Proposed amendments to the Labour Relations Act: some practical aspects

2011-02-11 00:00

THE Labour Relations Amendment Bill seeks to address the ANC’s commitment to avoiding exploitation of employees and to ensuring decent work while regulating contract work, sub-contracting, outsourcing and the so-called “problem of labour broking”.

The bill contains important inconsistencies. Some of the drafting is very vague and loose and if implemented in its current form will probably cause extensive litigation before parties learn the exact meaning of some of the clauses. For this reason the bill is likely to be amended before implementation.

Many practical aspects may cause concern for business, one being the proposed amended definition of an employee, which is “any person employed by or working for an employer, who receives or is entitled to receive any remuneration, reward or benefit and works under the direction or supervision of an employer”.

This definition is introduced to deal with what government has described as “new developments in the labour market”, which can be interpreted to mean labour broking and other atypical forms of employment.

The intention is to avoid legal points being taken when determining who the employer really is.

But the changes may not achieve this aim. In fact, the new definition limits the number of individuals who may be defined as employees and qualify for rights under the Labour Relations Act (LRA). The important elements in the definition are that employees must be employed or working for an employer, receiving remuneration and working under the direction or supervision of an employer.

These elements are cumulative and create new hurdles before anyone can enjoy the protection of the LRA.

Supervision is not defined. One does not know what level of supervision will be required to satisfy the definition. What happens if a person is employed and gets on with things without any real direction or supervision? Arguably this person would not be an employee in terms of the definition.

This may affect a number of employees working outside a mainstream office environment such as company representatives.

Although the definition is unclear, it appears that the right to receive remuneration, reward or benefit can be from the employer or a third party. To interpret this otherwise would allow employers to have those working for them remunerated by a separate company and thus avoid workers being defined as its employees in terms of the LRA.

The definition of employee in the bill does not specifically exclude independent contractors as does the current definition. The bill defines an independent contractor as “a person who works for or supplies services to a client or customer as part of the person’s business, undertaking or professional practice”.

This definition will no doubt protect the contractor. However, given the wide definition of an employee, the independent contractor’s employees may also become the employees of the client if that client has some control or supervision over those employees.

If one is to regularly employ a garden service and direct or supervise those performing the work to satisfy particular needs, those providing the services may become one’s employees.

Many professional businesses utilise the services of temporary secretarial staff. They are sometimes employed for a single day or part of it. In terms of the proposed definition these individuals will become employees for that period of time. This is not practical.

It would also result in those individuals who make a living out of temporary assignments being employed by a number of employers at any given time. This is likely to create even more confusion and more litigation.

* Michael Maeso is the head of employment law at Shepstone & Wylie Attorneys.

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