MRL3702_ Study Notes With Summary.

MRL3702_ Study Notes With Summary. Labour Law. Who is an employee? The primary aim of the LRA is to promote sound relations between employers and employees – workers falling outside the LRA do not obtain direct protection. The definition of an employee is generally; • Any person, excluding an independent contractor, who works for another person or for the State and who receives or is entitled to receive any remuneration • Any other person who in any manner assists in carrying on or conducting the business of an employer The first part of the definition includes domestic and farm workers. 2. Guidelines to distinguish between employees and independent contractors Three tests; • Control – control over the type of work the person does, the manner and when it must be done • Organisation test – is the person part and parcel of the business and not just an accessory • Dominant impression test – favoured by the courts and considers the employment relationship as a whole S200A of the LRA provides a rebuttal presumption of an employment relationship between the parties. The Code also provides a comparison between an employee and independent contractor as follows; Employee Independent contractor Object of the contract is to render personal services Object of the contract is to produce a specified result or perform specific work Employee must perform the services personally Can perform through others Employer may choose when to use services Must perform work within period fixed by contract Contract terminates on death of employee Contract need not terminate on death Contract terminates on expiry of period of service Contract terminates on completion of work or production of desired result 3. Categories of employees Most common categories of employees are; Type of employee Description Permanent employee Person employed for indefinite period Temporary / Contract / fixed term Employed for a specified period or contract Casual • Works for the same employer but not more than 3 days per week • Can be either temporary or permanent Part time • Person works only at certain times • Works on certain days but limited to three days per week • Can be either temporary or permanent Note the definition of employee does not distinguish between the categories. 2 4. Unprotected workers a. Illegal workers In terms of the common law an illegal contract is void or voidable but in terms of the Constitution and the LRA provision is made for illegal workers. (see Kylie v CCMA and others which was a decision overturned by the Labour Appeal Court). Similarly in the Discovery case, the Court has found even though workers may not be protected by the LRA they are protected by the Constitution. Thus if a person is not protected by the LRA they can obtain protection via the Constitution in; • S23 – everyone has the right to fair labour practices • S10 – everyone has the right to dignity b. Statutory exclusions of workers Specific exclusions from the definition of employee in the LRA are; • NIA, SA secret service and SA National academy of intelligence • Staff of Comsec • Members of the NDF 5. Who is an employer? The definition of employer is not provided for in any legislation and must be looked at in terms of the definition of an employee. An employer may thus be defined as; • Any person or body who employs any person in exchange for remuneration • Any person who permits any person to assist him in conducting his business This includes the issue of labour brokers who generate other concerns such as; • Difficult to identify the employer / employee relationship • Employee ends up with reduced salary as the broker extracts some rent for their services • The protection for unfair dismissal is not shared between the broker and the client 3 Chapter 3 The impact of the common law on the contract of employment 1. Introduction The fact that parties are in an employment relationship has consequences notably as a result of labour legislation and the impact of the common law relating to basic rights and duties of employees and employers. Both parties have rights and duties that, even though may not be expressly stated in the contract of employment, flow from the common law. 2. Duties of the employer and the employee a. Duties of employers To remunerate the employee The primary duty is to pay the employee and then if he does not work then no pay is due. The BCEA does though provide for paid leave in certain circumstance but principle of no work / no pay still applies. To provide work The employer is generally not required to provide the employee with work unless the employee’s salary is commission based or where the employer’s success is dependent on the performance of certain duties on a regular basis – such as acting. To provide safe working conditions This includes the provision of protective equipment and the exercise of proper supervision. It can also extend to protection of harassment by the employer or colleagues in terms of the EEA. It also encompasses the duty of an employer to a compensation fund should the employee be injured. To deal fairly with the employee This is captured by the constitutional duty to fair labour practices. The LRA also protects employees against unfair treatment during the time of employment and unfair dismissal. b. Duties of employees To render services to the employer The primary duty – to render