Interesting take on Legal principles of deeming and equality of employment as per proposed changes to the Labour Relations Act.
CONSTRUCTIONAL ENGINEERING ASSOCIATION
(INDUSTRIAL RELATIONS S
LABOUR BROKER DIVISION
LABOUR BRIEF: TES Industry – Parliamentary Portfolio Committee outcome (Labour Relations Amendment Bill) – June 2013. (Legal principles of deeming and equality of employment).
To: CEA – LABOUR BROKER DIVISION MEMBERS
Date: 24th June 2013
LABOUR BRIEF NO. 350
Over the past twelve months, all NEDLAC stakeholders and members of the public have, through the channel of the Parliamentary Portfolio Committee on Labour (PPC) debated the content of the ‘new’ Labour Relations Amendment Bill, in addition to three other Labour Law Review Bills, all of which were negotiated at NEDLAC over the past four years.
A topic of concern to both COSATU and DoL has been the controversial practice or industry of Labour Broking, which both of the above parties have seriously considered to ‘ban’ or in the instance of both Government’s recommendations and the detail of the ANC Manifesto, at least to formally ‘regulate’ and in so doing have strongly reject the concept of ‘self-regulation’, a model for which both private sector business and the TES Industry representative Associations, such as CAPES, CEA and APSO, have tediously argued over the past eight years, as having been proven to be the most effective means of ensuring compliance in this Industry.
During the last twenty days, the PPC has ended the phase of stakeholder presentations and debate. It has during this closing season of its deliberations concerning this ‘Bill’, now entered a phase of drafting a recommendation report, for submission to Government and the general members of Parliament, so accounting for its role in terms of the Parliamentary process. Therefore, at this stage the PPC is solely concerned with achieving a degree of agreement amongst its members, through the voting process, on certain legal technical matters contained within the Labour Relations Amendment Bill, as well as certain politically driven aspects of this Bill, such as the regulation of the right to strike and the regulation of the Labour Broking practice within the labour market.
In terms of the latter subject, earlier during June 2013, some members of the ANC called for what they considered to be a stricter form of regulation of this Industry, by voting for a ‘zero’ period of employment in terms of the recognized tri-partite relationship concerning the employment fixed-term period originally allowed in the Bill (i.e. six months). This call for ‘over-regulation’ by the ANC was obviously to flag their support of COSATU and knowing that any ‘ban’ of this Industry would draw a Constitutional challenge from both Business and the TES Industry, they were careful to avoid openly suggesting such a ‘ban’. However, members of the PPC agreed on the compromise of ‘three’ months, in terms of the fixed-term period of employment binding the relationship between Labour Broker, employee and client.
In this regard, both the PPC and the drafter of the original ‘Bill’ (viz: Professor Benjamin), have clarified that this duration of three months has the exact connotations as the original period prescribed by NEDLAC (i.e. six months), and as such is thus limited to and also limits the same employment relationship to the legal principle of ‘deeming’, this being a principle not foreign to our labour legislation, for such is already incorporated into the current Employment Equity Act. A further ‘debate’ has inevitably stemmed from this ‘principle’ and its impact on the atypical employment relationship concerning the Labour Broker, its client and the employee (assignee). This debate has largely been in the public arena and has been fuelled by so-called expert consultants and newspaper reporters, who have inaccurately assumed that the ‘shortened’ duration of the fixed-term contract of employment concerns the actual employment period, rather than the regulation of this atypical employment relationship specific to the ‘deeming’ principle being enacted by the employee (assignee). Once this party to the tri-partite employment relationship alleges an unfair dismissal dispute and so thus being entitled at will to nominate the responsible ‘employer’ (i.e. either the Labour Broker or its client or both), as the responsible party concerned with such an unfair dismissal dispute.
Not amended in any manner by the PPC and as it appears in the NEDLAC test of this ‘Bill’, is another legal principle introduced during the NEDLAC negotiations. The ILO principle of ‘equal pay for the equal value of work’ is referred to in this instance and as contained in Section 200 of the Bill. Once again, the ‘understanding’ of this principle by certain members of the PPC (where only limited reference was made to this principle by its members), as well as newspaper reporters, indicates clearly that such ‘understanding’ is limited and any deduction therefore being made, is inaccurate because their interpretation is ill-founded. The ‘equal pay’ principle is not limited to the Labour Broker employment relationship. In fact, it goes far beyond this ‘atypical’ employment relationship, in that it underlines another employment relationship, that being the ‘typical’ employment relationship (i.e. the bi-partite relationship between employer and employee, excluding the Labour Broker). As such, it has little to no relevance to the tri-partite employment relationship, other than causing Labour Brokers to ensure that the prescriptions of this principle apply to its own ‘core’ employees (staff).
The focus of this principle is on temporary employment, but not solely on how such employment applies within and to the TES Industry, but rather as applied to the normal or typical relationship. Therefore, the period of direct employment by a typical employer of a ‘temporary’ employee is limited in that the Bill currently prescribes that such an employee must eventually enjoy both permanent employment status and the related benefits, as to those enjoyed in the exact same job as other employees also employed by the typical employer at that time.
Unashamedly, this particular understanding is an unintended consequence which allows the Labour Broker an obvious advantage in terms of value it may add to its client’s employment practices and business. This reality is noted in this regard, in that because of the resources and nature of the larger TES Industry player, the latter is best positioned to implement the necessary criteria which will cause the principle of ‘equality’ to become more effectively managed and so limit the affect thereof on the Labour Broker’s client’s business, in terms of additional administrative and employment costs in the medium-to long-term employment periods. Factors such as HR/IR expertise, national foot-print and ‘dilution’, are just a few of the practical applications which will enable the atypical employer (i.e. Labour Broker), to assist the typical employer (e.g.: client), to more effectively manage the impact of the ‘equality’ principle on the latter’s business both technically and legally.
To conclude, the PPC will continue for this month with its deliberation process and has undertaken to make no further ‘surprise’ changes to the Bill. Dr. Loots, the Government’s legal adviser, has spent some time during the course of last and this week, clarifying both technical matters relating to the Bill, as well as confirming the interpretation of both the legal principles relating to atypical and typical ‘temporary’ employment, as noted above.
In terms of going forward, the PPC ‘whips’ agreed that this Bill will be tabled in the National Assembly and the PPC will adopt a report to present to that Assembly for their further debate. The adoption of the Committee’s report on the Bill and the Memorandum on Objections are still to be debated. Parliament has gone back into recess and will meet again toward the end of July 2013.
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(Chairperson – (CEA – LBD))