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Labour Relations Act, 1995 (Act No. 66 of 1995)

Notices

Bargaining Council for the Metal and Engineering Industries

Extension of the Consolidated Main Collective Agreement to Non-parties (for the period 1 July 2021 to 30 June 2024)

Part 2

5. Annexures

Annexure A - Security of Employment and Severance Pay

 

ANNEXURE A

 

SECURITY OF EMPLOYMENT AND SEVERANCE PAY

 

For the purpose of this Annexure, notwithstanding the definition of ‘employee’ in clause 3 of the Main Agreement, ‘employee’ shall include persons employed in terms of clause 1(4) and (5) of Part I of the Main Agreement.

 

1. Retrenchments and/or Redundancies

 

1.1 Introduction

Any retrenchment of employees falling under the scope of this agreement must be undertaken in accordance with either Procedure A or Procedure B set out below. The procedure to be used will depend on:

▪ The size of the Company;
▪ The number of employees that the Company proposes to retrench; and
▪ The Company’s retrenchment history over the preceding twelve-month period.

 

1.2 Procedure A must be applied by those employers who:
1.2.1 Employ 50 or fewer employees; or
1.2.2 Employ more than 50 employees but who are contemplating retrenching less than the number of employees reflected hereunder:
▪ For employers of up to 200 employees : 10 employees
▪ For employers of more than 200 but not more than 300 employees : 20 employees
▪ For employers of more than 300 but not more than 400 employees : 30 employees
▪ For employers of more than 400 but not more than 500 employees : 40 employees
▪ For employers of 500 or more employees : 50 employees; and

Where the number of employees retrenched in the 12-month period prior to the date of the notice of invitation to consult, together with the number of employees that the employer contemplates retrenching, is less than the above.

 

1.3 Procedure B applies to those employers who employ more than 50 employees and who are contemplating the retrenchment of at least the number of employees reflected hereunder:
▪ For employers of up to 200 employees : 10 or more employees.
▪ For employers of more than 200 but not more than 300 employees : 20 or more employees.
▪ For employers of more than 300 but not more than 400 employees : 30 or more employees.
▪ For employers of more than 400 but not more than 500 employees : 40 or more employees.
▪ For employers of 500 or more employees : 50 or more employees.

or

Where the number of employees retrenched in 12-month period prior to the date of the notice of invitation to consult, together with the number of employees that the employer contemplates retrenching, is equal to or exceeds the above.

 

1.4 For the purposes of this procedure:—

"Notice of invitation to consult" means the notice referred to in clauses 2.1.1 and 3.1.1;  and

"Employee" includes all persons employed by the legal entity that is the employer (e.g. a company, a CC or a sole proprietor) and is not confined to scheduled employees in terms of the Agreement.

 

1.5 This procedure is intended partly as a guide to the relevant provisions of the Act, and partly to establish specific terms regulating work security in the industry.  If there is a conflict between this annexure and the Act, the Act prevails, except for those clauses which are intended to supplement the Act.

 

2. PROCEDURE A

 

2.1 Notice of proposed retrenchment
2.1.1 An employer must notify all relevant consulting parties and the Regional Bargaining Council when that employer contemplates terminating the employment of one or more employees for reasons related to its operational requirements.
2.1.2 Consulting parties include any registered trade union of which any of the employees potentially affected by the proposed retrenchment are members, and the nominated representatives of any potentially affected employees who are not members of a registered trade union.
2.1.3 The notice referred to in 2.1.1 must be given in writing, as soon as possible after retrenchment is contemplated but at least 21 days before the contemplated date of retrenchment.
2.1.4 In the written notice, the employer must invite the consulting parties to commence consultations over the proposed retrenchment. At the same time, the employer must disclose all relevant information to the consulting parties. This information must include, but is not limited to the following:
2.1.4.1 The reasons for the proposed retrenchment;
2.1.4.2 The alternatives that the employer considered before proposing the retrenchment, and the reasons for rejecting these alternatives;
2.1.4.3 The number of employees likely to be affected and the job categories in which they are employed;
2.1.4.4 The proposed selection criteria to be used to determine which employees to retrench;
2.1.4.5 The proposed date of retrenchment;
2.1.4.6 The proposed severance pay;
2.1.4.7 Any assistance which the employer proposes to offer to the employees who are likely to be retrenched;
2.1.4.8 The possibility of the future re-employment of the retrenched employees;
2.1.4.9 The number of employees employed by the employer; and
2.1.4.10 The number of employees that the employer has dismissed for reasons based on its operational requirements in the preceding twelve-month period.

