This is a copy of the Declaration that was signed by representatives of the Cape Chamber of Commerce and Cosatu at the end of the Summit.
Declaration of the Jobs Summit held 26 September 2011
We come together at this Jobs Summit as representatives of Business and Labour, in the spirit of collaboration, in line with the New Growth Path, that finds innovative solutions and implements the National measures for the economy.
The signatories to this Jobs Summit have agreed to collaborate because of a growing economic and social crisis in the Western Cape. This Provincial and National crisis is exacerbated by the global economic crisis, which shows no immediate signs of relenting.
The signatories are agreed that the current level of poverty and inequality are unacceptable and new initiatives are needed to promote improved quality of life and decent work and work opportunities. The parties are further agreed that the current unemployment, job losses and lack of job creation, constitute a deepening crisis in South Africa that requires urgent action.
We have agreed to work towards a City that promotes a growing economy that is a hub for investments and promotes the fair treatment of workers through ensuring compliance with the law. To this end, we agree to jointly support the creation of decent work and work opportunities that ensure that all legislative rules are followed. This compliance culture ensures that compliant businesses are protected from non-compliant businesses, which would effectively undercut their prices and have an unfair advantage.
We commit to taking forward the national agreement that exist between Busa and Labour with National Government. This would entail operationalising the areas of the New Growth Path that are peculiar to the City of Cape Town. There are many areas of agreement which could immediately improve the environment for business as well as creating many more work opportunities for the unemployed. These areas include the government procurement policy, the new skills accord and the removal of red tape as well as looking at ways to increase savings and investment levels. This would complement the areas we already agree on, like the anti-corruption campaign as well as the role of voluntary counselling and testing, with the Provincial Department of Health.
We agree that working together on these areas are an essential component of improving the prospects for the success of the City and the Province. We accordingly share a view that the space to engage should be institutionalised and, to this end, believe that we should duplicate the engagement taking place nationally between the social partners at Nedlac. We believe an institution such as the Provincial Development Council has the framework and the institutional capacity for such an engagement.
We jointly undertake to bring on board the other sectors of our constituency and to ensure that we are as representative as possible to enhance the credibility of our agreements. We would then ensure that civil society and government at the various levels are brought on board in respect of the areas we have an agreement on.
Signed on this day the 26 day of September 2011
Business: …………………………………………
Labour: …………………………………………….
Leslie Downie
on September 28, 2011 at 3:53 pm
Well done to everyone who participated in the Jobs summit. A question: Non-compliant business in the formal sector must be penalized, but how is compliant business going to win over the informal sector which is growing every day and is non-compliant? The verbal disposals of illiterate urban landowners are not recognized by the Alienation of Land Act – and cannot therefore be protected by the law. This is not the way to win friends and influence people. Could the Western Cape please put its hand up and advise the legal system that even centuries ago Justinian would have been appalled at this gross injustice? Leslie Downie
‘Employer initiatives as alternatives to strikes and lockouts’
Graham Giles
Outline of talk to CCC on Monday 26 September 2011
Topics
#1 Disputes of right and interest
#2 Power-play and playing games
#3 Collective bargaining in SA
#4 Constitutional rights – right to strike and fair labour practices
#5 LRA – purpose and objectives
#6 Employer initiatives and alternatives to use of power-play
#7 Case law
#1 Disputes of right and interest
• Differentiate dispute resolving mechanisms based on the nature of dispute
• Mechanism depends largely on need to preserve freedom of parties
• Competitive market economy
• neutral third party legally required to conciliate/mediate – CCMA/BC
• Bull example 17 animals – bull – place holder
• Dismissals disputes (right) go to arbitration/adjudication
• Mutual interest disputes such as wages (interest)
• Allow parties to bargain collectively unless trumped by needs of society (job security for employees).
