or ratification. Further deliberation is needed on the kind of matters that ought to be included under this head. In respect of working time, the issues will need to be the subject of the consultations on a national strategy referred to in the following Chapter.
Proposals
A collective agreement may automatically vary any employment standard except:
A collective agreement may vary any employment standard to the extent permitted by legislation.
Problem statement
The Wage Board has tended to reproduce the standards in the BCEA and has not made full use of its power to set sector specific standards.
Discussion
Under existing law, the Wage Board is entitled to make recommendations on minimum wages and employment standards in a sector. In practice the wage board reproduced the provisions of the BCEA and very seldom made recommendations to vary employment standards to fit the particular requirements of the sector. The Department envisages that a restructured Wage Board (Employment Standards Commission) will provide a mechanism to vary employment standards to suit the needs of particular sectors.
In 1993 and 1994 the BCEA was extended to cover farm and domestic workers. A large number of provisions that apply specifically to these sectors were included into the Act. The provisions applicable to agriculture were agreed between agricultural employers organisations and trade unions representing farmworkers as a part of the process of extending labour legislation to the agricultural sector. The provisions applicable to domestic workers were the result of recommendations by the National Manpower Commission.
These sectoral provisions have increased the complexity of the legislation. The basic conditions applicable to agriculture are found in both the BCEA and the Agricultural Labour Act 147 of 1993. The incorporation of sector-specific provisions in the body of the Act was required because these sectors are not covered by the Wage Act. The jurisdiction of the Wage Board should be extended to these two sectors. Existing provisions in the BCEA applicable to farmworkers and domestic workers should remain in force until superseded by a bargaining council agreement or wage determination binding on employers and employees in that sector. These provisions would be listed in a transitional schedule.
Proposal
The existing provisions applicable to farmworkers and domestic workers in the BCEA should be included in transitional provisions pending an investigation by the Employment Standards Commission on the promulgation of a Sectoral Employment Standard for each of the sectors.
Problem statement
The exemption procedure is bureaucratic and time consuming.
Discussion
The Minister can grant an exemption in respect of any aspect of the BCEA. Exemptions may be of general application or in respect of an individual employer or employee. Authorisation from an inspector is required to work additional overtime and for work on Sundays in factories and shops.
New legislation should use the term 'variation' instead of 'exemption'. This emphasises that employers are not being relieved of the obligation to comply with a labour standard but being required to meet a different standard. This will bring the statutory formulation in line with practice because most exemptions are granted on specified conditions.
The Act does not lay down any procedure for the making and consideration of applications for an exemption although the general rules of administrative law apply. This requires allowing interested parties the opportunity to make representations before any decision is made. The power to permit variations should be conferred upon the Minister. The Minister would then be able to delegate the power to the appropriate level within the Department.
The Minister should be able to seek the advice of the Wage Board on any application for a variation. The Minister should be required to consult with relevant health and safety authorities on any application for a variation that may have an impact upon occupational health and safety.
The practice has developed that employee or trade union consent is an important consideration in applications for exemptions. The variation process should respect the integrity of the collective bargaining process. If a labour standard is the subject of negotiation between an employer and trade union, no exemption should be granted unless the trade union consents. If there is a representative trade union in the workplace, variation should be granted only in there is a collective agreement or the trade union consents to the variation.
Provision should be made for an expeditious procedure in the application and the grant of exemptions. This will require decentralised decision making and a set of guidelines to ensure consistency.
Proposal
If there is a representative trade union in the workplace, variation by administrative procedure should not be permitted unless there is a collective agreement or the trade union consents.
The administrative procedures must be expeditious.
Problem statement
No provision was made for variation by individual contract of employment without an exemption.
Discussion
The proposed legislation should also define the matters than can be regulated by individual agreement. This would be more limited than collective agreements. This would not permit employers to deal with individual employees on these topics in contravention of the terms of a collective agreement. Issues that could be varied by individual agreement include:
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Problem statement
The Wage Board has not played an effective role in the development and enforcement of employment standards in unorganised sectors.
Discussion
In recent years there has been a considerable decline in the significance of the Wage Board. This trend is evident in the number of wage determinations which have declined from 75 (1973) to 19 (1995). The current 19 wage determinations cover some 90,000 employers and 730,000 employees. This figure is misleading as the bulk of employees falling under the Wage Act are covered by a single determination. Wage Determination 455 for the Commercial Distributive Trade covers 80,000 employers and almost 500,000 employees.
The decline in the number of wage determinations is the result of a deliberate policy of the previous administration to run-down the Wage Board. Wage determinations currently cover only a small proportion of unorganised employers. A further factor that has contributed to the decline in significance of the Wage Board has been the failure in recent years to revise minimum wages regularly. In contrast to industrial council agreements, minimum wages have often remain static for a two year period without any provision for escalation being made in the determination.
An effective Wage Board remains an essential part of government policy to develop and enforce effective employment standards. Its capacity to make a significant contribution to the development of equitable employment standards is revealed by our recent history - the emerging trade union movement of the 1970s made effective use of the Wage Board to press its claims for improved working conditions for black workers. Wage Board hearings became focal points for the growth of trade unions.
The proposals in this section are aimed at revitalising the institution to play an active role in the development of a coherent policy on employment standards and to provide a mechanism for sectoral variation where the standards are inappropriate. The basis for this is laid by the inclusion of a reconstituted Wage Board in a single statute regulating employment standards. The extension of the Wage Board's role to the full range of decisions that involve the potential variation of employment standards will promote the development of an integrated policy. The Board should be able to advise the Minister on any matter impacting upon employment standards as well as the impact of standards upon employment creation.
Wage determinations may include minimum wages as well as conditions of employment. Current wage determinations set minimum wages and repeat with little variation the provisions of the BCEA. The most significant areas of variation have been spread-over, annual leave, and in recent wage determinations, a short period of compassionate leave. The effectiveness of the Board would be increased if determinations were limited to minimum wages and sector-specific provisions. Where a sector-specific standard is not considered appropriate the statutory employment standards should continue to apply to the sector.
The rules regulating the Wage Board's conduct of investigations and hearings should be sufficiently flexible to permit it to perform its functions in a manner appropriate to the sector concerned. In sectors where there are employer and employee organisations, the Wage Board should be able to encourage and assist the parties to develop sectoral employment standards through conciliation and negotiation. The determination may then amount to a ratification of a set of standards that have the support of the parties in the sector - a procedure that is now adopted in respect of labour Orders made in terms of the Labour Relations Act, 1956. This will contribute to higher levels of compliance with determinations.
