Labour Update 1 October 2012

Temporary Employment Services and the proposed Labour Law Amendments

A host of proposed amendments to the Labour Relations Act (LRA), along with the Basic Conditions of Employment Act (BCEA), are currently being reviewed by a parliamentary sub-committee and are expected to be promulgated sometime this year.
It is our opinion that these bills will be pushed and presented, together, for ratification by Parliament before the end of 2012. This deadline is near non-negotiable as the ANC marches steadily on to its leadership conference at the end of the year and in preparation for the national elections in 2014.

What will it mean when these proposed amendments come into effect?
TES and clients will need to work together to ensure that contracts and terms of employment and disciplinary processes are managed correctly to ensure that dismissals are handled appropriately and in accordance with the existing law after the six month period.

What happens to my temporary employees through the Temporary Employment Services (TES) after 6 months? Do they become my employees?
After consideration of the Act and the statements made by the Department, in essence the employee will be deemed an employee of the company after the 6 month period for the purposes of the Labour Relations Act only. What this in essence means is that whilst the employees may remain on the TES’s books, these employees may cite both the TES and their client company in a dispute and that the company would not be able to turn around and feign ignorance to avoid liability. This amounts to joint and several liability and your risk area is around dismissals. Similarly when the employee (subject to application being limited to those paid under the threshold amount – R183 003) has completed 6 months’ service, then the principles of equal pay for work of equal value shall apply. That is only where you have an exact comparator in your permanent workforce. Issues like length of service, quantity and quality of output, qualification and experience and any other non-discriminatory factors will justify a differential.

Is there a grace period once these proposed Labour Laws come into effect?
At the moment it appears that on a majority of the provisions the answer will be no, the proposed amendments will be effective immediately.

What will happen with temporary employees who, by the time the legislation comes into play would have been working for a number of years?
The law is not retrospective and will only come into effect on the day the legislation becomes promulgated. As such the 6 month provision discussed previously will only be applicable as of that date.

What will be considered justifiable reasons for different treatment?
The concept is dealt with under the proposed S198 (4F) where it stipulates that a (TES) employee must be treated on the whole not less favourably than an equivalent employee of the client (after 6 months).

Justifiable reasons for different treatment would be:
• The employees seniority, experience or length of service;
• Merit criteria;
• Quantity or quality of work performance; or
• Any other relevant criteria that are not prohibited in terms of section 6 of the Employment Equity Act.

The concept of equal treatment has not received successful worldwide application and could result in unnecessary job losses. However, it is important to bear in mind that there are certain justifiable reasons for such differential treatment as clearly set out above.

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