practice area articles
By Karen Fulton, Lusanda Raphulu, Nonkululeko, Mkhwanazi and Bulela Mungeka
Back to International Employment Law
KEY DEVELOPMENTS FOR 2020
Jurisdiction of the Labour Courts in matters arising from the Basic Conditions of Employment Act
In the case of Amalungelo Workers' Union and Others v Philip Morris South Africa (Pty) Ltd and Another  3 BLLR 225 (CC), the Constitutional Court dealt with the question of whether, barring claims based on employment contracts, the Labour Court's jurisdiction under the Basic Conditions Of Employment Act ("BCEA") is deferred until the matter has been resolved by the labour inspector appointed under the BCEA. The Constitutional Court held that the provisions of the BCEA are designed to promote access to Labour Courts rather than limit it and that the Labour Court enjoys exclusive jurisdiction over all disputes and claims arising from the BCEA, with a few exceptions. It was held that there is no provision in the BCEA which expressly requires that disputes first be referred to the labour inspectors before being brought to the Labour Court. It was further noted that the labour inspector does not have functions for dispute resolution. The labour inspectors are simply empowered to issue compliance orders, but this does not mean that the BCEA then lacks the jurisdiction to determine disputes concerning compliance with the BCEA. The Constitutional Court ultimately concluded that the Labour Court has exclusive jurisdiction of determining the outcome of disputes arising from the BCEA and, if the Labour Court lacked jurisdiction in these circumstances, then no other forum could entertain such matters.
This judgment is important because it provides clarity that employees can apply to the Labour Court for determination, when dealing with non-compliance in terms of the BCEA, rather than treat the Labour Court as a means of appeal. This is consistent with the rights of applicants to have their dispute resolved by application of law in a fair manner, which is a right that the labour inspector cannot exercise.
Role of public policy, reasonableness and ubuntu in the enforcement of contractual terms
In the recent case of Beadica 231 Cc and Others v Trustees For The Time Being Of Oregon Trust and Others  ZACC 13, the Constitutional Court had to look at the proper approach to the juridical enforcement of contractual terms and in particular, the public policy grounds upon which a Court may refuse the enforcement of these terms.
In considering this, the Constitutional Court held that the applicant has to discharge the onus of demonstrating that the enforcement of the strict terms of a contract would be contrary to public policy in the particular circumstances of the case. The Constitutional Court further held that parties to a contract cannot escape the enforcement of contractual terms on the basis that enforcement would be disproportionate or unfair in the circumstances. Constitutional values (such as good faith, ubuntu (humanity), public policy and reasonableness) do not provide a free-standing basis upon which a Court may interfere in contractual relationships. Rather, these values form important considerations in the balancing exercise required to determine whether a contractual term, or its enforcement, is contrary to public policy. It is only where the enforcement of contractual terms would be so unfair, unreasonable or unjust so as to be contrary to public policy that a Court may refuse to enforce it.
The judgment is important as it clarifies that the Courts cannot simply interfere with contractual relationships but will only interfere if complying with the terms would be contrary to public policy, or be unfair. These principles would also be applicable in the employment context, which means that any party challenging the enforcement of an employment contract or term contained therein (the employee or employer) would be required to establish why that employment contract or term is so unfair, unreasonable or against public policy that it would justify the interference of a Court in the employment relationship.
Impact of the Protection of Personal Information Act 2013
The Protection of Personal Information Act ("POPIA") came into force on 1 July 2020 and introduced 8 conditions for the lawful processing of personal information, the rules regulating the processing of special personal information, and the procedures dealing with complaints and the general enforcement measures provided for in POPIA. POPIA was partially enacted as far back as November 2013 and will have far-reaching implications for the processing of personal information of employees. For example, businesses that collect, hold, transfer and use individuals' personal information will have to do so under certain conditions. POPIA will be particularly relevant for employers, as they will have certain obligations as the 'responsible party'. The consequences of non-compliance with POPIA are significant and include hefty fines as an alternative to imprisonment. Such a fine will be in addition to the reputational damage an organisation will suffer as a result of failing to comply with POPIA.
Importantly, organisations will have a 12-month transitional period within which to ensure compliance with POPIA (i.e., by 1 July 2021). Although this grace period may seem like a lengthy period of time, it may be too short for organisations to make the necessary changes to ensure compliance within the required timeframe. Organisations should accordingly be encouraged to take steps now to ensure that they are, to a large extent, already complying with the provisions of POPIA.