#2 Power-play and playing games
• Society uses games to resolve conflicts of interest, e.g. rugby , soccer, etc but not boxing (it is not a game)
• Framework and strict rules – lev el playing field, size of field, ball, clothing
• Technology – video, camera, training, statistics
• Sports Science Institute – use of technology, fitness and verification
• Different rules
o Rugby and soccer – play player – play ball – American football
o Cricket and baseball – intentionally try hit batter – not in baseball
• Referee uses whistle to stop play but only when a rule is breached (dispute of right) – otherwise players must stop other players (interest dispute)
o Allow advantage first – ‘self-help’ –
o Same in labour law – ‘offensive’ lockout and strikes
• Time-frame –
o Rugby World Cup – must see out the allotted time only option is power
o Cricket test – can stop early – no hope of winning
o In other words – winning requires strength and power
#3 Collective bargaining in SA
• Introduced by Jan Smuts in 1908 – Industrial Disputes Prevention Act (Tvl)
• Accepted the Canadian model
• Rejected the Australasian model where
o Criminal offence for parties to use power-play (strikes & lockouts)
o Compulsory arbitration applied with binding awards
o Presumably to try and show how ‘civilised’ they had become!
• Deadlock – conciliation – power-play – immunity from certain consequences (breach of contract)
• Entrenched in 1924 – Industrial Conciliation Act
• Industrial councils introduced with power to extend agreements
• Fudged dismissals – employees only protected from dismissal after 1979 – Wiehahn Commission – ‘unfair labour practice’ doctrine introduced by statute
#4 Constitutional rights – from 1997
• Employees – individual right to strike – not a trade union right
• Employers and employees – right to fair labour practices –
• Protect enterprises
• Conundrum – tension – balancing interests of employees and employers
• Elephant in the room always the enterprise – contribute to the economy
#5 LRA 1995 – stress purpose (goal) and objectives (means)
• Economic development (a goal)
• through collective bargaining (the means)
o Trade unions essential parties
o Victimisation of representatives forbidden
• Exclude interference by Labour Court (dispute of interest not right)
• Duty to bargain excluded
• Good faith bargaining excluded
o Suggest it was a bad mistake and should be introduced
o Clear conflict with individual duty to employer
• Interest dispute to be resolved by power if no agreement
• Important – power-play recognised as part of collective bargaining
#6 Employer initiatives and alternatives to use of power-play
• Support or create independent bodies –provide ‘measurement’ resources
o Canadian model –benchmarks, inflation stats
• Collective agreement – binding with fixed time-frame (say three years)
• Voluntary private arbitration –
o Select experienced and skilled neutral person by mutual agreement
o Confidential and speedy
o Discretionary – usually unacceptable
split the difference
Solomon & baby
o Final-offer or pendulum arbitration –
rationality should prevail
limited discretion and need for reasons
o Need for proper ‘accounting’ and use of technology (measurement)
• Engage in power-play
o Select facilitator (referee)
o Allow negotiators to meet beforehand –
Captains meet referee before game
scenario planning & scoping
obtain proper mandates before ‘game’
o Agree certain rules – picketing, etc
• Consider lockout – means of enforcing changes – all ‘matters of mutual interest’ – court unable to interfere (dispute of interest not right)
• Terminate employment of strikers (dispute of right – exception LRA s189A)
o – even if strike protected
o Must follow statutory procedure – LRA s189 (otherwise unlawful)
o Must be fair reason based on ‘operational requirements’
o Can be fair reason related to misconduct during strike
Work suspended without pay
Employees still owe various duties to employer
#7 Case law
SACWU & others v Afrox Ltd [1998] 2 BLLR 171 (LC) Landman J
• Dispute over illegal overtime – stagger shifts – strike – lockout – abandoned – dismissal based on operational requirements – not unfair
Extracts from judgment
• The second exception relates to the economic foundations of employment.
• Although we may speak of the right to a job, this right is itself dependent, at least in the private sector, on the existence in economic terms of the enterprise. The enterprise which provides the employment must maintain its way, grow and prosper for the right to a job to have a meaning. If it fails then the right to a job fails with it. Economics dictates that if it is necessary to shed jobs so that the enterprise may survive or alter or adapt its business then so be it. This basic economic premise has been incorporated in the Act by way of the exception permitting dismissal for operational requirements. It is of course hedged by substantive and procedural requirements to ensure that it is utilised in suitable circumstances but it does not envisage dire necessity. A change in practice to make more profits will probably also be countenanced.
