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Green Paper on Labour

DEPARTMENT OF LABOUR

MINIMUM STANDARDS DIRECTORATE POLICY PROPOSALS FOR A NEW EMPLOYMENT STANDARDS STATUTE GREEN PAPER

13 FEBRUARY 1996

Contents

EXECUTIVE SUMMARY

CHAPTER A: INTRODUCTION

CHAPTER B: SCOPE OF THE NEW LEGISLATION

CHAPTER C: NON-STANDARD EMPLOYMENT

CHAPTER D: VARIATION OF EMPLOYMENT STANDARDS

CHAPTER E: EMPLOYMENT STANDARDS COMMISSION

CHAPTER F: WORKING TIME

CHAPTER G: MATERNITY LEAVE AND FAMILY RESPONSIBILITY

CHAPTER H: CHILD LABOUR

CHAPTER I: THE INDIVIDUAL EMPLOYMENT RELATIONSHIP

CHAPTER J: ENFORCEMENT

CHAPTER K: ADMINISTRATIVE OBLIGATIONS

ANNEXURE: HOW LONG DO SOUTH AFRICANS WORK?

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Commonly Used Abbreviations

BCEA

Basic Conditions of Employment Act 3 of 1983

CCMA

Commission for Conciliation, Mediation and Arbitration

CLMC

Comprehensive Labour Market Commission

COIDA

Compensation for Occupational Injuries and Diseases Act, 130 of 1993

ILO

International Labour Organisation

LRA

Labour Relations Act, Act 66 of 1995 (Note: the Labour Relations Act 28 of 1956 has not yet been repealed and is referred to as the 1956 LRA)

NEDLAC

National Economic Development and Labour Council

RDP

Reconstruction and Development Programme

UIA

Unemployment Insurance Act 30 of 1966

UIF

Unemployment Insurance Fund

Executive Summary - Policy Proposals for a new Employment Standards Statute

1. This Green Paper is the first step taken by the Department of Labour to develop new legislation to regulate employment standards in South Africa and replace the Basic Conditions of Employment Act (1993) and Wage Act (1957).
2. The Green Paper is not an official government view but a set of policy proposals and options for discussion and debate at NEDLAC, the public and other government agencies. The result of this process will be a draft Employment Standards Bill to be presented to Parliament in the second half of the year.
3. The need for change

   The BCEA and Wage Act need to be revised for many reasons. These include:

   3.1 The approach of these laws to employment standards is rigid and outdated, particularly in respect of working time.

   3.2 There are arbitrary differences in conditions of employment for different groups of workers.

   3.3 Vulnerable workers are inadequately protected.

   3.4 The Wage Act does not apply to farm and domestic workers.

   3.5 Their enforcement through criminal cases is ineffective and does not encourage compliance with labour standards.

   3.6 The Acts need to be revised to be consistent with the Constitution and the new Labour Relations Act (1995).

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4. Introducing 'regulated flexibility'

   4.1 The Green Paper's starting point is the need to balance the protection of minimum standards and the requirements of labour market flexibility.

   4.2 To achieve this, the Green Paper proposes the concept of 'regulated flexibility'. This has two main aspects:

   4.2.1 The protection and enforcement of a revised body of basic employment standards.

   4.2.2 Rules and procedures to vary these standards through collective bargaining, sectoral determinations for unorganised sectors and administrative variations (exemptions).

5. Principal aspects

   The principal aspects that the Green Paper has borne in mind in proposing revisions to employment standards are:

   5.1 Setting appropriate standards for current employment conditions. This includes modernising standards, bringing them in line with the Constitution and the LRA (1995) and revitalising the Wage Board to develop appropriate standards for employees in unorganised sectors.

   5.2 Allowing greater labour market flexibility through removing inappropriate restrictions, enabling arrangements to allow for the more productive use of working time and providing for variation through collective bargaining.

   5.3 Promoting collective bargaining, as a means of varying employment standards.

   5.4 Supporting employment creation by ensuring that proposals are compatible with employment creation and avoiding any consequence that may destroy jobs.

   5.5 Encouraging compliance with employment standards through the introduction of more effective enforcement mechanisms.

   5.6 Promoting a healthy work environment by minimising the potential negative effects of the arrangement of working time on the health and safety of workers and the public.

   5.7 Reducing administrative burdens on employers.

   5.8 Establishing a clear set of rights by developing a simpler statute drafted in plain language.

   5.9 Addressing gender discrimination and giving effect to South Africa's obligations under the Convention on the Elimination of all Forms of Discrimination Against Women.

6. The key areas of change proposed by the Green Paper are detailed below.
7. Scope of new legislation

   New employment standards legislation should (like the new LRA) cover all employees except the security and intelligence forces. There may be certain additional exclusions. The Minister should have the power to exclude higher paid workers as well as to vary the application of certain provisions of the Act to the public sector.

8. Non-standard employment relationships

   8.1 There are increasing numbers of part-time workers, temporary workers, workers supplied by labour brokers, home workers and contract workers in the labour market. They are particularly vulnerable to exploitation and not covered adequately by labour legislation.

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   8.2 To improve protection for these workers, it is proposed that:

   8.2.1 Part time workers should be entitled to the same protections as full time workers on a proportional basis.

   8.2.2 Employers who engage labour contractors are jointly liable for violations of employment standards.

   8.2.3 Employment standards can be extended to contract workers.

   • Appropriate protections for other categories of vulnerable workers should be developed.
9. Varying Employment Standards

   9.1 To allow for greater labour market flexibility, the Green Paper identifies the extent which issues can be varied. It is proposed that employment standards can be varied in the following ways:

   9.1.1 through collective bargaining.

   9.1.2 by wage determinations.

   9.1.3 by administrative variation (exemptions).

   9.1.4 in individual contracts of employment.

   9.2 The Wage Board should be revitalised. Its name should be changed to the Employment Standards Commission and its functions extended. Its principal function would be to develop employment standards for sectors of the economy not covered by collective bargaining. It should also be able to advise the Minister on a wider variety of issues relating to the regulation of employment standards as well as the impact of government policies on employment creation.

10. Working Time

    10.1 The Department is committed to the goal of reducing hours of work to 40 per week and to a framework that enables more flexible arrangements of working time. This will require a comprehensive and integrated approach involving legislation and national agreements.

    10.2 The following package of proposals is put forward for debate:

    10.2.1 Legislative changes to:

    1. Reduce hours of work from 46 and 48 to 45 and a reduction in excessive limits for security workers from 60 to 48.
    2. Permit more flexible working arrangements such as compressed working weeks and the averaging of working hours to be introduced by collective bargaining.
    3. Remove restrictions on Sunday work.
    4. Adjust the system for compensating overtime.

    10.2.2 A national strategy to further reduce hours of work in the context of promoting job creation, productivity, human resource development and wage compensation. Components of this strategy could include:

    1. A framework agreement which could be implemented sectorally taking into account the specific circumstances of different sectors.
    2. A timetable for reduction of working time.
    3. Investigation by the Employment Standards Commission and the setting of sectoral employment standards in unorganised sectors.
    4. Special provisions for small business.
    5. Technical assistance to social partners.

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    10.3 The manner in which working time is organised can impact significantly on the health and safety of workers and the public. There should be a general duty on employers to avoid these consequences. A Code of Good Practice to guide employers and workers should supplement the duty.

    10.4 Night work should be regulated. It is proposed that a 20 per cent premium for night work should be introduced and that special steps be taken to protect the health of night workers.

    10.5 The present annual leave entitlement of two weeks is increased to three weeks which is in line with the practice of most employers and with international standards.

    10.6 In regard to public holidays, it is proposed that the new legislation be brought in line with the Public Holidays Act which allows for the exchange of a public holiday with another day.

    10.7 The right to paid sick leave at current levels is retained, while changes are introduced to allow for greater flexibility to bargain collectively on the administration of sick leave.

11. Maternity and family responsibility. The following proposals are made to modernise our legislation:

    11.1 Workers are entitled to four months maternity leave during which her security of employment is protected.

    11.2 Women may not work for six weeks after the birth of a child unless agreed to by a doctor.

    11.3 A woman employed in night work or work which could be harmful to her or her child is entitled to suitable alternative work during pregnancy and a year after the birth of her child.

    11.4 Workers with more than one year's service are entitled to three days paid paternity or child care leave during each year.

