Employment Equity Amendment Bill; Employment Services Bill: public hearings Day 1

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Labour

06 August 2013
Chairperson: Mr K Manamela (ANC) (Acting)
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Meeting Summary

The Law Faculty of the University of the Western Cape argued that Clause 6 of Employment Equity Amendment Bill that amended section 11 did not comply with Convention 111 of the International Labour Organisation as it provided employees with less protection against discrimination than the Convention required. The problem arose due to the lack of definition for the term ‘unfair’ as there were different interpretations of the term undertaken by the courts. Many courts interpreted this provision as it being possible to discriminate fairly based on sex, gender, race, etc. Another definitional issue was the lack of definition of 'discrimination' in either this Act or in the Constitution. It was left to the courts to define the term and in some cases, the courts used a very wide meaning of discrimination. Section 11(1)(b) was stated in a way that would allow employers to discriminate on a prohibited ground if justified on the grounds of rationality, fairness or an open-ended notion of justifiability. The problem could be resolved quite easily if section 11(1)(b) was aligned with Convention 111 and 'discrimination' was defined within the Act based on the Convention’s definition.

Members asked if section 11(1)(b) should be changed or another section added; should the definition for 'discrimination' be definitive for all Acts or only for this Act; the role of commissioners; if affirmative action should be applied differently in the Western Cape due to the history of the region; and if the submission had considered the Employment Equity Commission reports and Portfolio Committee reports.

South African Board for People Practices (SABPP) submission stated that human resource professionals were responsible to society to advance transformation in the workplace and SABPP was a support mechanism that aided HR professionals to implement legislation. With regards to the Employment Services Bill, there were two potential overlaps: 1) section 5(1)(e) which advised on access to education and training, also fell under the scope of the South Africa Qualifications Authority (SAQA); and 2) collating employment information outlined under section 11 was also an activity planned by the Department of Higher Education and Training. Section 10 of the Employment Services Bill was said to lack practicality. SBPP was concerned with a lack of progress as well as lack of research in employment equity. Two key constraints presented were economic growth and the delivery of the education system. The Employment Equity Act in its original state was well drafted and it was some of its amendments undermined the Act. SABPP reports did not reflect the same results as the Employment Equity Commission reports. More research was needed.

The amendment of section 42 (assessment of compliance) would result in:
– Unproductive discussions between employers and DoL inspectors (what is “reasonable”?)
– Escalation of the argument straight to the Labour Court (s 36 amendment) will make the lawyers happy and could overload the Labour Court
– Surely it is better to set out clearly what substantive compliance/progress will look like so that employers can self-regulate.

Members’ concerns included the level of qualification required for a registered HR professional, affordability of HR professionals, examples of amendments that undermined the Employment Equity Act, what was the methodology for the reports and the process for upgrading HR skills.

Health Professions Council of South Africa submission stated that there were 12 professional boards constituting the HPCSA. The professional board for psychology retained complete control over the use and development of psychological testing and all that was related to that area. The HPCSA put forward only one suggestion for amendment, which was to include in section 4(d) of the Employment Equity Amendment Bill that only bodies appointed or delegated by the HPCSA were to conduct psychological tests or assessments.

Members asked if HPCSA was suggesting that only they could perform psychometric tests or and what other bodies could perform testing. They also asked about the role of indigenous health.

The Cape Chamber of Commerce and Industry's key concern was that the Portfolio Committee undermined the work of Nedlac where the provisions of the four Labour Bills had been hammered out. The Chamber recommended that a Regulatory Impact Assessment was needed again due to the largely changed amendments. The Chamber viewed the proposed compliance and enforcement amendments as entirely problematic. These compliance and enforcement measures might lead to a backlash as well as a backlog at the Labour Court. Rather, the Cape Chamber suggested that the issue be solved by increasing the number of inspectors with training and better wages. The provisions of the Employment Services Bill were very idealistic and as such lack of proper enforcement was predicted. Local businesses had a negative perception of doing business in South Africa and were investing abroad rather than in South Africa because international investments guaranteed businesses returns on their investment. The labour laws also created a negative perception amongst the international business community about doing business in South Africa.
 
