People: Labour law amendments

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www.zbconsulting.za.com

ZBZinn & Botha Consulting

what defines you?

We are in the business of sustainable BBBEE strategy

optimisation by bespoke innovation in talent

management, workforce optimisation and labour law

BZ Labour Relations Act Employment Equity Act Basic Conditions of Employment Act Employment Services Act BBBEE Codes

Scope of amendments

BZ Time to face up to the…

201420132011 2012

LARGEST regulatory changes in

the past 40 years

2015

BZ Stakeholder communication & capacitation (all levels of

management, employees, TES & suppliers) Draft & maintain a Risk Register Update Fixed-term Contracts Update TES Service Level Agreements Arrange an audit of TES Start an investigation into equal treatment risk exposure &

strategic options to minimize risk & employee cost increases Review IR policies such as retrenchments, employment equity

& the like Establish impact on collective agreements Commission an audit into the entire employment equity

compliance domain on the basis of the requirements of a DG review

Draft new a-typical employment & equal treatment/pay for work of equal value policies

Immediate administrative matters to address

Contact us now to arrange for any of

these [email protected]

.com

BZIts all inter-related; a “system” which calls for systems thinking rather than narrow-mindedness

LRA epicentre

LRA EMPLOYMENT STRUCTURE DECISION

WILL IMPACT




what defines you?

BBBEE codes & relationship with LRA & EE Act

BZ Three ways of securing human capital

Business strategy

SBO’s human capital needs

Temporary employment services

Direct employmento FTCo Part-timeo Permanent

Independent contracting/sub

contracting

BZElement Previous Weighting New Weighting

Ownership 20 Points 25 Points

Management Control

(Employment Equity)

10 Points Consolidated with Employment Equity

15 Points15 Points

Skills Development 15 Points 20 Points

Enterprise & Supplier Development

(Preferred Procurement Enterprise Development)

20 Points

40 Points

15 Points

Socio Economic Development 5 Points 5 Points

Generic scorecard

BZContribution Level Previous Calibration New Calibration

BEE Recognition Level

Level one contributor

≥ 100 points on the Generic Scorecard

≥ 100 points on the Generic Scorecard 135%

Level two Contributor

≥ 85 but < 100 points on the Generic Scorecard

≥ 95 but < 100 points on the Generic Scorecard 125%

Level three contributor

≥ 75 but < 85 on the Generic Scorecard

≥ 90 but < 95 on the Generic Scorecard 110%

Level four contributor



Level five contributor



Level six contributor



Level seven contributor



Level eight contributor



Non-compliant Contributor

< 30 on the Generic Scorecard

< 40 on the Generic Scorecard

0%

Recalibration of BBBEE levels - current score = ??

BZ Male

o AM (African male)– 40.7%

o CM (coloured male)– 5.8%

o IM (Indian male)– 1.9%

o WM (white male)– 6.4%

Total 54.8%

Femaleo AF (African female)

– 34.2%

o CF (coloured female)– 5.0%

o IF (Indian female)– 1.1%

o WF (white female)– 4.9%

Total 45.2%

National sub-race & gender

Now applies to management control/EE and skills development

Source: Statistics South Africa, (QLFS 3 2012) (all percentages are rounded to one decimal point)

BZ Skills development

Element Category Indicator Weighting points

Compliance

Target Score

Total Points = 20

Skills Development Spend on Learning Programmes in Matrix

Skills development spend on learning programmes specified in the matrix for black employees as a percentage of leviable amount

8 6%

Skills development spend on learning programmes specified in the matrix for black employees with disabilities as a percentage of leviable amount

4 0.3%

Learnerships, Apprenticeships & Internships

Number of black employees participating in Learnerships, Apprenticeships & Internships as a % of total employees

4 2.5%

Number of black unemployed people participating in training specified in the learning programme matrix as a % of number of employees

4 2.5%

Bonus PointsNumber of Black people absorbed by the Measured & Industry Entity at the end of the Learnerships programme