 

2.2 Consultation Process
2.2.1 The employer must engage in a meaningful joint consensus-seeking process with the appropriate consulting party, and attempt to reach consensus on:
2.2.1.1 Appropriate measures to:
▪ Avoid the  retrenchment;
▪ Minimise the number of retrenchments;
▪ Change the  timing of the retrenchment; and
▪ Mitigate  the adverse effects of the retrenchment;
2.2.1.2 The method for selecting the employees to be dismissed; and
2.2.1.3 The severance pay for dismissed employees.
2.2.2 The employer must allow the consulting parties an opportunity to make representations about any of the above matters, and any other issues relevant to the proposed retrenchment.
2.2.3 The employer must consider and respond to any representations made and, if the employer does not agree with them, it must state the reasons for disagreeing. If the consulting party’s representations are made in writing, then the employer must respond in writing.
2.2.4 In any dispute in which an arbitrator is required to decide whether or not any information sought by the consulting parties is relevant, the onus is on the employer to prove that the information which it has refused to disclose is not relevant for the purposes for which it is sought.
2.2.5 The employer must select the employees to be dismissed according to selection criteria:
▪ That have been agreed by the consulting parties; or
▪ If no criteria have been agreed, criteria that are fair and objective.

 

2.3 Severance Pay

The formula contained in clause 35 of this Agreement must be used to determine the amount of severance pay to be paid to a retrenched employee.

 

2.4 Notification of termination of employment

When the consultation process has been concluded, the employer must give notice of termination to those employees selected for retrenchment on the following basis:

▪ One week, if the employee has been employed for six months or less; or
▪ Two weeks, if the employee has been employed for more than six months but less than twelve  months.
▪ Four weeks, if the employee has been employed for twelve months and more.

 

2.5 Notification to the Bargaining Council
2.5.1 Once the affected employees have been given notice of the termination of their employment, the employer must inform the bargaining council’s Regional Office, in writing, of the number and occupational categories of the employees that have been retrenched.

 

2.6 Re-employment of retrenched employees
2.6.1 If an employer who has previously retrenched employees engages new employees, that employer must, as far as is practicable, give preference to the re-engagement of those persons who were retrenched from the establishment and who are qualified and available to undertake the categories of work required by the employer.

 

3. PROCEDURE B

 

3.1 Notice of proposed retrenchment
3.1.1 An employer must notify all relevant consulting parties when that employer contemplates terminating the employment of one or more employees for reasons related to its operational requirements.
3.1.2 Consulting parties include any registered trade union of which any of the employees potentially affected by the proposed retrenchment are members, and the nominated representatives of any potentially affected employees who are not members of a registered trade union.
3.1.3 The notice referred to in 3.1.1 must be given in writing, as soon as possible after retrenchment is contemplated.
3.1.4 In the written notice, the employer must invite the consulting parties to commence consultations over the proposed retrenchment. At the same time, the employer must disclose all relevant information to the consulting parties. This information must include, but is not limited to the following:
3.1.4.1 The reasons for the proposed retrenchment;
3.1.4.2 The alternatives that the employer considered before proposing the retrenchment, and the reasons for rejecting these alternatives;
3.1.4.3 The number of employees likely to be affected and the job categories in which they are employed;
3.1.4.4 The proposed selection criteria to be used to determine which employees to retrench;
3.1.4.5 The proposed date of retrenchment;
3.1.4.6 The proposed severance pay;
3.1.4.7 Any assistance which the employer proposes to offer to the employees who are likely to be retrenched;
3.1.4.8 The possibility of the future re-employment of the retrenched employees;
3.1.4.9 The number of employees employed by the employer; and
3.1.4.10 The number of employees that the employer has dismissed for reasons based on its operational requirements in the proceeding twelve-month period.

