To uphold the constitutional rights of trade unions and employers’ organisations to engage in collective bargaining, legislation has been enacted to establish the framework within which this process occurs.

The Labour Relations Act 66 of 1995 (LRA)

The LRA lays the groundwork for collective bargaining by establishing the framework for bargaining councils. According to Section 27 of the Act, registered trade unions and registered employers’ organisations may form a bargaining council for a specific sector and area. Additionally, the Act allows for the state to be a party to a bargaining council.

The primary objective of trade unions and employers’ organisations in forming a bargaining council is to regulate industrial relations matters between employers and employees within their respective sectors and areas.

Purpose of bargaining councils

Case law has affirmed that the primary functions of bargaining councils are to conclude and enforce collective agreements concerning terms and conditions of employment or matters of mutual interest, as well as to prevent and resolve labour disputes within the workplace.

Collective agreements

The outcome of collective bargaining between employers’ organisations and trade unions is the negotiation and conclusion of collective agreements. Collective agreements can be defined as agreements between trade unions and employers’ organisations that regulate matters of mutual interest and conditions of employment.

A collective agreement concluded in a bargaining council binds the parties to the bargaining council who are also parties to the collective agreement. A bargaining council may request, in writing, that the Minister of Employment and Labour extend the collective agreement to non-parties within its registered scope, as identified in the request and subject to certain requirements set out in the Act. Once the Minister extends the agreement to non-parties, any employer not originally party to the agreement will be obligated to comply with its provisions and register with the relevant bargaining council.

Collective agreements are concluded for a specific period, with the validity period clearly stipulated in the agreement. Once this period has expired, the agreement will no longer be binding on the parties unless it has been extended for an additional period or a new collective agreement has been concluded.

Dispute resolution

Another key function and power of a bargaining council is to perform dispute resolution functions, typically provided for by the collective agreement and within their jurisdiction, similar to the Commission for Conciliation, Mediation, and Arbitration (CCMA). Common types of disputes presided over by a bargaining council include unfair labour practice and unfair dismissal disputes.

Monitoring compliance

Bargaining councils also monitor compliance with labour legislation in general, and specifically with the provisions of any collective agreements in force within their respective industry and area.

According to the LRA, the Minister of Employment and Labour, at the request of a bargaining council, may appoint designated agents to promote, monitor, and enforce compliance with any collective agreement. These designated agents are empowered to ensure compliance by publicising the contents of agreements, conducting inspections, investigating complaints, and performing other functions as assigned by the bargaining council.

Bargaining councils play a crucial role in establishing terms and conditions of employment or addressing matters of mutual interest within a specific industry. They also work to prevent and resolve labour disputes within the workplace.

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The idea of receiving a “payment for years of service” is a very common query, especially after an employee’s termination of service. Many employees, particularly those with many years of service, expect and anticipate being rewarded for their loyalty and dedication to an employer, sometimes believing that this is an automatic entitlement created by law. However, this is not true for the most part and employers must be clear on the legal requirements regarding such payments under South African labour law as legislation is very specific about when and how such payments are applicable.

The legal framework: severance pay under the BCEA

The primary legal foundation for “payment for years of service” in South Africa comes from Section 41 of the Basic Conditions of Employment Act 75 of 1997 (BCEA), which provides for severance pay.

When is severance pay due under the BCEA?

Section 41 of the BCEA stipulates that severance pay is only due to an employee when their dismissal is due to the employer’s operational requirements. These are situations where business’s operational requirements, such as economic, technological, or structural changes, force the employer to reduce their workforce.

Under these circumstances, the employer must provide the employee with severance pay equal to at least one week’s remuneration for each completed year of continuous service. This payment is calculated in terms of BCEA Section 35, which details how remuneration should be calculated.

Fixed term contracts and long service

In cases involving fixed term contracts, the situation can be slightly different. According to Section 198B of the Labour Relations Act 66 of 1995 (LRA), employees on fixed term contracts, who earn below the earnings threshold, and when the contract exceeds 24 months, may be entitled to severance pay upon their contract expiring.

It’s crucial for employers to understand that there is no general right to a “payment for years of service” outside of the provisions for severance pay under the BCEA and LRA. Employees are not entitled to such payments simply because they have worked for the business for many years.

Navigating employee expectations

Employers often face difficult conversations with employees who feel entitled to a “reward” for long service, particularly in the context of retirement or termination. While it might be beneficial for businesses to recognise long-standing employees through awards or other incentives, employers should not confuse this with a legal obligation.  Employers should be careful not to create expectations of entitlement in the minds of employees with regards to payment for years of service.  Employers should ensure that their workplace policies clearly outline the conditions under which severance pay is applicable and should provide training to managers on how to handle such requests.

