Category: Business

Understanding the functions of the commission for conciliation, mediation and arbitration

This article briefly discusses the procedure which is followed when a dispute is referred to the Commission for Conciliation, Mediation and Arbitration. It explains what the different functions of conciliation and arbitration are and in what order these forms of dispute resolution should be conducted in order for the process to function optimally.

I have a dispute which has been referred to the CCMA. How does the process work?

The Commission for Conciliation, Mediation and Arbitration (“CCMA”) is a state-funded institution which acts as the centrepiece of the statutory dispute resolution system in the employment sphere. The CCMA, however, operates independently from the state.A dispute is referred to the CCMA within 30 days of the date when the dispute arose. When a dispute is referred to the CCMA, the first step in the process is that the Commissioner (the objective party presiding over the matter), who will act as a conciliator, assists the parties to reach a mutually agreed upon outcome. The conciliator cannot make any binding determinations during this process. Therefore, there is no obligation on the parties to accept the suggestions of the conciliator. What is also important to note is that the proceedings are confidential and conducted on a “without prejudice” basis, therefore, whatever is said during the said proceedings cannot be used against either party later in the process. Conciliation is not defined in the Labour Relations Act 66 of 1995 (“LRA”), however, in practice, the Commissioners tend to make use of mediation, conducting a fact-finding exercise, subsequently making a recommendation to the parties, which is regarded as an advisory arbitration award.

After conciliation has failed, the Commissioner will issue a certificate stating that the dispute remains unresolved after conciliation proceedings have been conducted (certificate of outcome). The referring party will then have the option to refer the matter to arbitration by completing an LRA Form 7.13 and serving it on all the relevant parties, including the CCMA, within 90 days after the date on which the certificate of outcome was issued. The director of the CCMA may direct that the parties conduct a pre-arbitration conference. The purpose of the said conference is so that the parties can simplify the matter and clearly define what the dispute is.

Arbitration is essentially a hearing based on the merits of the dispute. The arbitrator will give all the parties an opportunity to prove and argue their case. After the arbitrator has heard the parties’ cases, the arbitrator must make a finding, which any reasonable decision-maker could come to based on the available evidence. Reasons for the arbitrator’s decision may be provided. The arbitrator’s decision is final and binding on the parties, subject to a review application in the Labour Court. The arbitrator may also make an order as to costs in accordance with the CCMA rules.

It should also be noted that in 2002, amendments to the LRA were introduced, which also provide for what is now known as “con-arb”. What this entails is that the Commissioner will have to commence arbitration immediately after conciliation was found to be unsuccessful. However, a party to the proceedings may object to con-arb, whereafter the procedure as discussed above will then follow in the alternative.

When a dispute is referred to the CCMA, the first step in the process is that the Commissioner will attempt to settle the matter by way of conciliation which might include mediation, conducting a fact-finding exercise, subsequently making a recommendation to the parties, which is regarded as an advisory arbitration award. When the dispute remains unresolved, the matter will then be finalised on arbitration.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

Sources:

  • CCMA Rules
  • Labour Relations Act 66 of 1995
  • Country Fair Foods (Pty) Ltd v CCMA (1999) 11 BLLR 1117 (LAC)
  • CCMA website – https://www.ccma.org.za/Advice/CCMA-Processes/Arbitration
  • Law@work 3rd Edition (2015) A van Niekerk, M Christianson, M McGregor, E Smith, BPS van Eck

Prize draw or promotional competition – a promoter’s legal compliance checklist

If one opens almost any newspaper, magazine or website, one is confronted with a myriad of promotional competitions and, especially, competitions conducted using SMS or MMS technology. For this reason, the promoters of such competitions will need to realise that the Consumer Protection Act 68 of 2008 (the “CPA”), which came into effect on 1 April 2011, has certain far-reaching implications which are likely to apply to such competitions and educate themselves as to its specific requirements.