Members expressed concern over the comments about Nedlac. Other concerns were raised around compliance, enforcement failure, lack of local investment as well as the increase in the number of inspectors.

Meeting report

The Acting Chairperson welcomed all to the Public Hearings. He stated that many submissions were to be received from a wide range of individuals and organisations over the next few meetings. The labour laws that were at the root of the discussion were critical as they affected millions of people, individuals and businesses, both big and small. Employment equity matters had been ongoing over the last 19 years and since the advent of new labour laws, it has been one of the most critical pieces of legislation that worked towards workplace democracy. The procedure for the day was as follows: presenters made their submission, followed by questions from members.

University of the Western Cape Law Faculty submission: Employment Equity Amendment Bill
Prof Darcy du Toit, Social Law Project – UWC, focused on clause 6 of the Amendment Bill amending section 11 of the Act and whether it complied with Convention 111 of the International Labour Organisation (ILO). The Employment Equity Amendment Bill aimed to ensure that the Act complied with the convention; however, Prof du Toit argued that the proposed section 11 did not comply because it provided employees with less protection against discrimination than what the Convention required. The ILO Convention required employers to eliminate any and all discrimination with the workplace and the definition of 'discrimination' was: “ ‘any distinction, exclusion or preference’ based on a prohibited ground ‘which has the effect of nullifying or impairing equality of opportunity or treatment in employment or occupation.’” The Convention listed three forms of differentiation that did not count as discrimination:
▪ Measures based on “inherent requirement of a particular job” – such as requiring a driver’s licence;
▪ Measures in interests of state security;
▪ Affirmative action measures.

The problem arose due to the lack of definition for the term ‘unfair’. Clause 6 of the Amendment Bill used the term ‘unfair’ in the following manner: “No person may unfairly discriminate, directly or indirectly, against an employee, in any employment policy or practice, on one or more grounds, including race, gender…” The lack of clear definition of ‘unfair’ was evident due the different interpretations undertaken by the courts. Many courts interpreted this provision to mean that it was possible to discriminate fairly based on sex, gender, race, etc. However, this interpretation was in conflict with the Convention as well section 3(d) of the Employment Equity Act (EEA).

Another definitional issue was the lack of definition of 'discrimination' neither within the EEA nor in the Constitution. It was left to the courts to define the term and in some cases, the courts used a very wide meaning of discrimination. Some courts have defined discrimination as drawing a distinction; however, in the Convention, it was specified that discrimination referred to specifically a negative distinction. The submission argued that the Act should define these terms in order to avoid confusion.

With regards to the proposed amendment, Prof du Toit indicated that section 11(1)(a) was indeed in compliance with the ILO Convention. However, there was an issue with section 11(1)(b) as it was stated in a way that would allow employers to discriminate on a prohibited ground if justified on the grounds of rationality, fairness or an open-ended notion of justifiability. That is, if the employer was able to persuade a judge or commissioner that the act of discrimination was fair or just, then the employer was able to sidestep the system. This gave judges and commissioners open-ended discretion. It was important that the EEA be interpreted in relation to the Convention. It was argued that Act must resemble the Convention so that it did not cater to any level of discrimination. There was a long list of cases since the early 1990s on employment discrimination that were not justly aligned with the Act. Prof du Toit argued that had the Act been more explicit, then the cases would not have been misjudged. If the proposed amendments were passed, a series of problems were expected to emerge: Convention 111 was to be undermined and discrimination was to become allowed. This was not only theoretical as there were numerous cases where employers dismissed women based on pregnancy. The courts were supposed to be able to judge that this act was discriminatory; however if an employer provided an argument that deemed the act fair or justifiable, then the courts dismissed the case. For example, employers have argued that as a small business, they were unable to financially deal with the costs of a pregnant employee. Prof du Toit concluded that the problem was possible to be resolved quite easily. Section 11(1)(b) should be changed in alignment with Convention 111 and it was necessary to clearly define 'discrimination' within the Act based on the Convention’s definition.

Discussion
Mr A Williams (ANC) asked if Prof du Toit was proposing that section 11(1)(b) be replaced or that another section should be created? Should the Act define discrimination based on the Employment Equity Amendment Bill or will it have to have a specific definition in all the different Acts?