12. Child labour

    12.1 Recent surveys such as the October Household Survey indicate that as many as 200,000 children or 4 per cent of children between 10 and 14 could be engaged in child labour.

    12.2 There needs to be an integrated strategy linked to the provision of free basic education and addressing poverty to combat child labour.

    12.3 Children below 15 should be prohibited from working unless a Ministerial exemption is obtained. Exemptions should only be granted if the work does not place the child's physical and mental well being at risk.

    12.4 Children between 15 and 18 should not be permitted to perform work that is hazardous for that child's age or harmful to their health.

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13. Individual employment relationships

    13.1 The provisions in the Labour Relations Act (1995) on unfair dismissal and individual unfair labour practices (excluding those relating to employment equity) should be transferred to the new legislation.

    13.2 A four weeks notice period for all workers is proposed.

    13.3 Workers should have a right to receive written particulars of their employment.

    13.4 Employers should not be able to discriminate against workers who exercise rights conferred upon them by the legislation.

14. Enforcement

    14.1 An integrated enforcement system is proposed which will move away from the adversarial system and improve compliance with labour legislation.

    14.2 Proposals include:

    14.2.1 Allowing inspectors to issue 'compliance notices' to employers, and to issue penalties to employers who fail to keep prescribed records.

    14.2.2 Workers to be able to use the Small Claims Court, Labour Court or Commission for Conciliation, Mediation and Arbitration to institute claims against employers.

    14.2.3 Retaining criminal sanctions for serious offences such as child labour and repeated breaches.

15. Administrative obligations

    15.1 Labour statutes impose different administrative obligations upon employers, some of which overlap.

    15.2 To assist employers, particularly small employers. These obligations should be reduced and simplified. A single prescribed reporting form is proposed. This would increase the efficiency of the Department of Labour.

    15.3 The new legislation should also harmonise definitions commonly used in all labour legislation to create greater certainty.

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CHAPTER A: INTRODUCTION

Contents

1. Present law
2. Labour market policy and employment standards
3. Problems with existing legislation
4. The basis for new legislation
5. Principal aspects of new legislation

The publication of this Green Paper is the first step taken by the Department of Labour in developing new legislation to regulate minimum employment standards in South Africa. The Department believes that the Basic Conditions of Employment Act 3 of 1983 (BCEA) and the Wage Act 5 of 1957 should be revised and replaced by a single law regulating statutory employment standards. This is needed to meet the country's social, political and economic goals as reflected in the Reconstruction and Development Programme (RDP) and adopted by the Government of National Unity.

The purpose of the Green Paper is to promote a debate on the development of the law. It contains proposals and options for discussion. It also briefly describes important aspects of these Acts for people who may not be familiar with their contents.

The Green Paper has been prepared by the Directorate: Minimum Standards of the Department of Labour which is responsible for enforcing the BCEA and the Wage Act. It does not represent an official government view. It has not been endorsed by the Cabinet. It awaits the outcome on certain issues of the Report of the Comprehensive Labour Market Commission. The Green Paper will be submitted to the social partners at the National Economic Development and Labour Advisory Council (NEDLAC) for consideration. It is published to obtain public comment and will be circulated to other government agencies to obtain their views.

The Green Paper concentrates on the principles that will form the basis for the development of the new legislation. It draws the attention of the public and the social partners to aspects of the existing laws that often do not receive adequate attention.

Once the initial negotiations at NEDLAC are concluded, and the public comment has been received and analysed, a draft Employment Standards Bill will be prepared and presented for consideration to the social partners at NEDLAC. It will then be tabled in Parliament.

This chapter looks at the laws that now regulate minimum standards and the problems with those laws. It then proposes themes for the development of new legislation.

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1 PRESENT LAW

The BCEA and the Wage Act set minimum employment standards for the majority of employees in South Africa. They are therefore the formal basis of the employment conditions of millions of South Africans employed in the private sector. The BCEA contains a "floor" of minimum rights for employees in the private sector. As Table 1 illustrates these rights apply to more than four million employees. The BCEA covers matters such as working time, overtime and overtime pay, annual leave, sick pay and maternity leave. It does not set minimum wages. The Act does not apply to employers and employees in sectors of the economy with wage-regulating measures (industrial council (bargaining council) agreements, wage determinations and labour orders). It covers all other employees, although some employees, such as managers and senior personnel, are excluded from some of its provisions.

The Wage Act established the Wage Board. The Board has the power to investigate standards of employment in sectors of the economy without industrial councils and make recommendations to the Minister to make wage determinations. These may contain minimum wages and other conditions of employment. The Wage Act still does not apply to farmworkers and domestic workers.

TABLE 1 - Approximate figures to show number of employees covered

2 LABOUR MARKET POLICY AND EMPLOYMENT STANDARDS

The RDP White Paper states that "an active labour market policy must be geared towards maximising quality employment and minimising unemployment and underemployment, and while doing so improve efficiency, equity, growth and social justice" (paragraph 3.11.1,). Employment standards legislation is thus is an integral part of such a labour market policy.

Current employment standards and the development of new standards must be within the context of the economic, social and political goals of the Government of National Unity. These include:

• employment creation
• improved living standards
• reduced social inequality
• competitive enterprises
• enhanced investment in human resources development
• improved levels of productivity
• the deepening of democracy, including workplace democracy.

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The revision of employment standards is part of a broad developmental strategy in line with these goals. The Comprehensive Labour Market Commission, appointed by the President, has been investigating the employment related aspects of the RDP and will be reporting in June this year. In 1994, the Ministry of Labour published a five year plan. In addition, the proposals in this Green Paper need to be seen in the context of other reforms proposed by the Ministry of Labour's 1994 Five Year Plan. Employment Equity legislation is also planned for this year, while 1997 should see the revision of the Department's legislation in the area of human resources. Amendments have been proposed to the Insolvency Act to strengthen the claims of workers in the event of their employer's insolvency.

The success of aspects of the proposed legislation depend on other areas of social reform. For example, the provisions concerning sick pay will depend on reforms to the health system. The strategies to regulate child labour depend on the reconstruction of our education system. The proposals for improving the enforcement of employment standards are paralleled in the draft Mine Health and Safety Bill prepared by the Department of Mineral and Energy Affairs and mining unions and employers. The observance by small employers of employment standards is linked with the development of an enabling environment for emerging and expanding SMME's as proposed in the National Small Business Enabling Act.

3 PROBLEMS WITH EXISTING LEGISLATION

The BCEA and the Wage Act do not meet the requirements of the country's new economic, social and political goals.

The BCEA was enacted in 1983. It merged the minimum conditions of employment in the Shops and Offices Act and the Factories Act. Many of the provisions in the BCEA have their origins in legislation introduced in the 1920s to 1940s. These reflect a rigid and outdated approach to the regulation of working hours and other conditions of employment.

Many workers are excluded from the scope of basic rights and work without legal protection. Others have very limited protection or have minimum standards that are harsh or excessive. Furthermore, the systems for enforcing rights and encouraging compliance with Acts' standards have become ineffective. The law does not protect the vulnerable and the unorganised. Many of the standards are also rigid and restrict the productive arrangement of work and working time which hampers productivity and efficiency. The more detailed reasons why a new law is required to give effect to comprehensive labour market policies are:

• The daily and weekly limits on hours of work are rigid and restrict the arrangement of working hours for both part-time and full-time employees. These features are repeated in wage determinations.
• The BCEA was designed to protect full-time employees only: part-time workers are excluded from significant benefits.
• Permission from an inspector is required for Sunday work in a factory or a shop. The restriction on Sunday work is a central feature of the BCEA's regulation of working time.
• Some aspects of hours of work in the mining industry are regulated by the Minerals Act 50 of 1991. These are less favourable than those in the BCEA. The Mines and Works Act 27 of 1956 prohibits Sunday work in mines.
• There are arbitrary differences in conditions of employment for different groups of workers.
• Many of the conditions of employment in the BCEA and in wage determinations are inappropriate, unclear or require revision:
  • limits on overtime and overtime pay
  • annual leave
  • sick pay
  • notice of termination
  • maternity leave
  • child labour
• Some provisions of the BCEA and wage determinations could be challenged under the new Constitution (Act 200 of 1993), for example, child labour and maternity leave.
• The enforcement through criminal cases is adversarial, ineffectual and does not encourage compliance with employment standards. This severely disempowers the inspectorate.
• Both Acts are inconsistent with the Labour Relations Act 66 of 1995 and other laws administered by the Department of Labour. This undermines the effectiveness of the Department.
• The protections in the BCEA and the Wage Act are not integrated with the unfair labour practice jurisdiction.
• The Wage Act does not apply to the agriculture and the domestic sectors.