The Wage Board should remain an advisory body. However, the provisions regulating its relationship with the Minister should be reviewed to ensure that this process permits a public debate of differences of opinion that the determination of employment standards. At the conclusion of an investigation, the Wage Board makes a recommendation to the Minister of Labour on the proposed contents of a determination. Presently, the Minister may either make a determination in terms of this recommendation or reject it. Proposals are made to permit an exchange of views between the Minister and the Wage Board over differences regarding the levels of standards and their economic impact.
Additional changes are required as a result of the LRA of 1995. Institutional changes are required to conform with the introduction of statutory councils and the removal of the Labour Order.
The Wage Board can now make recommendations on an extensive list of conditions of employment. The list will have to be revised in line with the approach of the new legislation as well as the issues relevant to the protection of vulnerable employees. The powers of the Wage Board should be extended to include powers that have been expressly granted to statutory councils in terms of the Labour Relations Act, such as the establishment of training and education schemes and of social insurance schemes or funds such as provident and medical aid funds.
These proposals concern the revitalisation of the enabling structure in terms of which the Wage Board is established and operates. The Green Paper contains no recommendations in terms of the policies that should guide the Wage Board in the determination of minimum wage levels. These matters are currently being investigated by the Comprehensive Labour Market Commission (CLMC) which is investigating the relationship between national income determination and existing wage determination mechanisms.
Finally, it must be pointed out that the Wage Board is inappropriately named - its functions are not confined to the setting of wages. It is proposed that it be renamed the Employment Standards Commission.
Proposal
The Employment Standards Commission (Wage Board) should consist of:
The primary functions of the Employment Standards Commission are:
A Sectoral Employment Standard (wage determination):
The Employment Standards Commission must investigate conditions of employment in any sector if:
The Employment Standards Commission must:
The Minister may publish a wage determination in line with the recommendations of the Employment Standards Commission.
If the Minister does not concur with the recommendations, the Minister must given reasons.
The Minister may publish a wage determination after the Employment Standards Commission has considered and commented on the Minister's reasons.
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Many South Africans work very long hours. Information on working time is included in the Appendix. The limits on working time are rigid and require change. The goal of South Africa should be to achieve a 40 hour week for its employees. This will involve complex and difficult issues. To achieve this goal will require fundamental agreements between employers, trade unions and the government.
The length and arrangement of working time involves balancing a number of considerations:
The legal regulation of working hours requires a thorough overhaul. The weekly limits on working time are set out in Table II. Internationally the trend has been, in any review of the regulation of working time, to couple the reduction in working hours with greater flexibility in working time arrangements.
TABLE II - Ordinary weekly hours of work under the BCEA
| Day workers | 46 |
|---|---|
| Shift workers | 48 |
| Farmworkers | 48 |
| Security guards | 60 |
| Outside sales personnel | no limit |
| Shop & office employees (earning above a certain specified wage) | no limit |
| Managers and senior personnel (earning above a specified wage) | no limit |
The impetus for this has arisen on the one hand from the need of workers for better working conditions and for greater choice about their working lives, and on the other from the need of employers to adjust operating periods in line with demand in order to meet global competitive pressures. The trade off has included the introduction of more flexible arrangements such as averaging schemes, flexitime, compressed work weeks, changes in shift work systems and various patterns of part-time work.
The introduction of flexible working time in conjunction with reduced working hours can have a positive outcome for workers' health and safety. Fatigue and stress associated with long working hours has been shown to contribute to high levels of ill health. Reduced hours allow increased time for training and education, family and social responsibilities and leisure time. In some sectors, such as transport, long hours of work of workers can endanger the safety of the community. The negative effects of long working hours are exacerbated in a society such as South Africa in which many workers have to travel long distances to work. Advantages for employers are the ability to adjust operating capacity to fluctuating demands, the better utilisation of available resources and improved productivity.
It is proposed that, in line with international trends, rigidities that have restricted the arrangement of working hours should be removed from our law. However, equally importantly, employment standards legislation must ensure that working time is arranged responsibly.
The demand for shorter working time for individual employees has been described as "a constant and universal demand". This is reflected in South Africa's political history - the Freedom Charter records the right of all South Africans to a 40-hour week. The international significance of the 40-hour week and the 8-hour day are also reflected in International Labour Organisation (ILO) Conventions and Recommendations.
The implications of legislated reduced working time on employment depend on a number of factors. These relate to the structure, level of development and performance of the economy as a whole and on the particular performance of individual firms affected by such a measure. The relationship between legislated reduced working hours and employment is complex and should not be approached simplistically. There would appear to be general consensus on the social welfare merits of reduced working hours, even if there is no consensus on the employment effects.
Nevertheless, it is necessary to emphasise that this measure is not being proposed as an isolated policy, but in the context of other strategies aimed at employment creation, such as the Growth and Development Strategy currently being formulated by government and the anticipated recommendations of the Comprehensive Labour Market Commission. The manner in which any change to working hours is made must be compatible with employment creation and avoid consequences that may lead to job losses.
A reduction of working hours does not necessarily increase unit labour costs. The effect on costs will depend on whether or not the reduction of working time is accompanied by a compensatory wage increase. A compensatory wage increase may be traded off or accommodated by the phasing in of the reduction over a number of years.
A legislative reduction in working time has often acted as a trigger to management to reconsider work organisation or to introduce new and more efficient patterns of working time. Proponents of a reduction in working hours claim that the potential gains to enterprises of shorter hours is an increase in productivity. The linkage between the reduction and productivity has often provided the basis for the conclusion of agreements between business and labour.
The impact of a reduction of working hours varies between sectors and between businesses. Factors that account for this variation include:
It is evident from the above discussion that the relationship between a policy to reduce working hours over time and its effect on the economy is complex and the goal of reducing ordinary working hours to 40 hours per week is not realisable by legislation alone. What is needed is a comprehensive and integrated approach to the reduction of working hours and the introduction of more flexible working time arrangements. Any proposal to reduce working hours must:
With this in mind, the following package is proposed. As a first phase and part of the package, there should be a rationalisation of maximum working hours from 46 (or 48 for shift workers) to 45. Employees who work excessive hours should have their maximum ordinary hours reduced from 60 to 48. The rigidities imposed on daily or weekly time should be made more flexible and the restrictions on Sunday work removed. The detailed proposals concerning this first phase are dealt with in the next section.