Prof du Toit replied that he was proposing that the current wording in the Employment Equity Act be replaced to reflect the issues addressed. The proposed definitions were to be inserted in section 1 where the definitions are contained. It was an essential quality of the law to be able to address different contexts specifically; therefore, specific definitions of discrimination were required based on the context as discrimination was not an area where flexibility was favoured.

Mr S Motau (DA) asked for one sentence summarising what needed to be done with the Bill. Clarification was requested about the reference to commissioners and courts within the submission.

Prof du Toit stated the reference to CCMA commissioners as well as the courts was due to the vast number of employees who did not have access to the labour court. Employees should be allowed to go to the Commission for Conciliation, Mediation and Arbitration rather, which provided an accessible forum.

Mr F Maserumule (ANC) asked, with regards to affirmative action, if it should be applied differently in the Western Cape due to the history of the region.

Mr E Nyekemba (ANC) asked if the professor, in drafting his submission, had looked at what the Employment Equity Commission was reporting on since the inception of Employment Equity Act. Were similar issues raised? Did his submission reflect those issues? Were the national issues presented in the Committee’s report from national public hearings around the country taken into account?

Prof du Toit replied to both Mr Maserumule and Mr Nyekemba that their questions fell beyond his particular submission.

South African Board for People Practices (SABPP) submission
Dr Penny Abbott, head of human resources research at SABPP, began by stating that the mandate of SABPP was to ensure professional standards of human resources (HR) work. As workplace implementers, HR professionals had a strong interest in the employment discussion. HR professionals were responsible to society to advance transformation in the workplace and SABPP was a support mechanism that aided HR professionals to implement legislation. With regards to the Employment Services Bill, there were two potential overlaps: 1) section 5(1)(e) which advised on access to education and training, also fell under the scope of the South Africa Qualifications Authority (SAQA); and 2) collating employment information outlined under section 11 was also an activity planned by the Department of Higher Education and Training. In addition, section 10 of the Employment Services Bill was said to lack practicality and it was suggested to rather use private-public partnerships.

Dr Abbott expressed concerns about the Employment Equity Amendment Bill, saying this was likely to be the most difficult area for an HR employee. SBPP was concerned with a lack of progress as well as a lack of research in employment equity. The submission outlined the issues for employers to address. Two key constraints were economic growth and the delivery of the education system. At the professional level, there was increased deterioration whereas at the skilled level, there was evident progress due to investment in skills training. Recruitment within the professional sector continued to witness racial discrimination. SABPP noted that the analysis of statistics within the Employment Equity Commission reports was inadequate and the SABPP came up with differing results. Additionally, it was believed that the EEA in its original state was well drafted and SABPP was concerned that the amendments might undermine the integrity and intention of the original Act. There was a need to focus rather on flagrant non-compliance. Non-compliant employers must face the consequences but a differentiation must be made between flagrant lack of compliance (not submitting plans or reports, lack of any form of sensible action plan) and differences of opinion on substantive compliance. Serious non- compliance must be prioritised. The amendments to the BBBEE Codes are likely to have a greater impact on employers’ actions (more carrot) – although the targets set are physically impossible to reach within the time periods stated. Consequence management should be introduced: Employers should be categorised according to progress; Necessary to recognise good progress
Extra points awarded for progress; Need to establish guidelines for the steps to good progress; No rewards = little motivation.

The amendment of section 42 (assessment of compliance) would result in:
▪ Unproductive discussions between employers and DoL inspectors (what is “reasonable”?)
▪ Escalation of the argument straight to the Labour Court (s 36 amendment) will make the lawyers happy and could overload the Labour Court
▪ Surely it is better to set out clearly what substantive compliance/progress will look like so that employers can self-regulate.

Dr Abbot indicated that the interest in HR professionals was not simply out of self-interest but that employers were more likely to make good progress with employment equity if they employed qualified HR professionals as they acted as implementers of legislation. SBPP suggested introducing a requirement that all employment equity plans and reports should be reviewed and signed by a registered HR professional.

Discussion
Mr Maserumule asked what level of qualifications was required of a registered HR professional.

