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Unformatted text preview: [email protected] Fifth Edition [email protected] Fifth Edition André van Niekerk (Managing Editor) BA LLB MA (Applied Ethics) (Witwatersrand) LLM (Leicester) Judge of the Labour Court of South Africa Nicola Smit (Managing Editor) BLC LLB (Pret) LLD (RAU) Marylyn Christianson BA (UCT) GRAD CE (Zim) LLB LLM (Natal) Marié McGregor BLC (Pret) LLB (UNISA) LLM (Pret) AIPSA Dip (Pret) LLD (UNISA) Stefan van Eck BLC LLB LLD (Pret) Members of the LexisNexis Group worldwide South Africa LexisNexis (Pty) Ltd DURBAN 215 Peter Mokaba Road (North Ridge Road), Morningside, Durban, 4001 JOHANNESBURG Building 8, Country Club Estate Office Park, 21 Woodlands Drive, Woodmead, 2080 CAPE TOWN First Floor, Great Westerford, 240 Main Road, Rondebosch, 7700 Australia LexisNexis, CHATSWOOD, New South Wales Austria LexisNexis Verlag ARD Orac, VIENNA Benelux LexisNexis Benelux, AMSTERDAM Canada LexisNexis Canada, MARKHAM, Ontario China LexisNexis, BEIJING France LexisNexis, PARIS Germany LexisNexis Germany, MÜNSTER Hong Kong LexisNexis, HONG KONG India LexisNexis, NEW DELHI Italy Giuffrè Editore, MILAN Japan LexisNexis, TOKYO Korea LexisNexis, SEOUL Malaysia LexisNexis, KUALA LUMPUR New Zealand LexisNexis, WELLINGTON Poland LexisNexis Poland, WARSAW Singapore LexisNexis, SINGAPORE United Kingdom LexisNexis, LONDON United States LexisNexis, DAYTON, Ohio © 2019 ISBN 978 0 639 00880 6 E-book ISBN 978 0 639 00881 3 First Edition 2008 Second Edition 2012 Third Edition 2015, Reprinted 2016 Fourth Edition 2018, Reprinted 2018 Copyright subsists in this work. No part of this work may be reproduced in any form or by any means without the publisher’s written permission. Any unauthorised reproduction of this work will constitute a copyright infringement and render the doer liable under both civil and criminal law. Whilst every effort has been made to ensure that the information published in this work is accurate, the editors, authors, writers, contributors, publishers and printers take no responsibility for any loss or damage suffered by any person as a result of the reliance upon the information contained therein. Editor: ****** Technical Editor: ****** Preface This fifth edition of [email protected] was largely prompted by the amendments to the Labour Relations and Basic Conditions of Employment Acts and the introduction of the National Minimum Wage Act, all with effect from 1 January 2019. We have also incorporated the Code of Good Practice: Collective Bargaining, Industrial Action and Picketing that was published on 19 December 2018. A number of key judgments have emerged since the last edition. These have been incorporated into the text where there has been a substantive change to or advancement of the law, or into the footnotes where a reference is warranted. The book continues to be intended primarily as a teaching tool and a first point of reference for practitioners. The structure of the book remains as it was in the fourth edition. As far as possible, we have attempted to avoid a degree of overlap, but this is inevitable when chapters are designed, as they are, to be read on a ‘stand-alone’ basis. We trust though that the whole is coherent, and represents a snapshot of current South African labour law in its social, economic and constitutional context. We have incorporated the amending legislation, regulatory material, judgments and arbitration awards using material available to us as at 31 October 2019. THE AUTHORS November 2019 v Contents Page Preface .................................................................................................................. v CHAPTER 1 Introduction .................................................................................... 1 CHAPTER 2 International labour standards .................................................... 21 CHAPTER 3 The constitutional framework ....................................................... 37 CHAPTER 4 The elusive employee and non-standard employment ........... 57 CHAPTER 5 Common-law and statutory conditions of employment .......... 87 CHAPTER 6 The right to equality in employment: non-discrimination (Chapter II of the EEA) .................................................................. 117 CHAPTER 7 The right to equality in employment: employment equity and affirmative action (Chapter III of the EEA) ......................... 161 CHAPTER 8 Unfair labour practices ................................................................. 195 CHAPTER 9 Unfair dismissal – preliminary topics ............................................. 233 CHAPTER 10 Automatically unfair reasons for dismissal .................................. 269 CHAPTER 11 Conduct and capacity ................................................................ 293 CHAPTER 12 Dismissal for reasons based on the employer’s operational requirements .................................................................................. 