The notion that employees should automatically receive a ‘big payday’ for their years of service is often rooted in the employee’s mistaken beliefs or expectations, and is not legally required unless specified in an employment contract, or in the context of retrenchment or other specific legal conditions.

Conclusion

In summary, while the notion of compensating employees for their years of service may seem like a normal form of recognition, it is not an automatic right under South African law. Employers are only required to pay severance pay under specific conditions, primarily when an employee is dismissed due to the employer’s operational requirements and upon the expiration of a fixed term contract as set out above. As long as employers adhere to the legal framework outlined in the BCEA and LRA, they can avoid misunderstandings and disputes over payments for years of service.

This article focusses on employment under the BCEA and there might be different laws applicable to your industry, which might be governed by a sectoral determination or collective agreement with different provisions regulating severance pay, and therefore employers are encouraged to seek legal advice when dealing with these issues, especially in cases of retrenchment or fixed term contract terminations, to ensure compliance with the right laws and avoid unnecessary claims or disputes.

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Negligent conduct or actions of employees can cause the employer damage, including financial damages. In such instances the employer might consider taking disciplinary measures and as such should investigate the matter to determine whether the employee’s actions constitute negligence.  If so, the employer should further determine if the employee’s actions constitute gross negligence to ensure that the correct disciplinary process is followed and implemented.

Why? What’s the difference?

It is vital to determine the appropriate procedures to follow in terms of workplace policies and disciplinary codes.  Generally, if an employee is found guilty of negligence, the type of negligence (i.e. negligence vs. gross negligence) will have different sanctions.  Depending on the disciplinary code in the workplace, gross negligence might be met with a sanction of dismissal after a disciplinary hearing is concluded, as opposed to ‘ordinary’ negligence which might only lead to the employee being issued a warning.

Negligence

In his book titled Workplace Law (11th edition), John Grogan states the following in consideration of an employee’s negligence:

“In labour law, negligence bears the same meaning as it does in other areas of law: the culpable failure to exercise the degree of care expected of a reasonable person. In the workplace context, the ‘reasonable person’ would be a responsible employee with experience, skill and qualifications comparable to the accused employee. Negligence can manifest itself in acts or omissions. The test is whether a reasonable person in the position of the accused employee would have foreseen the possibility of harm and taken steps to guard against that harm.”

Gross negligence

Gross negligence can be described as an act or omission that is so careless or reckless that it shows a complete disregard for safety or well-being.  It occurs when an employee’s conduct deviates from the reasonable person’s standard to such an extent that it may properly be categorised as extreme. Our courts have held that it must demonstrate, in cases where there is conscious risk-taking, a complete lack of awareness or concern, and in the absence of conscious risk-taking, it demonstrates an absolute failure by the employee to exercise care.

Gross negligence is an elevated level of risk beyond typical neglect.  It emphasises a foreseeable possibility of severe harm if appropriate care is not taken, and/or a conscious and voluntary disregard for applying reasonable care, which is likely to result in severe injury or harm.

An objective test

From these descriptions we see that an objective test is used to determine negligence, and for gross negligence it needs to be assessed whether the employee demonstrated a high degree of reckless disregard for his/her acts or omissions, and a failure to exercise the standard of care that was reasonably expected of an employee with their degree of knowledge, skill and experience.

It is important to remember that onus lies with the employer to prove that the employee is guilty of negligence and/or gross negligence.  Where the employee is dismissed on grounds relating to gross negligence, the employer must be able to prove that dismissal was substantively and procedurally fair in consideration of the merits of the case.

Conclusion

Distinguishing between negligence and gross negligence is crucial in determining the appropriate disciplinary action in the workplace. Gross negligence involves a higher degree of reckless disregard for the safety or well-being of others, showing a departure from the standard of care expected of a reasonable employee. Employers must conduct thorough investigations to assess whether an employee’s conduct meets the higher set standard, as gross negligence often justifies more severe sanctions, including dismissal. The employer bears the burden of proving both the occurrence of gross negligence and the fairness of any dismissal that may follow, ensuring that disciplinary measures align with both substantive and procedural fairness.

The content in this article is for informational purposes only and should not be construed as legal advice. Please contact the LWO for advice and/or assistance.

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The Constitution of the Republic of South Africa, 1996 is built on a fundamental principle of the achievement of equality. Section 9 of the Constitution recognises that equality has two critical dimensions. The first, known as formal equality, prohibits unfair discrimination and ensures equal treatment for all individuals. The second, referred to as substantive equality, goes a step further by acknowledging the need to examine the social and economic conditions of individuals and groups. This approach focuses on implementing remedial measures to address historical disadvantages, which aligns with its goal of achieving true or meaningful equality, not just formal equality.

