BY Ivan Israelstam, Chief Executive of Labour Law Management Consulting. He may be contacted on (011) 888-7944 or 0828522973 or on e-mail address: firstname.lastname@example.org. Go to: www.labourlawadvice.co.za.
Since South Africa’s new labour legislation came into effect in the middle to late 1990s it has twice been substantially amended. The last new amendments that were enforced in 2014/2015 dealt a severe blow to employers via, amongst others, the restrictions placed on temporary employment and the use of labour brokers.
Employers who are still reeling due to the 2014/2015 amendments will now need to face further far reaching amendments proposed via the National Minimum Wage Bill (NMWB), the Basic Conditions of Employment Amendment Bill (BCEAB) and the Labour Relations Act Amendment Bill (LRAAB).
The NMWB proposes a national minimum wage of R20.00 per hour for most workers. This will force those employers that are unable to afford to pay this amount either to close down or retrench employees. Most unfortunately the great majority of such employers will be SMMEs because:
- Many small employers are start-up enterprises that do not have the money to pay minimum wages and
- The vast majority of employers are small businesses.
While provision has been made for exemption applications to be made the parameters thereof are unclear.
If the BCEAB proposals are passed the following changes, amongst others, will come into force primarily in respect of employees who earn below the BCEA’s earnings threshold (now at R205 433,30):
- A new section 9A will force employers to pay all employees who work fewer than 4 hours as if they have worked for the full four hours
- Chapters 8 and 9 of the BCEA, that provide for sectoral determinations and the Employment Conditions Commission, will be repealed.
- The revised section 64 will empower labour inspectors of the Department of Labour (DOL) to refer to the CCMA disputes concerning employers’ non-compliance with the BCEA, the impending National Minimum Wage Act (NMWA) and unemployment insurance legislation.
- Section 68(c) will allow the director General of Labour to apply to the Labour Court (LC) to enforce undertakings signed by employers and made in terms of labour legislation.
- The new section 73A will allow any person below the threshold to refer to CCMA a dispute against an employer for failing to pay that person monies due in terms of the BCEA, the NMWA, a contract of employment or a sectoral determination.
- The new section 76A will provide for fines against employers who fail to comply with the NMWA of the greater of:
- Twice the amount of the shortfall or
- Twice the employee’s monthly wage.
- Section 78 will be amended to allow employees to:
- discuss their conditions of employment with anybody they chose
- refuse instructions that are in conflict with provisions of the law
- inspect any record kept in terms of the BCEA, the NMWA or a sectoral determination that relates to the employment of that employee.
It is clear from the changes discussed above that the legislators are more determined than ever to pass even more legislation that will make the necessary levels of economic growth impossible.
The intention behind this legislation, namely the protection of employees is good in principle. However, in practice, these changes will backfire as regards the primary goal of job creation and wealth creation for the majority of South Africans. That is, it is seriously counterproductive to implement such measures without first ensuring that employers in general and small businesses in particular will be able to survive and prosper under the new laws.
In next week’s article we will look at the changes proposed to the LRA and the significance thereof for employers. We will also look at alternatives to the proposed legislative changes.
To attend our 15 June seminar in Johannesburg on OVERCOMING THE STRIKE MENACE please contact Ronni via email@example.com or 0845217492.