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4 THE BASIS FOR NEW LEGISLATION

The new legislation must address both the new standards and the procedures and institutions to make the standards effective.

This Green Paper proposes a legislative model of "regulated flexibility". This is a policy approach that aims to balance the protection of minimum standards and the requirements of labour market flexibility.

"Regulated flexibility" has two main aspects:

• the protection and enforcement of revised basic employment standards
• the establishment of rules and procedures for the variation of these standards.

The new legislation must provide for the variation of employment standards through collective bargaining, sectoral determination for unorganised sectors, administrative variation and individual contracts of employment.

5 PRINCIPAL ASPECTS OF NEW LEGISLATION

In the remainder of this introduction we look at some of the principal aspects of the proposed new legislation:

5.1 Setting employment standards

The Green Paper makes proposals to develop a set of employment standards appropriate for current employment conditions. These are:

• to modernise employment standards
• to protect vulnerable employees and employees in non-standard employment
• to bring employment standards in line with the Constitution of the Republic of South Africa 200 of 1993 and the reforms introduced by the LRA of 1995
• to incorporate protection against unfair dismissal and unfair labour practices
• to revitalise the Wage Board (to be reconstituted as the Employment Standards Commission)
• to develop appropriate employment standards for employees in unorganised sectors.

5.2 Allow greater labour market flexibility

The new legislation should:

• remove inappropriate restrictions on working time and other employment conditions
• permit the introduction of arrangements for the more productive use of working time, skills and equipment
• provide for wider variation of employment standards.

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5.3 Promote collective bargaining

The new legislation will promote the role of collective bargaining as a means of varying employment standards. In particular, the proposals stress the role of collective bargaining in introducing flexible working arrangements.

5.4 Support employment creation

"Employment creation is at the heart of efforts aimed at creating a democratic and prosperous society" (Ministry of Labour's programme of action 1994 to 1998 at page 3). The proposals in the Green Paper are compatible with employment creation and seek to avoid any consequence that may destroy jobs.

5.5 Encourage compliance with employment standards

Effective measures for encouraging compliance with employment standards need to be developed. It is proposed that the current use of criminal sanctions as the major means of enforcement be replaced by a range of mechanisms and incentives for compliance with employment standards.

5.6 Promote a healthy work environment

A central purpose of labour law is to promote a healthy work environment and the arrangement of working time is a crucial aspect of this. The new legislation should promote an approach which minimises the potential negative impact of the arrangement of working time on employees' health and safety and on the public. Important examples are the regulation of night work and work in sectors which affect the safety of the public.

5.7 Reduce administrative burdens

It is important to reduce the administrative burdens placed by current labour laws upon employers. Proposals are made to rationalise and simplify administrative obligations upon employers.

5.8 Establish a clear set of rights

The new employment standards legislation will be drafted in plain language and will aim to include a range of easily understood guides and schedules to assist employees and employers to understand the law. Provision is made for the drafting of Codes of Good Practice.

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5.9 Discrimination against women

South Africa has recently ratified the "Convention on the Elimination of all Forms of Discrimination Against Women" of 1979. The new legislation gives effects to obligations that affect employment standards.

5.10 International standards

The BCEA and the Wage Act do not comply with many international standards reflected in International Labour Organisation Conventions. These Conventions are indications of what government, employers and trade unions consider appropriate minimum international norms and standards. The proposals for new legislation are guided by these standards where they are appropriate for South Africa.

CHAPTER B: SCOPE OF THE NEW LEGISLATION

This chapter lists the categories of employees who are not covered by the BCEA and Wage Act and examines whether they should be covered by the new legislation.

Problem statement

The RDP calls for "equal rights for all workers, embodied in a single set of labour statutes". (paragraph 4.8.2)

Significant groups of employees (eg state employees) are excluded from the BCEA. The Constitution states all workers are entitled to fair labour practices. Farmworkers and domestic workers are not covered by the Wage Act.

Discussion

The LRA of 1995 will be the first labour relations law to apply to both the public and private sector. It covers all employees except members of the security forces and intelligence services. The harmonisation of aspects of the law of collective bargaining, dispute resolution and unfair dismissal is one of the most significant reforms introduced by the LRA of 1995. The provisions concerning unfair dismissal and the residual unfair labour practice are to be moved to the proposed employment standards legislation.

State employees. The most significant exclusion from both the BCEA and the Wage Act is that of employees of the state (both national and provincial) and employees of state-funded educational institutions. The law of unfair dismissal and the residual unfair labour practice which will apply to these employees is to be transferred from the new LRA to the new employment standards legislation. The extent to which the remainder of the proposed new legislation should similarly include the public and private sectors requires careful consideration.

The arguments in favour of this approach include the benefits of standardisation and consistency. Increasingly, the distinction between the private sector and public service is becoming blurred. Internationally, many public administrations have used private sector approaches to improve efficiency. This has led to corresponding changes in employment standards.

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The employment standards legislation prescribes substantive minimum conditions of employment. The sources of substantive conditions of employment in the public service are found in the Public Service Act and the legislation regulating the police and the educational sector, the various staff codes and bargaining council agreements (under the new LRA). In sectors in which bargaining councils are established these agreements will take precedence over the proposed legislation. The direct effect of inclusion of the public service under the new law will be that many of its provisions will not apply to the public service.

Farmworkers and domestic workers. Farmworkers and domestic workers remain excluded from the Wage Act. These employees require the protection of all aspects of new employment standards legislation.

Parastatal and statutory bodies. The continued total exclusion of a variety of parastatal organisations, marketing control boards and state-aided welfare organisation, children's welfare institutions and cultural institutions established under particular enabling legislation is no longer appropriate.

Temporary employees employed for agricultural and industrial shows. Temporary employees employed for agricultural, industrial or similar shows are excluded. Exclusion is not appropriate. Any need to vary employment standards for the duration of a show should be regulated by variation.

Employees on vessels at sea covered by the Merchant Shipping Act 57 of 1951. It may be appropriate for the full extent of this exclusion to be reviewed and appropriate conditions for this sector (or parts of this sector) to be regulated by a proposed Sectoral Employment Standard (wage determination).

Trainees and university students. Employees in training whose conditions of employment are regulated by conditions of apprenticeship under the Manpower Training Act 56 of 1981 are excluded from the operation of the BCEA to the extent that their conditions of employment are regulated by that Act. This approach should continue. If specific employment standards are developed for trainees under legislation regulating human resources development and training, those standards should take precedence on the matters that they regulate.

University students performing work required for their degrees should continue to be exempt from the BCEA.

Voluntary charity workers. The exclusion of voluntary workers should continue as these employees do not require the protection of employment standards.

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Partial exclusions. The BCEA applies in a limited fashion to several significant categories of employees:

• sales personnel and travellers
• shop and office employees earning a prescribed amount
• managers and other senior personnel earning above a prescribed amount.

The partial exclusion of sales personnel and travellers requires consideration. The continued exclusion of high-paid employees should continue. The Minister should exercise these powers on the advice of the Employment Standards Commission.

Proposal

The legislation should cover all employees except:

• members of the security forces and intelligence services
• unpaid employees of charitable organisations
• trainees, to the extent that their conditions of employment are regulated under other legislation.

The Minister of Labour should have the power, in consultation with the relevant Minister, to exclude the application of any provision of the Act to employees of the state, the South African Police Services and employees of educational institutions.

The Minister should have the power to exclude the application of any provision of the Act to employees earning above a defined level of earnings.

CHAPTER C: NON-STANDARD EMPLOYMENT

Contents

1. Part-time employees
2. Temporary employees
3. Employees of contractors
4. Dependant contractors
5. Employees at piece rates

This chapter looks at the need for the new legislation to protect vulnerable employees in non-standard employment.

The current labour market has many forms of employment relationships that differ from full-time employment. These include part-time employees, temporary employees, employees supplied by employment agencies, casual employees, home workers and workers engaged under a range of contracting relationships. They are usually described as non-standard or atypical employees.

