“The amendments that we’re talking about are under the Labour Relations Act and the LRA is one of a whole range of labour laws – organisations need to interpret the changes to the LRA in the context of overall labour law but, more importantly, BBBEE,” John Botha, a labour relations consultant, told CNBC Africa.
“If we talk about labour brokers, some organisations that are being incorrectly advised may be looking at cutting down the use of labour brokers but that has a significant impact on their BEE scorecards.”
The most significant review of labour legislation in South Africa is under way. According to Adcorp, with this new legislation, what matters now is how businesses interpret and manage it.
“The impact on business is really significant. It’s the largest labour law review that’s taken place in decades. The reality is that the nature and extent of those changes singlehandedly has the potential to bring many businesses to their knees if they don’t respond appropriately. The discussions moved from the platform into the boardroom,” Botha indicated.
“For the first time, organisations have started to get their mind around provisions such as equal pay for work of equal value. The reality [is] that fixed-term contracts in future would have to effectively be treated equally to their permanent counterparts. Obviously there are conditions attached to that such as the quality and the quantity of their work, performance-related remuneration has got a big role to play, experience, length of service.”
Botha added that there are also a number of myths about this labour legislation that need to be dispelled.
“The biggest myth that concerns me specifically is this myth that labour brokers will not be around after three months, so their temporary workers that they place with organisations. Many people have interpreted that after three months, the client becomes a permanent employer and nothing could be further from the truth. Their co-employment relationship continues indefinitely,” he explained.
“Another myth would be that fixed-term contracts can be for no longer than three months and then people become permanent – absolutely not the case. The act is actually very clear in saying that you could have fixed-term contractors indefinitely, what you have to do is treat them fairly.”