COVID-19: Compensation for workplace contracted COVID-19
On 23 July 2020, the Minister of Employment and Labour published a revised Directive for Compensation of Workplace-Acquired COVID-19. This Directive must be read with the Compensation for Occupational Injuries and Diseases Act 130 of 1993 (COIDA) and clarifies the Compensation Fund's position with regards to claims for compensation by employees who have caught COVID-19 at the workplace as result of work-related exposures. Importantly, the Directive provides that a workplace-acquired COVID-19 diagnosis would depend on there being either:
- the presence of an inherent risk posed by the particular category of work or occupation (see further below);
- exposure to a known source of COVID-19 at the workplace; or
- an approved official trip and travel history to countries and/or areas of high risk for COVID-19 on work assignment;
and, if any of the above circumstances is present, it then also requires a reliable diagnosis of COVID-19 as per the WHO guidelines, as well as a chronological sequence between exposure at the workplace and the development of symptoms.
The Directive recognizes that the Compensation Fund should consider all claims and determine whether the Fund is liable to pay compensation based on the information that is submitted to it. However, the Directive also provides that the inherent risk posed by various categories of work and occupations will be considered in addition to an employee's exposure and clinical history.
In this regard, the Directive makes provision for four levels of risk posed by various categories of work and occupations – the higher the risk, the more likely that the virus was contracted in the course and scope of employment.
These occupational risk levels are as follows:
- Very high exposure risk occupations, being those with high potential for exposure to known or suspected sources of COVID-19 during specific medical, post mortem or laboratory procedures, including healthcare employees, morgue employees and laboratory employees who come into contact with confirmed positive COVID-19 cases or specimens.
- High exposure risk occupations, being those with high potential of exposure to known or suspected patients with COVID-19, including healthcare delivery and support employees, medical transport employees moving patients, and mortuary employees involved in preparing bodies for burial or cremation.
- Medium exposure risk occupations, being those that require frequent and/or close contract (within 1.5 metres) with people who may be infected with COVID-19, but who are not known or suspected COVID-19 patients, such as employees employed in schools, and high-population-density work environments such as labour centres, consulting rooms, point of entry personnel and some high-volume retail settings.
- Low risk occupations, being those that do not require contact with people known to be or suspected of being infected with COVID-19, nor frequent close contract (within 1.5 metres) with the general public. Employees in this category have minimal occupational contact with the public and other fellow employees.
The Directive further sets out the benefits available to persons who are temporarily or permanently disabled due to infection with COVID-19.
Importantly, the Compensation Fund will not provide compensation for unconfirmed cases which are still being investigated. Accordingly, where an employee self-isolates or self-quarantines, the employer should deal with the employee's absence in line with the Consolidated COVID-19 Directive on Health and Safety in the Workplace. In the event that an employer becomes aware that an employee has contracted COVID-19 or is suspected of having contracted COVID-19 as a result of a work-related exposure, it should consider this Directive (read with the COIDA) without delay. The Directive explains how reporting must be done and what information and documents will be required to be submitted.
KEY DEVELOPMENTS FOR 2019
National Minimum Wage Act
The National Minimum Wage Act came into effect on 1 January 2019. This sets minimum wage at R20 per ordinary hour worked, amounting to around R3,500.00 per month. Non compliance with this minimum wage will be deemed to be unfair labour practice. The minimum wage cannot be waived and takes precedence over any agreement. Save for a few exclusions it will, by law, become a term of all contracts of employment.
Assign Services (Pty) Limited V National Union of Metalworkers of South Africa and Others 2018 (5) SA 323 (Cc)
The constitutional court has confirmed that a labour broker (i.e. temporary employment service) is the employer of a placed employee for the first three months. During this time, the labour broker and the client are jointly and severally liable for any contraventions of the Basic Conditions of Employment Act, sectoral determinations and any collective agreements. After this three month period, the client will become the sole employer. The court held that this does not create a new employment relationship; it merely changes the statutory attribution of responsibility within the triangular relationship.
Granting of parental leave under the Employment Amendment Bill
An employee, who is a parent of a child, will be entitled to 10 days of parental leave, which will be granted from the day of the child’s birth or the day of the granting of a child’s adoption order. This means that male employees and adoptive parents will no longer be disadvantaged by a lack of parental leave benefits. It is anticipated that this Bill will come into effect in early 2019.
KEY DEVELOPMENTS FOR 2018
Approval of the National Minimum Wage Bill
The National Minimum Wage Act 2017 (the “Act”) will come into force on 1 May 2018. The Act introduces a minimum wage of R20, 00 per hour which translates into a monthly wage of about R3 500 for a 40-hour week, and about R3 900 for a 45-hour week. This will take precedence over any other contrary law, contract or collective agreement. Employers who fail to pay wages in line with the Act will be required to pay interest on late payments and a fine equal to twice the value of the underpayment or twice the employee’s monthly wage, whichever is greater. Employers who anticipate that they will not be able to pay employees in line with the Act will be afforded the opportunity to apply for exemptions which will operate for a specified period.
Potential Modification to Employment Contract Regulation
Trade unions and employers’ associations are negotiating modifications to the employment contract regulation, in order to reduce reliance on fixed-term employment. Severance payments may be introduced, to reduce the difference between permanent employment and fixed-term employment contracts.
