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What is the likelihood that the Labour Relations Amendment Act (6 of 2014) will increase permanent employment in the construction sector?

The South African government introduced the Labour Relations Amendment Act (6 of 2014), which came into effect on 1 January 2015. The aim of this paper is to review the likelihood that the Amended Act will increase permanent employment in the construction sector of South Africa. First, an analysis of the changing nature of employment in the construction sector is done and the factors responsible for the change are explored. It is specifically highlighted that permanent employment in the sector has persistently been lower than non-permanent employment, predominately due to sub-contracting. In addition, the bulk of the construction workforce is now recruited on short-term contracts through sub-contractors. As a result, the sector has low rates of organised labour. Close scrutiny of the Amended Act reveals significant changes pertaining to the regulation of non-permanent employment in the sector. The Amended Act introduces a clause that stipulates that fixed-term or temporary employees must be employed permanently after three months of employment, unless the employer can justify the temporary nature of their employment. Although this clause is meant to increase permanent employment in the sector, the likelihood of its success is low because of the cyclical and project-based nature of the construction industry. Employers will continue to have a justifiable reason for not offering permanent employment under the Amended Act. This paper recommends that there be a clause in the Amended Act that limits the extent of sub-contracting to specialist services not covered by the main contractor.

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