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Report
Business Studies Grade 12
Topic 1: Impact of recent legislation on business –
response to demands for redress and equity
 ..\..\..\Graad 12\Kwartaal 1\Onderwerp 1_Impak van onlangse
wetgewing\Wette\Act 66 of 1995 Labour Relations Act.pdf
(workers can, through collective bargaining facilitated by their unions, improve their
working conditions and negotiate for higher wages)
NATURE of LRA:
 All relationships are complicated, but from a business perspective, it is even more
so because it includes individuals, groups and the government.
 The parties involved in labour relations is primarily the employer and employee, as
well as the government that supplies a legal framework how the relations should be
conducted, employer organisations acting on behalf of employers and trade unions
acting on behalf of workers.
 The handling of relations in the business can be done by the Human Resource
officers, if they have a thorough knowledge of the relevant legislation.
 More complex relationship problems require legal expertise from outside the
business.
NATURE of LRA:
 Before 1994, labour laws were only set by government. After 1994, these Acts are
open for discussion by the organised labour (trade unions) and organised business
(employer organisations), before it is implemented.
 Amendments in this Act were accepted by Government in 2013.
 These changes involve contract workers, labour brokers and strikes.
 It also strengthened the protection of part-time workers.
PURPOSE of LRA:
 Makes provision for collective bargaining, e.g. during wage disputes.
 Makes provision for the settling of labour disputes, e.g. unfair dismissals.
 Makes provision for trade unions and discussing othe roles and rights of trade unions.
 Regulates the rights to strike and the recourse to lock-out in accordance with the
Constitution.
 Promotes employee participation in decision making through the establishment of
workplace forums.
 Provides simple procedures for the resolution of labour disputes through conciliation,
mediation, arbitration or independent alternative dispute resolution services.
 Provides a simplified procedure for the registration of trade unions and employer’s
organisations.
 Establishes the Labour Court and Labour Appeal Court as superior courts.
PURPOSE of LRA:
 Makes provision for a framework for labour related issues for employers,
employees, employer organisations and trade unions.
 Regulate the fundamental rights of workers and employers.
 To make a contribution to the promotion of economic development, labour peace, a
democratic workplace and social justice.
 The Act provides, among other things, that employees can establish unions /
associations or join a trade union to enable them to protect their interests, as well
as collective bargaining and workplace forums.
 Employers can establish employer organisations and may join such organisations,
e.g. the Agricultural Employers Organisation.
 Regulations are built into the LRA to ensure that this organisations act
democratically and exercise proper financial control.
PURPOSE of LRA:
 Several structures were created by the LRA for handling disputes between
employees and employers, such as statutory boards, two courts (Labour Court and
Labour Appeal Court) and the Commission for Conciliation, Mediation and
Arbitration (CCMA).
 CCMA:
 To deal with individual cases that cannot be solved in the workplace.
 Has regional commissioners who are tasked to facilitate an agreement between the two
conflicting parties (employer and employee), via:
 Conciliation (helping the parties to find their own solution)
 Mediation (helping the parties to find a solution by giving his/her opinion)
 Arbitration (listening to both parties and then give his/her decision which is final)
 If this process fails the dispute is referred to the Labour Court.
PURPOSE of LRA:
 The LRA provides that workers may legally strike under certain conditions, if
negotiations between union representatives and employers are not successful.
 Employers have the right to exclude employees from the workplace.
 The LRA provides a framework for trade unions and employers’ organisations
regarding :
 The practice of collective bargaining.
 Determination of fair conditions of employment.
 Formulation of a business policy.
 Participation in business decision making.
 Understand the consequences of non-compliance with promises made.
 Understanding of fair labour practice.
PURPOSE of LRA:
 The provisions of the Act include rights and obligations of employees, trade unions,
employers and employers’ organisations:
 Freedom of association (employees may belong to any union they see fit and employers have
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the right to establish a employers’ organisation or to join such an organisation)
Collective bargaining
Procedures regarding strikes, lockouts and other forms of industrial action.
Workplace forums (committees of employees who regularly meet with employers to discuss
workplace issues)
Trade unions (have the right to access the work place to recruit members) and employers’
organisations
Structures and procedures for dispute resolution
Unfair dismissal:
 The dismissal is related to a worker being pregnant
 Workers participated in a strike (and the strike was legal)
 Reasons relating to age, gender, language or political beliefs
 A worker refuse to do the work of another worker who is on strike
ADVANTAGES
DISADVANTAGES
Provides a legal framework for employers to
dismiss unruly employees.
Can impact negatively on the speed of
decision making by management.
Facilitates communication between
stakeholders, management, employees and
trade unions.
May reduce the competitiveness of workers in
South Africa, compared to workers in other
countries.
Provides forums for conflict resolution
between these groups.
