Labour Relations: Important new legislation of 2018
16 Jan 2019
The Labour Relations Amendment Act, Basic Conditions of Employment Amendment Act & the National Minimum Wage Act.
2018 drew to a close and as we herald in a new year, so too have we seen the signing into law of the Labour Relations Amendment Act, Basic Conditions of Employment Amendment Act and the National Minimum Wage Act. The Acts have been signed off by the President and are due to come into effect in January 2019. The below would be a brief summary of the amendments.
The Labour Relations Amendment Act significantly amends section 69 dealing with picketing. The amendment requires a commissioner/person appointed to deal with the dispute that may lead to the strike/lockout to determine the rules surrounding the picket. A conciliating commissioner is therefore compelled to try and secure a picketing agreement between the parties when conciliating the dispute, before the expiry of the conciliation time limit in Section 64(1)(a). Parties are therefore compelled to agree on ‘ground rules’ prior to embarking on Industrial Action. This would hopefully curtail violence and unrest which has become so commonplace in the current labour sphere. If no picketing agreement exists or the commissioner is unable to secure agreement between the parties, the conciliating commissioner must then determine picketing rules based on standard picketing rules to be prescribed under Section 208, the code of good practice, and any representations made by the parties. Picketing rules must be issued together with any certificate of failure to settle the dispute.
Unions may further apply to the CCMA on an urgent basis for picketing rules where the dispute relates to unilateral changes to terms and conditions of employment (s64(4)) and the employer has failed to restore the status quo or an unprotected lockout has been implemented. Section 69(6C) further specifies that no picket may take place in support of a protected strike or lockout without picketing rules. The Labour Court is further empowered to suspend pickets if it is just and equitable to do so.
With regards to the amended Basic Conditions of Employment Act, the Act has been amended to include its application of the National Minimum Wage Act 2017 as a basic condition of employment. The Act further confirms, by way of section 9A, that employees who work for less than four (4) hours a day are entitled to pay for four (4) hours. This means that, for example, if employees are present at work for two (2) hours and there is a power outage for the rest of the day preventing them from rendering service, then they will be compensated for four (4) hours provided employees earn under the section 6(3) threshold (currently R205 433.33 pa). The powers of the both Labour Inspectors as well as the CCMA have been expanded upon. Labour Inspectors are now able to issue compliance orders for violation of the National Minimum Wage Act. The CCMA is empowered to adjudicate disputes of this nature. Employees who earn below the earnings threshold also have the right to refer disputes regarding non-compliance with the BCEA, the National Minimum Wage Act and UIF Legislation to the CCMA (section 73A). Inspectors are furthermore entitled to demand compliance in the form of an undertaking from employers.
The National Minimum Wage Act has as its purpose, the advancement of economic development and social justice by way of protection of employees from unreasonably low wages, improving wages of the lowest paid employees, promoting collective bargaining and supporting economic policy. The Act goes on to state that the payment of the minimum wage is read into the employment contract as a term and condition of employment. It therefore cannot be changed unilaterally and can only be ‘ignored’ if the employee is offered a higher wage by way of agreement.
A Minimum Wage Commission is established to determine the minimum wage from time to time. A national minimum wage is determined under Section 4(1), which refers to the amount in Schedule 1, and which amount is adjusted annually in terms of Section 6. However, there is a once off prescribed review of the minimum wage within 18 months of the commencement of the Act, followed by an adjustment two years after the commencement of the Act. Thereafter, annual reviews of the minimum wage will be conducted by the Minimum Wage Commission in terms of Section 7.
Section 5 of the Act stipulates that the term ‘wages’ for purposes of the Act, excludes payments which enable an employee to perform their job, including transport, food or accommodation allowance; payment in kind such as accommodation; gratuities (including bonuses, tips or gifts) and any other prescribed category of payment.
Schedule 1 of the National Minimum Wage Act sets a minimum wage of R20 per ordinary hour. This equates to approximately R3500 per month for employees working a 40 hour week and R3900 for employees who work a 45 hour week. The Act does however further specify that the minimum wage for farm workers is R18 per hour; domestic workers is R15 per hour (irrespective of the area they operate in), workers employed on an expanded public works programme will be entitled to R11 per hour, and workers on learnership agreements will be entitled to allowances as stipulated in the bill according to their NQF level.
Chapter 4 provides for a process whereby employers may apply for an exemption from paying the National Minimum Wage. Should an employer receive an exemption though, it will only be granted for a specified period not exceeding one (1) year and must specify the wage to be paid. This process, therefore, does not provide a permanent exemption from compliance. The actual process relating to the exemption has been delegated to the Minister of Labour. Should an employer fail to comply with National Minimum Wage requirements, they will be liable for a fine according to section 76A of the BCEA Amendment Bill or further consequences such as a claim of Unfair Labour Practices if terms and conditions of employment are amended to ‘unfairly adapt’ to the implementation of the National Minimum Wage.
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