5100% or pro-

rata

BZ Enterprise & supplier development

Element Category IndicatorWeighting

pointsCompliance

Target

ENTERPRISE & SUPPLIER

DEVELOPMENT

Total Points = 40

Preferential Procurement

BEE Procurement Spend from all Empowering Suppliers based on the BEE Procurement Recognition Levels as a percentage of Total Measured Procurement Spend

5 80 %

BEE Procurement Spend from all Empowering Suppliers that are Qualifying Small Enterprises based on the applicable BEE Procurement Recognition Levels as a percentage of Total Measured Procurement Spend

3 15 %

BEE Procurement Spend from all Exempted Micro Enterprises based on the applicable BEE Procurement Recognition Levels as a percentage of Total Measured Procurement Spend

4 15 %

BEE Procurement Spend from all Empowering Suppliers that are at least 51% black-owned based on the applicable BEE Procurement Recognition Levels as a percentage of Total Measured Procurement Spend

9 40%

BEE Procurement Spend from all Empowering Suppliers that are at least 30% black-women owned based on the applicable BEE Procurement Recognition Levels as a percentage of Total Measured Procurement Spend 4 12%

Bonus PointsBEE Procurement Spend from Designated Group Suppliers that are at least 51% Black-owned

2 2%

Supplier Development

Annual Value of all supplier development contributions made by the measured entity as a % of target

10 2% of NPAT

Enterprise Development

Annual Value of enterprise development contributions and sector-specific programmes made by the measured entity as a % of target 5 1% of NPAT

Bonus Points

Graduation of 1 or more ED beneficiaries to Supplier Development level

Creating one or more jobs as a result of Supplier Development & ED initiatives by the measured entity

1

1




what defines you?

Labour Relations Act amendments

BZ Section 189A of the Principal Act is hereby amended by

o the insertion in subsection (2) of the following paragraph– (d) a consulting party may not unreasonably refuse to extend the

period for consultation if such an extension is required to ensure meaningful consultation

Right-size; down-size; up-size…

Scope & Impact Retrench, change terms of

employment … 90 days is the minimum! Dismissal risk heightened




what defines you?

Fixed-term contracts, indefinite contracts & legitimacy of

contracts, equal pay matters etc.

BZ A ‘fixed term contract’

means a contract of employment that terminates on– the occurrence of a

specified event

– the completion of a specified task or project; or

– a fixed date, other than an employee’s normal or agreed retirement age

– Employment in terms of a fixed term contract in contravention of the above is deemed to be of indefinite duration

A ‘Dismissal’ meanso (b) an employee

engaged under a fixed-term contract of employment reasonably expected the employer– to retain the

employee on an indefinite contract of employment but otherwise on the same or similar terms as the fixed term contract, but the employer offered to retain the employee on less favourable terms, or did not offer to retain the employee

Fixed-term contracts – many shades of grey

BZApplies irrespective of direct FTC or via a TES

Joint and several liability for breaches of BC/SD/BCEA

D U R A T I O N O F C O N T R A C T

RE

MU

NE

RA

TI

ON

3 months

R205 per annum

Joint and several liability for breaches of BC/SD/BCEA

SERVICE LEVEL AGREEMENTo indemnificationso insuranceso SOP’s

Joint and several liability for LRA (if TES is involved)

Equal treatment Organisational rights

Fixed-term contracts – vulnerable persons

BZWhat does it really mean when it says the CLIENT is the deemed employer?

(4A) If the client of a temporary employment service is jointly and severally liable in terms of section 198 (4) or is deemed to be the employer of an employee in terms of section 198A (3)(b)o the employee may institute proceedings against either the

temporary employment service or the client or both the temporary employment service and the client

o a labour inspector acting in terms of the Basic Conditions of Employment Act may secure and enforce compliance against the temporary employment service or the client, as if it were the employer, or both; and

o any order or award made against a temporary employment service or client in terms of this subsection may be enforced against either

