The World Economic Forum’s Global Competitiveness Report of 2014/2015 (WEFGC report) rates South Africa 143rd – out of 144 countries – in terms of hiring and firing practices. The report also rates the country 136th for pay versus productivity and 133th in terms of the extent to which the incidence of crime imposes costs on doing business here. Overall South Africa is rated 144th in terms of cooperation in labour-employer relations.
The vast amount of legislation that regulates labour relations in South Africa stresses how crucial it is that the employer follows correct procedure, especially when dismissing an employee, which the WEFGC report clearly shows is already a challenge. Labour risk is a business risk in terms of sustainable profitability and needs to be managed pro-actively.
The following legislation regulates labour relations in South Africa in general:
- Labour Relations Act, Act 66 of 1995 (LRA)
The LRA remains the principal labour statute and regulates collective rights and also provides protection against labour practices. The LRA regulates trade unions and employers’ organisations and establishes key dispute resolution agencies in the form of the CCMA and labour courts.
- Basic Conditions of Employment Act, Act of 1997 (BCEA)
The BCEA establishes and enforces the minimum statutory terms on which employers and employees may contract.
- Sectoral Determinations
A Sectoral Determination controls the terms and conditions of employment in a particular sector where there is no centralised collective bargaining and which requires detailed and specific regulations. Conditions in a Sectoral Determination may differ from those in the BCEA, but will rank superior.
- Bargaining Council Agreements
Bargaining Councils deal with collective agreements, solve labour disputes, establish various schemes and make proposals on labour policies and laws. Trade unions and employers’ organisations may form Bargaining Councils.
- Employment Equity Act, Act of (EEA)
The EEA prohibits unfair discrimination in employment, defined to include a wide range of policies and procedures. It also requires designated employers (employers with 50 or more employees, or an annual turnover as specified in Schedule 4 of the EEA) to formulate an Employment Equity plan (EEA13) and to submit reports (EEA2 and EEA4) to the Department of Labour.
- Skills Development Act, Act 97 of 1998 (SDA)
The SDA regulates standard settings, training and development by requiring employers (with an annual expenditure on salaries exceeding R500,000.00) to contribute 1% of their payroll to the fund infrastructure established by the SDA.
- Unemployment Insurance Fund (UIF)
UIF provides short term relief to workers when they become unemployed or are unable to work because of maternity or adoption leave, or illness. It also provides relief to the dependants of a deceased contributor. It is the employer’s responsibility to pay over the unemployment insurance contributions (2% of the employee’s salary) although both the employer and employee equally contribute 1%.
- Compensation for Occupational Injury and Diseases Act, Act 130 of 1993 (COIDA)
When injured on duty or becoming sick as a result of your work, an employee can claim compensation from the Compensation Fund. Families or dependants can also claim if their breadwinner dies as a result of a work-related accident or disease. All employers must register with the Compensation Commissioner and will be rated annually, after which payments must be made.
- Occupational Health and Safety Act, Act 85 of 1993 (OHSA)
OHSA regulates health and safety conditions in the workplace. Legislation applies to all employers in terms of creating a safe and healthy working environment. Certain regulations must be implemented when the employer employs five or more employees.
Duties of employers
Employers have three duties:
- To receive the employee into service
- According to the BCEA all employers should provide an employee with a written contract within one day of employment;
- Employers are further obliged to accord employees their rights in terms of the applicable contracts of service, collective agreements and legislation. Take care that the contract is not less favourable than the applicable legislation which should be adhered to.
- To pay the employee’s remuneration
- To ensure that working conditions are safe and healthy
The relationship between the employer and the employee is based on mutual benefits and respect. Clear rules and guidelines ensure that friction and misunderstandings are kept to a minimum, which in turn promotes not only productivity but also a positive working environment. The employer must therefore have clear rules and guidelines in the workplace and ensure that every employee is aware of these rules.
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