The second and further phases cannot be achieved by legislation alone. The complex relationship between a reduction in working hours and its impact upon the economy requires thorough consultation with stakeholders and, if possible, an agreed national strategy. The elements of such a strategy should include:
2.1 Ordinary working time
Problem statement
The BCEA sets different maximum hours of work for different categories of employees. The limits on ordinary working time require reconsideration. (See Table II)
Discussion
With certain limited exceptions, the new legislation should set a single set of maximum daily and weekly hours applicable to all employees. Work performed in excess of these limits would be overtime. This limit should apply to both "day" workers and shift workers. It is suggested that there is no justification for a different limit on ordinary hours for shift workers. While the working hours of shift workers reflect a traditional 6-day week of 8 hour shifts, the practice in many agreements is to set lower ordinary working hours. This is reflected in the legislation of many countries. Many shift workers perform night work or other work involving high levels of fatigue or stress.
Special consideration needs to be given to the position of security guards. The 60-hour week is not only found in the BCEA but in wage determinations and many industrial council agreements. This is unacceptable and requires revision.
The Department proposes that the initial phase of reforming limits on working hours should be to replace the limit of 46 with 45 as the maximum permitted ordinary working hours. This is motivated by the Department's desire to reduce working hours over a period of time and to provide a simpler basis for calculating hours in the context of proposals to achieve greater flexibility. These changes are implemented as part of the objective of achieving a 40 hour week.
Two other limits should be set on daily working time. These are total working time (which includes both ordinary and overtime) and spread-over (which is the measure of time from the start to the finish of work on a day including intervals). Maximum spread-over is currently 12 hours (except for farmworkers and domestic workers).
The limit on total working time and on spread-over should be 12 hours. A lower limitation on total working time should apply to any sectors or occupations in which there is a high level of risk of accident or disease. The limit on total working hours in any such sector or occupation is 9 hours unless otherwise provided.
Proposal
2.2 Overtime
Problem statement
Many South Africans work high levels of overtime. Overtime rates are relatively low in comparison to other countries. They require consideration in the light of levels of overtime worked.
Discussion
Levels of overtime worked in certain sectors in South Africa tend to be high. (See Appendix)
The BCEA sets maximum overtime of three hours per day and ten hours per week; inspectors may authorise the working of extended overtime. This is one of the most common reasons for applications for exemption. Payment for overtime (including additional overtime) is at a time and a third. While the statute provides that overtime work is voluntary, many contracts of employment require employees to agree to work overtime when requested.
The limit of 10 hours overtime per week should be retained. However, there should be no daily limit. The amount of overtime that can be worked on any day will be regulated by the daily total limit on working time. Extended overtime should be permitted only by exemption.
Many countries set an annual limit for overtime in addition to the daily and weekly limits. Limits of 150 and 200 hours of overtime annually are common. This approach seeks to balance the short-term need for overtime with stricter limits on the regular use of lengthy periods of overtime.
Is the overtime pay regime still appropriate? The first area for examination is that of overtime payment or compensation. An examination of overtime systems elsewhere in the world indicates that an overtime rate of time-and-a-third for all overtime worked is lower than in most countries in the world. Two options for reform should be considered:
There could be more flexible approaches to the compensation of overtime. Overtime could be exchanged for additional leave or time-off. This approach again balances the short-term demands with limiting overtime over a longer period. Employees could work overtime during busy periods and in return gain longer holidays.
Proposal
The hours of work prescribed by the BCEA restrict the ability of employers and employees to make certain types of flexible working arrangements.
Discussion
One facet of the re-organisation of work has been the move towards the flexible arrangement of working time. Some flexible arrangements can operate within the limits of the current statutory framework, while the BCEA inhibits others. Two of these are discussed.
3.1 The compressed working week
The compressed working week permits employees to work extended hours in order to work the same or a similar number of hours in a shorter number of days. An employee may, for instance, work a 40-hour week consisting of four ten-hour working days.
The advantages of this system include a larger number of days off during the week, reduced transport costs, and in some cases better utilisation of equipment.
The compressed working week is not applicable to all sectors. The extended daily hours involved would be subject to any limit placed on total daily hours for any reason involving the health and safety of employees or the public.
Proposal
A collective or individual agreement may permit employees to work up to 12 hours of normal work on any day.
An employee whose hours of work are regulated by such an agreement may not work on more than 4 days per week.
3.2 Averaging of working time
Under the BCEA working hours are calculated in one week cycles. No transfer of hours is permitted from week to week other than in continuous shift operations, which can utilise three week cycles. "Averaging" permits employers and employees to calculate average working hours over a cycle of longer than one week. This allows the distribution of working time in a manner that may coincide better with the employer's demand for production than an equal spread of hours, between weeks.
Hours of work can be unequally distributed between weeks provided that the average number of hours worked within the cycle is not greater than a specified figure. If this figure is lower than the usual limits on weekly hours, this would offer employees the benefit of reduced working hours. For employers, the more efficient arrangement of working time generally results in a saving on overtime pay. This may enable employers to compensate employees for any reduction in working hours.
The new legislation should permit the introduction of averaging through collective bargaining. It should also place a limit on the weekly average hours and also limit the period over which averaging can be calculated. It is suggested that a period of four weeks as a basic rule would permit the operation of most commonly utilised shift systems and allow sufficient short-term flexibility. A longer period would require an exemption.
Proposal
A collective agreement may permit normal working hours to be calculated over a cycle of longer than one week.
An agreement may not:
Problem statement
Sunday work is restricted by both the BCEA and the Mines and Works Act
Discussion
In terms of the BCEA:
In terms of the Mines and Works Act essential maintenance work is allowed on Sundays. Additional work may be permitted by the Minister of Mineral and Energy Affairs "in the national interest".
The purpose of this legislation should be the protection of employees, not the restriction of operating time. While the restriction of Sunday work is not uncommon in the rest of the world, the continuation of these restrictions in South Africa is not justified. Extended operating times, not only in mines but in other sectors of the economy, has important employment creation potential. The requirement of permission to work on a Sunday in factories and shops in the BCEA should be repealed as should the prohibition on work in mines on a Sunday.
The removal of this prohibition from the mining industry is being negotiated by employers and trade unions in the industry. The conclusion of an agreement to give effect to this will boost employment creation and improve wages and is of great importance.