337 CHAPTER 13 The transfer of undertakings ......................................................... 363 CHAPTER 14 Freedom of association and the right to organise .................... 393 CHAPTER 15 Collective bargaining and worker participation ....................... 415 CHAPTER 16 Strikes and lock-outs ...................................................................... 447 CHAPTER 17 Dispute resolution .......................................................................... 477 CHAPTER 18 Employment and social protection ............................................. 507 vii viii [email protected] Page Bibliography ........................................................................................................... 545 Table of cases ....................................................................................................... 559 Table of statutes .................................................................................................... 589 Index ....................................................................................................................... 601 1 Introduction Page 1 The discipline of labour law ............................................................................ 3 2 Perspectives on labour law in a South African context .............................. 8 2.1 The libertarian perspective ...................................................................... 8 2.2 A social justice perspective ..................................................................... 10 3 The evolution of employment law in South Africa ....................................... 12 3.1 Pre-1995 labour legislation ....................................................................... 12 3.2 The post-1994 era ..................................................................................... 14 4 Key labour market institutions: A brief overview .......................................... 16 5 The future .......................................................................................................... 17 1 Introduction 3 1 The discipline of labour law What is labour law, and what is its claim to existence as an independent discipline? A moment’s reflection will reveal that labour law cannot assert a right to existence in the same way that the law of contract, delict, or criminal law might. All of these subjects are based and rely for their coherence on a single legal concept. For example, criminal law concerns the relationship between the individual and the state and the kinds of conduct that should be punishable; the law of delict is primarily concerned with obligations between individuals, the concept of fault and the manner in and extent to which harm should be compensated. Labour law, on the other hand, has been described as less of a concept than a ‘dimension of life’.1 The dimension of life with which we are concerned is the world of work and people’s engagement in it. However, this does not detract from the significance of labour law, nor is it a negative reflection on the status of labour law as a discipline either in its own right or as one worthy of study. While the focus of labour law is the workplace, its subject matter is a complex and intertwined body of law drawn from a number of diverse legal sources. Contract, delict, criminal law, administrative law, company law, constitutional law and international law are all areas of law with which labour law to a greater or lesser degree intersects. The relationship of these concepts to work and how they are drawn together to regulate the terms on which work is performed is what gives labour law conceptual coherence as a subject, and what justifies its study as a discrete discipline. Conceptual coherence aside, there are at least two other reasons why labour law warrants consideration as a stand-alone topic. The first is that work is fundamental to definitions of self and provides status, esteem and meaning to those persons sufficiently fortunate to be engaged in it. The loss of employment, especially in economies with high levels of unemployment (South Africa’s is such an economy), will most often have devastating personal consequences for a worker and a worker’s family. Work is a means to sustain material needs and escape poverty, and a lack of it can result in social exclusion. Secondly, at a social, political and economic level, work remains the principal means through which economic activity is conducted. 2 The nature and extent of the regulation of the labour market in general, and the organisation of work in particular, are inevitably contentious political issues. ________________________ 1 Langille ‘Labour Law’s Back Pages’ in Boundaries and Frontiers of Labour Law Davidov and Langille (eds) (2006). This chapter draws from the perspective on labour law offered in this essay. 