Mercantile Law 311
Labour Law
Session 1: Introduction to labour law
Read ch 1 and 2, study ch 3 – concentrate on what is discussed in class
Labour law is grounded in contract law
o Employee working for employer on basis of an employment contract
o This employment contract has its own characteristics, over and above what is
discussed in contract law
Employment contract is unusual because its operation is indefinite – a relational contract;
does not happen quickly like a contract of sale
Special role for good faith and fair dealing between the parties in order not to threaten this
relationship
The contractual basis of labour law:
o The employment contract is a specific form of contract
o Subject to the general principles of contract law
o But has its own specific rules and principles which regulate the employment
relationship
o Heavily regulated by means of labour legislation, supplementing or replacing the
common law rules
Role and importance of work
o For workers
o For the economy
o For society at large
Chosen system (and extent) of regulation by the state may have significant implications for
the economy, the achievement of social justice and the well-being of society
o Criticism of SA labour laws as being too strict; impact on unemployment; foreign
investment
o Calls for deregulation of the labour market in order to encourage economic growth
o One major challenge is the size and scope of the informal labour market
Sources of labour law
Our labour laws are not only derived from one source
1. Contract of employment (supplemented by any collective bargaining agreements, which
supercede the individual employment contracts)
2. Labour legislation
o Labour Relations Act 1995 (LRA)
o Basic Conditions of Employment Act 1997 (BCEA)
o Employment Equity Act 1998 (EEA)
3. Constitution (Bill of Rights)
4. International labour standards
o Set by International Labour Organisation (ILO) – part of UN
o Parliament is obliged to incorporate these standards into our domestic law because
we are a party to this organisation
Collective labour law: employees are part of a trade union and bargain collectively, and use
their right to strike – more powerful and puts more pressure on the employer
Individual labour law: e.g. the individual employment contract – going to the employer
yourself to bargain for higher wages is much less powerful than going through a trade union
Why is labour law so heavily regulated by special legislation?
Labour Law
Session 1: Introduction to labour law
Read ch 1 and 2, study ch 3 – concentrate on what is discussed in class
Labour law is grounded in contract law
o Employee working for employer on basis of an employment contract
o This employment contract has its own characteristics, over and above what is
discussed in contract law
Employment contract is unusual because its operation is indefinite – a relational contract;
does not happen quickly like a contract of sale
Special role for good faith and fair dealing between the parties in order not to threaten this
relationship
The contractual basis of labour law:
o The employment contract is a specific form of contract
o Subject to the general principles of contract law
o But has its own specific rules and principles which regulate the employment
relationship
o Heavily regulated by means of labour legislation, supplementing or replacing the
common law rules
Role and importance of work
o For workers
o For the economy
o For society at large
Chosen system (and extent) of regulation by the state may have significant implications for
the economy, the achievement of social justice and the well-being of society
o Criticism of SA labour laws as being too strict; impact on unemployment; foreign
investment
o Calls for deregulation of the labour market in order to encourage economic growth
o One major challenge is the size and scope of the informal labour market
Sources of labour law
Our labour laws are not only derived from one source
1. Contract of employment (supplemented by any collective bargaining agreements, which
supercede the individual employment contracts)
2. Labour legislation
o Labour Relations Act 1995 (LRA)
o Basic Conditions of Employment Act 1997 (BCEA)
o Employment Equity Act 1998 (EEA)
3. Constitution (Bill of Rights)
4. International labour standards
o Set by International Labour Organisation (ILO) – part of UN
o Parliament is obliged to incorporate these standards into our domestic law because
we are a party to this organisation
Collective labour law: employees are part of a trade union and bargain collectively, and use
their right to strike – more powerful and puts more pressure on the employer
Individual labour law: e.g. the individual employment contract – going to the employer
yourself to bargain for higher wages is much less powerful than going through a trade union
Why is labour law so heavily regulated by special legislation?