Sunday work, like night work, can have disruptive social and family consequences. It therefore remains appropriate to continue to require payment of premium rates on Sunday. To the greatest extent possible, work on Sundays should accommodate individual preferences.
The exclusion of Sunday work from the calculation of total hours (i.e.: ordinary time plus overtime) that can be worked in a week should however be removed.
Proposal
Unless agreed to in a collective or individual agreement, an employee may not work on three successive Sundays.
An employee who works on a Sunday is entitled to the greater of:
If part of a working period falls on a Sunday, all work during that period must be remunerated at Sunday rates.
Sunday work is included in the calculation of total permissible working hours.
Problem statement
Adequate rest periods are an essential aspect of the scheduling of working time. The new legislation should regulate meal intervals and daily and weekly rest periods.
5.1 Meal intervals
Under the BCEA, employees are entitled to a one hour break after five hours continuous work; this may be reduced to 30 minutes by written agreement. A minimum meal interval of 30 minutes is in line with international practice and should be retained. Meal intervals of between 30 minutes and 75 minutes are unpaid. This limit prevents longer meal intervals being used to create split shift working arrangements. Certain flexibility should be introduced to accommodate employees who do not work full days. For instance, the entitlement to a meal break should not apply to employees who work 6 hours or less per day.
The requirement that certain employees who work a 12 hour shift are paid for meal intervals (currently applicable to security guards) should be extended to all employees who work extended shifts.
Proposal
Employees must have adequate meal intervals.
Collective and individual agreements may regulate the taking of meal intervals.
In the absence of an agreement, no employee may work for longer than five hours without a meal interval of at least 30 minutes. This does not apply to employees who do not work more than 6 hours.
An employee is entitled to payment for meal intervals if the employee:
5.2 Daily rest period
The BCEA requires a daily rest period of 12 hours. This is because the maximum spread-over permitted is 12 hours. Placing a limit on the spread-over of working time achieves the same purpose as setting a minimum daily rest period. No proposal is made to depart from this approach.
Employees are entitled to a daily rest period of 12 hours
5.3 Weekly rest period
Discussion
The introduction of a 36 hour minimum weekly rest period is proposed. The rest period must include one complete day. The logic for a 36 hour period is that it consists of 24 hours plus the daily rest period of 12 hours. The weekly rest period is an important safeguard in an approach that permits the flexible arrangement of working time.
The requirement for a rest period is not a substantive change. The reason for the absence of a stipulated rest period was because of the restrictions on work on Sundays.
The principles of averaging may apply, on a limited basis, to the weekly rest period. It could be permissible to consolidate rest periods over a 14 day cycle.
Proposal
Every employee is entitled to a rest period of 36 continuous hours, including one complete day, in every week.
A collective agreement may provide that the rest period may be averaged over a cycle of up to 14 days.
Problem statement
The manner in which working time is organised impacts significantly on the health and safety of employees and the public. No legislation regulates or promotes the organisation of work for this purpose.
Discussion
The proper scheduling of working time together with factors such as engineering controls, the ergonomic design of workplaces and improved health and safety training, can make a major contribution to improving the country's unacceptably high level of occupational accidents and disease.
The following two examples serve to highlight this point: Adequate rest-breaks are one of the prime methods of reducing the risk of musculo-skeletal injuries among employees whose work involves rapid and repetitive movements. These employees include video display unit operators, assembly line workers and many types of machinists. The full extent of these injuries in South Africa is not known as adequate statistics are not collected. In industrialised countries this is the most common work-related disease. Long hours of work and payment on commission are associated with the high level of accidents in the taxi industry.
There should be a general duty on employers to take account of the potential health and safety consequences of the arrangement of working time. This is already a part of the employer's common law and statutory duties. However, its express inclusion in employment standards legislation will highlight this important but neglected aspect of employer obligations.
The general duty should be supplemented by a Code of Good Practice to guide employers, employees and trade unions. This would set out guidelines for the considerations that should be taken account of in particular forms of work. The Code of Good Practice should be published as a schedule to the legislation.
Since the regulation of work at night is perhaps the most significant health issue raised by the arrangement of working time, additional proposals are made.
Proposal
Working time must be arranged so as not to endanger the health, safety or welfare of the employee, other employees or the community.
This applies to the duration and scheduling of working time, the rotation of shifts, rest periods, and hours during which an employee works.
A Code of Good Practice on working time should be drafted.
Problem statement
Before 1983 night work by women was prohibited. There is presently no regulation of night work. Night work has been shown to have significant health consequences.
Discussion
The reason for the prohibition of night work by women was the impact of night work on family life. In addition there is extensive evidence to demonstrate that the night work has adverse health consequences for all employees. The proposals made here seek to promote a responsible and informed approach to the regulation of night work to avoid or minimise health risks. International awareness of the problems associated with night work led to the adoption of the Night Work Convention 171 of 1990.
The most common health risks associated with regular night work are:
Certain of these health problems have a direct effect on safety at work. Increased levels of fatigue among night workers lead to low levels of alertness and vigilance and a reduced ability to respond to information or signals. This has been shown to lead to a higher rate of accidents during night shifts. The effect is greater if the length of night-shifts is extended beyond eight hours or if employees perform work likely to accentuate fatigue. This has led many countries to place lower limits on the number of hours that night workers can perform. Rest periods and meal intervals are of particular importance for night workers. Additional problems faced by employees performing night work include security and the absence of adequate public transportation.
The arrangement of night work directly affects the public. Major hazard installations, such as refineries, operate 24 hour shifts and public and goods transportation services operate at night.
Night work should be defined as work performed between 23h00 and 6h00.
The effective regulation of night work requires a comprehensive package of proposals. The initial proposal is the introduction of a night shift allowance. These allowances are commonly required in the legislation of other countries. The available information indicates that most employers in South Africa making use of regular night shifts pay a night-shift allowance of between 10 and 33% of basic wages. It is proposed that the allowance should be equivalent to 20 per cent of an employee's normal pay.
Other proposals are that employees who regularly perform more night work should be informed of the possible health hazards and should be entitled to receive a free health assessment after commencing night work and subsequently. An employee who suffers from a health condition associated with the performance of night work should be entitled to be transferred to suitable day-work. Special protection should be given to pregnant employees engaged in night work.
Proposal
All employees performing work at night are entitled to receive a premium of twenty percent for work performed.
An employers who regularly engages employees in night work must take adequate steps to ensure the health of employees.