2 This despite predictions of the demise of work. See Rifkind ‘The End of Work’ (1996). Rifkind’s theory is that human labour ‘is being systematically eliminated from the production process’ (at 3). More recent studies have focussed on the impact of technological advances on work. This is an element of what is termed the ‘fourth industrial revolution’ – the emerging technologies in robotics, automation and artificial intelligence – and their impact on the nature of work. (See Schwab The Fourth Industrial Revolution (2016) and International Labour Organization Work for a Brighter Future – Global Commission on the Future of Work (2019).) 4 [email protected] This is especially so in an environment where government seeks to provide decent work for all but where assertions are made, as they have been in South Africa, that in comparative terms the labour market is overly rigid and that labour legislation inhibits economic development and the creation of jobs. Legislative intervention in the employment relationship was originally motivated by the recognition that contractual rules ignore the fact that the bargaining power between employer and employee is inherently unequal. Few employees are in a position to bargain on equal terms with their employers; the employer is usually in a position to dictate the terms of the relationship.3 The traditional function of labour law has been to address this imbalance.4 Labour law has sought to serve as a countervailing force in two ways. The first is intervention in a substantive sense, by imposing minimum standards below which an employer and employee may not contract. In South Africa, the Basic Conditions of Employment Act5 (BCEA) adopts this mechanism by fixing statutory basic conditions of employment that constitute a term of any contract of employment, unless more favourable terms are either agreed to or imposed by another regulatory measure. 6 The National Minimum Wage Act7 (NMWA) establishes a national minimum wage which cannot be waived, and the mechanisms to review that wage on an annual basis. The Labour Relations Act8 (LRA) estab- lishes protection for individual employees against employer action in the form of unfair dismissal and unfair labour practices. The second and more procedural form of intervention is to improve the bargaining position of employees by creating rights, institutions and structures (for example, the rights to freedom of association and to bargain collectively) to act as a countervailing force to the employer’s economic power. Thus, the LRA guarantees employees the right to join trade unions and participate in their activities, affords representative trade unions a set of organisational rights, establishes ________________________ 3 Perhaps senior executives and highly skilled professional employees are potential exceptions. Even then, this must be an insignificant number of employees. Most employees, particularly in a society such as South Africa’s, with the official unemployment rate at 29 per cent, have no bargaining power and are hardly in a position to negotiate the terms of their employment contracts. 4 The classic statement of this perspective remains this often-quoted passage: ‘The main object of labour law [is] to be a countervailing force to counteract the inequality in bargaining power which is inherent and must be inherent in the employment relationship’ (Davies and Freedland Kahn Freund’s Labour and the Law (1983) at 18). Some South African scholars disagree with the application of this perspective in South Africa and argue that historically the collective bargaining system perpetuated power imbalances by seeking to control White workers while simultaneously excluding Black workers. See Le Roux ‘The Purpose of Labour Law: Can it Turn Green?’ in Malherbe and Sloth-Nielsen (eds) Labour Law into the Future: Essays in Honour of D’Arcy du Toit (2012) at 237. Le Roux also develops a concept of ‘sustainable labour law’. 5 Act 75 of 1997. 6 S 4 of the BCEA. 7 Act 9 of 2018. This Act will be discussed in more detail below in para 3.2 ‘The post-1994 era’ and in chapter 5 below. 8 Act 66 of 1995. Introduction 5 collective bargaining structures, recognises and gives effect to collective agreements, and upholds the right to strike. The form of these interventions, both to fix minimum terms of employment contracts and to establish the framework within which collective bargaining might be conducted, suggests that ascertaining the applicable law in an employmentrelated dispute will often be difficult. Unlike contracts that are concluded in most other forms of commercial engagement, the express terms of the employ- ment contract are usually not definitive of the relationship between the parties, nor do they seek to be. It may be necessary to look beyond the terms of the contract to legislation (including the Constitution), wage-regulating measures, collective agreements, work rules and practices and the like, in order to establish the applicable law. However, the contemporary challenge to labour law is not the complexity of the individual employment relationship. At an external level, the standard contract of employment is increasingly no longer the primary means through which work is performed. The traditional foundation of labour law – an indefinite contract with a single employer arranged around a core concept of permanent employment where the employee is engaged in a workplace over which the employer exercises physical control, organises work and directs how employees should do it – is being eroded. Nowadays, it is as likely that work is performed by someone who works from home, receives instructions on-line, performs work with full autonomy, delivers the agreed product or services on-line, and is paid online. In this instance, there is no workplace (except in some virtual sense) and the worker rarely, if ever, sees the employer. 