labour potential to the employer To work competently and diligently When the employee enters the contract, he/she guarantees that they will be capable of doing the work To obey lawful and reasonable instructions The employee is under the control of the employer and non compliance with this rule is subordination and breach of contract unless the order is outside the scope of the employment contract To serve the employers interests and act in good faith The employment relationship is built on trust and is an implicit term in the contract 3. Doctrine of Vicarious Liability This provides that an employer is liable for the unlawful or delictual acts of an employee performed during the course of business. This is regulated by the common law and not legislation. This doctrine 4 protects third parties and does not mean that the employer will not have later recourse against the employee. In order for the employer to be held liable, the following three requirements must be met; • There must be a contract of employment • The employee must have acted in the course and scope of employment • The employee must have commissioned a delict. Bezuidenhout v Eskom where the employee had a truck but was forbidden to give lifts without authority. The court found this prescription placed a limitation on the contract and thus exonerated Eskom from vicarious liability in a case where Eskom was sued for injuries caused to a hitch hiker given a lift by the driver and subsequently involved in an accident. 4. Impact of the contract of employment on the employment relationship Introduction The contract of employment contains the terms and conditions but these can be changed under certain conditions. General contact principles The contract must contain all the requirements of the law for the conclusion of a valid contract, namely; • There must be an agreement between the parties • The parties must have capacity to act • The agreement must be lawful and legally possible • Performance under the agreement must be possible • If any formalities are prescribed, these formalities must be satisfied e.g. a candidate attorney must be registered with the Law Society The contract of employment need not be in writing and its terms may be express or tacit. However there are certain terms which the employer is obliged to provide in writing to the employee in terms of the BCEA which include; • The full name and address of the employer • The name and occupation of the employee • The place of work • The date of commencement, ordinary days of work and hours of work • The employee’s wage, overtime rate, other cash payments due, payment in kind and value thereof and the frequency of remuneration as well as deductions • The leave entitlement • Period of notice required • And other documents which may form part of the employment contract The employer must keep these for three years after termination. The employer is obliged to display a statement of the employee’s rights in terms of the BCEA at the place of work. Remedies for breach If the parties do not perform in terms of the contract this is breach in terms of the common law. In the event of breach the parties may terminate or compel the defaulting party to perform. The LRA has largely replaced the processes for breach provided by contract law. In terms of the LRA, a breach by the employer will probably amount to an unfair labour practice. If an employee breaches then 5 it amounts to misconduct. Note the High Court has jurisdiction for an employee claiming breach (not the Labour Court) and only common law remedies are available. Such a termination deals with lawfulness and not fairness Restraint of trade There to protect the interests of the employer. In determining whether a restraint of trade is enforceable, the court will balance the public interest (requiring parties to comply with the contractual obligations even if unreasonable or unfair) against the right of all persons to be permitted to engage in commerce or the profession of their own choice. Questions that should be considered include; • Is there an interest deserving protection at the termination of the agreement? • Is that interest being prejudiced? • If so, how does the interest weigh up against the interests of the other party not to work? • Are there other factors requiring the restraint to operate or be disallowed? • If the restraint wider than necessary? Changes to contractual terms and conditions of employment Even though the terms of the employment relationship are bound by contract, there are also other statutory and collective agreements at play. An employer may not unilaterally change the terms and conditions and it can only de done as follows; • By agreement between the employer and employees in methods prescribed in the contract • By means of a collective agreement between the employer and trade union • By operation of law e.g. the BCEA • Through a sectoral determination by the Minister. 5. Customs and practices in the workplace In addition to contract and labour law, customs will also have an impact e.g. given an afternoon off per month. 