• One of the ways which an employer who wishes to nurture and grow an enterprise may consider taking, after consultation and negotiation have failed, is to compel the consent of the employees, if they are judged capable of adapting to new working conditions, by locking them out until such a time as they concede to the employer’s new terms or changed way of doing business. The employer would generally not follow this route where the employees do not have an ability, with or without support in the form of retraining, to adapt to the new business plan.
• A dismissal for operational requirements has much in common with the concept of a lock-out. In both cases the employer initiates the action. In both cases the objective is to achieve a goal set by the employer.
• Formerly, in both cases, the dismissal would be a “no fault” dismissal. A difference however lies in the fact that a lock-out may be instituted for a wider number of reasons falling within the phrase “matters of mutual interest” and occurs in a province beyond the law – the realms of power play.
• In the case of dismissal for operational requirements the termination is limited to operational requirements as defined in section 213 of the Act and is moreover the subject of judicial scrutiny.
SACWU & others v Afrox Ltd [1999] 10 BLLR 1005 (LAC) Ngcobo AJP, Froneman DJP & Kroon JA
• The right to strike is subjected to a number of significant limitations in the LRA … , whilst an employer’s fundamental right to fair labour practices is recognised in the employer’s right to dismiss an employee for a fair reason based on operational requirements and in accordance with a fair procedure (sections 67(5), 188(1)(a)(ii) and (b) and 189 of the LRA;
• [29] Mr Gauntlett, who appeared with Mr Franklin for Afrox, suggested that there was both a textual and a substantive answer to this argument.
• Section 67(5) provides for an explicit limitation on the protection of striking employees.
• The limitation itself is not textually limited by either the language of section 67(4) or the definition of “operational requirements” in section 213.
• The substantive answer, he submitted, lay in the functional limits of the right to strike, a factor alluded to by Landman J in the court below, where he spoke of the dependence of the right to work “on the existence in economic terms of the enterprise”.
• A right to strike is predicated on the very existence of an enterprise providing employment for the employees who wish to exercise that right.
• The employer’s right to fair labour practices in the form of a right to a fair dismissal based on operational requirements (section 188(1); … must come into play when the exercise of the right to strike threatens the continued operation of the employer’s enterprise.
[36] It is implicit in the terms of section 189(2) that an employer, apart from taking part in the formal consultations on the aspects set out in the section, should also take substantive steps on his or her own initiative to take appropriate measures
• to avoid the dismissals;
• to minimise the number of dismissals;
• to change the timing of the dismissals;
• to mitigate the adverse effects of the dismissals;
• to select a fair and objective method for the dismissals (see also section 189(7)) and
• to provide appropriate severance pay for dismissed employees
NUMSA v Dorbyl Ltd [2004] 9 BLLR 914(LC)
Unfair procedure only – compensation awarded – 2 months – upheld on appeal – Also fair reason to terminate based on operation requirements
NUMSA v Dorbyl Ltd (2007) 28 ILJ 1585 (LAC) Zondo JP, Patel AJA & Jappie AJA
Disallowed appeal (award of compensation related to unfair procedure not challenged) – protected strike – dismissals based on operational requirements – dominant reason – not automatically unfair dismissals
Summary of talk
As pointed out by Froneman DJP it can be forcibly argued that employers have a legal duty to take appropriate measures or initiatives to save and not destroy jobs even before contemplating any ‘dismissals’.
Such measures should include ‘measurements’ or proper accounting to determine the ‘value-exchanges’ in their enterprises.
There is an urgent need for resource bodies to assist the parties to the collective bargaining process in understanding how enterprises work.
Facilitators or mediators should assist the negotiators in determining the general framework and issues affecting the industry before negotiations.
Employers should consider initiating discussions on alternative ways of avoiding power-play, such as voluntary final-offer arbitration and fact-finding.
As a last resort employers have protected rights to ensure that their enterprises are efficient, competitive and sustainable even to the extent of compelling employees, on pain of dismissal, to accept changes to terms and conditions of employment.
