Sources of law that govern the employment relationship

There are a variety of sources of law in South Africa that impact on the world of work.

The legal principles applicable to the employment relationship in this country come from a variety of sources. These include, the common law, international, law labour legislation, workplace level collective agreements, bargaining council collective agreements and the contract of employment. All of these are subject to the principles contained in the Constitution.

If one has to create a hierarchy of the sources (an order of the most important) referred to above, it would be as follows:

1. Constitution;
2. Labour legislation, including determinations made by the Minister of Employment and Labour;
3. Collective agreements concluded in bargaining councils;
4. Collective agreements concluded outside of bargaining councils;
5. Contract of employment; and
6. The Common Law.

The Constitution

• The Constitution of South Africa is the supreme law in this country.
• It provides the framework against which all other law (legislation and the common law) must be measured.
• All laws must be in line with the requirements of the Constitution or run the risk of being cancelled for being seen to be unconstitutional.
• All laws must also be interpreted and applied in a way that is in the line with the Constitution. For example, if there are two possible interpretations of the law, one giving effect to constitutional rights and one not, the interpretation giving effect to the Constitution must be adopted.

Conventions of the International Labour Organisation (ILO)

• South Africa is a member of the ILO.
• The main instruments of the ILO are Conventions, which reflect the agreements reached by consensus among the member states of the ILO.
• The Conventions of the ILO have a role to play in determining the content of the labour rights in the Bill of Rights and the proper interpretation of our labour legislation.
• South Africa has ratified several ILO conventions and by doing so, it undertakes binding legal obligations relating to a wide variety of matters.
• Labour legislation enacted since 1995 for example, the Labour Relations Act 66 of 1995 (LRA), the Basic Conditions of Employment Act 75 of 1997 (BCEA) and the Employment Equity Act 55 of 1995 (EEA) reflect ratification or adoption of core ILO Conventions.

Labour Legislation

• The main source of labour law is legislation or statutes.
• These are Acts of Parliament which regulate specific matters of labour law.
• Laws generally contain broad provisions setting out rights and duties, establishing processes and procedures and imposing obligations on parties.
• Obvious examples would be the Labour Relations Act (LRA) or Basic Conditions of employment Act (BCEA).

Regulations

• Broader provisions contained in legislation are often regulated in more detail by means of regulations.
• The regulations focus how to practically implement aspects of legislation. For example, in 2006 the Minister of Labour issued General Administrative Regulations in terms of the Employment Equity Act (EEA), which set out in detail how employment equity plans must be drawn up. Regulations are a form of subordinate legislation, but are binding in the same way as statutes.

Codes of Good Practice

• Certain pieces of legislation (the LRA, BCEA and EEA) make provision for the issuing of Codes of Good Practice.
• Codes of Good Practice are guidelines and any person interpreting or applying legislation must take the relevant code into account.
• Codes of Good Practice provide employers with information that may assist them with implementing various pieces of legislation.
• Codes of Good Practice are prepared and issues by NEDLAC in terms of the law.
• Employers should be guided by a particular Code of Good Practice unless they have a good reason to depart from it.

Some of the more well-known Codes of Good Practice are:

• Code of Good Practice: Dismissal;
• Code of Good Practice on the Handling of Sexual Harassment Cases in the Workplace;
• Code of Good Practice on the Employment of People with Disabilities.

Sectoral Determinations

• Chapter 8 of the BCEA allows the Minister of Labour to issue sectoral and ministerial determinations which set basic conditions of employment for employees working in a particular sector.
• For example, determinations have been issued for domestic workers and the cleaning services sector. Where the issues dealt with in a sectoral determination are also dealt with by the BCEA, the determination shall be accepted.

The Minister has made sectoral determinations for the following sectors:

It is important that all employers familiarise themselves with the contents of sectoral and ministerial determinations and keep abreast with the changes to the minimum rates of pay.