6 Chapter 4 Basic Conditions of Employment Act 1. Introduction The Act lays down the minimum terms and conditions for employers from which, as a general rule, employers may depart but only to improve these. Employers and employees may thus not contract out of the BCEA but this can happen in limited circumstances. A basic condition of employment in the BCEA constitutes a term of any contract of employment except where; • Any other law provides a term more favourable to the employee • The contract provides a term more favourable to the employee • The basic condition has been replaced, varied or excluded in terms of the Act 2. Scope of Application The BCEA gives effect to the Constitutional right to fair labour practices, enforcing basic conditions of employment and regulating the variation of such conditions. The BCEA is applicable to almost all employees except; • NIA, SA secret service and SA National academy of intelligence • Unpaid volunteers working for charitable organisations • Directors and staff of Comsec • People undergoing vocational training • People employed on vessels at sea • Independent contractors In addition there are partial exclusions – people excluded from certain chapters of the Act 3. Minimum conditions of employment 3.1 Working time Chapter 2 of the BCEA regulates working time but is not applicable to senior managers; Max 45 per week; • 5 days per week 9 hrs /d • 6 days per week 8 hrs/d • Employers endeavour to reduce time to 40 hrs/w • Can be extended by 15 mins/w but not more than 2 hrs per week One hour meal interval for 5 hours continuous work Can be reduced by agreement to 30 minutes Overtime - max 10 hrs /w but can extend to 15 by collective agreement Overtime only by agreement; • Pay 1 ½ times normal or time off • O/T may not be more than 12 hrs on any day Sunday and public holiday rates are at double and if the employee normally works on a Sunday this is at 1 ½ times For night work ; • allowance applies Night work is after 6 pm and before 6 am Night work can only be done in terms of an 7 • reduced hours of work • be provided with transport to and from place of residence agreement Employee is entitled to; • Daily rest period of 12 hours between working periods • A weekly rest period of 36 hours Parties may agree the employees can work up to 12 hours in a day without overtime provided; • The employee does not do more than 45 hours per week • More than 10 hours overtime in the week Ordinary hours and overtime can be averaged over a four month period in terms of a collective agreement Averaging of working and overtime hours is allowed for peak periods in certain sectors due to their cyclicality 3.2 Leave Chapter 3 of the BCEA regulates leave but is not applicable to employees who work less than 24 hours a month. Minimum of 21 consecutive calendar days paid leave excluding public holidays Maternity leave – 4 consecutive months • Commence from 4 weeks before birth or • On a date where deemed necessary either for employees’ or the unborn’s health This is unpaid leave and the employee must notify the employer in writing Entitled to 3 days family responsibility leave • When child is sick • In the event of the death of the employee’s spouse, partner, parent, child etc Only applicable to employees who have worked longer than 4 months and who work at least 4 days a week. No provision in the event of the death of an inlaw Six weeks paid sick leave in every three yearly cycle. If absent longer than two days a sick note is required from a doctor 3.3 Other matters a. Wages Neither the BCEA nor any other law stipulates minimum wages for employees. However these are determined in collective agreements and ministerial and sectoral determinations. Employees must be paid in Rands, weekly, fortnightly or monthly in cash, cheque or direct deposit. b. Notice periods BCEA provides for minimum notice periods in the event that the contract does not make provision therefore; • One week if employed for less than 6 months • Two weeks if more than 6 months but less than a year • Four weeks if more than a year or a farm worker or domestic employed for more than 6 months 8 Notice can be reduced to two weeks by collective agreement. Alternatively an employer may pay out an employee salary equivalent to the notice period. c. Severance Pay Dismissal based on operational requirements means payment of one week per year’s employment. But an employee who unreasonably refuses an offer of alternative employment is not entitled to severance pay. d. Certificate of service An employer is required to supply an employee with a certificate of service when employment is ended. 4. Children and forced labour The BCEA prohibits the employment of children under 15. However children less than 15 can participate in sporting, advertising and cultural events provided that; • Nourishment is provided • Pay directly to parents or guardian • Space set aside for rest and play • Maximum hours are stipulated (four 10 yrs and three 10 years) as are rest periods after 2 hours continuous work for those 10 and 1.5 hrs for those 10 years • Safe transport to be provided between home and workplace 5. Enforcement of the BCEA 5.1 The Courts Labour court has concurrent jurisdiction with civil courts with the former having wide powers including compliance orders and the issuing of fines 5.2 Inspectors Provision is made for inspectors who must monitor and enforce compliance. Inspectors are allowed to; • Enter workplaces • Question employers / employees • Inspect documents • Obtain written undertakings from an employer in default to comply and issue a compliance order if the employer refuses, else recourse may be obtained from Labour Court for compliance.