The fourth industrial revolution changing the world of work

October 1st, 2018
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Acting Judge President of the Labour Court and the Labour Appeal Court, Judge Violet Phatshoane, spoke at the 31st annual Labour Law conference on 16 August.

By Kgomotso Ramotsho

The 31st annual Labour Law Conference, themed ‘The Fourth Industrial Revolution: Challenges and Opportunities’ was held in Johannesburg on 16 and 17 August. Acting Judge President of the Labour Court and the Labour Appeal Court, Judge Violet Phatshoane, said the fourth industrial revolution has a positive and negative effect in the workplace. She added that as the fourth industrial revolution sets in, job security in South Africa remains a key aspect to be jealously protected. She pointed out that the job security of the indigent, unemployed and the marginalised members in the country is continuously under threat as a result of the slow economic growth.

Judge Phatshoane said business, labour and government should continue to strive in finding sustainable ways of building the economy, through job creation. She added that another worrying aspect was that as the fourth industrial revolution sets in, poor countries lose their work force to developing countries and some economies become stranded as a result of the abundance of skilled work force.

How does South Africa prepare for the fourth industrial revolution?

International Labour Organisation, Director, Doctor Joni Musabayana, said the fourth industrial revolution means the working world is changing. He added that the labour laws and labour institutions must change to accommodate the fourth industrial revolution. Dr Musabayana pointed out that his organisation was engaged in a worldwide process, which is called the ‘National Dialogue on the Future of Work.’ He said research was done through the University of Cape Town, to look at what is going on at enterprise level in communities and the implications for labour law, labour institutions and the labour administration in general.

International Labour Organisation, Director, Doctor Joni Musabayana, said labour laws and labour institutions must change to accommodate the fourth industrial revolution.

Dr Musabayana said the informal economy was coming into the formal economy. He added that what is becoming an exception was becoming a rule. He pointed out that the employment relationships were changing, and the world has informalised of formal jobs and that is not an exception but a standard worldwide. Dr Musabayana noted that the ability for government to make policy decisions is absolutely imperative. He said robots do not make decisions, but human beings do. He added that governments have a choice on which projects to fund.

Does the law really encourage and protect whistle-blowers in fight to combat corruption

Programme Manager at whistle-blowing unit and non-government organisation (NGO), Open Democracy Advice Centre, Lorraine Martin, said when people speak about whistle-blowing, the first thing that comes to mind is corruption. However, she pointed out that whistle-blowing is much wider than just exposing corruption. She added that whistle-blowing, in many countries, deals with issues of fraud, corruption and other wrong doings, which are not recognised as some fundamental human rights.

Ms Martin said the laws of whistle-blowing were limited and that employees cannot blow the whistle on just anything at a workplace. She pointed out that with regards to the protection of whistle-blowers in the workplace, there are currently two pieces of legislation in South Africa, which are –

  • the Protected Disclosures Amendment Act of 5 of 2017 (Amendment Act); and
  • the Companies Act 71 of 2008.

Ms Martin noted that both Acts have whistle-blowing provisions, but that the Protected Disclosures Act, is specifically about whistle-blowing.

Ms Martin said the thinking behind the Amendment Act was to create a contract, to facilitate the disclosure of information by employees, as the Amendment Act only protects employees.  She added that employees must blow the whistle in a responsible manner, by adhering to comprehensive statutory guidelines to the disclosure of the information they are disclosing.

Ms Martin said employees may disclose the following –

  • a criminal offence;
  • the failure to comply with the legal obligation;
  • a miscarriage of justice;
  • the endangerment of the health and safety of an individual;
  • damaging the environment; or
  • unfair discrimination.

She added that the highest protection of whistle-blowing is when an employee discloses internal happenings within the organisation. She pointed out that the employee does not need to disclose the issue to the line manager, but instead they can go to the top management in the organisation. She said if an employee works for government, the employee could disclose the information to the office of the Public Protector or the Auditor General.

Ms Martin added that s 9 in the Amendment Act, allows an employee to blow the whistle outside of the organisation, but with conditions attached. She said this option is called, ‘general disclosure’. She pointed out that if the disclosure was made internally and nothing was done about it, then an employee can report the incident outside the organisation.

Programme Manager at whistle-blowing unit non-government organisation, Open Democracy Advice Centre, Lorraine Martin, said employees needed to follow correct procedures on whistle-blowing. She spoke at the 31st annual Labour Law Conference held in Johannesburg on 16 and 17 August.