Any employee who suffers from a health condition associated with the performance of night work is entitled to be transferred without loss of benefit, if reasonably practicable, to suitable day-work.
Problem statement
Under the BCEA, special conditions apply to continuous shift work.
Discussion
As mentioned earlier it is proposed that there should not be separate limits for shift work. Consideration needs to be given to whether any special provisions have to be included in the legislation for plants that operate on a continuous shift basis. These plants operate in terms of rules issued by the Minister of Labour which vary the application of a number of provisions. These include the calculation of weekly hours, Sunday pay and meal breaks. The proposed systems of averaging would permit these plants to agree on appropriate working arrangements.
Problem statement
The general leave entitlement of two weeks is below the practice of most employers and out of line with international standards
Discussion
Although most South African employees receive three weeks annual leave or longer, surveys show that approximately five percent of weekly paid workers receive less than 3 weeks leave. (PE Corporate Services) For higher paid categories the leave entitlements are more generous. For example, more than 75 per cent of managers receive more than four weeks annual leave.
In terms of the BCEA, employees are entitled to two weeks' paid leave per year. Employees like security guards who work a 60 hour week and those whose hours of work are not restricted have the right to three weeks' leave. Wage determinations allow for three or four weeks leave. Most industrial councils set the annual entitlement at between three and four weeks.
International Labour Organisation Convention 132 of 1970 sets an international standard of three weeks (21 days). Most countries guarantee between two and six weeks annual leave to employees annually with the majority being at three weeks or higher.
The increase of the minimum entitlement to 3 weeks will bring South African legislation in line with international standards and local practice. As this is a widespread practice, it is not likely to have major cost implications for employers.
The legislation of many other countries gives additional leave to employees with longer service. This can be achieved through collective and individual agreements.
A number of changes should be introduced to simplify the calculation of leave and remove certain discriminatory provisions from the right to accrued leave.
Proposal
Every employee is entitled to three weeks' paid annual leave.
An employee's right to take paid leave accrues at the rate of one week's leave for every four months' employment.
On termination of employment, an employee is entitled to be paid for leave that has accrued but not been taken.
An employee is entitled to:
An employee may not receive payment as an alternative to taking the prescribed amount of leave.
Problem statement
The Public Holidays Act (1994) extends the rules for remuneration for public holidays in the BCEA to all employees. No provision exists in the Public Holidays Act for exemptions or for variation by agreement (although public holidays can be exchanged for other days).
Discussion
The Public Holidays Act of 1994 introduced a system for the payment of public holidays that applies equally to all employees. The employment standards legislation should regulate payment for public holidays for all employees. The Public Holidays Act should be confined to the proclamation of holidays.
In terms of the BCEA, employees are entitled to normal pay for public holidays or, if they work, double pay (subject to a minimum payment of one day's wages) or time-and-a-third plus a day off in the following week. This approach should be retained except the alternative of time-and-a-third plus a day off on pay should be omitted because the Public Holidays Act permits the exchange of a public holiday for another day.
Proposal
An employee is entitled to be paid for every public holiday.
An employee who works on a public holiday is entitled to the greater of:
Problem statement
The right to paid sick leave should be retained at current levels.
Discussion
The new legislation should set the floor for sick leave provisions while allowing for greater flexibility to bargain collectively on the administration of sick leave. No proposal is made to alter the levels of sick pay. However, the acquisition of sick-pay in the first year of employment should be less restrictive. It is proposed that the full rights to accrue sick-leave should occur after six months' employment.
The issue of proof of sickness is a controversial issue. These provisions should, on the one hand, prevent the abuse of sick leave provisions by healthy people. On the other hand, they should not result in employees having to incur disproportionate expenses or have the effect of denying employees the benefit of sick pay. Consideration should be given to whether the current approach strikes this balance.
Certain sick pay schemes have been permitted to offer benefits that are inferior to those provided by the BCEA. This is in particular true of certain industrial council schemes whose levels of sick pay are below 20% of the employee's wages. This exclusion should not be allowed to continue and these funds should be required to comply with the Act within a certain period. However, consideration should be given to proposals that may permit flexibility in sick pay where employees receive comprehensive medical benefits.
Proposal
Every employee is entitled to six weeks' paid sick leave over any three year cycle. This is calculated by multiplying the number of days that the employee works in a week by six.
During the first six months of employment, an employee is entitled to one day's sick leave for 23 days worked.
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Problem statement
The BCEA prohibits pregnant employees from working for twelve weeks. The only statutory support for women is the Unemployment Insurance Fund. Only contributors may receive these benefits.
Discussion
The BCEA prohibits work for four weeks before and eight weeks after the birth of a child. The mother may not work during this period without an exemption. This is one of the most common sources of applications for exemptions. The LRA of 1995 has for the first time provided job security for pregnant women. A dismissal in relation to pregnancy is automatically unfair.
Legislation should provide two things:
A total prohibition on work for twelve weeks can be criticised as many employees may be able to work during this period. It is suggested that the prohibition on work be shortened to six weeks after the birth of the child. At the same time, a woman may be able to return to work earlier, depending on the kind of work she does and her health. However, a relaxation of the prohibition may expose employees to pressure to return to work prematurely. Therefore, the mother should be required to get a medical certificate indicating good health to return within the six week period. The other approach would be to require an exemption which is the current position.
The proposed legislation should guarantee the employee's job during maternity leave. A number of factors determine the appropriate length of maternity. These include the employee's health and the nature of the work performed. It is suggested that the maximum period for which maternity benefits are available should be four months. There should be no qualification period to receive protection against dismissal.
Maternity pay. There is no general right to maternity pay, although the Unemployment Insurance Act makes limited provision for maternity benefits. Employees who are contributors to the fund may receive 45% of their wages for up to six months. More than 60,000 women claim maternity benefits from the Fund annually. There are a number of restrictions on this benefit:
These problems restrict the capacity of employers and employees to make suitable arrangements during maternity leave. Greater flexibility would help create a more equitable system of maternity pay. The introduction of these reforms would have financial consequences for the Fund. A Stakeholder's committee is currently considering the future direction of the Fund, including issues related to maternity benefits. The level of maternity benefits has been the subject of criticism for a considerable period of time - the Wiehahn Commission on Labour in 1981 recommended an increased to 60%.