Amendment to Whistleblower Laws
The Protected Disclosures Amendment Act, No 5 of 2017 (the “Amendment Act”) was assented to on 31 July 2017 and supplements the obligations employers are held to under the Protected Disclosures Act, No 26 of 2000 (the “PDA”). Both the Amendment Act and PDA provide for and regulate reports made by employees, of unlawful or irregular conduct by employers and fellow employees. The Amendment Act has been expanded to extend to independent contractors, consultants, agents and temporary employment services workers, who now fall within the definition “worker”.
Employers will need to implement appropriate internal procedures for receiving and dealing with disclosures and further obligations in terms of informing employees or workers as to whether the employer has decided to investigate the matter or refer the disclosure to another person or body. Notably, the Amendment Act also provides employees with wider protection in that they will not be liable for disclosures which are prohibited by any other law, oath, contract, practice or agreement requiring him or her to maintain confidentiality or otherwise restricting the disclosure of the information with respect to a matter.
Parental Leave Developments
On 28 November 2017, the Labour Laws Amendment Bill (the “Bill”) was passed by Parliament. As a result, paternity leave of 10 days will now be available to fathers. Additionally, 1 adoptive parent of a child who is less than 2 years old will be entitled to 10 weeks’ adoption leave, and the other parent will be entitled to 10 days’ leave. Surrogate parents will share the same entitlements as adoptive parents. The Bill also provides for payment of parental and surrogate parental benefits from the Unemployment Insurance Fund (“UIF”).
KEY DEVELOPMENTS FOR 2017
Protection of Personal Information Act
The enactment of the Protection of Personal Information Act (“POPI”) and developments in data protection law are expected to continue to affect the way organizations and companies conduct their businesses.
POPI intends to give effect to the constitutional right to privacy by introducing measures and obligations upon employers, and granting rights to employees with a view to striking a balance between the right of employers to conduct a business on the one hand, against the rights of its employees to privacy on the other.
Limited sections of POPI have already been brought into force, with the majority (including the sections which create compliance obligations) to take effect at a later date. Once the legislation takes full effect, there will be a one year transition period for employers to ensure compliance, but it this is likely to be insufficient in many cases. Businesses should start to consider what steps and how long it is likely to take to take to comply, to ensure compliance within the prescribed period.
Establishment of a new labour federation
The plans to establish a new trade union federation are well under way, and its first campaign will focus on organising workers in the formal and informal sectors, and fighting job losses.
While 57 unions have expressed interest in joining the new federation, the report said 31 unions were represented in a meeting to discuss the way forward. The new federation remains open to other unions and members who want to join, and its attempts to unionise informal sector workers (such as recyclers and home workers) would be a crucial step forward for the labour movement.
The proposed new federation (incorporating breakaway Cosatu unions and those independent of it) has been in the pipeline since the expulsion of the National Union of Metalworkers of SA (“Numsa”) at end of 2014. The union will be strictly unaligned politically, as a result of growing concerns of disaffection over political parties.
SA faces first long period of salary decline
South Africa has seen a plateaued and steady salary decline, which supports the growing sentiment that salaries are unlikely to beat inflation in 2017.
This has led to a period of subdued consumer spending, which has the potential to result in a recession.
Executive remuneration and King Code IV
The King Code IV (“King IV”) will seek to address the issue of executive remuneration issue. It aims to foster enhanced accountability for remuneration, by insisting on more definitive disclosure requirements.
Additionally, it provides that the remuneration of executive management should be fair and responsible, in the context of overall employee remuneration. This acknowledges the need to address the gap between the remuneration of executives and those at the lower end of the pay scale.
KEY DEVELOPMENTS FOR 2016
Bid to set a National Minimum Wage/ National Living Wage
Talks regarding the national minimum wage have taken place throughout 2016, but nothing was legislated. Legislation is expected to be finalised and implemented later in 2017.
Increased regulation of strikes
The debate regarding increased regulation of strikes continued. The government had proposed changes to labour laws regulating strikes, reintroducing compulsory strike ballots and increasing the powers of the Labour Court to intervene in violent strikes, but these were withdrawn following trade union lobbying.
Similar provisions are, however, the subject of a separate on-going engagement process at Nedlac. There is some prospect that improved regulation of strikes will emerge from this process going into 2017.
Parental benefits should be universal – activists
Legislation which looks to offer 10 days of parental leave and new leave provisions for parents who adopt or have children through surrogates which was proposed in 2016 remains in draft form. The Labour Law Amendment Bill (the “Bill”) is still subject to on-going consideration and submissions which recognise a disparity between fathers and mothers with regards to parental leave. The Bill proposes that any parent who is not entitled to maternity leave can apply for 10 days’ parental leave after a child is born, or, when an adoption order is granted. This leave would be paid for from the Unemployment Insurance Fund.
The Bill is yet to be passed.