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Understanding the Labour Relations Act to ensure complete compliance

Table of Contents

The Labour Relations Act 66 of 1995 was drawn up to advance economic development, social justice, labour peace, and democratisation in the workplace. Part of this is the regulation of trade unions’ organisational rights and the promotion and facilitation of collective bargaining at the workplace and at the sectoral level. This legislation includes information based on strikes, lock-outs, workplace forums and alternative dispute resolution, all of which impact the metal and engineering industry. This Act also establishes the CCMA, Labour Court and Labour Appeal Court as superior courts with exclusive jurisdiction to decide matters relating to the Act. Why is it necessary for businesses within the metal and engineering industry to ensure complete compliance with this Act? We examine the answer to this question in more detail below. 

The aim of the Labour Relations Act

We have briefly described what the LRA is, but it is vital to examine its purpose and its role within the metal and engineering industry. 

In simple terms, this Act ensures that there are guidelines in place for employers, employees and employee representative groups, like trade unions. These guidelines regulate the fundamental rights listed in Section 27 of the Constitution and provide a framework that employers, employees and trade unions can follow to:

  • Collectively bargain to determine wages, terms and conditions of employment and other matters of mutual interest
  • Formulate industrial policy
  • Promote orderly collective bargaining, collective bargaining at a sectoral level, employee participation in decision-making in the workplace and the effective resolution of labour disputes.

This Act also states that every person shall have the right to fair labour practices. It ensures that workers have the right to form and join trade unions and that employers can create and join employers’ organisations, like SEIFSA. The Act also states that employers and workers have the right to organise and bargain collectively, and that workers shall have the right to strike for the purpose of collective bargaining.

Key Provisions of the Labour Relations Act

Key Provisions of LRA_

There are several key provisions of the LRA that impact compliance within the workplace. These include:

Successful and collective bargaining practices can only be effective if there are strong trade unions and employer organisations. Collective bargaining ensures that industrial relations are regulated, and that the employee’s wages and benefits are negotiated fairly. 

In the past, there was often a lot of contention between trade unions and employers, where trade unions were not permitted to enter a workplace or conduct union meetings. This was an issue that weakened the strength of the trade unions and impacted employee rights. The LRA provides a framework for managing this process which ultimately strengthens trade union organisations by supporting the freedom of association rights. This allows employees and job seekers to participate freely in union activities. In this way, trade unions support employees’ organisational rights. 

The Act also allows employers to join employer organisations. It is advised that these organisations register with the Department of Labour, although this is not set out in the Act. The registration of an employers’ organisation ensures that there will be a proper constitution over finances. This will also allow for the tracking of any abuses, corruption and unconstitutional or unethical practices. This also affords the unions certain rights, like the right to participate in forming a federation of trade unions or a federation of employers’ organisations and the right to conclude collective agreements.  

The LRA provides three options for promoting centralised collective bargaining and ensuring that both employers and employees take part and have their say in the workplace decision making process. These three options include: 

  • Collective Agreements – collective bargaining is the process through which a union negotiates with an employer to formally agree and accept the workplace demands that workers put forward. The purposes of collective bargaining are to allow employers and a relevant trade union to negotiate a collective agreement on issues related to wages, pension funds, pension benefits, remuneration working conditions, overtime, severance pay, minimum wage, union rights, maternity and paternity leave etc.  The terms and conditions of this type of collective agreement will then only apply to the parties who agreed to the conditions and its members.
  • Bargaining Councils – Bargaining councils, sometimes referred to as industrial councils, are established when employer and employee bodies (unions) in a particular industrial sector and geographical area agree to come together to engage in collective bargaining. Bargaining councils may negotiate agreements across an array of issues that could include wages, conditions of work, training schemes, and disciplinary or grievance procedures. 
  • Statutory Councils – may be formed by trade unions or employer organisations to manage labour disputes, schemes, funds, education and training and to make collective agreements. 
Organising and Collective Bargaining

The LRA makes several provisions that allow for employee organisations to partake in collective bargaining activities. These are in the form of organisational rights and include: 

  • Providing trade unions with access to the workplace. In this way, the unions have the right to enter the employer’s premises and recruit or meet members, host meetings with employees outside their working hours and conduct elections and ballots relating to union matters. 
  • Any employee who is a member of a representative trade union may authorise the employer in writing to deduct subscriptions or levies payable to that trade union from the employee’s wages.
  • Trade union size is dictated by the number of employed members. Trade unions can elect representatives within the workplace if there are at least ten members. For example, if there are 10 members of the trade union employed in the workplace then one trade union representative can be elected, if there are more than 10 members of the trade union employed in the workplace, two trade union representatives can be elected, etc. These trade union representatives are able to, at the request of an employee in the workplace, assist and represent the employee in grievance and disciplinary proceedings. They can monitor the employer’s compliance with the workplace-related provisions of this Act, any law regulating terms and conditions of employment and any collective agreement binding on the employer. Trade union representatives can also report any alleged contravention of the workplace-related provisions of this Act, any law regulating terms and conditions of employment and more.