International employment standards suggest that the responsibility for maternity pay should rest upon the state and not employers. The most common solution internationally is for maternity benefits to be paid from social security funds. However, approximately a third of countries (including a significant number in Africa) do impose a statutory obligation upon employers in respect of maternity pay. Maternity pay is a widely granted benefit in South Africa - roughly 60% of permanent female employees are entitled to. (ILO Country Review, 1996) Consideration needs to be given to the regulation of maternity pay.
Right to suitable work. Pregnancy restricts the type of work that a woman may perform. This also applies to nursing mothers. Undesirable work includes the lifting of heavy objects or standing for long periods of time and night work. A pregnant employee who performs work that may place her health at risk should be offered suitable alternative work on terms of employment that are no less favourable. This should apply during the period of pregnancy and for a period of three months after the birth of a child.
Adoption benefits. The Unemployment Insurance Act allows women who adopt children of under two years of age to take leave equivalent to maternity leave. Consideration should be given to the period during which the employment security of an adoptive parent should be guaranteed.
Proposal
An employee may not work for six weeks after the birth of a child (unless her doctor certifies that she is fit to return to work).
An employee is entitled to four months' maternity leave during which her security of employment is protected.
Maternity leave may be taken at any time in the period starting four weeks before the expected date of birth, or at an earlier date if required for the employee's health and safety.
A woman employed in night work or in work which may be harmful to her or her child is entitled to suitable alternative work without loss of benefit during pregnancy and a year after the birth of her child.
Problem statement
The BCEA does not grant employees paid paternity leave or child-care leave. Employees are required to take occasional leave (from their annual quota) or unpaid leave.
Discussion
Paternity and child-care leave are common demands in collective bargaining, but have been unsuccessfully regulated through collective bargaining.
It is proposed that the legislation should provide for a short period of paid paternity or child-care leave during the year of the birth of a child and that additional benefits should remain a matter of collective bargaining.
Proposal
Every employee with more than one year's service is entitled to three days' paid paternity or child-care leave during the year of the birth of the child.
This leave does not accrue if it is not used in any year.
An employer may require reasonable proof of paternity.
One of the challenges of removing discrimination against women is to introduce provisions that permit women to continue working careers with the greater burden of family responsibility that they assume. Two options are:
The second option should be considered.
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Section 30(1)(e) of the Constitution gives children under 18 the right "not to be subject to exploitative labour practices nor to be required or permitted to perform work which is hazardous or harmful to his or her education, health or well-being;"
Child labour in South Africa is widespread, although the precise extent is not known. An analysis of the 1994 October Household Survey indicates that over 200,000 children between 10 and 14 years are engaged in child labour. This figure is significantly higher than most previous estimates and represents 4% of all children between those ages. The preliminary research indicates that the four sectors employing most of the child workers are agriculture (21%), retail and catering (17%), manufacturing (12%) and social and personal services (7%). Fifty eight percent of child workers in commercial farming areas work 40 to 49 hours a week and 20% more than 50 hours.
It is internationally recognised that child labour should be combatted for reasons such as the following:
Eliminating child labour is a complex matter. Thousands of families presently facing poverty and unemployment depend on the income of their children. A comprehensive strategy is required to address the problem of child labour. This strategy should include compulsory and free basic education (including the necessary infrastructure such as adequate school facilities within reasonable distance), appropriate social security and welfare provisions, economic development which would increase earnings of adults to reduce the need for children to work and programmes to raise public consciousness about child labour.
The ILO's Minimum Age Convention No. 138 of 1973 requires that countries who ratify the convention to undertake to "pursue a national policy designed to ensure the effective abolition of child labour and to progressively raise the minimum age for admission to employment or work to a level consistent with the fullest physical and mental development of young persons". (Article 1)
The Convention also provides that no employer should be allowed to employ children under the age of 15. This age level is increased if the child has not completed compulsory schooling. The minimum age for someone "carrying out work that is likely to jeopardise the health, safety or morals of a young person shall not be less than 18 years." (Article 3)
This Convention states that the minimum age for light work (work which is not likely to be harmful to children's health or education) could be reduced to 12:
Problem statement
Existing legislation does not give effect to the Constitution or to relevant provisions of the ILO's Minimum Age Convention.
Discussion
The prohibition on child labour by children under 15, subject to exemptions, should continue. Legislation should also regulate the employment of children between 15 and 18. This minimum age should be increased, if necessary, to coincide with provisions on compulsory education.
The wage rate paid to children plays a significant role in determining the extent of child labour. It is generally accepted that a requirement to pay children the same wage as adults who do the same work discourages child labour. Consideration should be given to whether legislation should regulate this topic or whether it should be left for regulation in Sectoral Employment Standards.
Proposal
Children below 15 years may not work.
Children below 18 may not perform work which is inappropriate for that child's age, or which is hazardous or harmful to their health.
Problem statement
The BCEA prohibits employment of children under 15 years, but contains no provision for enforcement.
The enforcement clause was removed from the BCEA when a similar prohibition was included in the Child Care Act in 1991. However, the Department of Welfare which is responsible for this Act, does not have the resources to enforce the prohibition.
Discussion
The Department of Welfare does not have the necessary infrastructure or staff to deal effectively with this problem. The administration and enforcement of child labour prohibition fits more appropriately with the Department of Labour.
Proposals
Child labour should be regulated in the proposed legislation and the Department of Labour should be primarily responsible for its enforcement.
The Minister of Labour should be empowered to delegate inspection and other enforcement responsibilities to officials from other government departments.
Problem statement
The existing provisions empower the Minister of Welfare to grant exemptions to individual employers or exemptions that are of general application. General exemptions make monitoring difficult.
Discussion
South African legislation has traditionally contained a total prohibition on child labour. However, the widespread occurrence of child labour in South Africa indicates that these policies have not succeeded. The reason lies both in the economic dependence of many families on income earned by child workers, and in the weak enforcement by authorities of the relevant provisions.
Although exemptions can be granted in terms of existing legislation, very few applications for exemptions have been received. In practice, the exemption process is ignored and merely serves to conceal the extent of the problem.
The exemption process should offer an opportunity for government agents to identify, regulate and control users of child labour. Employers of child workers should be encouraged to identify themselves through the exemption process. This would facilitate focused inspections. General exemptions are inappropriate since this makes it difficult for inspectors to monitor whether the conditions for exemptions are complied with.
The grant of exemptions would have to comply with relevant Constitutional provisions.
Proposal
An exemption may only be granted to an individual employer to employ children between the ages of 12 and 14 to perform work which is not likely to be harmful to the child's health or education.