The CPA replaced the repealed Lotteries Act 57 of 1997 and became effective on 1 April 2011. Section 36 of the CPA imposed the stringent definitions of a “promoter” and “promotional competition”, which includes competitions where prizes can be won regardless of whether a participant shows any skill or ability. Given these rather wide definitions and the very low-value threshold of R1.00 prescribed in terms of Regulation 11(4) of the CPA Regulations, it is clear that the vast majority of competitions conducted in South Africa from 31 March 2011 will be governed by the CPA.

Promoters, including promoters of SMS or MMS competitions, will be in contravention of the CPA where:

  • they indicate that a participant has won a competition if no competition has been conducted, the person has, in fact, not won the competition or the person is required to meet a previously undisclosed condition or to pay a further sum of money in order to receive the prize; or
  • a participant is informed that he has a right to a prize when, in fact, he does not have such right, where the prize was generally offered to other similar participants, or where the participant is required to pay a further amount for the prize or to purchase any goods or services.

Crucially, section 36(3) requires that a promoter should “not require any consideration to be paid by… any participant… other than the reasonable costs of posting or… transmitting an entry” and Regulation 11(1) specifies that the “reasonable cost of electronically transmitting an entry shall not exceed R1.50”.

A promoter would similarly fall foul of the CPA, where he requires participants to make payment for the opportunity to participate in the competition or where he requires the purchase of any goods or services and the price charged for those goods or services “is more than the price… ordinarily charged for those or similar goods or services without the opportunity of taking part in (the) competition”.

For the purposes of ensuring fairness, the CPA requires that a promoter may not award a prize to any person who is a director, member, partner, employee or agent of, or consultant to, the promoter or to the supplier of any goods or services in respect of the competition.

Practical Requirements

A promoter should ensure that his invitation for participants to take part in his competition includes details on:

  • how a participant should accept the invitation to participate;
  • how the results will be determined;
  • the competition’s closing date;
  • the means by which the results of the competition will be made public; and
  • the person from whom or the place from where a copy of the competition rules may be obtained.

The promoter will be deemed to have satisfied these requirements if this information is available directly on the medium through which a person participates in the competition, on a document accompanying any medium or in any advertisement which is published, and which draws attention to the promotional competition.

Any provision in the rules of a promotional competition requiring a prize winner to:

  • permit the use of his image in marketing materials;
  • participate in any marketing activity; or
  • be present when the prize draw takes place, or the winners are announced,

without offering him the opportunity to decline such requirement, will be null and void.

The Regulations also require the promoter to ensure that certain specified professional persons oversee and certify the manner in which the competition was conducted and report his/her findings through the promoter’s internal audit reporting or validation and verification procedures. There is also a strict requirement regarding record keeping for a period of 3 years.

Non-compliance by promoters of the provisions of the CPA and its Regulations may result in the competition being declared void and in contravention of the CPA. The imposed offences under the CPA range from a fine or imprisonment (or both) for a period not exceeding 10 years or a fine or imprisonment (or both) for a period not exceeding 12 months or to both, depending on the severity of the contravention. In addition, administrative fines imposed by the Tribunal in respect of prohibited or required conduct is particularly onerous as such fines are set at the greater of 10% of the guilty party’s annual turnover during the preceding financial year or R1 million.

Conclusion

Promoters of promotional competitions and, in particular, competitions conducted using SMS or MMS technology, should ensure that they are aware of the various requirements and obligations placed upon them by the CPA. Great care should be taken when conducting competitions which will fall within the realm of the CPA as and from 31 March 2011, since the Commission and the Tribunal are likely to take a very dim view of promotional competitions which do not comply with the requirements of the CPA and its Regulations.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

Reference List:

  • The Lotteries Act 57 of 1997
  • The Consumer Protection Act 68 of 2008 and its Regulations
  • Naudé T & Eiselen S, Commentary on the Consumer Protection Act, Juta, 2014

IS YOUR BUSINESS LEGALLY COMPLIANT?