Dr Abbott replied that HR professionals are registered at different levels. There are both one and two year diplomas. It was required that they have experience as well as have completed a candidateship program. As a professional body, SABPP was required to have membership standards.

Mr Motau stated that self-interest was often the best motivator, so there was nothing wrong with SBPP having self-interest in the matter. What would smaller companies do if they were not able to afford the expense of having an HR professional? What were some examples of amendments that undermined the Employment Equity Act?

Dr Abbott replied that there was a large industry of consultants at reasonable prices that did the required HR work for smaller companies. SABPP was more interested in empowering companies to conduct HR work themselves. There was also a new program in action that placed new HR graduates in smaller companies. With regards to amendments undermining the Act, she referred to the amendments to section 42 where the list of indicators of substantive compliance had been removed as well as the removal of the preference for taking engagement on the issue of compliance outside labour court procedures. SABPP felt that placing the matters directly in the hands of the labour court was undesirable.

Ms L Makhubela-Mashele (ANC) sensed that SABPP was questioning the reports presented by the Employment Equity Commission (EEC). The methodology used for the report produced by the SABPP was requested. How did the SABPP reach the results within their report, which led them to question the report used by the Committee?

Dr Abbott replied that SABPP used the same figures as in the EEC report, so there was no methodology for the collection of new statistics. The differences within reports emerged in the comments regarding the figures. The comments in the EEC report were not reflective of the figures, as observed by the SABPP. As such, it was a different interpretation of the same figures.

The Acting Chairperson outlined that SABPP’s submission stated that in order for employment equity to succeed, there needed to exist a higher level of economic growth. He stated that the notion of growing the economy was used in many instances to try and avoid changes that were required. With regards to self-regulation, it was certainly ideal to use self-regulation. However, due to the apparent lack of compliance, it an increased budget for more inspectors was more important and more likely to succeed.

Dr Abbott replied that she was not implying that lack of economic growth should be used as an excuse; rather, when the Act was put in place, there was a hope for growth and less emphasis on the actual development of equity. Therefore, economic growth was not an excuse but a contributing factor. Self-regulation was to be used more to continue compliance pressure alongside inspectors.

Mr Maserumule asked what the process was for upgrading the skills of an HR professional.

Dr Abbot replied that there were extensive programmes in place to help upgrade skills and there was also extensive opportunities for people to improve their knowledge.

Health Professional Council of South Africa (HPCSA) submission
Professor Tholene Sodi, Vice President of HPCSA, explained there were 12 professional boards constituting the HPCSA. The professional board for psychology retained complete control over the use and development of psychological testing and all that was related to that area. The HPCSA put forward only one suggestion for amendment, which was to include in section 4(d) of the Employment Equity Amendment Bill that only bodies appointed or delegated by the HPCSA were to conduct psychological tests or assessments.

Ultimately the professional board for psychology retained complete control over the use and development of psychological testing and all that was related to that area. With regards to psychometric testing, the development of this form of testing in South Africa was created in an environment that was branded by unequal distribution of resources based on racial categories. Over time, psychological testing has transformed from being used as a tool to perpetuate colonial and apartheid ideals to a tool that was responsive to the socio-cultural needs of South Africans.

Prof Sodi presented the following as reasons for the need to regulate psychological testing in South Africa:
▪ Based on the mandate of the Professional Board for Psychology, it was apparent that psychometric testing was to be controlled and regulated by the HPCSA
▪ Psychological testing, based on its history in SA, contained the ability to decide the fate and destiny of individuals and as such demanded regulation
▪ Endless number of psychological tests were currently flooding the market and the sheer number of these tests required control and regulation to ensure the protection of the public

The suggested change to section 4(d) of the Act was as follows:
Psychometric [Psychological] testing and other similar assessments of an employee are prohibited unless the test or assessment being used –
(d) “has been certified by the Health Professions Council of South Africa established under the Health Professions Act, 56 of 1974 or any other body appointed or delegated by the Health Professions Council of South Africa to certify such tests or assessments.”

Discussion
Mr Nyekemba asked if he was correct in understanding that the submission suggested that in any matter relating to psychometric testing, the HPCSA was to be the one performing or in charge of the testing.