Problem statement
The enforcement of child labour provisions presents particular difficulties not encountered with other breaches of employment standards. In most cases, child workers and their parents are unwilling to prosecute or to testify.
Discussion
The violation of the child labour provisions should remain a criminal offence. To enable children and their families to prosecute and to testify in child labour cases, the law should include appropriate procedures, presumptions, protections and sanctions. The precise nature of these requires consideration.
Proposals
Contravention should remain a criminal offence, although these provisions should also be capable of civil enforcement.
The victimisation of parents who refuse to grant permission for their minor children to work should be prohibited.
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Problem statement
Protections for individual employees are found both in the BCEA and the LRA. Chapter Eight of the Labour Relations Act of 1995 regulates unfair dismissal. The residual unfair labour practice protects employees against other forms of unfair labour practice.
Discussion
The explanatory memorandum to the Labour Relations Bill, 1995, stated-
"Those sections of the Bill regulating individual employment relations, in particular unfair dismissal and other individual unfair labour practices, are contained in excisable parts. This will allow for their repeal, without alteration to the main body of the new Act, and their inclusion into the proposed new laws regulating basic conditions of employment and employment equity."
The law of unfair dismissal is contained in Chapter VIII of the LRA, 66 of 1995 and in Schedule VIII to that Act which contains the Code of Good Practice. In the past, there has been a lack of clarity about the relationship between the requirements of the BCEA, such as the protections against victimisation, which carry a criminal sanction and the equity-based considerations of the unfair labour practice. There is a considerable overlap - many actions may violate the BCEA and be an unfair labour practice. The concern of unfair dismissal is the individual employment relationship and it is therefore appropriate that a 'codified ' body of unfair dismissal law should be situated in a statute regulating individual employment relations rather than one dealing with collective bargaining. Rationalising the protections applicable to individual employees into a single statute will create greater clarity.
Similar considerations apply to certain portions of the residual unfair labour practice in Part B of the Transitional Arrangements (Schedule 7 of the LRA). (See Annexure 1). Paragraph (a) concerns discrimination against employees and prospective employees. Issues of discrimination are to be dealt with in the proposed Employment Equity legislation and these provisions should at an appropriate time be re-enacted in that law.
The remaining paragraphs of the residual unfair labour practice concern unfair acts or omissions that arise between an employer and employee (including an applicant for employment) concerning:
It is important that employers and employees can obtain guidance as to the effect of the unfair labour practice definition. For this reason a Code of Good Practice should be developed. The LRA 66 of 1995 provides for disputes concerning the residual unfair labour practice to be referred to the Labour Court. On the other hand individual disputes that cannot be resolved through mediation will be determined by arbitration. This approach should be adopted in respect of individual unfair labour practice disputes.
Proposal
Chapter Eight of the LRA of 1995 on unfair dismissal should be included in the proposed new employment standards statute.
The relevant parts of paragraphs (b) - (d) of the definition of residual unfair labour practice should be incorporated into employment standards legislation as an individual unfair labour practice.
The legislation should provide for the development of codes of practice to guide all persons applying the individual unfair labour practice.
Disputes concerning individual unfair labour practices should be dealt with in the same manner as individual unfair dismissals.
Problem statement
The notice period for a weekly-paid employee is one week, while for a monthly paid employee it is two weeks. During the first four weeks of employment, the notice period is 24 hours .
Farmworkers and domestic workers (other than those who are weekly-paid) are entitled to one month's notice.
Discussion
The distinction between weekly-paid and monthly-paid employees is archaic and no longer appropriate in contemporary labour law.
The same minimum notice period should apply to all employees regardless of the frequency of their payment. The only exception should be made in respect of an initial period of employment. The issue is to determine what an appropriate notice period is.
Factors to consider are:
It is proposed that a reasonable period of notice would be 4 weeks.
Proposal
An employer who terminates must give an employee four weeks notice of the termination of employment or pay the employee for the period of notice. This does not apply to:
An employee who resigns from employment must give the employer one month's notice of the termination of employment.
3.1 Discrimination
Problem statement
The BCEA and the Wage Act have criminal victimisation provisions to protect employees who are dismissed or discriminated against for insisting on their rights in terms of the Acts or for co-operating with an inspector or other official.
The LRA of 1995 has remodelled the victimisation provisions as a discrimination provision enforceable through mediation and arbitration proceedings under the Commission for Conciliation, Mediation and Arbitration (CCMA).
Discussion
The proposed employment standards legislation should adopt an approach that is consistent with the LRA of 1995 and should include a discrimination provision. Those portions of the present victimization section that overlap with the LRA of 1995 should be removed.
Proposal
No employer may discriminate against employees for:
These protections apply to applicants for employment.
3.2 Protection of wages
Problem statement
Employment standards law regulate the payment of wages to prevent abuse.
Discussion
The BCEA (and Wage Act) regulates the method of payment or remuneration and prohibits practices which may deprive employees of the benefit of their wages. These include:
Proposal
Protections of this type must be retained and there is no basis to depart from the approach of the BCEA.
Problem statement
There is no requirement in labour legislation that employers supply employees with written particulars of employment.
Discussion
A written record of the details and particulars of an employment relationship is an important aspect of monitoring compliance with labour legislation and enforcing employment standards. Many cases fail because the employee is unable to prove even the most basic terms. It is therefore proposed that every employee should be entitled to receive from the employer written particulars of employment. These particulars should be designed to permit the employee, or a person assisting the employee, to assess whether the employee's statutory rights have been observed. The employer should be required to update the particulars regularly. If there are no particulars, the onus should be on the employer to prove the terms of any contract. The particulars could include:
Proposal
An employer must supply an employee with prescribed written particulars of employment within a prescribed period.
The legislation should include a model form.
Problem statement
Currently, employees are entitled to a certificate of service on termination of employment. This does not apply to casual employees or employees who "desert" employment.
Proposal
On termination of employment, all employees should be entitled to a certificate of service regardless of the reason for the termination of their employment.
An employee should be entitled to request that the reason for the termination of his or her employment does not appear on the certificate.
The legislation should include a model certificate of service.
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Problem statement
The powers of industrial inspectors are dealt with separately in labour legislation. The inspectors' powers are confined to the conduct of inspections.