The Employment Equity Act, Act 55 of 1998, as amended by Act 47 of 2013, (hereinafter the EEA) was passed to align with the aforementioned principles. The primary purpose of this Act is to eliminate unfair discrimination in the workplace and to ensure that affirmative action measures are implemented. These measures are designed to ensure that suitably qualified individuals from designated groups—such as those historically disadvantaged by apartheid—are afforded equal employment opportunities. Through this framework, the EEA aims to ensure fair representation at all occupational levels within the workforce.

What is an Employment Equity Plan?

A key component of the EEA is the requirement for designated employers to design and implement an Employment Equity Plan. The purpose of this plan is to enable employers to make reasonable progress toward achieving employment equity within their businesses. By implementing an Employment Equity Plan, employers demonstrate their commitment to eliminating unfair discrimination in the workplace and to achieving equitable representation of designated groups through affirmative action measures.

Who does employment equity apply to?

Employment equity applies to:

• Employers who employ 50 or more employees.
• Employers who employ fewer than 50 employees but whose annual turnover equals or exceeds the amounts specified in Schedule 4 of the EEA.
• Employers who have been declared designated employers under a collective agreement.

These designated employers are legally required to implement Employment Equity Plans in their workplaces.

But what does an Employment Equity Plan entail, and what must it include?

Key Components of an Employment Equity Plan

An Employment Equity Plan must clearly outline the steps the employer will take to achieve the objectives of employment equity, including annual objectives, affirmative action measures, and numerical goals for equitable representation of designated groups. The plan must include a timetable for achieving both numerical and non-numerical goals, a monitoring process, procedures to resolve disputes, and the identification of those responsible for implementation. The plan must have a duration between one and five years.

Employers, however, are not left to navigate this process without guidance. The Department of Employment and Labour has published a Code of Good Practice as well as a guide to tailor plans to meet the employer’s specific needs while still adhering to the requirements as set out in the EEA.

This code, together with a user guide, offers a structured approach for employers to follow in preparation, implementation, and monitoring of Employment Equity Plans. 

Steps to implement an Employment Equity Plan

• Consultation: Employers must engage in meaningful consultation with trade unions and employees. This ensures that the plan is understood and accepted by all stakeholders, giving employees a voice in shaping the workplace’s future.
• Workforce analysis: Employers must conduct a comprehensive review of their current employment policies and workforce profile. This process helps identify barriers and areas where the business may be falling short in terms of employment equity.
• Develop and implement the Plan: Once barriers are identified, the employer must develop a detailed plan that sets out specific affirmative action measures. These measures should address the underrepresentation of designated groups at various occupational levels and provide clear steps toward meeting the business’s employment equity goals.
• Reporting and monitoring: Employers are required to report their progress to the Department of Employment and Labour. This reporting process allows the Department to monitor compliance with the EEA and ensure that employers are actively working toward eliminating workplace discrimination.

Reporting period

The reporting window will run from the first working day of September 2024 until 15 January 2025 for online submissions.

Consequences of non-compliance

Failure to comply with the EEA can have serious legal and financial repercussions for designated employers. The Labour Court also has extensive powers under the Act, including the authority to impose fines as outlined in Schedule 1 of the EEA, order compliance, or direct the Commission for Conciliation, Mediation and Arbitration (CCMA) to conduct further investigations.

Conclusion

In summary, the EEA is a vital legislative tool designed to foster equality and redress the imbalances created by South Africa’s history of discrimination. For designated employers, implementing an Employment Equity Plan is not just a legal obligation but a necessary step toward building an inclusive workplace. By engaging with employees, analysing policies, and reporting progress, employers can ensure they contribute to the broader goal of achieving true equality in South Africa’s workforce.

We are proud to announce that the LWO Employers Organisation is affiliated with Labour Quest, which will handle all services related to the Employment Equity Act going forward. Please contact us for more information: Employment Equity | Labour Quest.

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Theft in the workplace is a serious misconduct that places additional pressure on a business in terms of profitability and sustainability. Each year hundreds of thousands of cases are referred to the Commission for Conciliation, Mediation and Arbitration (“CCMA”) due to alleged unfair dismissal, of which many cases are related to misconduct that lead to dismissal.

An employer cannot dismiss an employee under any circumstances, without holding a disciplinary hearing to ensure that a fair procedure is followed and that there is a fair substantive reason (proof) for the employee to be dismissed.

