Zimpapers Logo

Herald Reporters—
PROPOSED amendments to the Labour Act will remove the common law right of an employer to unilaterally dismiss employees on notice, but have also streamlined retrenchment procedures and will require works councils and employment councils to include minimum compensation in collective bargaining agreements in the event of retrenchments, with the default being at least one month’s pay for each year of service.

Also read…..

• EDITORIAL COMMENT: Draft Labour Bill brings win-win situation

Under the proposed amendments to the Labour Act expected to be gazetted today, employers will only be able to terminate a contract of employment on three grounds: for disciplinary reasons in terms of a code of conduct, if the employer and employee agree, or if the employee has been engaged on a fixed-term contract for a specified task.

If none of these three reasons apply, then the employer has to go through a formal retrenchment process.

However, the present cumbersome process of retrenchments will be streamlined and simplified.

As a first step, works councils and employment councils will have to negotiate compensation packages that will apply to all future retrenchments in the enterprise or the industrial sector concerned.

Such standard packages have not been in place in the past.

The amendment gives a default of at least one month’s pay for each year of service although the Labour Minister must consult the Retrenchment Board before registering an agreement that contains only this default. The Retrenchment Board will fix the minimum package in cases where there is no works or employment council.

Works councils are company specific, with representives of management and staff, while employment councils cover entire economic sectors with representatives of employers and employees, usually through trade unions for employees.

However employers who cite inability to pay these previously laid down packages in the event of retrenchments can apply for an exemption to the relevant employment council which will have 14 days to decide the matter taking into account ability to pay, relocation, and the security of remaining staff.

The amendments retain the present procedures of notice and negotiation to find other solutions to retrenchment but if there is no agreement possible then employers wishing to retrench apply to their employment council which will have 30 days to determine the matters arising from the disagreement for special measures to avoid retrenchment.

Parliament is expected to gazette the Labour Amendments Bill today, while legislators, currently on recess, are likely to be summoned to debate the proposals.

Further major proposed amendments make it clear that employees on fixed contracts will have the same benefits as those on contracts without time limits after they have served continuously for a period laid down by the relevant employment council or, if there is no such council, by the Labour Minister. This plugs a present loophole.

Collective bargaining agreements will have to take into account productivity, cost of living, economic factors, competitiveness, sustainability and the need to foster high levels of employment. These factors, basically an ability to meet the agreed levels of pay and benefits, are seen as restoring a balance to employers.

At least 18 000 employees have lost their jobs in the last four weeks following a Supreme Court ruling that found employers retained their common law rights, unexercised since the first post-independence labour statutes, to dismiss employees unilaterally on notice with the only statutory modification to that right being a minimum of three months notice for staff with three years or more of service.

The Attorney General’s Office was yet to submit the Bill back to Parliament late yesterday.

The drafters of the Bill have taken the opportunity to add a series of minor amendments. It makes it clear that the minimum age for employment is raised to 16 under strict conditions, mainly concerning training, but encourages children to stay in school until at least 18.

Employment councils will have to admit new employers groups and unions in proportion to their support in a sector, and there is a set of proposals over employment council administration. The qualifications for a judge of the Labour Court have been clarified and makes clear the powers of the Labour Court, especially that it has unlimited and original juristiction in all labour matters. Arbitrators, under set conditions, will be able to vary or rescind their determinations.