Discussion
Inspectors' powers under all legislation should be rationalised in the new statute. It would enhance the efficiency and effectiveness of the Department, since in a single visit an inspector would be able to check compliance with all labour laws. The new legislation should therefore contain a chapter on labour inspection This should set out the powers required to conduct inspections relevant to all legislation administered by the Department of Labour. These powers should include the right to enter premises without notice, conduct inspections and examinations, question employers, employees and witnesses, require the production of records and if necessary, remove the records.
Inspectors should be granted additional powers to empower them to encourage compliance with minimum standards and to enhance their effectiveness. These are discussed in the following section.
Proposal
The new legislation should contain a chapter consolidating the powers of labour inspection contained in the different Acts administered by the Department of Labour.
Problem statement
The BCEA and Wage Act are enforced through the criminal courts. This does not encourage compliance with employment standards
Discussion
Criminal proceedings are not an effective method of enforcing cases involving employment standards. The criminal courts are overloaded with other cases and are in general inadequately resourced to deal with labour cases. Labour cases do not have a high priority within the criminal justice system. This contributes to long delays, parties not turning up at court and prosecutors dealing inadequately with cases. It also makes a major impact on the time of inspectors. Even in those cases that reach a conclusion, the most common outcomes are a warning, a suspended fine or a low fine. The reliance on criminal proceedings undermine the capacity of the Department of Labour to encourage compliance with employment standards.
Certificates are required from the Attorney-General or Director-General to proceed in civil court to enforce statutory conditions of employment. This is cumbersome and time-consuming and causes an unnecessary duplication of legal proceedings. Many cases involve both a failure to comply with statutory contractual provisions, requiring the institution of separate legal proceedings.
The changes made by the LRA of 1995 need to be considered. Breaches of conditions of employment contained in bargaining council agreements are enforced through mediation and arbitration rather than the criminal courts.
Total decriminalisation is not appropriate in the proposed law. Criminal sanctions must be retained for offences such as the illegal employment of child labour. However, criminal sanctions cannot remain the primary mechanism for breaches of employment standards.
There must be a range of remedies available to encourage and enforce compliance with employment standards. The system of enforcement must contribute to the effective operation of the inspectorate. It is therefore proposed that the enforcing agency should have a direct role in the imposition of warnings and penalties.
The Commission for Conciliation, Mediation and Arbitration (CCMA) should become the primary forum for the adjudication of disputes concerning employment standards. The requirement for conciliation and the informality of arbitration proceedings and the labour expertise of commissioners make it a more appropriate venue for the enforcement of claims than the civil or criminal courts.
The current system of enforcement through the criminal courts has one very significant benefit for employees: the state enforces claims on behalf of employees. This is of particular importance to employees who are not members of trade unions. However, the ineffectiveness of criminal prosecutions means that this benefit is often theoretical. Any revised system of enforcement must allow for State enforcement on behalf of employees. It is suggested that this should be retained by permitting the inspectors of the Department of Labour to bring cases on behalf of employees to the CCMA.
A successful enforcement system must ensure employers meet their administrative obligations - supplying employees with wage slips and maintaining records. An employee who does not have a wage slip is often not able to prove that he or she has been underpaid.
In the past many employers who have received State assistance to establish businesses in decentralised areas have been known to operate their business in violation of the BCEA and wage determinations. There are still low levels of compliance with the BCEA in agriculture, a sector in which a high proportion of employers receive State assistance.
In the long term, the proposals in this chapter should be supplemented by incentives for employers to adopt appropriate employment standards. Compliance with employment standards legislation should be a requirement for employers to obtain state contracts or benefits from state schemes such as financial and technical assistance to small and medium enterprises, Land Bank loans and export or industrial incentive schemes.
Proposal
An integrated enforcement system should contain the following elements -
An inspector may impose an administrative penalties on employers who fail to keep the prescribed records.
In other offenses, an inspector may issue a 'compliance notice' to employers who are in violation of any provision of the law. The notice would state:
The penalties imposed would be:
Employees should be entitled to institute claims arising out of a failure to comply with employment standards in the appropriate court. (Proceedings could be instituted in the Small Claims Court, the CCMA or in the Labour Court.)
An inspectorate could institute proceedings arbitration proceedings before the CCMA on behalf of the employee
Criminal sanction should be retained for:
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Problem statement
Different labour statutes impose different administrative obligations upon employers. This burdens employers and the Department of Labour.
Discussion
Labour legislation imposes three different types of obligations
Employer's administrative obligations
All employers must register with the Director-General in terms of the Unemployment Insurance Act (section 28);
m. Compensation Commissioner in terms of the Compensation for Occupational Injuries and Diseases Act (section 80).
. keep records of hours of work, remuneration and deductions under the BCEA (Regulation 3), the Wage Act (Regulation 5), the Manpower Training Act (section 44) and the Unemployment Insurance Act (section 32).
. submit to the Compensation Commissioner, an annual return of earnings each March;
m. Unemployment Insurance Commissioner, monthly statements of employees' earnings, together with contributions (s.30(1)).
Employers who operate factories must obtain a factory registration certificate from the Regional Director in terms of General Administrative Regulation under the Occupational Health and Safety Act 85 of 1993.
The record-keeping requirements are inconsistent. For instance, some records must be kept for three years and others for four years.
Different Acts have different definitions of key terms. For instance, the UIA employment (section 3) and COIDA (section 63) have different definitions of earnings.
The duplication of administrative requirements:
The absence of a single, clear definition of earnings and the keeping of separate records contribute to serious under-reporting of earnings of employees. It is estimated that underpayment by employers to the Compensation Fund is in excess of R200 million. Contributions to the UIF are also reduced (although it is not possible to estimate the full extent of this).
This under-reporting means that:
The new legislation should introduce a single set of definitions to rationalise reporting requirements. A single prescribed reporting form should be introduced and employers should be able to meet all their obligations under labour legislation by maintaining a single set of records. This will reduce employers' obligation to maintain records and submit returns significantly. Within this framework, additional rationalisation to assist small employers could be developed.
In the longer term, the Department should investigate a co-ordinated approach with the Receiver of Revenue since it is less likely that employers will understate their wage bill for tax purposes. This will also achieve greater administrative efficiency in collecting a contribution to these funds.
Proposal
The new legislation should include definitions of terms commonly used in all labour legislation.
There would be a single prescribed form to allow employers to comply with most of the key obligations under legislation administered by the Department of Labour.
The legislation should prescribe:
A simple computer software programme could be developed to enable employers to record information and calculate payments in the manner set out in the prescribed forms.
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