This is a copy of the Declaration that was signed by representatives of the Cape Chamber of Commerce and Cosatu at the end of the Summit.
Declaration of the Jobs Summit held 26 September 2011
We come together at this Jobs Summit as representatives of Business and Labour, in the spirit of collaboration, in line with the New Growth Path, that finds innovative solutions and implements the National measures for the economy.
The signatories to this Jobs Summit have agreed to collaborate because of a growing economic and social crisis in the Western Cape. This Provincial and National crisis is exacerbated by the global economic crisis, which shows no immediate signs of relenting.
The signatories are agreed that the current level of poverty and inequality are unacceptable and new initiatives are needed to promote improved quality of life and decent work and work opportunities. The parties are further agreed that the current unemployment, job losses and lack of job creation, constitute a deepening crisis in South Africa that requires urgent action.
We have agreed to work towards a City that promotes a growing economy that is a hub for investments and promotes the fair treatment of workers through ensuring compliance with the law. To this end, we agree to jointly support the creation of decent work and work opportunities that ensure that all legislative rules are followed. This compliance culture ensures that compliant businesses are protected from non-compliant businesses, which would effectively undercut their prices and have an unfair advantage.
We commit to taking forward the national agreement that exist between Busa and Labour with National Government. This would entail operationalising the areas of the New Growth Path that are peculiar to the City of Cape Town. There are many areas of agreement which could immediately improve the environment for business as well as creating many more work opportunities for the unemployed. These areas include the government procurement policy, the new skills accord and the removal of red tape as well as looking at ways to increase savings and investment levels. This would complement the areas we already agree on, like the anti-corruption campaign as well as the role of voluntary counselling and testing, with the Provincial Department of Health.
We agree that working together on these areas are an essential component of improving the prospects for the success of the City and the Province. We accordingly share a view that the space to engage should be institutionalised and, to this end, believe that we should duplicate the engagement taking place nationally between the social partners at Nedlac. We believe an institution such as the Provincial Development Council has the framework and the institutional capacity for such an engagement.
We jointly undertake to bring on board the other sectors of our constituency and to ensure that we are as representative as possible to enhance the credibility of our agreements. We would then ensure that civil society and government at the various levels are brought on board in respect of the areas we have an agreement on.
Signed on this day the 26 day of September 2011
Business: …………………………………………
Labour: …………………………………………….
Well done to everyone who participated in the Jobs summit. A question: Non-compliant business in the formal sector must be penalized, but how is compliant business going to win over the informal sector which is growing every day and is non-compliant? The verbal disposals of illiterate urban landowners are not recognized by the Alienation of Land Act – and cannot therefore be protected by the law. This is not the way to win friends and influence people. Could the Western Cape please put its hand up and advise the legal system that even centuries ago Justinian would have been appalled at this gross injustice? Leslie Downie
‘Employer initiatives as alternatives to strikes and lockouts’
Graham Giles
Outline of talk to CCC on Monday 26 September 2011
Topics
#1 Disputes of right and interest
#2 Power-play and playing games
#3 Collective bargaining in SA
#4 Constitutional rights – right to strike and fair labour practices
#5 LRA – purpose and objectives
#6 Employer initiatives and alternatives to use of power-play
#7 Case law
#1 Disputes of right and interest
• Differentiate dispute resolving mechanisms based on the nature of dispute
• Mechanism depends largely on need to preserve freedom of parties
• Competitive market economy
• neutral third party legally required to conciliate/mediate – CCMA/BC
• Bull example 17 animals – bull – place holder
• Dismissals disputes (right) go to arbitration/adjudication
• Mutual interest disputes such as wages (interest)
• Allow parties to bargain collectively unless trumped by needs of society (job security for employees).
