Labour Bill bears relief for workers

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.

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.

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.