Collective agreements

• Collective agreements are written agreements between trade unions and employers or employers’ organisations, concerning terms and conditions of employment or any other matter of mutual interest.
• Collective agreements are a form of ‘collective contract’.
• A collective agreement can amend, replace or change some basic conditions of employment to the extent it is allowed by the BCEA.
• That agreement is then the instrument that regulates the minimum conditions of employment for the employees covered by it.

Collective agreements concluded in bargaining councils

• A bargaining council is a voluntary institution made up of one or more registered employers’ organisations and one or more registered trade unions, which is set up for particular sectors and which regulates terms and conditions of employment or any other matter of mutual interest in that sector.
• Bargaining council collective agreements are also important because they regulate dispute resolution processes (conciliation and arbitration) applicable in the sector and area for which the council has been established.
• With some exceptions, bargaining council agreements can set aside or change even the minimum standards set out in the BCEA.
• If certain requirements are met, an agreement concluded in a bargaining council by employers and trade unions that represent the majority of employees in a sector may be extended to cover employers and employees who are not a party to the council at, provided that they fall within the area of jurisdiction of the council.

Collective agreements concluded outside of bargaining councils

• Collective agreements concluded between employers and trade unions outside of bargaining councils are also an important source of rules governing the employment relationship between an employer and its employees.
• Such agreements might regulate any matter of mutual interest, terms and conditions of employment and contain disciplinary codes and procedures.

Contract of employment

• A contract of employment still has an important role to play in our labour law. It creates and regulates the employment relationship.
• A contract comes into existence when an employer and employee intend to create binding obligations and agree on the content of the agreement.
• A contract of employment may be indefinite or for a fixed term.
• An indefinite contract of employment may be oral or in writing, but a fixed-term contract must be in writing and must state the reason for entering into a fixed-term contract.
• An employer and employee are free to agree to the terms of the employment relationship in the contract of employment, but they may not contract out of the minimum conditions of employment set out in the BCEA.

The Common Law

• The Common Law is a body of law, a set of principles, that has been developed by South African Courts over decades, initially drawing on Roman-Dutch and English law.
• It is unwritten, but its contents became clear as the courts consistently applied the same legal principles to the cases that came before them. For example, most of the South African law of contract is to be found in the common law.
• Even though the common law is unwritten, it remains an important and a binding source of law.
• The common law can be relied on unless it has been overridden or excluded by legislation.

Labour legislation that regulates the employment relationship

The employment relationship is based on the common law contract of employment. The common law covers basic contractual rights.  It does not give an employee rights to sick leave, maternity leave, minimum standards of safety, etc.

As a result of the gaps in common law, various pieces of labour legislation have been enacted to address the imbalance.

Labour legislation uses a wide range of techniques to achieve its objectives. These include:

• establishing regulatory standards with sanctions in respect of occupational health and safety;
• establishing a floor of minimum rights regulating conditions at work; and
• promoting workplace organisation through registered trade unions and collective bargaining.

The Constitution of South Africa

The Constitution is the supreme law of the Republic providing a framework and standards that other laws must follow. All laws that are made by the government must be in line with the provisions of the Constitution and if they are not, they have to be amended.

Labour legislation seeks to give effect to the basic rights in the Constitution, ensuring that everyone has the right to fair labour practices, that employers and trade unions can engage in collective bargaining and that workplaces are free from discrimination.

Each piece of labour legislation has its own focus or theme. Each of these “themes” can be traced back to a basic right contained in Chapter II of the Constitution (the Bill of Rights).

Legislation must be interpreted with reference to the Bill of Rights in the Constitution and international labour standards established by the International Labour Organisation. These are the Conventions which South Africa has approved and which are binding upon it.

Section 23 of the Constitution which is of fundamental importance in shaping labour law in South Africa reads as follows:

Employers are advised to display summaries of the main pieces of legislation at their workplaces in order for employees and employers to familiarise themselves with the legislation.

The following are some of the main labour statutes.