Theft is defined as the action or crime of stealing – taking goods belonging to another, without permission and with the intention of permanently depriving the owner (lawful possessor) of its use and possession. In charging an employee with theft, an employer must be able to prove on a balance of probability that:

• the employee took goods which didn’t belong to him/her;
• the employee knew that he/she required permission to take such goods and didn’t have such permission;
• by taking the goods, the employee deprived the employer of its use and possession; and
• the employee didn’t intend to return the goods to the employer.

A disciplinary code is vital to ensure that there are clear rules in the workplace, with appropriate sanctions, for employees to follow.   When these rules are broken the employer can apply progressive discipline (warnings) or in cases of severe misconduct proceed directly to a disciplinary hearing. In most cases of theft, dismissal as a sanction is appropriate as the rule against theft is not only well known, but goes to the root of the employment relationship that binds an employee to act in good faith and to further the employer’s interests. This misconduct can negatively impact the employment relationship, rendering trust irreconcilable.

To prove the employee’s actions – taking the goods – the employer can call witnesses who can attest to the employee’s actions, or were present when the goods were found in the employee’s possession. The employer can also make use of cameras in the workplace, but only with employees’ permission as this can be seen as violation of the employee’s rights. To prove the employee’s intentions – aware of the lack of permission and intention not to return the goods – the employer should determine the employee’s “state of mind” by considering the nature of the stolen goods and the explanation provided by the employee.

When the employer has insufficient proof to charge the employee with theft, the employer can resort to charging the employee with related alternative offences, provided that these offences are set out in the disciplinary code. These offences include “unlawful possession of property”, “unlawful removal of property”, “misappropriation”, or even “fraud”, depending on each case’s merits.

We strongly advise employers to implement proactive measures to combat theft in the workplace. Herewith a few guidelines employers can follow:

• Use labour legislation to your benefit in drafting your employment contracts by including proactive clauses that require the employee’s permission, such as the installation of cameras in the workplace and search of employees as well as their belongings.
• Ensure that your disciplinary code is relevant and up to date regarding offences and appropriate sanctions. Also ensure that all employees are aware of what the disciplinary code entails.
• Employ security personnel. Where possible, try to outsource this function to ensure less collusion between security personnel and company employees.
• Control access and exit points to the company.
• Improve the recruitment process by including reference and criminal checks.
• Encourage employees to report dishonest conduct of co-workers.

In general arbitration awards in favour of the employee are due to the lack of following correct procedure on the employer’s behalf. We strongly advise employers to implement clear rules in the workplace and follow correct procedures with regards to all labour matters, especially dismissal and general discipline in the workplace, by acting pro-actively.

Contact the LWO for advice and assistance with these situations.
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We advise employers to address labour as a business risk proactively in order to promote a working environment with reduced conflict, friction and misunderstanding, which in turn creates a structured environment receptive for growth.

Absenteeism is a common issue in the workplace with a huge impact on business activities. The employer must address absenteeism effectively to ensure productivity.

What does absenteeism mean?

Apart from not being at work without permission, absenteeism can be seen as a broader category which also includes:

• Arriving late to work (it is still absence as long as the employee is not at work)
• Leaving work early
• Unauthorised breaks
• Extended breaks (smoke, toilet, lunch, tea, etc.)
• Feigned illness
• Other unexplained absences from the workstation or from the premises

It is the employee’s duty to commence and end duties at the times required, and/or contractually agreed to with the employer. When employees do not follow the rules, employers have the right to act in accordance with the workplace disciplinary code, which not only stipulates the rules of the workplace, but also the appropriate sanction. It is vital that these rules are discussed with employees and reduced to writing. The employers can only then prove that employees are aware of the rules as well as the consequences when these rules are broken.

How do you deal with absenteeism?

There are three important steps:

• Interview the offender and write down what he/she says.
• The employee must prove that the absence was justified.
• Reasons may be produced by the employee, but even if a reason might seem valid it can still be unacceptable – apply your disciplinary code.

The employee should always notify the employer by any means possible of his/her absence. It is very seldom that there are no means whatsoever available of notifying the employer of the absence.

Note however, that even if the employee does notify you that he/she will be absent for the day, such notification does not mean that the absence is now authorized. You have three options depending on the circumstances:

• Request him/her to come to work
• Treat the absence as authorized and pay the employee for the period absent
• Process the absence as unpaid leave

It is important to record and keep record of all incidents, including absenteeism and late coming, in an incident book or an employee file and act according to your disciplinary code. Sanction given must always be fair for the type of misconduct

Absence after permission has been refused

Desertion