Download Benefits - LexisNexis South Africa

Strike issues: replacement labour, leave, public holidays,
benefits
Presented by:
Michelle Naidoo
Norton Rose South Africa
Introduction
•
Sustainability is the capacity to endure
•
Sustainable development is “development that meets the
needs of the present without compromising the ability of future
generations to meet their own needs”
•
Does strike action pose a challenge to the concept of
sustainable development?
Introduction
The challenges:
• Sustainability is not a guaranteed outcome of collective
bargaining power play
• Competing interests such as economic interests versus social
justice are both critical pillars of sustainability
• The consequences of strike action impact on both business and
labour
Strike statistics 2011: work days lost
Netherlands
• 20 000
United Kingdom
• 1.4million
South Africa
• 30million as at end of July 2011
The effect of strike action on business and labour on key conditions of
employment that directly affect the social and economic pillars of
sustainability:
• Remuneration
• Benefits
• Accrual of leave
• Pay for public holidays; and
• Replacement labour
Section 213, LRA
Remuneration
• “Any payment in money or in kind, or both in money and in kind,
made or owing to any person in return for that person working
for any other person, including the state, and remunerates has
a corresponding meaning.”
Employee
• “Any person, excluding an independent contractor, who works for
another person or for the state and receives, or is entitled to
receive, any remuneration; and
•
Any other person who, in any manner, assists in carrying on or
conducting the business of an employer, and “employed” and
“employment” have meanings corresponding to that of
employee.”
Section 67, LRA
• An employee does not commit a delict or breach of contract for participating
in protected strike action.
• The employer’s obligation to remunerate an employee for service not
rendered during strike action is suspended.
But what if services are partially tendered?
• Exceptio non adimpleti contractus (defence of non-performance of contract)
available to employer when locked-out employees claim payment for work
tendered on a go-slow basis
• An employer is entitled to reject the tender of services on a go-slow basis
during a protected lock-out and not obliged to pay for partial compliance
Benefits
Section 186(2), LRA
“An unfair labour practice means any unfair conduct or omission that
arises between an employer and an employee involving unfair conduct
by the employer relating to promotion, demotion, probation (excl.
disputes about dismissals for reasons relating to probation) or training
of an employee or relating to the provision of benefits to an employee.”
What constitutes a benefit?
Jurisprudence
Hospersa and another vs Northern Cape Provincial Administration
[2000] 21 ILJ 1066 (LAC)
Issue: Whether failure by the employer to pay an acting allowance, in the
absence of any agreement, was an unfair labour practice?
Held:
Unfair labour practice concerned only with disputes of right arising
ex contractu or ex lege. No right existed, therefore no unfair
labour practice.
Protekon (Pty) Ltd vs CCMA & others
[2005] 7 BLLR 703 (LC)
Issue:
Whether travel concessions constituted a benefit?
Whether the withdrawal thereof was an unfair labour practice?
Held:
The travel concession constituted a benefit.
Although remuneration does not constitute a benefit, the
categories of benefits that fall within the scope of Section 186 are
not finite.
Disputes over the provision of benefits fall into two categories:
• benefits not presently enjoyed by employees; or
• the fairness of the employer’s conduct in relation to the provision
of benefits
Schoeman vs Samsung Electronics (Pty) Ltd
[1997] 10 BLLR 1364 (LC)
Held:
Remuneration is different from benefits. A benefit is something
extra apart from remuneration.
Gaylard vs Telkom South Africa Limited
[1998] 9 BLLR 942 (LC)
Held:
A claim for accumulated leave pay is not a benefit.
Section 35(5), BCEA:
Minister’s determination
Categories of payment forming part of an employee’s remuneration for the
purposes of calculating leave pay, severance pay and notice pay:
• Housing or accommodation allowances or subsidy
• Car allowance or provision of a car (unless provided to enable the
employee to work)
• Any cash payments or payments in kind except those listed as
exclusions
• Employer’s contributions to medical aid, pension, provident fund, funeral
or death benefit schemes
Applicable principles
• If a payment in money or in kind is held to constitute remuneration,
section 67(3) applies
• The defence conveyed by the maxim exceptio non adimpleti
contractus is a potential competent defence to claims for remuneration
or benefits
The accrual of leave and public holiday pay
• Minimum statutory entitlements governed by the BCEA
• No express provision in the LRA providing for the suspension of
accrual of leave or payment for public holidays in the event of
protected strike action
Nampak Products Ltd t/a Nampak Corrugated Containers v Paper, Printing
and Wood Allied Workers’ Union
[1992] 13 ILJ 1292 (ARB)
Held:
Statutory payments such as leave, are suspended if:
(a)
(b)
(c)
employees were not receiving or entitled to receive
remuneration; or
not actually working under the supervision of the employer;
or
not assisting the employer in the carrying on of the
business.
The employer was therefore entitled to disregard the period of strike action
in calculating leave pay.
Arbitrator’s reasoning
• During a strike, although the employee remains employed, the employee
is not entitled to receive remuneration, does not work under the direction
or supervision of the employer and does not assist in carrying on or
conducting the business of an employer.
•
Statutory benefits are applicable only to persons who satisfy both
components of the definition of employee.
•
Statutory benefits are entitlements in terms of the BCEA that are
automatically imported into contracts of employment and apply during
periods that employees are entitled to receive remuneration.
• Constitutional provisions
• ILO conventions
• Foreign jurisdictions
• Canadian law
• United Kingdom
Replacement labour
Section 76, LRA
(1)
(2)
An employer may not take into employment any person(a)
to continue or maintain production during a protected
strike if whole or a part of the employer’s service has
been designated a maintenance service; or
(b)
for the purpose of performing the work of any employee
who is locked out, unless the lock-out is in response to a
strike.
For the purpose of this section, ‘take into employment’ includes
engaging the services of a temporary employment service or an
independent contractor.
Key issues arising
• The interpretation of the phrase “in response to a strike”; and
• The meaning of “take into employment”
“In response to a strike” has been interpreted as including both protected
and unprotected strikes and to occur if a lock-out notice is issued after
notice of the strike has been given, even though the strike has not yet
commenced.
“Take into employment” has been interpreted to mean that employers may
not employ new persons to replace striking employees on a temporary or
permanent basis. An employer may use its existing employees to
continue with operations.
The aim is to discourage employers from resorting to an offensive lock-out
and to discourage employees from resorting to strike action.
Conclusion
• Strike action impacts on a broader level than “no work, no pay”
•
Loss of BCEA entitlements are associated losses that should be
factored into both economic and social considerations prior to
embarking on strike action.
•
Applying the potential associated losses, the impact of 30million lost
days of work in South Africa, on both business and labour, poses a
serious threat to the sustainability of business and job security.