9 These more contingent forms of engagement may have advantages for those employees seeking maximum flexibility, but they generally offer less protection to workers than does the traditional model of employment. 10 The erosion of the standard contract of employment as the primary means by which work is performed has extended to the essentials of the employment relationship itself. Many employers seek to have work performed in terms of agreements that on their face are not employment contracts but rather contracts between a client and a service provider. While the legal distinction between ________________________ 9 An ILO report on the employment relationship refers to these persons as ‘e-lancers’. 10 See Thompson ‘The Changing Nature of Employment’ (2003) 24 ILJ 1793. Thompson argues that ‘Work has changed and is changing for both better and for worse. On the positive side, there are now many more options open to employees, allowing them to work in more flexible ways and to better match their work obligations with their lifestyle aspir-ations. And the expanded modes of employment and the general competition for skills have promoted gender equity in the workplace. On the downside, however, a restructured workplace has meant that some employees have been placed under considerably more workplace pressures while others have been displaced into more precarious and less well-rewarded job roles’ (at 1815). The International Labour Organization’s recently published Work for a Brighter Future – Global Commission on the Future of Work (fn 2) suggests that technological advances will create new jobs, but those who lose their jobs in the transition may be the least equipped to seize new job opportunities. Today’s skills will not match the demands of tomorrow’s jobs, and newly acquired skills will quickly become obsolete. 6 [email protected] employee and independent contractor has been drawn since Roman times, this divide has become increasingly blurred as work-related relationships have become more diversified. Engagement through intermediaries in the form of temporary employment services or other agencies has further complicated the nature of the legal relationship through which work is performed. In these circumstances, it has been argued that the legal scope of employment and employment protection is increasingly out of step with the reality within which working relationships exist. 11 The emergence of what has been described as the ‘gig economy’, ‘pop-up economy’ or the ‘platform economy’ in which services are app-mediated and provided on demand, on a job-by-job basis (Uber is a good example), has brought the debate on contingent forms of engagement into sharp focus. Whether those who participate in the gig economy are engaged in employment relationships and the extent of any coverage of labour rights has been the subject of litigation in labour courts and tribunals around the world.12 The individual employment relationship aside, the institution of collective bargaining, the centre piece of many traditional approaches to labour law, has been in decline in most industrialised economies for some years. South Africa is no exception, and levels of union membership in recent years have exhibited a consistent downward trend. There are various explanations for this decline (the changed nature of work, the decline of industries where union membership has traditionally been high), but it has obvious implications for those who regard the purpose of labour law as rooted in power relationships and, in particular, the role of trade unions and collective bargaining in addressing the asymmetrical distribution of power in society. Given these developments, traditional conceptions of labour law face something of a crisis, and recent debates have focused on the need to re-evaluate the purpose of labour law. One of the proposed solutions is to rethink the contract of employment as the basis for the legal regulation of work and to shift the focus from contract to a consideration of the nature of protection that should be afforded to different categories of work. Alan Hyde suggests that ‘Labour law has a bright future, once it understands itself as a collection of regulatory techniques, not a sidecar on the motorcycle of subordinate employment’. 13 ________________________ 11 Benjamin ‘Beyond “Lean...
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