#2 Power-play and playing games
• Society uses games to resolve conflicts of interest, e.g. rugby , soccer, etc but not boxing (it is not a game)
• Framework and strict rules – lev el playing field, size of field, ball, clothing
• Technology – video, camera, training, statistics
• Sports Science Institute – use of technology, fitness and verification
• Different rules
o Rugby and soccer – play player – play ball – American football
o Cricket and baseball – intentionally try hit batter – not in baseball
• Referee uses whistle to stop play but only when a rule is breached (dispute of right) – otherwise players must stop other players (interest dispute)
o Allow advantage first – ‘self-help’ –
o Same in labour law – ‘offensive’ lockout and strikes
• Time-frame –
o Rugby World Cup – must see out the allotted time only option is power
o Cricket test – can stop early – no hope of winning
o In other words – winning requires strength and power
#3 Collective bargaining in SA
• Introduced by Jan Smuts in 1908 – Industrial Disputes Prevention Act (Tvl)
• Accepted the Canadian model
• Rejected the Australasian model where
o Criminal offence for parties to use power-play (strikes & lockouts)
o Compulsory arbitration applied with binding awards
o Presumably to try and show how ‘civilised’ they had become!
• Deadlock – conciliation – power-play – immunity from certain consequences (breach of contract)
• Entrenched in 1924 – Industrial Conciliation Act
• Industrial councils introduced with power to extend agreements
• Fudged dismissals – employees only protected from dismissal after 1979 – Wiehahn Commission – ‘unfair labour practice’ doctrine introduced by statute
#4 Constitutional rights – from 1997
• Employees – individual right to strike – not a trade union right
• Employers and employees – right to fair labour practices –
• Protect enterprises
• Conundrum – tension – balancing interests of employees and employers
• Elephant in the room always the enterprise – contribute to the economy
#5 LRA 1995 – stress purpose (goal) and objectives (means)
• Economic development (a goal)
• through collective bargaining (the means)
o Trade unions essential parties
o Victimisation of representatives forbidden
• Exclude interference by Labour Court (dispute of interest not right)
• Duty to bargain excluded
• Good faith bargaining excluded
o Suggest it was a bad mistake and should be introduced
o Clear conflict with individual duty to employer
• Interest dispute to be resolved by power if no agreement
• Important – power-play recognised as part of collective bargaining
#6 Employer initiatives and alternatives to use of power-play
• Support or create independent bodies –provide ‘measurement’ resources
o Canadian model –benchmarks, inflation stats
• Collective agreement – binding with fixed time-frame (say three years)
• Voluntary private arbitration –
o Select experienced and skilled neutral person by mutual agreement
o Confidential and speedy
o Discretionary – usually unacceptable
split the difference
Solomon & baby
o Final-offer or pendulum arbitration –
rationality should prevail
limited discretion and need for reasons
o Need for proper ‘accounting’ and use of technology (measurement)
• Engage in power-play
o Select facilitator (referee)
o Allow negotiators to meet beforehand –
Captains meet referee before game
scenario planning & scoping
obtain proper mandates before ‘game’
o Agree certain rules – picketing, etc
• Consider lockout – means of enforcing changes – all ‘matters of mutual interest’ – court unable to interfere (dispute of interest not right)
• Terminate employment of strikers (dispute of right – exception LRA s189A)
o – even if strike protected
o Must follow statutory procedure – LRA s189 (otherwise unlawful)
o Must be fair reason based on ‘operational requirements’
o Can be fair reason related to misconduct during strike
Work suspended without pay
Employees still owe various duties to employer
#7 Case law
SACWU & others v Afrox Ltd [1998] 2 BLLR 171 (LC) Landman J
• Dispute over illegal overtime – stagger shifts – strike – lockout – abandoned – dismissal based on operational requirements – not unfair
Extracts from judgment
• The second exception relates to the economic foundations of employment.
• Although we may speak of the right to a job, this right is itself dependent, at least in the private sector, on the existence in economic terms of the enterprise. The enterprise which provides the employment must maintain its way, grow and prosper for the right to a job to have a meaning. If it fails then the right to a job fails with it. Economics dictates that if it is necessary to shed jobs so that the enterprise may survive or alter or adapt its business then so be it. This basic economic premise has been incorporated in the Act by way of the exception permitting dismissal for operational requirements. It is of course hedged by substantive and procedural requirements to ensure that it is utilised in suitable circumstances but it does not envisage dire necessity. A change in practice to make more profits will probably also be countenanced.
