Labour Relations Act, 1995 (Act No. 66 of 1995)

Notices

Bargaining Council for the Building Industry, Cape of Good Hope

Extension to Non-parties of the Main Consolidated Collective Agreement

58. Codes of Good Practice

Annexure 1: Code of Good Practice: Joint and Several Liability
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58. CODES OF GOOD PRACTICE

 

ANNEXURE 1: CODE OF GOOD PRACTICE: JOINT AND SEVERAL LIABILITY

 

A.Purpose

 

This Code of Good Practice is intended to provide practical guidance to employers on how to apply the provisions of the Collective Agreement (CA) in respect of clause 7.

 

In terms of the CA, the contracting party cannot subcontract any work under clause 7 of the Agreement to another party unless both parties are employers in good standing at all times during the subcontracting process.

 

This Code outlines the best practices that ensure compliance with Clause 7. It provides guidance on subcontracting, the use of temporary employment services, and the responsibilities of employers.

 

B.Interpretation

 

This Code needs to be read in conjunction with the CA.

 

C.What to expect during an inspection by a BIBC Designated Agent

 

1.1The role of the BIBC Designated Agent is to:
(a)Conduct systematic inspections to verify compliance.
(b)Review documentation, interview employees, and observe on-site practices.
(c)Issue reports detailing compliance status and necessary corrective actions.

 

1.2The inspection process involves:
(a)Notification: Provide advance notice where applicable, though unannounced inspections may occur, especially where Whistle Blower reports are received.
(b)On-Site Inspection: Examine records, interview employees, and review operations.
(c)Findings & Reporting: Document observations and recommend corrective actions.
(d)Follow-up & Enforcement: Verify that corrective measures have been implemented and impose penalties where necessary.

 

D.Frequently Asked Questions

 

In this section, the most frequently asked questions are listed along with their responses.

 

Question

Answer / Response

What is a "Contracting' party"?

It includes both the main contractor who subcontracts and a subcontractor who subcontracts work.

 

It includes temporary employment services (TES) or labour brokers.

What does it mean to be in good standing "at all times" during the subcontracting?

"All times" means that the parties need to be compliant from the date that the contract is awarded right until the site/project hand-over date.

What is the contracting party jointly and severally liable for?

All debts  of the subcontractors  relating to the terms and conditions of employment that are provided for in the CA and all administrative and legal costs associated with recovery of non-payment of wages and benefits.

How can a contracting party avoid liablity before subcontracting work?

There are various due diligence checks that must be done by the contracting party at the pre-contract stage.

(a)Verify that subcontractors are registered and compliant with the BIBC.
(b)Obtain necessary registration certificates before awarding the contract.
(c)Call the BIBC if you are unsure or if the certificate conflicts with the information on the website and ask for confirmation that the certificate is authentic.
(d)Ensure all compliance documentation is up to date before work commences and will be provided to you on a regular basis by the subcontractor.

What due diligence activities can the contractor perform during the course of the contract?

During the contract/project, it is important to ensure that:

(a)The contractor maintains its records to demonstrate ongoing compliance by subcontractors.
(b)You will need to conduct periodic checks to confirm that subcontractors remain in good standing. It is especially important when you are contracting with multiple subcontractors, to have a system in place to check multiple compliance certificates that all expire at different times.
(c)Ensure that the records on-site match those listed in the certificates. The contracting party is aware that the number of employees declared to the contracting party is more than what is on record.

If I have done all the above and have performed the due diligence checks before, during and at hand-over of the contract, can I then still be held liable if the subcontractor is found to be non-compliant?

The BIBC agent will require evidence that you have managed your site effectively. If you are able to produce the documented evidence that you have taken all steps necessary to ensure the compliance of your sub-contractor(s), you will not be held liable.

I am able to prove that I have done everything required to ensure compliance by my subcontractor(s) and have still received a notice that cites me as a Respondent along with my subcontractor(s) and requires that I appear before a Commissioner. What should I do?

Immediately make contact with the BIBC case administrator whose contract details appear on the notice. Assuming that your evidence is sufficient, the notice will be amended to exclude you.

 

Ignoring the notice will mean that the Commissioner does not hear your side of the story and can only make a ruling on the version of the BIBC.

 

If you do want to let us know that you are not jointly and severally liable, you must do this as soon as possible. If you only respond within the seven (7) days prior to the arbitration date, you will be liable for the costs of the arbitration.

 

E.Joint and several liability Scenarios

 

Scenario One: Non-Compliance

 

Company X subcontracts work to Company Y without verifying its registration or compliance status.

 

The BIBC conducts an inspection and finds Company Y to be non-compliant. Company X is held liable for the subcontractor's contraventions and the costs and penalties.

 

Scenario Two: Best Practice system of due diligence

 

Company X verifies Company Y's registration or compliance status before awarding the contract. Company Y maintains compliance throughout the project. Upon inspection, documented proof demonstrates due diligence which protects Company X from liability.

 

If any allegation of non-compliance arises for the period of the contract Company X will be able to show that it has done everything reasonably possible and will not be held liable for Company Y's non-compliance.

 

F.Protect your compliance status

 

Adhering to this Code of Good Practice ensures compliance with Clause 7, mitigates risk, and fosters fair labour practices within the building industry. Employers are encouraged to implement stringent due diligence, maintain accurate records, and cooperate with BIBC inspections to uphold industry standards.