Ms Martin said if an organisation has a whistle-blowing policy an employee has to follow that organisation’s policy. She added that employees who blow the whistle are protected in a case where, should they blow the whistle on some form of criminal conduct, and they have followed all the correct procedures they could suffer occupational detriment. Ms Martin listed forms of occupational detriment, such as –

  • demotion;
  • harassment;
  • intimidation;
  • transfer against your will;
  • disciplinary hearings;
  • suspension;
  • poor work performance claims;
  • refusal of a transfer; or
  • refusal of a reference or anything that an employee can prove that has a negative impact on their employment, because of the disclosure that the employee had made.

Ms Martin said that an employee in such case, can seek a redress through the Commission for Conciliation, Mediation and Arbitration (CCMA), the Bargaining Council or the Labour Court. She added that such treatment towards an employee is regarded as unfair labour practice and is written in the Labour Relations Act 66 of 1995.

The developing jurisprudence in ‘equal pay for equal work’ claims

Partner at Bowmans, Employment Practice and Benefits Department, Talita Laubscher, spoke at the 31st annual Labour Law Conference in Johannesburg.

Partner at Bowmans, Employment Practice and Benefits Department, Talita Laubscher, said on 1 August 2014 the amendment to the Employment Equity Act 55 of 1998 the (EEA) came to force, however, she added that there were mixed reactions to it. She noted that s 6 of the EEA prior to the amendment said ‘no person should discriminate against unfairly, either direct or indirectly against the other.’ She pointed out that in 2014 this was amended by the inclusion of the phrase ‘or any arbitrary ground.’

Ms Laubscher said s 6(4) speaks about, the difference in terms and conditions of employment, not just remuneration but any terms and condition of employment between employees of the same employer. She added that the section did not concern itself with the wage gap of the chief executive officer and a secretory, but with employees doing the same work that can be attributed to the same value.

Interventions for businesses in trouble

University of South Africa (Unisa) professor in corporate law and CCMA facilitator, Anneli Loubser, discussed whether business rescue was the only answer to companies suffering difficulties. She said South African corporate law, currently provides four interventions for a business in financial difficulty, namely –

  • business rescue;
  • insolvent liquidation;
  • compromise for creditors; or
  • composition for close corporation.

University of South Africa professor in corporate law and Commission for Conciliation, Mediation and Arbitration facilitator, Anneli Loubser, discussed whether business rescue was the only answer to companies suffering difficulties.

Ms Loubser pointed out the four procedures appear to be completely different with various outcomes or purposes, which are applicable to different entities. She added that in fact the separation between the four is not that wide. She said that business rescue, which under certain circumstances could fail and leave a business in a much worse off state than it was before. She added that what disturbed her was that some judges appeared to have the belief that business rescue was always the answer for a business in financial distress.

Ms Loubser said it was worrying for businesses to rush into business rescue. She added that the courts were confusing the purpose of business rescue, which is to rescue the business, not to save jobs. She noted that jobs are only saved when there is a successful business rescue plan and a failure to rescue will not save a single job.

Ms Loubser said business rescue is regulated by the Companies Act and applies to companies and close corporations. She added that the requirements for business rescue, included financial distress for the company and pointed out that there must be a reasonable prospect for a rescue. She noted that the first option a company can take to rescue the company is to return the company to a solvent state and enable it to continue on a solvent basis.

Ms Loubser said the second option to rescue a business is that the company will result in better return for credit, although the Act does not spell it out. It is assumed that the sale in liquidation would be the sale of loose assets. While a sale from the business rescue idea is that a company must be kept afloat long enough that the business can be sold and get a better price than one would get for selling individual assets. She added that this assumption was not true.

Ms Loubser asked if business rescue achieved its stated purpose as defined. She said statistics showed that since 2011, 28% of the business rescue cases since ended with a notice of substantial implementation of an approved rescue plan, but others went into liquidation. She added that a small percentage was recovered from that 28% and 20% was still in business rescue at the end of March 2018.

Ms Loubser said it was clear that most of businesses in business rescue end up in liquidation. She pointed out that often the business rescue of a company was intended to avoid the consequences of a formal liquidation. She added that there were issues of abuse surrounding business rescue, because some companies simply wanted to avoid liquidation. Ms Loubser said insolvent liquidation was still regulated by the Companies Act 61 of 1973. She added that it applied to companies, close corporations and external companies. She noted that a requirement for this procedure must be that the company must be commercially insolvent. She pointed out that not many companies use the compromise creditors’ procedure even though it is a very useful procedure. Ms Loubser said what makes this procedure useful is that it may be used in liquidation.

Ms Loubser said the composition under s 72 of the Close Corporations Act 69 of 1984, is only available to close corporations under liquidation. She pointed out that business rescue is supposed to be a short procedure, however, statistics have revealed it can sometimes take a lot longer.

Kgomotso Ramotsho Cert Journ (Boston) Cert Photography (Vega) is the news reporter at De Rebus.

This article was first published in De Rebus in 2018 (Oct) DR 12.

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