• One of the ways which an employer who wishes to nurture and grow an enterprise may consider taking, after consultation and negotiation have failed, is to compel the consent of the employees, if they are judged capable of adapting to new working conditions, by locking them out until such a time as they concede to the employer’s new terms or changed way of doing business. The employer would generally not follow this route where the employees do not have an ability, with or without support in the form of retraining, to adapt to the new business plan.
• A dismissal for operational requirements has much in common with the concept of a lock-out. In both cases the employer initiates the action. In both cases the objective is to achieve a goal set by the employer.
• Formerly, in both cases, the dismissal would be a “no fault” dismissal. A difference however lies in the fact that a lock-out may be instituted for a wider number of reasons falling within the phrase “matters of mutual interest” and occurs in a province beyond the law – the realms of power play.
• In the case of dismissal for operational requirements the termination is limited to operational requirements as defined in section 213 of the Act and is moreover the subject of judicial scrutiny.
SACWU & others v Afrox Ltd [1999] 10 BLLR 1005 (LAC) Ngcobo AJP, Froneman DJP & Kroon JA
• The right to strike is subjected to a number of significant limitations in the LRA … , whilst an employer’s fundamental right to fair labour practices is recognised in the employer’s right to dismiss an employee for a fair reason based on operational requirements and in accordance with a fair procedure (sections 67(5), 188(1)(a)(ii) and (b) and 189 of the LRA;
• [29] Mr Gauntlett, who appeared with Mr Franklin for Afrox, suggested that there was both a textual and a substantive answer to this argument.
• Section 67(5) provides for an explicit limitation on the protection of striking employees.
• The limitation itself is not textually limited by either the language of section 67(4) or the definition of “operational requirements” in section 213.
• The substantive answer, he submitted, lay in the functional limits of the right to strike, a factor alluded to by Landman J in the court below, where he spoke of the dependence of the right to work “on the existence in economic terms of the enterprise”.
• A right to strike is predicated on the very existence of an enterprise providing employment for the employees who wish to exercise that right.
• The employer’s right to fair labour practices in the form of a right to a fair dismissal based on operational requirements (section 188(1); … must come into play when the exercise of the right to strike threatens the continued operation of the employer’s enterprise.
[36] It is implicit in the terms of section 189(2) that an employer, apart from taking part in the formal consultations on the aspects set out in the section, should also take substantive steps on his or her own initiative to take appropriate measures
• to avoid the dismissals;
• to minimise the number of dismissals;
• to change the timing of the dismissals;
• to mitigate the adverse effects of the dismissals;
• to select a fair and objective method for the dismissals (see also section 189(7)) and
• to provide appropriate severance pay for dismissed employees
NUMSA v Dorbyl Ltd [2004] 9 BLLR 914(LC)
Unfair procedure only – compensation awarded – 2 months – upheld on appeal – Also fair reason to terminate based on operation requirements
NUMSA v Dorbyl Ltd (2007) 28 ILJ 1585 (LAC) Zondo JP, Patel AJA & Jappie AJA
Disallowed appeal (award of compensation related to unfair procedure not challenged) – protected strike – dismissals based on operational requirements – dominant reason – not automatically unfair dismissals
Summary of talk
As pointed out by Froneman DJP it can be forcibly argued that employers have a legal duty to take appropriate measures or initiatives to save and not destroy jobs even before contemplating any ‘dismissals’.
Such measures should include ‘measurements’ or proper accounting to determine the ‘value-exchanges’ in their enterprises.
There is an urgent need for resource bodies to assist the parties to the collective bargaining process in understanding how enterprises work.
Facilitators or mediators should assist the negotiators in determining the general framework and issues affecting the industry before negotiations.
Employers should consider initiating discussions on alternative ways of avoiding power-play, such as voluntary final-offer arbitration and fact-finding.
As a last resort employers have protected rights to ensure that their enterprises are efficient, competitive and sustainable even to the extent of compelling employees, on pain of dismissal, to accept changes to terms and conditions of employment.
-oOo-