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Most of these employees are particularly vulnerable to exploitation because they are unskilled or work in sectors with little or no trade union organisation or little or no coverage by collective bargaining. A high proportion are women. Frequently, they have less favourable terms of employment than other employees performing the same work and have less security of employment. Often they do not receive "social wage" benefits such as medical aid or pension or provident funds.

These employees therefore depend upon statutory employment standards for basic working conditions. Most have, in theory, the protection of current legislation, but in practice the circumstances of their employment make the enforcement of rights extremely difficult. Others are excluded and consideration must be given to their inclusion. This section identifies the main categories of non-standard employment and makes proposals for greater protection.

The proposals must be viewed in the context of the changes introduced by the LRA of 1995 which will significantly improve the employment security of these employees. This must also be seen in the context of the proposals to achieve greater compliance with employment standards set out in Chapter I.

1 PART-TIME EMPLOYEES

Problem statement

Part-time employees are inadequately protected by the BCEA and the Wage Act.

Discussion

Part-time employees are employees who regularly work less than the ordinary hours of work in the sector in which they are employed. While there appears to be relatively low levels of part-time employment (approximately 2% of the workforce) in South Africa, most part-time employees are women [October 1994 Household Survey].

The BCEA incorrectly uses the term "casual employees" to describe part-time employees. It classifies employees who work for an employer on three or less days a week as "casual employees". The BCEA denies them the right to paid leave, paid sick pay and notice of termination. A 1996 ILO study reveals that approximately half of part-time employees in the manufacturing sector do not receive paid leave or paid sick leave. (ILO Country Review).

The BCEA defines domestic workers who work for an employer for three days or less in a week as "regular day workers". They receive all the protections in the BCEA on a proportional basis, except the right to notice of termination. This new approach was necessary because many domestic workers work part-time for several employers. This more inclusive approach suggests the direction for future reforms.

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The basic norm should be that all employees, including part-time employees, should be protected by employment standards. Where appropriate, these employees should receive benefits on a proportional basis.

Employees who enter employment on a part-time basis and who remain in regular employment should acquire the right to fill appropriate vacancies that arise in the full-time work-force. Provisions of this type encourage part-time employment as a "bridge" into permanent full-time employment.

Proposals

Part-time employees should be entitled to all protections in the Act, where appropriate on a proportional basis.

A part-time employee who has been employed for two years or longer is entitled to be considered in preference to any person not in employment for a vacancy for which the employee is adequately qualified and has sufficient experience.

2 TEMPORARY EMPLOYEES

Problem statement

Many employees in regular employment are classified by their employers as temporary employees although they are in ongoing employment.

Discussion

The practice of incorrectly classifying employees as "temporary" is used by some employers to pay them lower benefits than other employees performing similar tasks. The unfair dismissal provisions and the residual unfair labour practice will offer protection against this type of abuse.

3 EMPLOYEES OF CONTRACTORS

Problem Statement

Employers who engage contractors have no liability for violation of employment standards by the contractors. Certain contractors are able to evade their obligations in terms of labour legislation.

Discussion

Employers are increasingly using contractors and sub-contractors to supply goods or services. There is significant use of contractors in many sectors of the economy, especially the mining industry. Considerable use is made of contractors to perform tasks formerly performed by employees.

Three parties are involved in a contracting relationship: the contractor, its employees and the user (the business that engages the contractor). The terms "contractor" and "sub-contractor" are sometimes used interchangeably and usage varies from sector to sector. (In this discussion the term "contractor" is used to cover both categories.)

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The LRA of 1995 protects employees engaged by temporary employment services by imposing joint and several liability for violation of employment standards on both the employment service and the client to whom the employees are supplied. (This means that both parties are liable in the event of a violation of labour legislation.) This approach should be adopted in the proposed legislation to protect employees of certain types of contractors.

Labour legislation commonly distinguishes contractors who supply goods or services from contractors who supply labour. The potential for abuse in labour contracting is recognised internationally; several countries prohibit labour contracting or require authorisation. To the extent that labour contractors fall outside the definition of a temporary employment service, the new legislation should impose joint and several liability.

Many contracts for services are in effect contracts for labour. This is particularly true when employees are engaged through a cascading series of contracting relationships, for example, in the construction industry or where the contractor has minimal infrastructure as in the security industry. These contractors sometimes avoid their obligations by simply changing their identity or location. It is therefore proposed that the term labour contractors should include contractors who, while supplying a service:

• do not supervise their employees while working
• supply little or none of the infrastructure or equipment used by their employees.

Much contracting work is performed in respect of work formerly performed by the user's employees. This is very controversial because these arrangements are often preceded by retrenchments. It also leads to situations in which employees performing similar or the same work may receive different benefits. For this reason, many countries have sought to regulate this type of contracting by placing joint and several liability on users where the contractor's employees are performing work that forms a part of the employer's principal or core business or by requiring equality of treatment. The regulation of this form of contracting requires careful consideration.

Proposal

An employer who engages a labour only contractor is jointly and severally liable if the contractor violates any employment standard.

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4 DEPENDENT CONTRACTORS

Problem statement

Some workers are excluded from employment standards because they are not classified as "employees".

Discussion

Labour law traditionally distinguishes employees (who enter into a contract of service with their employer) from independent contractors. The South African courts look at the contract as a whole to determine whether a person is an "employee" or an "independent contractor". This distinction excludes "classic" independent contractors (such as a plumber hired to perform a particular task) from the ambit of labour legislation.

The development of new working arrangements has led to an increasing number of workers being excluded from the protection of labour legislation because of the terms of their contract which do not meet the traditional employment test. Sectors where this is present include home working, transport and agriculture. These workers are potentially subject to extremely exploitative working conditions and are often referred to as "dependent contractors".

Certain countries extend labour protection to "dependent contractors". It is proposed that this should be done in South Africa by empowering the Employment Standards Commission to recommend to the Minister to extend particular sectoral employment standards to "dependent contractors".

Proposal

The Employment Standards Commission should have the power to recommend the extension of employment standards to workers who fall outside the formal definition of an "employee" but who are engaged in a dependent contracting relationship.

5 EMPLOYMENT AT PIECE RATES

Problem statement

Many vulnerable workers are paid on a piece rate basis. There is no general protection against the abuses associated with piece-rate work.

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Discussion

There is no general protection of employees engaged on a piece-rate basis. The BCEA provides some protection for piece workers in agriculture (s.19(3)); a number of wage determinations and industrial council agreements either prohibit payment other than for time worked, or prescribe specific minimum payments for time worked by employees doing piece work, with the piece work payments being treated as productivity bonuses. Task-based work has been used on labour-intensive job creation schemes in the civil engineering industry.

Payment of blanket piece work rates often undermines the provisions on working hours effectively compelling employees to work excessive hours. It is suggested that the provisions applicable in certain wage determinations and the BCEA approach regarding farmworkers be made generally applicable. Consideration must be given to the inclusion of appropriate general protections for piece-rate workers.

CHAPTER D: VARIATION OF EMPLOYMENT STANDARDS

Contents

1. Variation by collective bargaining
2. Variation by sectoral employment standards (wage determinations)
3. Variation by administrative procedure
4. Variation by individual contract of employment

Employment standards legislation must provide for variation from the statutory standards in certain circumstances. Under the existing law variation from employment standards is permitted by an administrative procedure for exemption or by the replacement of the standards by those contained in wage regulating measures. Wage regulating measures include wage determinations, industrial council agreements, labour orders and conditions of apprenticeship. These methods of variation have been criticised for their rigidity and lack of responsiveness to the needs of the modern enterprise in an increasingly global economy.

Any new legislation must seek to balance the demands of international competitiveness and the protection of basic rights of workers in order to give effect to the goals and principles of the RDP. These include high productivity, improved efficiency, equity and social justice (paragraph 3.1.1 of the White Paper) and the promotion of collective bargaining at industrial and workplace levels (paragraphs 3.11.1 and 3.11.13 of the White Paper). New legislation must recognise that South Africa's return to the international economy demands that enterprises compete with countries whose employment standards and social costs of production vary considerably. It must therefore avoid the imposition of legal rigidities in the labour market, provide greater flexibility and introduce more responsive mechanisms for variation from statutory standards. The new law envisages four methods to give effect to this idea of "regulated flexibility":

• collective bargaining
• wage determinations (sectoral employment standards)
• expeditious administrative procedures for exemption
• individual contracts of employment.