Can increase unemployment.
Protect benefits for both the employer and
employee through involvement in the
workplace processes and procedures.
Contributes to inflation and raises costs of
products and services.
Promote fair employment and retrenchment
practice.
The LRA provides for unions and give them
power to negotiate, but not all unions put the
interests of their members first.
ADVANTAGES
DISADVANTAGES
Implementation of codes of good business
practice.
Trade unions abuse the power given to them.
Provide a framework for employers, unions
and employees in collective bargaining
regarding salaries, terms and conditions of
employment and other matters of mutual
interest.
Many employees use the right to strike,
without taking responsibility in this regard.
Form a legal framework for all employers and
employees.
Strikes disrupt business and cause a decline
in business productivity.
Promote and recognise the rights and
responsibilities of employees and employers.
Labour disputes and negotiation processes
can be destructive and time consuming.
Promote fair business practices .
Employees and unions strike too easily to
persuade employers to give in to their
demands.
ADVANTAGES
Recognise the rights and responsibilities of
trade unions and promote orderly collective
bargaining and effective resolution of labour
disputes.
Promote opportunities and encourages
employees to participate in decision making
in the business.
DISADVANTAGES
IMPLICATIONS FOR BUSINESSES:
 Businesses may find it hard to cope with the administrative load and paperwork.
 Less management time is available for dealing with regulation.
 Leads to increased labour costs – some businesses may not be able to employ
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additional employees.
Employment is inhibited as the cost of labour increases.
Employees have the right to join a trade union and participate in its activities
(freedom of association).
There is an effective and inexpensive (free) option to employees in the form of the
CCMA and the Department of Labour. When a business gets involved in the
dispute resolution process the employer risks financial costs (legal fees, CCMA
fees and even fines) and / or ultimately imprisonment.
Recent example: Strikes at the mines
RIGHTS OF BUSINESSES AND EMPLOYEES:
 Freedom of association:
 Employers may establish employer organisations or join an existing one of their choice
and participate in their activities.
 Employees may also establish unions or join an existing one in the specific sector and
participate in their activities.
 Trade unions may give the right to employers to deduct union members’ fees from the
employee’s salary.
 Right of access in the workplace by union representatives:
 Trade unions have the right of access in the workplace, but they may not interfere with the
operation of the business.
 Recruitment may be done and membership meetings may be held in the workplace after
working hours.
RIGHTS OF BUSINESSES AND EMPLOYEES:
 Employees can establish a workplace forum when there are more than 100 workers
in the workplace
 Employees have the right to participate in decision-making in the business as part
of collective bargaining on issues that affect workers’ rights.
 Employers have the right to retrench workers if it is justified by the procedures
prescribed in the LRA.
 Bargaining and statutory councils:
 A large part of the LRA focus on collective bargaining.
 Different employers’ organisations and trade unions have the right to form a bargaining
council.
 These councils should deal with labour disputes.
RIGHTS OF BUSINESSES AND EMPLOYEES:
 Commission for Conciliation, Mediation and Arbitration (CCMA):
 An independent commission that deal with employment disputes between employers and
employees.
 Employees and employers have the right to refer labour disputes that are not resolved
internally, to the CCMA.
 The CCMA may refer unresolved disputes to the Labour Court, and if the people involved are
still not satisfied with the outcome of the court, it could be referred to the Labour Appeal Court.
 Strikes and lock-outs:
 Employers may exclude workers from the workplace during strikes and workers may go on
strike if the strike comply with legal procedures.
 The LRA gives employees the right to strike as a means to solve labour grievances. Workers
providing essential serves may not strike.
 Strikes may be in the form of formal strikes, protest-marches and go-slows.
RIGHTS OF BUSINESSES AND EMPLOYEES:
 The change in the LRA in 2013 has the following implications for employers:
 Part-time workers with a fixed-term contract may not be employed for more than three
months, The only exception is when the employer can give valuable reasons for the
extension.
 When an employee with a fixed-term contract is employed for more than three months, he
/ she cannot be treated in a different way as a permanent worker doing the same type of
job. The only reason for different treatment is if the employer can give a valuable reason
for the difference in treatment.
 This means that such a worker, who has the same training and experience as a permanent
worker, is liable for medical benefits, housing, pension benefits and the same right to
apply for a vacant post.