 

3.2 Appointment of a CCMA facilitator
3.2.1 The employer, or the consulting parties representing the majority of the employees that the employer proposes to retrench may, within 15 days of the date of the employer’s notice of invitation to consult, request the CCMA to appoint a facilitator to facilitate the retrenchment process in terms of section 189A of the Labour Relations Act.
3.2.2 If a facilitator is appointed, the facilitator will assist the parties to the consultation process and will act in terms of the Regulations made by the Minister.
3.2.3 If a CCMA facilitator has been appointed and 60 days have elapsed from the date of the employer’s notice of invitation to consult:
3.2.3.1 The employer may give notice of termination to those employees selected for retrenchment on the following basis:
▪ One week, if the employee has been employed for six months or less; or
▪ Two weeks, if the employee has been employed for more than six months but less than twelve  months.
▪ Four weeks, if the employee has been employed for twelve months and more.
3.2.3.2 A registered trade union or the employees who have received notice of termination may, in accordance with the provisions of section 189A of the Act, may either:
▪ Give notice of a strike in terms of the applicable provisions of the Act; or
▪ Refer a dispute concerning whether there is a fair reason for the dismissal to the Labour Court in terms of the applicable provisions of the Act.

 

3.3 Procedure when a CCMA facilitator is not appointed
3.3.1 The employer must engage in a meaningful joint consensus-seeking process with the appropriate consulting party, and attempt to reach consensus on:
3.3.1.1 Appropriate measures to:
▪ Avoid the retrenchment;
▪ Minimise the number of retrenchments;
▪ Change the timing of the retrenchment; and
▪ Mitigate the adverse effects of the retrenchment;
3.3.1.2 The method for selecting the employees to be retrenched; and
3.3.1.3 The severance pay for retrenched employees.
3.3.2 The employer must allow the consulting parties an opportunity to make representations about any of the above matters, and any other issues relevant to the proposed retrenchment.
3.3.3 The employer must consider and respond to any representations made and, if the employer does not agree with them, it must state the reasons for disagreeing. If the consulting party’s representations are made in writing, then the employer must respond in writing.
3.3.4 In any dispute in which an arbitrator is required to decide whether or not any information sought by the consulting parties is relevant, the onus is on the employer to prove that the information which it has refused to disclose is not relevant for the purposes for which it is sought.

 

3.4 Selection criteria
3.4.1 The employer must select the employees to be dismissed according to selection criteria:
▪ That have been agreed by the consulting parties; or
▪ If no criteria have been agreed, criteria that are fair and objective.
3.4.2 A party may not refer a dispute over the retrenchment to the bargaining council unless a period of 30 days has elapsed from the date on which the employer’s notice of invitation to consult was given.
3.4.3 After a dispute has been referred to the bargaining council, and after the relevant period referred to in section 64(1)(a) of the Act has elapsed:
3.4.3.1 The employer must give notice of termination to those employees selected for retrenchment on the following basis:
▪ One week, if the employee has been employed for six months or less; or
▪ Two weeks, if the employee has been employed for more than six months.
▪ Two weeks, if the employee has been employed for more than six months but less than twelve  months.
▪ Four weeks, if the employee has been employed for twelve months and more.
3.4.3.2 A registered trade union or the employees who have received notice of termination may, in accordance with the provisions of section 189A of the Act, either:
▪ Give notice of a strike; or
▪ Refer a dispute concerning whether there is a fair reason for the dismissal to the Labour Court in terms of the applicable provisions of the Act.