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1 VARIATION BY COLLECTIVE BARGAINING

Collective bargaining is the preferred method of regulating the labour market. One of the purposes of any employment standards legislation must be to encourage collective bargaining. It can do this by permitting collective bargaining to vary basic employment standards by collective agreement. It can promote collective bargaining in workplaces where there are representative trade unions by requiring agreement as a necessary condition for administrative exemption or ratification.

However there are limitations that should be placed on the outcomes of collective bargaining to ensure that the broad policy goals of the statute are not undermined.

1.1 Fundamental rights

Collective agreements should not be able to vary - to the detriment of employees - fundamental rights and protections. The precise ambit of the fundamental rights that merit this form of protection requires debate. The question for debate is which rights are so fundamental that the state must guarantee them to all employees. The Constitution and the state's public law obligations may provide the starting point to this enquiry. The following rights and standards may constitute the core of this category:

• the prohibition on child labour
• the prohibition on discrimination
• protection against employer abuse (for example the imposition of fines)
• automatically unfair dismissals

1.2 Variations not against the public interest

The second reason for limiting collective bargaining is the effect that a variation may have on third parties. For instance, the right to sick pay illustrates an area of potential controversy. Should a bargaining council be able to strike an agreement in terms of which employees do not have the right to paid sick leave? This may represent trade-off for another benefit such as a higher wage increases. But this will have adverse social costs. Employees working while they are sick results in a transfer of costs from the enterprise to the health system. The Australian Industrial Relations Commission ruled that an agreement of this kind was not in the public interest.

The approach to this category of rights and standards should be to permit variation by collective bargaining subject to exemption or ratification. The new legislation ought to provide a fast-track procedure for exemptions based on collective agreements or provide for the ratification of collective agreements that vary rights and standards in this category by the Employment Standards Commission. Consideration must be given in the debate to what the test for ratification or exemption should be. The tests that are generally employed are whether or not the variations from the standards are: (a) in the "public interest"; or (b) "on the whole not less favourable". The rights and protections that may fall into this class are:

• sick pay rights
• maternity rights

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1.3 Variation within statutory limits

The new legislation should also specify the instances in which collective agreements are able to vary employment standards within defined limits but without exemption or ratification. This would include the capacity to make arrangements to promote flexible working patterns. Proposals in this regard are included in this Green Paper. This approach has been adopted in respect of the following:

• ordinary working time including the length of the working day and the length of the working week
• weekly rest periods
• meal intervals

It is necessary to distinguish between agreements concluded by the parties to bargaining councils and other collective agreements. The LRA of 1995 significantly alters the inter-play between the bargaining council agreements and minimum standards. Under the Labour Relations Act 28 of 1956 an agreement concluded by the parties to an industrial council acquired the force of subordinate legislation once promulgated by the Minister of Labour. The promulgated agreement, like any other wage-regulating measure, took precedence over the provisions of the BCEA by virtue of section 1(3) of the BCEA. The Minister's right to exercise a discretion as to whether or not to promulgate an individual agreement allowed the Minister to examine the agreement concluded by the parties to a council in the light of the BCEA and to determine whether or not the conditions of employment were acceptable.

In terms of the LRA, all collective agreements, including those concluded at bargaining councils, acquire legal force in terms of section 23 of the Act. Agreements are no longer transformed into subordinate legislation. The role of the Minister is confined to the extension of an agreement to non-parties within the registered scope of the council (s. 32). The Minister does not consider the substantive conditions of employment in deciding on an extension other than whether or not they discriminate against non-parties.

The LRA of 1956 accords no special status to collective agreements that are not promulgated in the Government Gazette. Their provisions cannot deviate from the Basic Conditions of Employment Act unless an administrative exemption is obtained.

The new legislation should maintain the distinction that has been traditionally drawn between bargaining council agreements and other collective agreements. There are issues on which it is appropriate to permit bargaining councils to vary employment standards but on which it may not be appropriate to permit individual employers and trade unions to do so. For instance, it is not consistent with the purpose of the legislation for individual employers to seek to compete with each other through extending the ordinary working day or reducing the overtime rate. Bargaining council agreements however, should be entitled to do just this. Not only because it sets a floor for competition, but also because it is in keeping with the goal of the Labour Relations Act which has as one of its primary objects the promotion of collective bargaining at sectoral level. Accordingly in the debate on what the statutory limits ought to be in respect of this category of standards, consideration ought to be given to the expanded horizons that ought to be accorded to bargaining councils.

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1.4 Variation without limits

The new legislation should permit collective bargaining agreements to vary employment standards without a requirement for administrative exemption or ratification. Further deliberation is needed on the kind of matters that ought to be included under this head. In respect of working time, the issues will need to be the subject of the consultations on a national strategy referred to in the following Chapter.

Proposals

A collective agreement may automatically vary any employment standard except:

• a fundamental right
• a right that requires exemption of ratification for variation

A collective agreement may vary any employment standard to the extent permitted by legislation.

2 VARIATION BY WAGE DETERMINATION (SECTORAL STANDARDS)

Problem statement

The Wage Board has tended to reproduce the standards in the BCEA and has not made full use of its power to set sector specific standards.

Discussion

Under existing law, the Wage Board is entitled to make recommendations on minimum wages and employment standards in a sector. In practice the wage board reproduced the provisions of the BCEA and very seldom made recommendations to vary employment standards to fit the particular requirements of the sector. The Department envisages that a restructured Wage Board (Employment Standards Commission) will provide a mechanism to vary employment standards to suit the needs of particular sectors.

In 1993 and 1994 the BCEA was extended to cover farm and domestic workers. A large number of provisions that apply specifically to these sectors were included into the Act. The provisions applicable to agriculture were agreed between agricultural employers organisations and trade unions representing farmworkers as a part of the process of extending labour legislation to the agricultural sector. The provisions applicable to domestic workers were the result of recommendations by the National Manpower Commission.

These sectoral provisions have increased the complexity of the legislation. The basic conditions applicable to agriculture are found in both the BCEA and the Agricultural Labour Act 147 of 1993. The incorporation of sector-specific provisions in the body of the Act was required because these sectors are not covered by the Wage Act. The jurisdiction of the Wage Board should be extended to these two sectors. Existing provisions in the BCEA applicable to farmworkers and domestic workers should remain in force until superseded by a bargaining council agreement or wage determination binding on employers and employees in that sector. These provisions would be listed in a transitional schedule.

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Proposal

The existing provisions applicable to farmworkers and domestic workers in the BCEA should be included in transitional provisions pending an investigation by the Employment Standards Commission on the promulgation of a Sectoral Employment Standard for each of the sectors.

3 VARIATION BY ADMINISTRATIVE PROCEDURE

Problem statement

The exemption procedure is bureaucratic and time consuming.

Discussion

The Minister can grant an exemption in respect of any aspect of the BCEA. Exemptions may be of general application or in respect of an individual employer or employee. Authorisation from an inspector is required to work additional overtime and for work on Sundays in factories and shops.

New legislation should use the term 'variation' instead of 'exemption'. This emphasises that employers are not being relieved of the obligation to comply with a labour standard but being required to meet a different standard. This will bring the statutory formulation in line with practice because most exemptions are granted on specified conditions.

The Act does not lay down any procedure for the making and consideration of applications for an exemption although the general rules of administrative law apply. This requires allowing interested parties the opportunity to make representations before any decision is made. The power to permit variations should be conferred upon the Minister. The Minister would then be able to delegate the power to the appropriate level within the Department.

The Minister should be able to seek the advice of the Wage Board on any application for a variation. The Minister should be required to consult with relevant health and safety authorities on any application for a variation that may have an impact upon occupational health and safety.

The practice has developed that employee or trade union consent is an important consideration in applications for exemptions. The variation process should respect the integrity of the collective bargaining process. If a labour standard is the subject of negotiation between an employer and trade union, no exemption should be granted unless the trade union consents. If there is a representative trade union in the workplace, variation should be granted only in there is a collective agreement or the trade union consents to the variation.

Provision should be made for an expeditious procedure in the application and the grant of exemptions. This will require decentralised decision making and a set of guidelines to ensure consistency.

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Proposal

If there is a representative trade union in the workplace, variation by administrative procedure should not be permitted unless there is a collective agreement or the trade union consents.

The administrative procedures must be expeditious.

