Transport World Africa learns about the legislative impact of recent amendments to the Labour Relations Act on the fleet industry.

On 1 January 2015, significant amendments to the Labour Relations Act 66 of 1995 (LRA), came into effect. Subsequently, the South African fleet industry will have to comply with the stipulations contained therein.

According to Hugo Pienaar, director in the employment practice at Cliffe Dekker Hofmeyr, the amendments introduced to the LRA signal movement by government to streamline the country’s labour environment and have required that South African businesses, including those in the fleet industry, adjust the way they have traditionally employed and managed staff within their organisations.

Discussing some key features of the amendments to the LRA, pertaining to the fleet industry in particular, Pienaar states that companies who use labour brokers for seasonal employment (a common occurrence in the fleet industry) will now have to ensure that their contracts meet the requirements set out in the LRA.

“The amended LRA seeks to more actively regulate non-standard employment relationships,” explains Pienaar. “This ambit includes the employees of labour brokers (TES) (section 198A of the LRA), employees employed for a fixed period of employment (section 198B of the LRA) and part-time employees (section 198C of the LRA). In the premises, employers must pay careful attention to the various amendments when making use of seasonal workers, labour brokers or successively renewing fixed-term contracts of employment. These amendments invite closer scrutiny of labour practice.

“In terms of section 198B of the LRA, fixed term employees, who earn below R205 433.30 per annum (the current Basic Conditions of Employment Act 75 of 1997 threshold), are protected by placing limitations on the right to employ employees for a fixed period of employment. This includes not being treated less favourably than employees employed on a permanent basis performing the same or similar work unless the difference in treatment can be justified. In the premises, section 198B (3) of the LRA states that fixed term contracts of employment for longer than three months, may only be used if there is a legitimate justification for it. In the absence of such a justification, the fixed term employee will be deemed to be employed for an indefinite period of time,” says Pienaar.

“The amendments are primarily intended to limit the use of these employees, who earn below the threshold, to true short-term contracts, being agreements equal to, or less than, three months. Should an employer wish to enter into contracts of this nature for periods in excess of three months, their reason for doing so would have to justify this type of employment relationship. Without limiting the grounds upon which employers can rely, the LRA now identifies specific justifications including: replacing another employee who is temporarily absent, or persons employed to work exclusively on a specific project that has a limited or defined duration. The underlying principle guiding section 198B of the LRA is justifiability. In the absence of such justifications, fixed term employees will be deemed to be employed for an indefinite period of time and TES employees will be deemed to be the employees of the client,” he notes.

Pienaar explains that collective labour law is also affected by the amendments introduced to the LRA. These amendments are aimed at promoting the inclusion of non-standard employees in the collective bargaining framework and expanding the application of organisational rights. This will effectively expand the employee pool in a workplace for purposes of procuring organisational rights.

These amendments will have the effect of creating a more inclusive collective bargaining arena in the workplace. Hopefully, this will lessen the need felt by smaller unions to use industrial action as the only route to obtain organisational rights, previously ordained for more representative unions only.

Large trade unions like AMCU and NUMSA have started organising within the road freight industry. Although the LRA now accommodates and empowers smaller and other trade unions in the industry, it cannot be guaranteed that these smaller and other trade unions will respect agreement’s entered into with existing unions. This will affect the collective negotiation process and the way forward.