Summary
Summary Labour Law (Mercantile Law 311) full notes.
- Institution
- Stellenbosch University (SUN)
Mercantile Law 311 (Labour Law) full module notes. Includes: Lecture notes; case law; textbook summaries.
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Labour Law1. Introduction to Labour Law
What is labour Law?
It is the relationship between employees and employers – labour law regulates the
rights and obligations within this relationship.
o Compare an employment contract with others. E.g. contract of sale
o The employment relationship is an ongoing one (the ‘relational contract’)
It is an indefinite and long-term contract
o Special role for good faith and fair dealing between the parties in order not to
threaten this relationship
Most contract rules are informed by fair dealing.
The parties are required to act in good faith
Common law brought fairness into the equation.
Role and importance of work:
o For workers.
o For the economy.
o For society at large
Chosen system (and extent) of regulation by the state may have significant
implications for the economy, the achievement of social justice and the well-being of
society.
o Criticism of SA labour laws as being too strict (pro employee, legislation has
gone too far to give rights to workers as opposed to employers) this then has
an impact on unemployment; foreign investment.
o Calls for deregulation of the labour market in order to encourage economic
growth.
o One major challenge is the size and the scope of the informal labour market.
Fundamental challenge
Inherent conflict (different expectations)
, Power differential
Traditional common law regulation (law of contract)
o Power differential – risk of exploitation/actual exploitation (no bargaining
power
o Termination on notice (irrespective of the reason/no reason at all)
o Frozen in time (unless renegotiated) – does not cater for growth and
expectations
o Individualised – does not recognize collective dimension/shared concerns
o Traditionally enforced through ordinary civil courts (do not understand
labour relations dynamic): lawfulness vs fairness.
So, the story of labour law is the story of the use of legislation to force fairness onto
the individual employment relationship (contract)
How legislation imposes fairness on employment relationship:
5 fairness mechanisms to labour law tries to do to promote fairness.
o Fair terms and conditions of employment – legislation override the contract
Directly: BCRA/NMWA (minimum standards legislation) – provides
rights
Indirectly: promotion of collective bargaining (LRA) – recognition of
the freedom of association, trade union organizational rights, the
right to strike, the effect of collective agreements
o Protection against unfair dismissal (LRA)
NB: the act gives an expanded definition to the word ‘dismissal’
A dismissal is only fair if it is: substantively fair and procedurally fair
3 reasons you can fairly dismiss an employee:
1. misconduct
2. incapacity
3. operational requirements
o Protection against residual unfair labour practices (LRA)
o Protection against unfair discrimination (EEA)
o Tailor-made ‘fairness’ dispute resolution institutions (LRA)
Distinction – disputes of rights and disputes of interest
Dispute about rights: Dispute about the interpretation and
application about a right that already exists, disputes of rights
go to the court.
2
, Dispute of interest – collective bargaining (trade union and employer
waging economic warfare to force the other to agree with them)
Disputes of rights – CCMA/ Bargaining Councils/ Labour court (all
disputes first have to be conciliated then other either
arbitration/adjudication)
LRA gave us these parallel to the courts – we have our own
labour resolution system.
Old Mutual v Moyo case [prescribed]
Moyo CEO of OM, he also directs another company NMT capital that owes OM
money
NMT doesn’t repay debt but declared a dividen so the money goes to the
shareholders (Peter Moyo)
OM wrote Moyo a letter of notice and paid him for 6 months on notice.
Moyo can either bring a contractual case (labour or civil court) or unfair dismissal
(CCMA)
He based his change on contract and went to the High Court.
Thus even though there is legislation, the courts still recognise the contracts.
The Contractual Basis of Labour Law:
The employment contract is a specific form of contract.
It is subject to the general principles of contract law
However, it has its own specific rules and principles which regulate the employment
relationship
It is heavily regulated by means of labour legislation, supplementing or replacing the
common law rules
Sources of Labour Law
Sources of rules
3
, 1. ILO Conventions (eg 87 (freedom of association), 98 (collective bargaining),
111(Discrimination)
2. Constitution (S 9, 23 and 33)
o S 23: labour relations that gives employees important constitutional rights
S 23 – the right to fair labour practices
Due to the above right, the Constitution can have a significant impact on
labour law.
o Labour rights are elevated to same place as constitutional rights
o S 9: equality
o S 33: fair administrative action – important as it plays a big role in how we view
CCMA arbitration, as it is not a court and this bound by s 33.
o Subsidiarity – says if you have legislation giving effect to a constitutional right look at
legislation first.
o Pretorius and another v Transport Pension Fund and another
Only protects employees
Relied directly on s 23(1) – however they argued that they cant rely on
legislation as they are not employees
Court said subsidiarity is not a ‘hard and fast rule’ and only does when the
constitution requires legislation to be adopted to give rise to constitutional
rights.
3. Labour Legislation (inclusive of regulations and codes of Good Practice)
o Legislation plays a very significant role
o Especially LRA, 1995, BCEA, 1997 (and new NMWA, 2018) and EEA, 1998
o Example of important regulations – EEA (Equal Pay)
o Codes of Good Practice (esp dismissal and sexual harassment):
Issued in terms of legislation as guidelines as to what is expected of the
parties to the employment relationship.
4. Collective agreements (trade unions obo employees and employer)
o Collective agreements in labour law are more important than contracts of
employment
o Fairer to employees than contract of employment
5. Contract of employment (individual employee and employer)
o Individual employment contract which is supplemented by collective agreements
(trade unions/employers).
o By means of collective agreements they can set the minimum wages and shift hours
for a specific industry.
4
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