4 VARIATION BY INDIVIDUAL CONTRACT OF EMPLOYMENT

Problem statement

No provision was made for variation by individual contract of employment without an exemption.

Discussion

The proposed legislation should also define the matters than can be regulated by individual agreement. This would be more limited than collective agreements. This would not permit employers to deal with individual employees on these topics in contravention of the terms of a collective agreement. Issues that could be varied by individual agreement include:

• the introduction of compressed work weeks;
• work on Sundays;
• arrangement of meal intervals;
• scheduling of annual leave.

CHAPTER E: EMPLOYMENT STANDARDS COMMISSION

STANDARDS

Problem statement

The Wage Board has not played an effective role in the development and enforcement of employment standards in unorganised sectors.

Discussion

In recent years there has been a considerable decline in the significance of the Wage Board. This trend is evident in the number of wage determinations which have declined from 75 (1973) to 19 (1995). The current 19 wage determinations cover some 90,000 employers and 730,000 employees. This figure is misleading as the bulk of employees falling under the Wage Act are covered by a single determination. Wage Determination 455 for the Commercial Distributive Trade covers 80,000 employers and almost 500,000 employees.

The decline in the number of wage determinations is the result of a deliberate policy of the previous administration to run-down the Wage Board. Wage determinations currently cover only a small proportion of unorganised employers. A further factor that has contributed to the decline in significance of the Wage Board has been the failure in recent years to revise minimum wages regularly. In contrast to industrial council agreements, minimum wages have often remain static for a two year period without any provision for escalation being made in the determination.

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An effective Wage Board remains an essential part of government policy to develop and enforce effective employment standards. Its capacity to make a significant contribution to the development of equitable employment standards is revealed by our recent history - the emerging trade union movement of the 1970s made effective use of the Wage Board to press its claims for improved working conditions for black workers. Wage Board hearings became focal points for the growth of trade unions.

The proposals in this section are aimed at revitalising the institution to play an active role in the development of a coherent policy on employment standards and to provide a mechanism for sectoral variation where the standards are inappropriate. The basis for this is laid by the inclusion of a reconstituted Wage Board in a single statute regulating employment standards. The extension of the Wage Board's role to the full range of decisions that involve the potential variation of employment standards will promote the development of an integrated policy. The Board should be able to advise the Minister on any matter impacting upon employment standards as well as the impact of standards upon employment creation.

Wage determinations may include minimum wages as well as conditions of employment. Current wage determinations set minimum wages and repeat with little variation the provisions of the BCEA. The most significant areas of variation have been spread-over, annual leave, and in recent wage determinations, a short period of compassionate leave. The effectiveness of the Board would be increased if determinations were limited to minimum wages and sector-specific provisions. Where a sector-specific standard is not considered appropriate the statutory employment standards should continue to apply to the sector.

The rules regulating the Wage Board's conduct of investigations and hearings should be sufficiently flexible to permit it to perform its functions in a manner appropriate to the sector concerned. In sectors where there are employer and employee organisations, the Wage Board should be able to encourage and assist the parties to develop sectoral employment standards through conciliation and negotiation. The determination may then amount to a ratification of a set of standards that have the support of the parties in the sector - a procedure that is now adopted in respect of labour Orders made in terms of the Labour Relations Act, 1956. This will contribute to higher levels of compliance with determinations.

The Wage Board should remain an advisory body. However, the provisions regulating its relationship with the Minister should be reviewed to ensure that this process permits a public debate of differences of opinion that the determination of employment standards. At the conclusion of an investigation, the Wage Board makes a recommendation to the Minister of Labour on the proposed contents of a determination. Presently, the Minister may either make a determination in terms of this recommendation or reject it. Proposals are made to permit an exchange of views between the Minister and the Wage Board over differences regarding the levels of standards and their economic impact.

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Additional changes are required as a result of the LRA of 1995. Institutional changes are required to conform with the introduction of statutory councils and the removal of the Labour Order.

The Wage Board can now make recommendations on an extensive list of conditions of employment. The list will have to be revised in line with the approach of the new legislation as well as the issues relevant to the protection of vulnerable employees. The powers of the Wage Board should be extended to include powers that have been expressly granted to statutory councils in terms of the Labour Relations Act, such as the establishment of training and education schemes and of social insurance schemes or funds such as provident and medical aid funds.

These proposals concern the revitalisation of the enabling structure in terms of which the Wage Board is established and operates. The Green Paper contains no recommendations in terms of the policies that should guide the Wage Board in the determination of minimum wage levels. These matters are currently being investigated by the Comprehensive Labour Market Commission (CLMC) which is investigating the relationship between national income determination and existing wage determination mechanisms.

Finally, it must be pointed out that the Wage Board is inappropriately named - its functions are not confined to the setting of wages. It is proposed that it be renamed the Employment Standards Commission.

Proposal

The Employment Standards Commission (Wage Board) should consist of:

• a chairperson and additional members with experience in the setting of employment standards;
• sectoral members with experience of particular sectors and who are appointed to investigate employment standards in a particular sector;
• members appointed by the Minister after consultation with NEDLAC.

The primary functions of the Employment Standards Commission are:

• to investigate employment standards in any sector in which no bargaining council is established with a view to making recommendations to the Minister;
• ratify provisions in collective agreements that vary employment standards that affect third parties or the public interest;
• advise the Minister on any matter involving the application of employment standards including any variation or exemption from employment standards.

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A Sectoral Employment Standard (wage determination):

• may contain minimum levels of remuneration for the sector;
• may vary any employment standard contained in the statute in order to address the specific needs of the sector;
• may not deal with any matter regulated by a bargaining council agreement or a ministerial determination made on the recommendation of a statutory council;
• should be reviewed at least every three years.

The Employment Standards Commission must investigate conditions of employment in any sector if:

• directed to do so by the Minister;
• requested to do so by an organisation representing a significant number of employers or employees in the sector; or
• it is satisfied that it is necessary for the proper regulation of conditions of employment in the sector.

The Employment Standards Commission must:

• publicise its investigation;
• invite and consider written and oral representations;
• be able to call meetings of affected parties and encourage them to reach consensus;
• be able to subpoena the information that it requires to conduct an investigation and make a recommendation;
• publish a report of its investigations, including recommendations for a wage determination.

The Minister may publish a wage determination in line with the recommendations of the Employment Standards Commission.

If the Minister does not concur with the recommendations, the Minister must given reasons.

The Minister may publish a wage determination after the Employment Standards Commission has considered and commented on the Minister's reasons.

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CHAPTER F: WORKING TIME

Contents

1. Debate on the reduction of working hours
2. Working hours
3. Flexibility arrangements
4. Sunday work
5. Rest Periods
6. Working time and health and safety
7. Night work
8. Shift work
9. Paid leave
10. Public holidays
11. Paid sick leave

Many South Africans work very long hours. Information on working time is included in the Appendix. The limits on working time are rigid and require change. The goal of South Africa should be to achieve a 40 hour week for its employees. This will involve complex and difficult issues. To achieve this goal will require fundamental agreements between employers, trade unions and the government.

The length and arrangement of working time involves balancing a number of considerations:

• the economic and technological constraints and requirements of the economy and the enterprise
• the biological and physical needs of employees
• familial, parental and social needs, constrains and aspirations of employees, and
• the possible impact upon the health, safety and well-being of the community.

The legal regulation of working hours requires a thorough overhaul. The weekly limits on working time are set out in Table II. Internationally the trend has been, in any review of the regulation of working time, to couple the reduction in working hours with greater flexibility in working time arrangements.

TABLE II - Ordinary weekly hours of work under the BCEA

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The impetus for this has arisen on the one hand from the need of workers for better working conditions and for greater choice about their working lives, and on the other from the need of employers to adjust operating periods in line with demand in order to meet global competitive pressures. The trade off has included the introduction of more flexible arrangements such as averaging schemes, flexitime, compressed work weeks, changes in shift work systems and various patterns of part-time work.

The introduction of flexible working time in conjunction with reduced working hours can have a positive outcome for workers' health and safety. Fatigue and stress associated with long working hours has been shown to contribute to high levels of ill health. Reduced hours allow increased time for training and education, family and social responsibilities and leisure time. In some sectors, such as transport, long hours of work of workers can endanger the safety of the community. The negative effects of long working hours are exacerbated in a society such as South Africa in which many workers have to travel long distances to work. Advantages for employers are the ability to adjust operating capacity to fluctuating demands, the better utilisation of available resources and improved productivity.