 

3.5 Severance pay

The formula contained in clause 35 of this Agreement must be used to determine the amount of severance pay to be paid to a retrenched employee.

 

3.6 Notification to the Bargaining Council
3.6.1 Once the affected employees have been given notice of the termination of their employment, the employer must inform the Bargaining Council’s regional office, in writing, of the number and occupational categories of the employees that have been retrenched.

 

3.7 Re-employment of retrenched employees
3.7.1 If an employer who has previously retrenched employees engages new employees, that employer must, as far as is practicable, give preference to the re-engagement of those persons who were retrenched from the establishment and who are qualified and available to undertake the categories of work required by the employer.

 

2. Lay-offs

For the purpose of this clause, “lay-off” means the temporary suspension, without pay, of employment for a minimum of five full consecutive shifts owing to a reduction in the volume of work in an establishment or section of an establishment or owing to any other economic reason or any other contingency or circumstance beyond the control of the employer.

 

The following procedures and conditions shall apply in respect of lay-off provisions:—

(a) An employer shall give the Regional Office, affected employees and affected party trade unions fourteen clear working days’ notice of the intention to lay-off employees.
(b) The notification of lay-off shall provide the names of the affected employees, the reasons for the lay-off and the estimated duration of the lay-off.
(c) The employer shall, during the fourteen-day notification period, consult with the representatives of the trade unions and/or elected shop stewards on the reasons for the lay-off and the manner in which it will operate.
(d) The employer shall give the affected employees a minimum of five shifts notice of the intention to lay-off.  This notice shall include the specific date on which the employees are to resume work.
(e) The employer shall not be required to pay wages to the employees on lay-off, provided that where the employer believes resumption of work can be affected and expressly instructs the employees to present themselves for employment on a particular day, they shall receive not less than four hours’ work or pay in lieu thereof, in respect of such day.
(f) Lay-off may not continue beyond a period of eight weeks unless otherwise agreed between the employer and representatives of the party trade unions representing the affected employees or such other representatives of the affected employees.
(g) Periods not worked by an employee whilst on lay-off shall count as shifts actually worked and these employees shall be credited with the full shifts for an ordinary week, whilst on the lay-off, for purposes of paid leave and leave enhancement pay up to an eight week maximum in any calendar year.
(h) Employees on lay-off may engage in any other employment for remuneration during the duration of the lay-off.
(i) Should an employee on lay-off not return to employment within three working days of the due date. The employee shall be deemed to have terminated employment with the employer, unless the absence is condoned by the employer.”
(j) The provisions of subclause (8)(i)(a) of this Agreement shall mutatis mutandis apply to the payment of earnings in respect of lay-off.

 

3. Limited duration contracts of employment

 

(a) Definition

An employer may employ an employee for a specified, limited contract period in terms of a limited duration contract of employment, otherwise known as a limited duration contract of employment, fixed term, short term or temporary contract as per the schedule hereto on the following specified categories of work:

(i) Site work

Employment in terms of a contract which specifies that employment is in respect of a specific construction site for the duration of the site contract or a specific portion or section thereof.

(ii) Turnaround work

Employment in terms of a contract of employment which specifies that employment is for the duration, or portion thereof, of

(aa) a contract secured by the employer to carry out specified installation, maintenance, overhaul or development work on existing equipment or on an installation not owned by the employer,  or
(ab) major maintenance, overhaul or development work on equipment or an installation owned by the employer necessitating the recruitment of employees over and above the normal complement.
(iii) Ship repair work

Employment in terms of a contract of employment that specifies that employment is for the duration or portion thereof of a specific contract secured by the employer to carry out repairs on a particular vessel.