• Labour Relations Act 66 of 1995 (LRA)
• Employment Equity Act 55 of 1998 (EEA)
• Basic Conditions of Employment Act 75 of 1997 (BCEA)
• Mine Health and Safety Act 29 of 1996 (MHSA)
• Occupational Health and Safety Act 85 of 1993 (OHSA)
• Unemployment Insurance Act 63 of 2001 (UIA)
• Compensation for Occupational Injuries and Diseases Act 130 of 1993 (COIDA)

1. The Labour Relations Act No 66 of 1995 (LRA)

The purpose of the LRA is to advance economic development, social justice, labour peace and the democratisation of the workplace by promoting collective bargaining, to provide a framework for unions and employers’ organisations to establish terms and conditions of work at sectoral and enterprise level; to facilitate employee participation in decision-making in the workplace and the effective resolution of labour disputes. The LRA codifies the law of unfair dismissals and unfair labour practices.

2. The Basic Conditions of Employment Act No 75 of 1997 (BCEA)

The purpose of the BCEA is to advance economic development and social justice by giving effect to the constitutional right to fair labour practices, by establishing and enforcing basic or minimum conditions of employment, such as hours of work, leave, sick leave, notice of termination of employment and setting limits to the variation of these minimum conditions (by ministerial determination, collective and individual agreements).

3. The Employment Equity Act No 55 of 1998 (EEA)

The purpose of the EEA is to achieve equity in the workplace by promoting equal opportunity and fair treatment in employment by the elimination of unfair discrimination and implementing affirmative action measures to redress the disadvantages in employment experienced by designated groups, in order to ensure their equitable representation in all occupational categories and levels of the workforce.

4.The Mine Health and Safety Act No 29 of 1996 (MHSA)

The purpose of the MHSA is to provide for the protection of the health and safety of employees and other persons at mines. The MHSA requires employers and employees to identify hazards and to eliminate control and minimize health and safety risks. To enhance this function; greater employee participation is encouraged by the creation of health and safety representatives and committees. Health and safety conditions will be monitored, measures enforced, improvements made, risks investigated and training provided, so as to promote the development of a culture of health and safety in the mining industry.

5. Occupational Health and Safety Act 85 of 1993 (as amended) (OHSA)

The OHSA provides for the health and safety of persons at work and in connection with the use of plant and machinery. The OHSA also provides for the protection of other persons (not at work) against hazards arising out of or in connection with the activities of persons at work. The OHSA proposes to achieve its objectives by the establishment of an advisory council for occupational health and safety.

6. Unemployment Insurance Act 63 of 2001 (UIA)

The purpose of the UIA is to establish a system to provide temporary and limited relief for workers who have become unemployed. The UIA establishes an unemployment insurance fund to which employers and employees contribute. From this fund, employees who become unemployed, or their beneficiaries, are entitled to receive short term benefits (for up to six months) and limited to no more than 45% of the contributor’s remuneration.

The UIA creates the following benefits, which a contributor or the dependants of the contributor, are entitled to claim:

• Unemployment benefits;
• Illness benefits;
• Maternity benefits;
• Adoption benefits;
• Dependant benefits.

7. Compensation for Injury and Occupational Diseases Act 130 of 1993 (COIDA)

The purpose of COIDA is to provide for compensation for disablement (inability to work) caused by occupational diseases sustained or contracted by employees in the course of their employment, or for death resulting from such injuries or diseases.

An overview of how to manage conduct and capacity in the workplace

It is essential for employers to fully understand all aspects of disciplinary and incapacity procedures, and the legal requirements and the rights involved.

The manner in which an employer handles challenges in respect of an employee’s conduct and capacity in the workplace can impact on a case right up to the arbitration, Labour Court, Labour Appeal Court and Constitutional Court stages, should the employee decide to challenge it.

Since workplace discipline and incapacity enquiries form part of the broader dispute resolution system, it cannot be examined in isolation. In order to manage workplace discipline effectively, as a first step, employers need to have a big picture view of the various components of the dispute resolution system that impact on workplace relationships, namely:

• The sources of South African Labour Law;
• The main pieces of employment legislation (statutes);
• The South African labour dispute resolution institutions and their roles.

