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BER 220 Labour Law Summary
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Business Law 220 (BER220) summary of labour law (chapter 37, 38, 39)
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LABOUR LAWPurpose of labour law
• Labour law is concerned with the world of work and people’s engagement in it. Simply put it is
concerned with rights and obligations that arise between the parties engaged in the workplace.
• In the past, employment was regulated by what is known as a common law contract of
employment which was primarily focused on the freedom and sanctity of contract.
• This common law contract of employment disregarded unequal relationship that existed between
the parties to the contract: employer and employee. Both parties were regarded as equals.
• As a result, employees had no right to be treated fairly by their employers
• In order to level the playing field, labour laws were introduced. Thus, labour law aims to counter
the inequality of bargaining power which is inherent in an employment relationship by providing
employees with security and also bargaining power collectively.
• The labour laws that exist in South Africa aim to protect employees during the course of their
employment and also during the termination of their employment.
• There are two areas of labour law: individual labour law and collective labour laws.
• These fields are governed by various labour laws.
Sources of Labour Law
1. The Constitution of RSA, 1996
• section 23 of the constitution provides that everyone has a right to fair labour practices. There
are also other supporting rights such as the right to freedom of association, right to engage in
collective bargaining, right to strike
2. Labour Relations Act 66 of 1995
• the purpose of the LRA is to advance social justice, economic development, labour peace and
democratisation of the workplace. It regulates both individual and collective rights
• collective rights are rights which are afforded to trade unions such as the right organisational
rights, establishment of bargaining councils and the right to strike.
• individual rights = rights afforded to individual employees like protection against unfair dismissals
3. Basic Conditions of Employment Act 75 of 1997
• advances economic development and social justice by establishing and enforcing basic conditions
of employment such as working hours, overtime and the provisions of leave
4. Employment Equity Act 55 of 1998
• aimed at achieving equality in the workplace by eliminating unfair discrimination in order to
promote equal opportunities and fair treatment and also implementing affirmative action
measures to redress past discrimination
5. Other legislation
• National Minimum Wage 9 of 2018, Occupational health and Safety Act 85 of 1993, Compensation
for Occupational Injuries and Diseases Act 130 of 1993, Unemployment Insurance Act 63 of 2001
and Skills development Act 97 of 1998
, Individual and Collective Labour Law
• There are what we call rights and interest disputes
• Rights disputes: dispute that arises from an employment contract, a collective agreement, a
statute or common law. The dispute must emanate from an existing right that a party has as a
result of the employment contract, a collective agreement, a statute or common law.
• Interest dispute: it involves a claim by a party for something new or something to which the party
currently has no legal right but would like to have.
• thus individual labour law concerns the relationship between employer and an individual
employee. Whilst collective labour law concerns the relationship between an employer or
employer’s organisation and trade unions
Dispute Resolution Structures
• During the employment relationship, disputes arise (rights and interest disputes)
• The LRA provides for dispute resolution institutions that preside over these dispute:
o Commission for Conciliation, Mediation and Arbitration (CCMA) - resolves disputes referred
to it through conciliation, mediation, arbitration. Adjudicate such disputes in a speedy,
accessible and inexpensive manner
o Bargaining and Statutory Councils - should parties to the dispute form part of a bargaining
council, the dispute is referred to a bargaining council instead of the CCMA.
o Labour Court – review arbitration awards in respect of unfair dismissal and unfair labour
practice disputes, where conciliation fails the LC deals with disputes that relate to
automatically unfair dismissals, retrenchments etc
o Labour Appeal Court - resolves all appeals from the LC
Establishing Existence of Employment Relationship
Definition of Employee
• LRA defines employee as:
o any person, excluding an independent contractor, who works for another person or the State
and who receives, or is entitled to receive any remuneration
o any other person who in assists in carrying on or conducting business of employer
• Categories of employees excluded form protection of LRA are: Members of the Defence Force and
Members of the State Security Agency
• Independent contractors excluded for the definition ∴ Courts have developed test to distinguish
between employees and independent contractors
Judicial Tests
Control Test Organisation Test Dominant Impression Test
Whether employer exercises control Whether individual is integrated into Number of factors is taken into
over individual and degree of employer’s business (is person account, looks at employment
control regarded as part of organisation) relationship as a whole. Looks at:
economic dependence on employer,
whether individual must perform
duties, is paid monthly salary, has set
working times etc.
, Presumption as to who is an employee
• LRA section 200A -to increase level of statutory protection afforded to employees, making it more
difficult for employers to disguise employment relationship
• States that person who works for, or renders services to another is presumed to be an employee
if any criteria is met:
o manner in which a person works is subject to the control or direction of another person
o person’s hours of work are subject to the control or direction of another person
o case of a person who works for organisation, the person forms part of that organisation
o person has worked for that other person for an average of at least 40hrs per month over the
last 3 months
o person is economically dependent on other person for whom he works/renders a service
o person is provided with tools of the trade or work equipment by the other person
o person only works for or renders a service to one person
Code of Good Practice: Who is an Employee
• LRA contains code – adjudicators must take into account when dispute about whether employee
or not
• Purpose of code = providing certainty and clarity defining employee, maintaining proper
distinction between employment relationships regulated by labour legislation and independent
contracting
Types of employment
• Typical/standard employee = employed on full time, permanent basis
Atypical employment
Temporary employment • Section 198 defines TES as person who, for reward, procures for/provides to a
services client other persons:
o Who perform work for client
o Who are remunerated by temporary employment service
• Regarded as tripartite relationship – TES, worker and client
• TES is regarded as employer (responsibilities lies on them) if employee
genuinely performs temporary employment services
• Definition of temporary services include:
o If period for which work is performed x exceed 3 months
o As substitute for employee of client who is temporarily absent
o For any period of time and any category of work determined to be
temporary service by collective agreement/sectoral determination/notice
published by Minister of Labour
• Definition not met ∴ client is employer (responsibilities lies on them ie.
Disputes and worker must be treated equal to other workers of client)
• If client is employer = employee employed on indefinite basis (earn
R205433/year or less)
Fixed-term contracts • Someone that works for limited duration of time (not permanent employment)
• Section 198B provides protection for employees on fixed-term contract if:
o Employee earns R205433/year or less
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