Changes to the Labour Relations Act and the Right to Strike

The Labour Relations Amendment Bill was recently debated and passed in the National Assembly and has subsequently been submitted to the National Council of Provinces to be ratified.

The Bill proposes significant amendments to the right of employees to strike, by introducing a new mechanism for strikes to be resolved by an advisory arbitration panel. Such a panel will be led by a commissioner appointed by the Commission for Conciliation, Mediation and Arbitration (CCMA), and will have the power to resolve strike action without the employers being required to engage directly with their dissatisfied employees.

Furthermore, the Bill extends the traditional 30-day conciliation period to maximum of 35 days, consequently delaying strike action and causing much dissatisfaction amongst workers and trade unions.

Another controversial element introduced by this Bill, is the requirement for trade unions to take decisions whether to strike by secret ballot. The Bill defines “ballot” as “any system of voting by members that is recorded and in secret”. This is in stark contrast with the established practice of unions to hold open and relatively informal ballots to take these decisions. It is interesting to note that this “ballot-clause” is included in the constitutions of many trade unions, but has never been enforced by government.

This new proposed procedure surrounding strike actions also confers considerable power on employers to prevent a strike in its entirety. If an employer is of the view that a ballot was improperly conducted, they may apply for an interdict against the strike action before it has even begun.

As demonstrated by the widespread acrimony with which these amendments have been received by workers and unions, this Bill imposes significant restrictions on the right to strike – a remarkable irony in the face of the increased protection afforded to workers by other recent Bills such as the National Minimum Wage Bill. However, when one considers the rather tedious enforcement mechanisms proposed by the minimum wage Bill, it is yet to be seen if the recent changes in the South African labour law landscape are favouring the employee or the employer.

Eduane Neethling

The National Minimum Wage Bill and its Enforcement

On 29 May 2018, the National Minimum Wage Bill was submitted to the National Assembly for debate and approval – a development long-awaited by South African workers and labelled by Labour Minister Mildred Oliphant as “groundbreaking”. The Bill was passed and has been sent to the National Council of Provinces for ratification.

The purpose of the Bill, according to the legislator, is to improve social justice, protect workers from unreasonably low wages and promote the process of collective bargaining.

The proposed minimum wages are structured as follows:

R 20-00 per hour for average workers;

R 18-00 per hour for farmworkers;

R 15-00 per hour for domestic workers;

R 11-00 per hour for expanded public works programme workers.

The Bill also determines that it will be unfair labour practice for an employer to unilaterally alter work hours or other conditions of employment when implementing the relevant minimum wage.

Employers can take comfort that the Bill does provide for companies who cannot afford to pay their employees the minimum wage. These companies will be allowed to apply online to the Labour Department for an exemption, which can be granted for a maximum period of one year. Companies registered as small businesses will be granted a period of two years. However, the department will reserve the right to revoke these exemptions if employers violate any labour laws in force.

The enforcement of this Bill is partially dealt with in the (also recently introduced and passed) Basic Conditions of Employment Bill, which will uphold wages determined by each individual sector that are already higher than the proposed national minimum wage.

It is also envisaged that the enforcement of the national minimum wage will be shifted from the Labour Department to the Commission for Conciliation, Mediation and Arbitration (CCMA). This means that, if a worker is not being paid at least the national minimum wage, he/she will need to refer their matter to the CCMA.

This Bill is a clear indicator of the change in the labour law landscape in South Africa which has long since been demanded and fought for by workers and unions alike, and employers should pay close attention to keep abreast of further developments regarding this Bill and other new labour legislation.

Eduane Neethling

Divorce – Pension fund Claims

When parties are considering the prospect of divorce, they often wonder what will happen to the assets and liabilities they have accrued during the marriage. One of these assets is a spouse’s pension interest in a pension / provident fund or retirement annuity.

Section 7(7)(a) of the Divorce Act provides that the pension interest of a party shall be deemed to be a part of that party’s assets unless the parties were married after 1 November 1984, by way of an ante nuptial contract excluding the operation of the accrual system.

In marriages in community of property this means that the pension interest will form part of the joint estate and will be subject to the division of the joint estate when the marriage comes to an end, either by death or divorce. Generally speaking, this means that a spouse who is not a member of the pension / provident fund in question will be entitled to a pay-out of a percentage of the other spouse’s pension / provident fund. In the recent decision of Ndaba v Ndaba, the Supreme Court of Appeal clarified that this entitlement is automatic and by operation of Law, meaning that courts need not specifically grant an order for this entitlement to be enforceable.

In marriages out of community of property where the accrual system is operational, a spouse pension interests in a pension / provident fund is an asset of their estate and a non-member spouse may be entitled to receive a pay-out from a spouse’s pension / provident fund, provided the pay-out is purposed for paying that spouses accrual claim.

In marriages out of community of property where the accrual system is not operational a spouse’s pension interests in a pension / provident fund forms part of the assets of their estate but a non-member spouse is not entitled to any pay-out from their pension / provident fund as their marital regime does not result in a joint estate or an accrual claim.

Despite a non-member spouse not being entitled to any pay-out from the other spouse’s pension / provident in marriage out of community of property, where the accrual is not operational, spouses have an occasion agreed to award a portion of their pension / provident fund to their spouse even though there is no legal entitlement for a pay-out to be awarded.

This practice recently considered by the Pension Fund Adjudicator who has ruled that a portion of a pension interest assigned to a non-member spouse in terms of a decree of divorce, may not be paid out when parties are married out of community of property where the accrual system is not operational.

No matter how parties are married, it is very important that they properly consider the consequences that may befall their pension interests in the event of a decree of divorce being granted by a court, either by agreement between the parties or by the courts judgement in a trial

Nuno Palmeira