An overview of discipline at the workplace

While the focus of this section is dealing with workplace challenges once they have already arisen, it is important to stress the value of building positive relationships within the workplace.

The ultimate goal should be to get to a position in a workplace where sound work relationships and adherence to workplace rules and procedures stems from the internal motivation of the employees concerned.  This is more likely in a workplace where there is respect between managers and the employees and where the contribution of the employees is valued.

Employees have a right to fair disciplinary action

The right to fair disciplinary action comes from:

• Section 23 of the Constitution, 1996: “Everyone has the right to fair labour practices”; and
• Section 185 of the Labour Relations Act 66 of 1995 (LRA): “Every employee has the right not to be unfairly dismissed and not to be subjected to unfair labour practices.”

The right to ‘fairness’ also extends to employers

The Constitutional Court has found that the reference to ‘everyone’ in section 23 of the Constitution extends to employers as well and that the concept of fairness extends to both employers and employees. This principle is reflected and reaffirmed in Schedule 8 to the LRA, the Code of Good Practice: Dismissal (the Code).

In terms of item 3 of the Code:

The LRA recognises three grounds or reasons on which termination of employment might be legitimate. These grounds are –

• The conduct of the employee (behaviour related dismissal).
• The capacity of the employee (poor performance, ill health).
• The third ground relates to the employer’s operational requirements (retrenchment).

Employers and employees both have rights and obligations within the workplace. These include the need to exercise fair labour practices on the part of employers and the duty to further the employer’s business interests on the part of employees.

These rights and obligations may arise from:

• Statutes (for example the Basic Conditions of Employment Act 75 of 1997);
• Collective agreements reached between trade unions and employers;
• Individual contracts of employment; and
• Employer imposed policies and procedures.

The contract of employment

The employment relationship is established by an agreement entered into by an employer and an employee. This agreement is known as a contract of employment. In terms of the contract of employment the employer and the employee have certain rights and obligations.

If one of the parties does not carry out his/her obligations or duties in terms of the employment contract that party is said to be in breach of the contract. The breach of contract may result in the employee taking legal action against an employer or the employer taking disciplinary (or other) action against the employee, which could result in the employee being dismissed.

Disciplinary and incapacity procedures

• The employer should deal with the breach by following the procedures that are set out in the Code or the company’s own policies and procedures.
• The Code sets out guidelines for procedural fairness in respect of dismissals for misconduct and incapacity (poor performance and ill-health/injury).
• Disciplinary procedures are used to deal with misconduct by the employee and incapacity proceedings are used to deal with incapacity.
• If an employer has a disciplinary procedure, it should comply with the minimum standards as set out in the Code.
• Although the Code is a guideline only, CCMA and bargaining council arbitrators are obliged to take the provisions of the Code into account when determining whether an employer has acted fairly or not.

‘Over proceduralism’

Some company disciplinary codes and procedures are detailed and formalistic. Following the judgment in the case of Avril Elizabeth Home for the Mentally Handicapped v CCMA and others 2006, 9BLLR 833, where the Court commented that “the rules relating to procedural fairness introduced in 1995 do not replicate the criminal justice model”, it is not necessary for an employer to follow such complex procedures. Bear in mind, however, that an employer is always required to follow its own procedures, and especially so when these procedures are contained in a collective agreement with a trade union.

What are the most important factors that should be considered when applying discipline at the workplace?

The following factors should be considered when applying discipline at the workplace:

• The importance of the rule breached;
• The circumstances of the offender; and
• The interests of the employer and employee.

Discipline should have a positive effect

The purpose of disciplinary action should be to modify or correct behaviour and not solely to penalise employees for offences.

The same applies to matters of incapacity.  Incapacity proceedings should have a corrective approach to enable the employee to “get back on track” and to determine whether external sources may be the cause of the poor performance.