The report, which documents the proposals made, and the outcome of the discussions among the parties, has been submitted to the Minister of Employment and Labour, along with four proposed amendment bills.
These bills propose 47 amendments to the Labour Relations Act, 1995 (LRA), 13 amendments to the Basic Conditions of Employment Act, 1997 (BCEA), two amendments to the National Minimum Wage Act, 2018 (NMWA) and three amendments to the Employment Equity Act, 1998 (EEA).
We outline some of the more notable changes that have been proposed.
Limitation of remedies for unfair dismissal of high-paid employees
A new section is proposed to be included in the LRA providing that high-paid employees are only entitled to reinstatement in the case of automatically unfair dismissals.
In respect of all other dismissals, such employee’s remedy would be limited to compensation, which will be capped. The cap on compensation will not apply to automatically unfair dismissals and unfair labour practices involving whistleblowing.
The high-earnings threshold will be based on an amount of R1.8m per annum for the period from May 2024 to April 2025, adjusted annually on 1 May in line with the consumer price index.
Keshni Naicker and Amandla Makhongwana 30 Jan 2025
Test for procedural fairness of a dismissal clarified
It is proposed to include a specific provision making it clear that, subject to any applicable collective agreement, a fair procedure for dismissal is one in which the employee has been given an adequate and reasonable opportunity to respond to the reason for dismissal.
This amendment aligns with the recently released new draft Code of Good Practice on Dismissal and endorses the move away from more formal, adversarial pre-dismissal processes.
Introduction of a qualifying period of employment for full protection against unfair dismissal
In terms of a new section 188(4) of the LRA, the protection against unfair dismissal does not apply to a new employee during the first three months of employment, or if it is a longer period, a period of probation specified in the employment contract that is both reasonable and operationally justifiable. Such employees will, however, still be protected against automatically unfair dismissals.
This proposal is aimed at encouraging employers to hire new employees, particularly young people with no prior work experience.
Amendments to provisions dealing with large-scale retrenchment processes
A number of changes to the retrenchment process under section 189A of the LRA were proposed and debated among the social partners.
One of the final amendments that have been proposed is that the authority to make rules (as opposed to regulations) relating to facilitation is given to the Commission for Conciliation, Mediation and Arbitration (CCMA), rather than the Minister.
In addition, the process for challenging the procedural fairness of a retrenchment under section 189A is proposed to be amended.
In particular, sub-sections (13) to (18) (which provide for a challenge to procedural fairness to be made by way of urgent application, usually while the process is still ongoing) are proposed to be deleted and sub-sections (7) and (10) amended to allow all aspects of a retrenchment dismissal to be challenged after the dismissal.
Further, where there has been a facilitated consultation process, a dispute concerning the fairness of a dismissal can proceed straight to the Labour Court without first having to be conciliated.
These changes effectively restore the legal position on the process for challenging procedure that prevailed before the introduction of section 189A of the LRA.
Dhevarsha Ramjettan and Mbali Nkosi 22 Nov 2024
Definition of ‘unfair labour practice’ curtailed
Sub-sections 186(2)(a) and (c) are proposed to be deleted from the definition of ‘unfair labour practice’, meaning that justiciable unfair labour practice disputes would be limited to those relating to the unfair suspension of an employee or other unfair disciplinary action short of dismissal; and an occupational detriment on account of the employee having made a protected disclosure (ie. protected whistleblowing).
Provision is, however, made for a transitional period of one year, during which time disputes arising in relation to unfair conduct relating to promotion will be dealt with as if section 186(2)(a) had not been repealed.
This only applies to employers within the public service and local government, employers covered by the Employment of Educators Act and the South African Police Service, to allow these employers and trade unions an opportunity to conclude collective agreements to regulate promotion and the resolution of disputes concerning promotion.
Increase in statutory severance pay
The minimum statutory severance pay that an employee would be entitled to upon retrenchment (ie. dismissal based on an employer’s operational requirements) is proposed to be increased from one week to two weeks’ remuneration per completed year of continuous service.
The entitlement to severance pay equal to two weeks’ remuneration only applies to a completed year of service with that employer commenced after the commencement of the Amendment Act.
Extended definition of employee
A new schedule 11 is proposed to be included in the LRA extending the rights to freedom of association, organisational and bargaining rights to a broader category of employees.
For purposes of this schedule, an employee is defined to mean an individual, other than an employee as defined in section 213 of the LRA, who works personally for a person who is not a client or customer of any profession, business or undertaking carried on by the individual. A presumption of employment is included unless the employer demonstrates that certain factors are satisfied.
The same expanded definition of ‘employee’ is also proposed to be included in the BCEA and applicable to chapters 8 to 10 of that Act, effectively allowing the Minister to set basic conditions of employment for this category of employees through sectoral determinations.
These amendments appear to be designed to make it possible to provide additional protection for, among others, platform workers, such as e-hailing and food delivery drivers.
Additional regulation of ‘on-call’ or seasonal workers
A new section is proposed to be included in the BCEA dealing with employees who are obliged to hold themselves available for work but are not guaranteed work by their employers.
Among others, the provision requires employers to confirm, in writing, certain particulars including the notice period to the employee to report for work and the notice period of any cancellation of work, both of which must be reasonable.
Exclusion of start-up businesses from bargaining council agreements
Employers of ‘new businesses’ employing fewer than 50 employees are proposed to be exempt from conditions of employment set by extended bargaining council collective agreements.
For purposes of these sections, a ‘new business’ is one that has been in operation for less than two years but excludes a new employer contemplated in section 197(1) of the LRA (ie. a new employer who has taken transfer of a business as a going concern) or a business that was formed by the division or dissolution of any existing business.
Next steps
The reforms to the various laws still have some way to travel before they become law. The draft amendment bills will now make their way through the Parliamentary process after they are vetted by the State Law Advisor.
Once the Parliamentary process commences, opportunities will arise for public comment. The Nedlac Report highlights that many of the final proposed amendments did not receive support from all three social partners, so further debate and possible changes are anticipated. Watch this space for further developments.
Copies of the Nedlac Report and the amendment bills are available on the Nedlac website here.
