Balancing Flexibility And Stability

CE
Consolidated Employers Organisation

Contributor

The Consolidated Employers’ Organisation is a prominent South African membership-based employers’ association that assists businesses to navigate labour disputes and collective bargaining at the Commission for Conciliation, Mediation and Arbitration (CCMA) and various Bargaining Councils on a national scale - through direct representation, professional support, proactive engagement and training mechanisms.
The origins of employment relationships derive from principles of Common Law and remain the basis of employment relationships in labour relations as they exist today.
South Africa Employment and HR
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The origins of employment relationships derive from principles of Common Law and remain the basis of employment relationships in labour relations as they exist today. Many of the provisions of the Common Law employment contract have subsequently been amended and regulated by adopting legislation that sought to remedy the inadequacies of the Common Law, such as unequal bargaining power and the rise of collective rights through unionisation. Legislation was further adopted to impose minimum general conditions of employment.

The two prominent pieces of Legislation adopted for this purpose were the Labour Relations Act and the Basic Conditions of Employment Act. The Labour Relations Act regulates fair labour practices for both individual and collective rights and seeks to referee the employment relationship; for the purpose of this article, the intricacies of the Labour Relations Act will not be dealt with in detail. The second is the Basic Conditions of Employment Act ("BCEA"), which principally seeks to impose the minimum conditions of employment that apply to all employers and employees party to an employment relationship. The adoption of the BCEA does not preclude the rights of parties to negotiate terms and conditions of employment but rather acts as the safety net of absolute minimum standards to which an employment relationship may be negotiated. This means that the parties may not agree to terms and conditions that are unreasonably less beneficial than the prescribed standards set out in the BCEA.

The general conditions of employment that are regulated within the BCEA include but not limited to are inter alia:

  • Formalities of an employment contract
  • Remuneration;
  • Working hours;
  • Leave;
  • Termination provisions.

The BCEA, while serving as a minimum standard, is, however, static in its adaptation, which has resulted in supplementary Legislation or, in the case of collective bargaining, the adoption of Council main agreements, which seek to redress the relatively static nature of certain conditions of employment that are regulated within the BCEA, these include remuneration, working hours and overtime. It is often the case that Contracts of employment are concluded, and over time, they become dated in their original provisions; as a general rule, changes to the contract require a bi-lateral act of consent before it can be done; this is the case in overtime agreements where the BCEA requires the parties to agree to overtime on a year to year basis, however in the case of legislation it applies retroactively and does not need the bilateral agreement between the parties, it applies by operation of the Law.

The BCEA is further supplemented by the adoption of the National Minimum Wage Act ("NMWA"), which regulates the minimum remuneration, which the Minister adjusts on a year-to-year basis. The provisions of the NMWA apply retroactively to all employment contracts within its scope, and the parties to the contract are bound to comply with these adjustments even if they differ from the original contract of employment. Bargaining Councils may further have main agreements that regulate the conditions set out in the BCEA. In disputes where the Council exercises jurisdiction, the parties are bound by the main agreement over the Basic Conditions of Employment Act. Sectoral determinations further act as supplementary to the BCEA, where an employment relationship falls within the scope of the sectoral determination sector; the provisions of the sectoral determination will apply retroactively during the subsistence of the employment relationship.

The parties to an employment relationship are still free to negotiate terms of employment. However, it is important to ensure that any change to conditions of employment is signed and agreed between the parties and is no less favourable than that set out in the BCEA, further, where conditions are regulated under another enabling Act of Legislation or through collective agreements, employers ensure compliance with these provisions to avoid claims for non-compliance or unfair labour practice disputes. While it appears at face value that the power dynamic of employment relationships has shifted towards the employees, the employer still has the right and protection to ensure they employ the best candidates, and that the employment relationship still imparts the "good faith" duty for an employee to act in the interests of the employer.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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