RIGHTS OF BUSINESSES AND EMPLOYEES:
 The change in the LRA in 2013 has the following implications for employers:
 Fixed-term contracts are used for the following:
 Seasonal work
 Where a worker replace another who is temporally absent
 More workers needed because the workload has increased temporally
 Where workers are employed for specific projects with a limited time frame
COMPLIANCE WITH THE PROVISIONS IN THE LAW AND PENALTIES IF THE
BUSINESS FAILS TO COMPLY:
 The Labour Relations Act applies to:
 All employers
 All employees
 All trade unions
 All employee organisations
 The Labour Relations Act does not apply to the following institutions:
 The National Defence Force
 The National Intelligence Agency
 The South African Secret Service
COMPLIANCE WITH THE PROVISIONS IN THE LAW AND PENALTIES IF THE
BUSINESS FAILS TO COMPLY:
 Employers and employees must follow the provisions in the LRA in order to comply
with the Act.
 If not, a dispute-resolution procedure should be followed as follows:
Internal
solution
CCMA /
Bargaining
councils
Labour
Court
Labour
Appeal
Court
COMPLIANCE WITH THE PROVISIONS IN THE LAW AND PENALTIES IF THE
BUSINESS FAILS TO COMPLY:
 Fines as determined by the Minister of Labour may be imposed if employers /
employees are guilty of not complying to the LRA’s provisions.
 This contributes to equality and fair treatment in the workplace.
 Mechanisms are built into the law to act when conflict in the workplace occurs, e.g.
because of discrimination.
 Employers who fail to comply with the Act in terms of dismissals, may be
compelled to pay compensation to employees who were unfairly dismissed.
TRADE UNIONS, STRIKES, COLLECTIVE BARGAINING AND UNFAIR DISMISSALS:
 Trade unions:
 An employee organisation with the purpose of regulating employer-employee
relations, through collective bargaining.
 The roles and functions of trade unions include :
 Improving working conditions and terms of employment
 Involving employees in decision making processes
 Ensuring that workers are treated fairly at work
 Striving to ensure that workers get a fair share of the wealth generated by business
enterprise
 Improving social security
 Resolving grievances and disputes in the workplace
 Preventing retrenchment
TRADE UNIONS, STRIKES, COLLECTIVE BARGAINING AND UNFAIR DISMISSALS:
 Strikes:
 A strike take place if workers refuse to work.
 The most common reasons for strikes are wages, working hours and working conditions.
 There are different types of strikes, for example:
Type of strike:
Go-slow
Discription:
Employees show up at work, but work very slowly and produce less than
usual.
Sympathy strike Members of other trade unions, who are not in dispute with their
employer, join in on a strike to support workers who are in dispute with
their employer.
TRADE UNIONS, STRIKES, COLLECTIVE BARGAINING AND UNFAIR DISMISSALS:
 Strikes:
Type of strike:
Discription:
Sit-down strike
Employees show up at work, but refuse to do any work.
Wildcat-strike
Against the law – takes place without any warning.
Work to rule
Workers cause a decrease in production by doing only the minimum of
what is expected of them, according to the rules of the workplace.
Lockout
Employees are locked out by their employer and refused entry to their
workplace.
TRADE UNIONS, STRIKES, COLLECTIVE BARGAINING AND UNFAIR DISMISSALS:
 Collective bargaining:
 Collective bargaining is a process whereby employer / employee organisations and trade
unions negotiate with one another to achieve an agreement over conflicting needs,
interests or goals.
TRADE UNIONS, STRIKES, COLLECTIVE BARGAINING AND UNFAIR DISMISSALS:
 Unfair dismissals:
 Employees are not dismissed for a first offence, unless the offence was extremely serious
(gross dishonesty, fraud, physical assault).
 The employer must launch an investigation into the matter to establish wheter there are
sufficient grounds for dismissal.
 The employer must notify the employee of te allegations made against the employee.
 The employee should be allowed:
 To react to allegations.
 Sufficient time to react to allegations.
 Assistance and representation by a trade union representative / colleague / legal advisor.
TRADE UNIONS, STRIKES, COLLECTIVE BARGAINING AND UNFAIR DISMISSALS:
 Unfair dismissals:
 Once the enquiry has been held, the employer must inform the employee of his / her
decision – preferably in writing.
 If the employee is dismissed, the employee should be made aware of the reasons for the
dismissal and reminded of the right to take the matter further, e.g. to the CCMA.
 There are only three fair reasons for dismissal:
 Misconduct by the employee
 Incapacity on the part of the employee (the inability of the employee to perform his/her job)
 Operational requirements of the enterprise (retrenchment)
TRADE UNIONS, STRIKES, COLLECTIVE BARGAINING AND UNFAIR DISMISSALS:
 Unfair dismissals:
Dismissals is fair if:
Dismissals is unfair if:
The disciplinary procedure is fair.
The employee was discriminated against.
The reason for dismissal is fair.
The employee is pregnant or plans to fall pregnant.
The employee took part in a strike or intends to take
part in a strike.
A worker is forced to accept a demand.
The employer cannot prove the employee’s
misconduct.
The employer cannot prove that the dismissal
procedure was fair.

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