It is proposed that, in line with international trends, rigidities that have restricted the arrangement of working hours should be removed from our law. However, equally importantly, employment standards legislation must ensure that working time is arranged responsibly.

1 DEBATE ON THE REDUCTION OF WORKING HOURS

The demand for shorter working time for individual employees has been described as "a constant and universal demand". This is reflected in South Africa's political history - the Freedom Charter records the right of all South Africans to a 40-hour week. The international significance of the 40-hour week and the 8-hour day are also reflected in International Labour Organisation (ILO) Conventions and Recommendations.

The implications of legislated reduced working time on employment depend on a number of factors. These relate to the structure, level of development and performance of the economy as a whole and on the particular performance of individual firms affected by such a measure. The relationship between legislated reduced working hours and employment is complex and should not be approached simplistically. There would appear to be general consensus on the social welfare merits of reduced working hours, even if there is no consensus on the employment effects.

Nevertheless, it is necessary to emphasise that this measure is not being proposed as an isolated policy, but in the context of other strategies aimed at employment creation, such as the Growth and Development Strategy currently being formulated by government and the anticipated recommendations of the Comprehensive Labour Market Commission. The manner in which any change to working hours is made must be compatible with employment creation and avoid consequences that may lead to job losses.

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A reduction of working hours does not necessarily increase unit labour costs. The effect on costs will depend on whether or not the reduction of working time is accompanied by a compensatory wage increase. A compensatory wage increase may be traded off or accommodated by the phasing in of the reduction over a number of years.

A legislative reduction in working time has often acted as a trigger to management to reconsider work organisation or to introduce new and more efficient patterns of working time. Proponents of a reduction in working hours claim that the potential gains to enterprises of shorter hours is an increase in productivity. The linkage between the reduction and productivity has often provided the basis for the conclusion of agreements between business and labour.

The impact of a reduction of working hours varies between sectors and between businesses. Factors that account for this variation include:

• skills levels - it may not be possible to increase levels of productivity in sectors reliant upon high levels of unskilled labour. A shortage of skilled labour may hinder the capacity to benefit from flexible working arrangements (until more employees acquire these skills);
• size of the business and methods of organisation of production;
• the structure of markets and demands for products;
• employee attitudes - low paid workers particularly those who depend on overtime earnings, may be more reluctant to agree to a reduction of working time than better paid workers;
• the extent of trade union participation - schemes for the re-organisation of working time accompanying a reduction in working time have generally been implemented more successfully if there has been trade union participation in the process.

It is evident from the above discussion that the relationship between a policy to reduce working hours over time and its effect on the economy is complex and the goal of reducing ordinary working hours to 40 hours per week is not realisable by legislation alone. What is needed is a comprehensive and integrated approach to the reduction of working hours and the introduction of more flexible working time arrangements. Any proposal to reduce working hours must:

• be compatible with employment creation and avoid consequences that may lead to job losses;
• be directed at reducing the actual working time of employees;
• enhance the potential for increased productivity (of labour and capital)
• take account of the potential and limitations of specific sectors and businesses to reduce working hours;
• take account of the possibility of increased costs;
• address the need for employees to be compensated for the reduction in working hours.

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With this in mind, the following package is proposed. As a first phase and part of the package, there should be a rationalisation of maximum working hours from 46 (or 48 for shift workers) to 45. Employees who work excessive hours should have their maximum ordinary hours reduced from 60 to 48. The rigidities imposed on daily or weekly time should be made more flexible and the restrictions on Sunday work removed. The detailed proposals concerning this first phase are dealt with in the next section.

The second and further phases cannot be achieved by legislation alone. The complex relationship between a reduction in working hours and its impact upon the economy requires thorough consultation with stakeholders and, if possible, an agreed national strategy. The elements of such a strategy should include:

• a phased time-table for the reduction of working time;
• a framework agreement on the reduction of working time in the context of employment creation, productivity, human resources development and wage compensation;
• implementation of the framework agreement through sectoral and plant-level collective agreements;
• investigation by the Employment Standards Commission of working hours in unorganised sectors;
• special provisions for application to small business;
• technical assistance to social partners in implementing reduced working hours.

2 WORKING HOURS

2.1 Ordinary working time

Problem statement

The BCEA sets different maximum hours of work for different categories of employees. The limits on ordinary working time require reconsideration. (See Table II)

Discussion

With certain limited exceptions, the new legislation should set a single set of maximum daily and weekly hours applicable to all employees. Work performed in excess of these limits would be overtime. This limit should apply to both "day" workers and shift workers. It is suggested that there is no justification for a different limit on ordinary hours for shift workers. While the working hours of shift workers reflect a traditional 6-day week of 8 hour shifts, the practice in many agreements is to set lower ordinary working hours. This is reflected in the legislation of many countries. Many shift workers perform night work or other work involving high levels of fatigue or stress.

Special consideration needs to be given to the position of security guards. The 60-hour week is not only found in the BCEA but in wage determinations and many industrial council agreements. This is unacceptable and requires revision.

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The Department proposes that the initial phase of reforming limits on working hours should be to replace the limit of 46 with 45 as the maximum permitted ordinary working hours. This is motivated by the Department's desire to reduce working hours over a period of time and to provide a simpler basis for calculating hours in the context of proposals to achieve greater flexibility. These changes are implemented as part of the objective of achieving a 40 hour week.

Two other limits should be set on daily working time. These are total working time (which includes both ordinary and overtime) and spread-over (which is the measure of time from the start to the finish of work on a day including intervals). Maximum spread-over is currently 12 hours (except for farmworkers and domestic workers).

The limit on total working time and on spread-over should be 12 hours. A lower limitation on total working time should apply to any sectors or occupations in which there is a high level of risk of accident or disease. The limit on total working hours in any such sector or occupation is 9 hours unless otherwise provided.

Proposal

• The maximum weekly hours of work should be reduced to 45 ordinary hours with effect from 1 January 1997.
• The maximum working day should be 9 ordinary hours (8 hours for employees who work 6 days per week)
• The hours of work of security guards should be reduced to 48 over a period of two years.
• Any adjustment in pay occasioned by the reduction in working hours must be implemented in terms of the proposed national agreement.
• No employee may work for more than 12 hours in a day.
• No employee may work for more than 9 hours in any work with a particular exposure to health and safety risks or high levels of physical or mental stress. The Minister may set a different limit after consulting with the relevant occupational health and safety authority.
• The maximum spread-over period on any day is 12 hours.

2.2 Overtime

Problem statement

Many South Africans work high levels of overtime. Overtime rates are relatively low in comparison to other countries. They require consideration in the light of levels of overtime worked.

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Discussion

Levels of overtime worked in certain sectors in South Africa tend to be high. (See Appendix)

The BCEA sets maximum overtime of three hours per day and ten hours per week; inspectors may authorise the working of extended overtime. This is one of the most common reasons for applications for exemption. Payment for overtime (including additional overtime) is at a time and a third. While the statute provides that overtime work is voluntary, many contracts of employment require employees to agree to work overtime when requested.

The limit of 10 hours overtime per week should be retained. However, there should be no daily limit. The amount of overtime that can be worked on any day will be regulated by the daily total limit on working time. Extended overtime should be permitted only by exemption.

Many countries set an annual limit for overtime in addition to the daily and weekly limits. Limits of 150 and 200 hours of overtime annually are common. This approach seeks to balance the short-term need for overtime with stricter limits on the regular use of lengthy periods of overtime.

Is the overtime pay regime still appropriate? The first area for examination is that of overtime payment or compensation. An examination of overtime systems elsewhere in the world indicates that an overtime rate of time-and-a-third for all overtime worked is lower than in most countries in the world. Two options for reform should be considered:

• an increase of the rate of pay for all overtime worked;
• the introduction of a staggered system of overtime pay in which a higher rate of pay must be paid beyond certain number of hours of overtime worked. (For example: a premium of one-third for the first five hours of overtime in a week and a premium of one-half for the next five hours in the week).

There could be more flexible approaches to the compensation of overtime. Overtime could be exchanged for additional leave or time-off. This approach again balances the short-term demands with limiting overtime over a longer period. Employees could work overtime during busy periods and in return gain longer holidays.