That deeming provision

Client instructs the TES to remove an assignee

Determine if FTC clearly defines an event, duration or project with clear indicators managing expectations: consider number of renewals/ rolling,

duration & wording of contract as well as reason for removal

FTC is clear wrt termination & expectation management

Probability is that assignee harbours an expectation of renewal of contract or

indefinite duration

Assigned for <24m

Give contractual notice if end date is not

clear

Assigned for >24m

Give contractual notice &

termination pay (1w

remuneration/ complete year

service)

Misconduct IncapacityOperational Requirement

s

Be careful of potential application of selection criteria across client & TES staff & severance

pay

SOP: ASSIGNEE REMOVAL GUIDELINES

BZStatute Client

Joint & Several Liability

TES Liability Severally

Labour Relations Act Yes – pending Yes

Employment Equity ActUnfair

discriminationAA (after 3 months)

Yes

Skills Development Act Yes

Skills Development Levies Act Yes

Bargaining Council/ Sectoral Determination/ BCEA Yes

UIF Yes

COID Yes

OHSA Yes

Risk management – labour law scenarios




what defines you?

Equal treatment

BZ General Approach…

1. Is the dispute a genuine equal pay/ equal treatment dispute?

2. Are the positions being compared of equal value?the responsibility for people, finances and material & the skills,

qualifications, including prior learning and experience required &physical, mental and emotional effort required to perform the work & the conditions under which work is performed, including physicalenvironment, psychological conditions, time when and geographic location where the work is performed.

3. Are there justifiable reasons for differentiation?Seniority, length of service, qualifications, ability, competence,

performance or quality of work, temporarily employed to gain experience or training, shortage of skills or market values thereof, any other factor

REMEDY: LRA – address immediately & EEA – take remedial steps

BZ JUSTIFIABLE REASON for different treatment... includes the fact

that the different treatment is as a result of the application of a system that takes into accounto the employee’s seniority, experience or length of serviceo merit criteriao the quality or quantity of work performedo any other relevant criteria of a similar nature

– (that is not prohibited in terms of section 6 of the Employment Equity Act)

Under the Labour Relations Act

BZ It is partly about correlations

Equal pay for work of equal value

BZ Determining Equal Pay risk exposure - first things first!

F

BA

A – Earning more than R193K/pa

B – Contracted for less than 3 months

C – Normal absenteeism replacement

D – Trainee/intern/learnership/ apprenticeship

E – Short-term project

F – Justifiable reason

(LOS/experience/performance/ merit/other)

Fields & data (data sheet)

o Client perm

o Client part-time

o Client FTC

o TES

100 Assignees

20 Assignees - Exposure

Clean up “Gene Pool”Options: perm,

attrition, increase …

CRUCIAL…Design & Develop a NEW DISPENSATION STAFFING SOLUTION going forwards

Opportunist Ambassador

Qu

an

tita

tive

Pro

gre

ss

Business Uncertainty & CyclicalityPe

rmanent

Em

plo

ym

ent

High Flexibility Needs

Cool Martyr

Hybrid

TE

S/

Outs

ourc

ed

Sta

ffing

Low Flexibility Needs

WHERE DO YOU FEATURE?

John Botha

CHANGED HEADING

RESPONSEBusiness strategy must drive decisions

Options BlendIndependent Contractors/ Sub-

contractors/ Outsourcing

Temporary Employment

Service/ Labour Broker

Direct Employment

Managed Service Provider (MSP)

Full Function Outsource

Pay-for-Performance

Other arrangements

SLA indemnifications

integrated SOP’s Systems & MI Capacity & delivery Thought leadership Remove

comparator Compliance with

law

Recruitment process outsourcing (RPO)

HR outsourcing

LR outsourcing Payroll

bureau etc.

STRATEGIC STAFFING PARTNER CHARACTERISTICS (2014 & BEYOND)

• Back up SLA Indemnifications & Insurances

Strong Balance Sheet

• Management InformationSystems

• Innovation & differentiationThought leadership

• Global Best-practice, locallyCapacity to

Deliver

• Values, culture and track recordTrust & “in it for the long haul”

• Immerse into Client Business Drivers

Business Sense




what defines you?

Thank you!

John Botha082 457 [email protected]