Chapter 5 — Legislation
Business Studies | Simplified Study Notes
Constitution of South Africa (Act 108 of 1996)
The highest law in South Africa — every other law must follow it. Applies to all citizens and businesses.
Business is mainly affected by:
• Human rights
• Inclusivity — equal access for everyone, no unfair discrimination
• Environmental responsibility
Bill of Rights
Protects basic human rights. Rights are not absolute — they can be limited if they harm someone else's rights.
Limitation Clause
Your rights can be limited only if it is reasonable and justifiable in a democratic society.
Example: Freedom of speech cannot be used to violate someone's dignity.
Labour Relations Act (LRA) — Act 66 of 1995
Regulates the relationship between employers and employees. Promotes democracy in the workplace.
Promotes:
• Economic development
• Labour peace
• Social justice
• Workplace democracy
Does NOT apply to:
• National Defence Force
• National Intelligence Agency
• SA Secret Service
Key Objectives:
• Enforce constitutional labour rights
• Provide a framework for collective bargaining
• Ensure fair dispute resolution
• Guidelines for fair discipline and dismissal
• Promote cooperation between employers and employees
■ Negative: Labour disputes can be time-consuming and reduce productivity.
Freedom of Association
• Employees may join Trade Unions — protect workers' interests, negotiate better wages
• Employers may join Employer Organisations — promote their collective interests
Discipline & Grievance Procedures
Purpose of discipline: correct behaviour, not punish. Must be consistent and fair.
Progressive Discipline (start mild, increase if behaviour continues):
• Coaching and counselling
• Verbal warning
• Written warning
• Suspension
• Demotion
• Dismissal (last resort!)
Disciplinary Policy explains:
• Acceptable behaviour
• Expected standards
• Consequences of misconduct
Grievance Procedure — follow this order:
• 1. Supervisor
• 2. Line Manager
• 3. HR Manager
• 4. CCMA
• 5. Labour Court
• 6. Labour Appeal Court
Fair Dismissal — must have a VALID REASON (Substantive Fairness):
• Incapacity — can't do the job (poor performance or ill health)
• Misconduct — broke workplace rules
• Operational requirements — retrenchment (business can't afford to keep them)
For misconduct to be valid:
• The rule existed and was reasonable
• Employee knew the rule
• Rule was applied consistently
• Dismissal is appropriate
■ Even if the reason is valid, not following proper PROCEDURE makes the dismissal UNFAIR.
Retrenchment = not the employee's fault.
Happens when: business loses money, restructuring, jobs become unnecessary, or technology replaces roles.
Unfair Treatment & Unfair Dismissal
Unfair Treatment includes:
• Discrimination (race, gender, religion, age, disability, etc.)
• Unfair probation periods
• Unfair suspension or discipline
• Victimisation after whistle-blowing
Exceptions (NOT unfair discrimination):
• Affirmative action — giving preference to previously disadvantaged groups to fix past inequality
• Inherent job requirements — e.g. hiring a female actor for a female role
Unfair Dismissal includes firing someone because of:
• Trade union participation
• Protected strike participation
• Pregnancy or maternity leave
• Arbitrary discrimination
• Constructive dismissal — making working conditions so bad they are forced to quit
Remedies (what the employee can get):
• Reinstatement — get job back (preferred under LRA)
• Compensation
• Or a combination, ordered by CCMA
Industrial Relations & Collective Bargaining
Industrial Relations = relationship between:
• Employers, Employees, Trade Unions, Government
Goal: industrial peace
Collective Bargaining = negotiation between employer and trade union about:
• Wages, working hours, leave, conditions of service
Outcome is written into a collective agreement.
Types of Industrial Action:
• Strike — refuse to work
• Go-slow — work slower
• Work-to-rule — only do minimum duties
• Overtime ban — refuse overtime
• Picketing — public protest
• Secondary/sympathy strike — striking in support of others
Common reasons for strikes:
• Pay/remuneration issues
• Want trade union to be recognised
• Employer changed working conditions without agreement
During a Protected Strike:
• Employees cannot be dismissed for striking
• "No work, no pay" still applies
• Employer cannot claim damages
For a strike to be PROTECTED, follow these steps:
• 1. Refer dispute to CCMA or Bargaining Council
• 2. Conciliation attempted (30 days)
• 3. Certificate of non-resolution issued
• 4. Give 48 hours written notice (7 days for state)
Lock-out:
Employer prevents workers from coming in to work to enforce demands.
Dispute Resolution Structures:
Bargaining Councils — formed by employer orgs and trade unions
• Negotiate agreements, resolve disputes, develop training
Workplace Forums — internal structure for joint decision-making
CCMA — independent body that resolves disputes
• Conciliation — facilitated discussion
• Mediation — advice given
• Arbitration — binding decision (can only be reviewed by Labour Court within 6 weeks)
NEDLAC — brings together government, business, labour and community to make inclusive economic
decisions
Employment Equity Act (EEA) — Act 55 of 1998
Purpose:
• Eliminate unfair discrimination
• Promote affirmative action
• Focus on designated groups: Black people, Women, People with disabilities
Impact on Business:
• Encourages diversity and equality
• Must create an Employment Equity Plan (EEP)
• Non-compliance = heavy fines
Employment Equity Plan (EEP) — a written plan to:
• Remove unfair discrimination
• Promote equal opportunity
• Implement affirmative action
• Improve representation of designated groups
BBBEE Act — Act 53 of 2003
Corrects past economic imbalances and brings previously disadvantaged groups into the economy. Not meant
to benefit a small elite.
Five Pillars:
• 1. Black ownership
• 2. Management and control
• 3. Skills development
• 4. Preferential procurement
• 5. Socio-economic development
■ Benefits must mainly go to previously disadvantaged BLACK people (Africans, Coloureds, Indians — especially
black women and people with disabilities).
Skills Development Act (SDA) — Act 97 of 1998
Purpose:
• Improve access to education and training
• Address the shortage of skilled workers in SA
SETAs (Sector Education and Training Authorities):
• Industry-specific bodies
• Manage training funds and learnerships
Benefits:
• More skilled workforce
• Career progression for employees
• Businesses can reclaim part of the Skills Development Levy through SETAs
Basic Conditions of Employment Act (BCEA)
Protects vulnerable workers by setting minimum standards every employer must follow.
Key Provisions:
• Working hours: Maximum 45 hours per week
• Overtime: Max 3 hours/day, paid at 1.5× rate
• Meal break: Required after 5 hours of work
• Public holidays: Paid, or double pay if worked
Leave:
• Annual leave: 21 days
• Sick leave: 30 days per 36 months
• Maternity leave: 4 months
• Family responsibility: 3 days
• Notice periods based on length of service