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Proposal

• An employee may agree to work ten hours at overtime rates in any week.
• An individual agreement to work overtime may not be valid for more than one year.
• All overtime worked must be remunerated at a rate of time-and-a-half.
• A collective or individual agreement may provide that employees may receive paid time off in exchange for working overtime.

3 FLEXIBILITY ARRANGEMENTS

Problem statement

The hours of work prescribed by the BCEA restrict the ability of employers and employees to make certain types of flexible working arrangements.

Discussion

One facet of the re-organisation of work has been the move towards the flexible arrangement of working time. Some flexible arrangements can operate within the limits of the current statutory framework, while the BCEA inhibits others. Two of these are discussed.

3.1 The compressed working week

The compressed working week permits employees to work extended hours in order to work the same or a similar number of hours in a shorter number of days. An employee may, for instance, work a 40-hour week consisting of four ten-hour working days.

The advantages of this system include a larger number of days off during the week, reduced transport costs, and in some cases better utilisation of equipment.

The compressed working week is not applicable to all sectors. The extended daily hours involved would be subject to any limit placed on total daily hours for any reason involving the health and safety of employees or the public.

Proposal

A collective or individual agreement may permit employees to work up to 12 hours of normal work on any day.

An employee whose hours of work are regulated by such an agreement may not work on more than 4 days per week.

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3.2 Averaging of working time

Under the BCEA working hours are calculated in one week cycles. No transfer of hours is permitted from week to week other than in continuous shift operations, which can utilise three week cycles. "Averaging" permits employers and employees to calculate average working hours over a cycle of longer than one week. This allows the distribution of working time in a manner that may coincide better with the employer's demand for production than an equal spread of hours, between weeks.

Hours of work can be unequally distributed between weeks provided that the average number of hours worked within the cycle is not greater than a specified figure. If this figure is lower than the usual limits on weekly hours, this would offer employees the benefit of reduced working hours. For employers, the more efficient arrangement of working time generally results in a saving on overtime pay. This may enable employers to compensate employees for any reduction in working hours.

The new legislation should permit the introduction of averaging through collective bargaining. It should also place a limit on the weekly average hours and also limit the period over which averaging can be calculated. It is suggested that a period of four weeks as a basic rule would permit the operation of most commonly utilised shift systems and allow sufficient short-term flexibility. A longer period would require an exemption.

Proposal

A collective agreement may permit normal working hours to be calculated over a cycle of longer than one week.

An agreement may not:

• permit an averaging period of longer than 4 weeks;
• permit employees to work an average of more than 40 hours per week over that period.

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4 SUNDAY WORK

Problem statement

Sunday work is restricted by both the BCEA and the Mines and Works Act

Discussion

In terms of the BCEA:

• permission from an inspector is required for Sunday work in factories or shops;
• there are two basic pay regimes: double pay or time-and-a-third coupled with a day off in the following week. Employees (other than farmworkers) working on Sunday must receive at least a full day's wages;
• Sunday work is excluded from the calculation of weekly maximum;
• special rules apply to Sunday work in plants that have a continuous operation exemption.

In terms of the Mines and Works Act essential maintenance work is allowed on Sundays. Additional work may be permitted by the Minister of Mineral and Energy Affairs "in the national interest".

The purpose of this legislation should be the protection of employees, not the restriction of operating time. While the restriction of Sunday work is not uncommon in the rest of the world, the continuation of these restrictions in South Africa is not justified. Extended operating times, not only in mines but in other sectors of the economy, has important employment creation potential. The requirement of permission to work on a Sunday in factories and shops in the BCEA should be repealed as should the prohibition on work in mines on a Sunday.

The removal of this prohibition from the mining industry is being negotiated by employers and trade unions in the industry. The conclusion of an agreement to give effect to this will boost employment creation and improve wages and is of great importance.

Sunday work, like night work, can have disruptive social and family consequences. It therefore remains appropriate to continue to require payment of premium rates on Sunday. To the greatest extent possible, work on Sundays should accommodate individual preferences.

The exclusion of Sunday work from the calculation of total hours (i.e.: ordinary time plus overtime) that can be worked in a week should however be removed.

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Proposal

Unless agreed to in a collective or individual agreement, an employee may not work on three successive Sundays.

An employee who works on a Sunday is entitled to the greater of:

• payment at double the ordinary rate for time worked; or
• one ordinary day's wage.

If part of a working period falls on a Sunday, all work during that period must be remunerated at Sunday rates.

Sunday work is included in the calculation of total permissible working hours.

5 REST PERIODS

Problem statement

Adequate rest periods are an essential aspect of the scheduling of working time. The new legislation should regulate meal intervals and daily and weekly rest periods.

5.1 Meal intervals

Under the BCEA, employees are entitled to a one hour break after five hours continuous work; this may be reduced to 30 minutes by written agreement. A minimum meal interval of 30 minutes is in line with international practice and should be retained. Meal intervals of between 30 minutes and 75 minutes are unpaid. This limit prevents longer meal intervals being used to create split shift working arrangements. Certain flexibility should be introduced to accommodate employees who do not work full days. For instance, the entitlement to a meal break should not apply to employees who work 6 hours or less per day.

The requirement that certain employees who work a 12 hour shift are paid for meal intervals (currently applicable to security guards) should be extended to all employees who work extended shifts.

Proposal

Employees must have adequate meal intervals.

Collective and individual agreements may regulate the taking of meal intervals.

In the absence of an agreement, no employee may work for longer than five hours without a meal interval of at least 30 minutes. This does not apply to employees who do not work more than 6 hours.

An employee is entitled to payment for meal intervals if the employee:

• is required to remain in control of any machinery, equipment or vehicle or at the disposal of the employer during the meal interval;
• works for a daily period of longer than 10 hours;
• is required by the employer to take a meal interval of longer than one and one-quarter hours.

5.2 Daily rest period

The BCEA requires a daily rest period of 12 hours. This is because the maximum spread-over permitted is 12 hours. Placing a limit on the spread-over of working time achieves the same purpose as setting a minimum daily rest period. No proposal is made to depart from this approach.

Employees are entitled to a daily rest period of 12 hours

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5.3 Weekly rest period

Discussion

The introduction of a 36 hour minimum weekly rest period is proposed. The rest period must include one complete day. The logic for a 36 hour period is that it consists of 24 hours plus the daily rest period of 12 hours. The weekly rest period is an important safeguard in an approach that permits the flexible arrangement of working time.

The requirement for a rest period is not a substantive change. The reason for the absence of a stipulated rest period was because of the restrictions on work on Sundays.

The principles of averaging may apply, on a limited basis, to the weekly rest period. It could be permissible to consolidate rest periods over a 14 day cycle.

Proposal

Every employee is entitled to a rest period of 36 continuous hours, including one complete day, in every week.

A collective agreement may provide that the rest period may be averaged over a cycle of up to 14 days.

6 WORKING TIME AND HEALTH AND SAFETY

Problem statement

The manner in which working time is organised impacts significantly on the health and safety of employees and the public. No legislation regulates or promotes the organisation of work for this purpose.

Discussion

The proper scheduling of working time together with factors such as engineering controls, the ergonomic design of workplaces and improved health and safety training, can make a major contribution to improving the country's unacceptably high level of occupational accidents and disease.

The following two examples serve to highlight this point: Adequate rest-breaks are one of the prime methods of reducing the risk of musculo-skeletal injuries among employees whose work involves rapid and repetitive movements. These employees include video display unit operators, assembly line workers and many types of machinists. The full extent of these injuries in South Africa is not known as adequate statistics are not collected. In industrialised countries this is the most common work-related disease. Long hours of work and payment on commission are associated with the high level of accidents in the taxi industry.

There should be a general duty on employers to take account of the potential health and safety consequences of the arrangement of working time. This is already a part of the employer's common law and statutory duties. However, its express inclusion in employment standards legislation will highlight this important but neglected aspect of employer obligations.

The general duty should be supplemented by a Code of Good Practice to guide employers, employees and trade unions. This would set out guidelines for the considerations that should be taken account of in particular forms of work. The Code of Good Practice should be published as a schedule to the legislation.

Since the regulation of work at night is perhaps the most significant health issue raised by the arrangement of working time, additional proposals are made.

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Proposal

Working time must be arranged so as not to endanger the health, safety or welfare of the employee, other employees or the community.

This applies to the duration and scheduling of