(iv) Short-term fluctuations in workload

Employment in terms of a contract of employment which arises out of a situation where the employer is required to take on additional employees as a result of having secured additional work of a short-term nature.  This employment must be limited in duration to a period not exceeding four months.  Provided that if a longer period is required to complete a specific task or activity, then the period of the specific task or activity shall be specified in the limited duration contract of employment.

Any other work, activity or requirement that falls outside the work categorised above, may not be subject to a limited duration contract of employment, fixed term, short term or temporary contract in terms of this agreement.  This does not affect an employer’s right to implement the probationary provisions prescribed in the Labour Relations Act in respect of new employees.

 

(b) General
(i) The provisions of the Main Agreement shall apply in respect of employees engaged on limited duration contracts of employment.  The provisions of clause 1 above shall not, however, apply to such employees:  Provided the termination of such employees’ services does not precede the agreed expiry date of the limited duration contract.
(ii) An employer shall on engagement of an employee in terms of a limited duration contract of employment give the employee a signed copy of the contract which has been entered into.
(iii) Every employer who has employees engaged in terms of a limited duration contract of employment shall each month, in such form as required by the Council from time to time, notify the Council of the number of such employees in his employ.  The employer shall, at the request of the representatives of the trade unions represented at the company, make this information available to such representatives.  This information shall include the names of the individual employees, if required.
(iv) The Special Provisions Limited to Construction Sites covered by Project Labour Agreements are set out in Annexure H.

 

Footnote:

Whilst the provisions of this Annexure apply to party trade unions it is recommended that they also be observed in respect of non-party trade unions and any employee representative body elected in terms of an agreed procedure, unless such non-party trade union or employee representative body elects otherwise.

 

 

 

 

LIMITED DURATION CONTRACT OF EMPLOYMENT

Schedule referred to in clause 3(a) of Annexure A to the Main Agreement.

 

CONTRACT OF EMPLOYMENT

 

(The employer)...................................................agrees to engage the services of (the employee) and the employee hereby agrees to accept service with the employer on the following terms and conditions:

(i)

(a) The contract of employment in terms of clause 3 of Annexure A to the Main Agreement shall be for a maximum period of............................................................................................months/weeks from date of employment, for the purpose of site work/turn-around work/ship repair work (delete whichever is not applicable) from …………………..to ……………………...........................or completion of the specific work detailed hereunder:

..........................................................................................................................................................................................................................................…………………………………………………………………………………………………………………………………………

(b) The contract of employment for short-term fluctuations in workload shall not exceed a period of four months from date of employment, viz from ……………...……………… to ...............……………….., or completion of the specific work detailed hereunder:

(Note:  Should a period longer than four months be required to complete a specific task or activity, the period and the specific task or activity must be specified hereunder:)

....................................................................................................................................................................................................................................................................................................................................................................……………………….

(ii) On completion of the contract detailed in (i) above, this contract shall automatically terminate. Such termination shall not be construed as being retrenchment but as completion of contract.

The employee shall nonetheless still be given one shift’s notice of expiry of the contract period.

(iii) The remaining conditions of employment, not expressly detailed above, shall be existing employer policy, rules and regulations and the general conditions of employment as contained in the Main Agreement for the Iron, Steel, Engineering and Metallurgical Industry, subject to the limitation set out in (ii) above.
(iv) Where employment continues after completion of this contract in terms of (i) above this contract shall become null and void and the provisions of the Main Agreement shall apply.
(v) Subject to the amendment of the general conditions of employment as set out in (ii) above, the engagement conditions shall be:

(a)        Occupation............................................................................................

(b)        Rate of pay..............................................................................................

(which shall not be less than the rate scheduled in the Main Agreement).

 

The employee acknowledges that he/she understands the contents of this contract and signifies acceptance thereof.

Signed at........................................................................on..............................................

Employer......................................................................

Employee.....................................................................

Witness........................................................................

 

Note: The employer and employee shall, during the period of employment in terms of this contract, observe the provisions of the applicable Benefit Fund Agreements.