Compliance refers to a company obeying all of the legal laws and regulations regarding how they manage the business, their staff, and their treatment towards their consumers. The point of compliance is to make sure that corporations act responsibly.

Is compliance for every business the same?

Certain businesses may be required by law to register with an industry association. For instance, if you want to practice as a public auditor and issue an opinion on assurance engagements, you must be registered with the South African Institute of Chartered Accountants (SAICA) and the Independent Regulatory Board of Auditors (IRBA). Compliance in this regard would depend on the type of business involved.

What are general requirements for all businesses:

Tax compliance (SARS, VAT Act) – First and foremost, the business enterprise must be registered with SARS for tax purposes (to be taxed on the income that it makes), secondly, if the business is an employer it must register itself as such and as an agent of government required to deduct employees’ tax from the earnings of employees and pay the amounts deducted over to SARS on a monthly basis. Thirdly, if applicable, a business may register for VAT in terms of the VAT Act.

The Occupational Health and Safety Act – The government requires businesses that employ people to provide a work environment that is safe and without risk to the health of employees.

Skills Development Levy (SDL) – Employers must pay 1 percent of their workers’ pay to the skills development levy every month. The money goes to Sector Education and Training Authorities (SETAs) and the Skills Development Fund to pay for training.

The Compensation for Occupational Injuries and Diseases Act (COIDA) – This Act seeks to ensure that employers are duly covered to provide compensation for disablement caused by occupational injuries or diseases sustained by employees in the course of their employment, or for death resulting from such injuries or diseases.

Unemployment Insurance Fund (UIF) – Employers must register with the Department of Labour to ensure that their employees are appropriately covered when out of employment.

Auditing requirements – Depending on the type of company you register, it may be required to be audited on an annual basis.

Financial Intelligence Centre Act (FICA) – If your company will be engaged with financial services, estate agencies, insurance, etc. you are required to comply with this Act in order to combat money laundering.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

References:

http://www.bonaman.co.za/business-compliance-101-for-entrepreneurs/

https://bizconnect.standardbank.co.za/manage/operations-compliance/reference-documents/legislation-business-compliance.aspx

DOES YOUR BUSINESS NEED A LIQUOR LICENCE?

My Lawyer_Images-02Liquor manufacturers and suppliers require a liquor license, as regulated by the National Liquor Authority. If your liquor registration has been cancelled you cannot continue to trade. Trading without a license is an offence punishable by law.

What is the National Liquor Authority?

The National Liquor Authority is a regulatory body within the Department of Trade and Industry (the DTI) responsible for administering The National Liquor Act 2003 (Act No.59 of 2003).

What documents are required with my application?

  • A business zoning certificate for industrial purposed or a consent letter from the relevant municipality.
  • A comprehensive written representation in support of the application.
  • Any determination, consent approval or authority required by the Act.
  • A valid proof that the prescribed application fee has been deposited in the bank account of the Department of Trade and Industry.
  • A valid certified copy of ID of the applicant or a passport and trading business permit if the applicant is a foreigner.
  • A South African Police Services (SAPS) police clearance certificate not older than three 3 months from the date of issue.
  • If the applicant is a juristic person, valid copies of registration issued by the Companies and Intellectual Property Commission (CIPC) or any other relevant registration authority indicating the financial interest of all members, shareholders, partners or beneficiaries as the case may be;
  • A valid tax clearance certificate if the applicant is a juristic person issued by the South African Revenue Services (SARS) within twelve months from the date of application.
  • Verification certificate issued in terms of the Broad Based Black Economic Empowerment Act (B-BBEE).

A liquor licence is an extremely important document to possess for those who are planning on trading in, or manufacturing liquor. It is an official document issued to a premise on which liquor is to be sold or manufactured. It can be a time consuming and painstaking process for an individual to obtain a valid liquor licence on their own. There are many complicated legal requirements and steps to follow before a liquor licence can be granted. It is also critical to obtain the correct classification of liquor licence for the premises and/or occasion or event.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

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