The terms of this act give employees the right to strike and grants employers the necessary recourse to lock-out employees. This often occurs over issues related to wage increases, negotiations on benefits etc. For a strike to be protected, the dispute must first be referred to the CCMA for conciliation. If the dispute remains unresolved or a 30-day period has expired since it has been referred to the CCMA, a certificate of outcome must be obtained. From here, a notice of commencement must be issued at least 48 hours prior to the strike or lock-out in the form of a written statement that outlines the intention to strike or lock-out. If employees are showing support of a protected strike and choose to picket, they cannot be dismissed. 

The terms of the Labour Relations Act provides three grounds on which an employer may dismiss an employee. These grounds include misconduct, incapacity and operational requirements. For a dismissal to be fair, certain procedures need to be followed. If not followed correctly, the employee may choose to take the employer to the CCMA and lodge a dispute. Dismissal should always be the last possible option for employers.  

Unfair Labour Practice

According to the Labour Relations Act terms of Section 186 (2) and Section 23(1) of the Constitution, every employee has the constitutional right to fair labour practices. The Employment Equity Act further emphasises this. But what constitutes unfair labour practices? 

In simple terms, unfair labour practices reference the unfair treatment by an employer of an employee or job applicant. This treatment is stipulated in the LRA and falls under four particular instances. These include: 

  • The unfair conduct of the employer relating to the promotion, demotion or training of an employee or relating to the provision of benefits to an employee
  • The unfair suspension or unfair dismissal of an employee or any other disciplinary action short of dismissal in respect of an employee
  • The failure or refusal of an employer to reinstate or re-employ a former employee in terms of any agreement
  • An occupational detriment, other than dismissal, in contravention of the Protected Disclosures Act, 2000, on account of an employee having made a protected disclosure as defined in that Act 

Unfair labour practices can also be based on unfair discrimination based on an employee or job applicants gender, race, marital status, sexual orientation etc. 

Obligations imposed by the Act

Obligations imposed by the Act_

There are several obligations posed for both the employer and the employee with regards to the LRA. These include: 

  • Employer – the organisational rights of trade unions include the right to have access to the workplace to recruit or communicate with members. Employers cannot stop trade unions from coming onto their premises and hosting these kinds of meetings. The employer will also need to give trade union representatives the leave necessary to conduct their activities. When an employee joins a trade union and authorises its membership fee’s deduction, the employer is required to make these dedications as soon as possible. The employer will also need to provide the trade union representative with any information necessary to allow the representativeness to perform their functions efficiently. In the case of a dismissal, the employer needs to ensure that a fair procedure was followed. The employee must be allowed to consult with their trade union representative, must be informed of all allegations and the investigation findings and be given adequate time to prepare. Employers need to keep all files on record in the case of collective bargaining, agreements, arbitration awards, and wage determinations. 
  • Employee organisations – trade unions need to keep all records of their income, expenditure and liabilities. Registered trade unions need to have their financial statements prepared within six months after the end of each financial year. They are required to keep a list of members, meeting minutes, and ballot papers for three years. The financial reports, list of members, changes of address, information on elections etc. need to be sent through to the Registrar of Labour Relations. 

The importance of LRA compliance within the Metal and Engineering sector

These labour relations laws provide a strict framework and list of requirements that employers, employees and trade unions need to comply with. This is supported by the Basic Conditions of Employment Act (BCEA) and the Code of Good Practice.

What happens in the case of non-compliance? In terms of the employer, there are serious consequences, especially if not taken seriously. Dispute resolution and arbitration processes not only have a financial impact but can impact the businesses reputation, workplace environment and more. This further affects the businesses revenue, productivity and efficiency. 

We have seen this often within the metal and engineering sector, where the correct procedures have not been followed. For example, trade unions being denied access to the employers’ premises, trade union representatives having to take unpaid leave to perform their functions and more. It is essential that you, as the employer, know what the laws are, what is required of you, and the roles and responsibilities of each party and organisation to ensure that compliance is achieved. This will positively impact your business and employees as well as mitigate risk.  

Conclusion

By taking the time to understand the Labour Relations Act and what is required from you, as the employer, in relation to the Act, you can ensure compliance. This will not only give you peace of mind in terms of following the correct practices and protocols, but it will mitigate business risk and improve relations with employees and employee organisations. 

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