Prof Sodi replied that indeed all testing should be conducted by HPCSA as the Health Professions Act indicated that the psychology board was in charge of any and all tests.

Mr Maserumule asked where indigenous health was located by the HCPSA.

Prof Sodi replied that this was an interesting point as some argued that the work of psychologists and the work of traditional healers were two sides of the same coin. That is, the work of the two institutions was strongly similar and indirectly aligned. The only difference was that psychologists were regulated by the Health Act and traditional healers were not. However, an Act had been passed by Parliament that aimed to regulate the work of traditional healers.

Mr Nyekemba followed up by asking which part of the amendment exactly was HPCSA not satisfied with.

Prf Sodi replied the HPCSA did not have a problem with the proposed amendments as they stood but their suggested amendment reflected anxieties around the act. HPCSA was not particularly distressed by the amendment.

Mr Williams outlined that as it stands, the Amendment Bill stated that any body appointed by law could perform the testing; however, HPCSA argued that it should be appointed by the health council. As such, what bodies existed that HPCSA could appoint?

Ms Thandeka Moloi, Chairperson of the HPCSA Psychometrics Committee, replied that there was currently no other body that conducted certified tests.

Cape Chamber of Commerce and Industry submission
Mr Michael Bagraim, attorney for the Chamber of Commerce and Industry, began by stating that Cape Chamber of Commerce and Industry was the largest chamber across Africa. It has become known my many as the voice of business throughout the Cape with a majority of its membership made up of small business. To keep matters concise, the Cape Chamber chose to comment on only some of the issues. It was important to keep in mind that Chamber was directly aligned with Business Unity South Africa (BUSA) and as such clearly endorsed the negotiations that took place within Nedlac. The Chamber recognised and applauded the work conducted by Nedlac on the amendments. However, the Chamber also believed that the Nedlac process was greatly overruled by the recommendations made by the Portfolio Committee despite agreements that were reached at Nedlac on the Labour Bills.

The Chamber recommended that the largely changed amendments be taken to a Regulatory Impact Assessment (RIA) again as all parties placed great merit on RIAs and a proper investigation would cause no harm. In addition, the Chamber viewed the proposal on compliance and enforcement as entirely problematic. This proposal would lead to colossal time wastage, legal costs as well as frustration. It appeared as though government was aiming to facilitate a speedy form of enforcing compliance that did not allow the business community from objecting or appealing any compliance orders. These compliance and enforcement measures would lead to a backlash as well as a backlog at the Labour Court. Rather, the Cape Chamber suggested that the issue be solved by increasing the number of inspectors with training and better wages. Currently, inspectors were under resourced, underpaid and under trained. The issue was not one of legislation but rather one of enforcement. Mr Bagraim stated that many of the proposed amendments would place added pressure on the adjudication process as opposed to the enforcement process.

Mr Bagraim argued that the provisions in the Employment Services Bill were very idealistic but would probably never be able to be properly enforced. Ultimately, the amendments would place a huge burden on the Department of Labour, which was already facing budget limitations. In addition, the Chamber deemed many of the suggested fines to be harsh and appeared to be trying to criminalise labour law.

With regards to the business community, Mr Bagraim argued that it was important to understand its negative perception which was all pervasive and needed to be turned around. The Minister of Finance had announced that businesses were not investing in their own businesses and were not releasing finances to grow their business. In addition, businesses were in possession of large sums of money, over R15 billion, but were investing abroad rather than in South Africa because international investments guaranteed businesses returns on their investment. The international business community had a negative perception of South Africa’s system of hiring and firing employees. That perception needed to be eliminated and the economy also needed to grow and create more jobs.

Discussion
The Acting Chairperson wanted to emphasise that Nedlac was a very important player and its efforts were greatly appreciated as Nedlac has greatly helped the Portfolio Committee. However, Parliament was obligated to take all submissions into consideration before the provisions in the Bills were to be implemented.

Mr Bagraim stated that he did in fact respect both the work of Nedlac as well as Parliament. However, SA was in need of a body such as Nedlac, and it was of no help to help ignore this institution. While Nedlac was not necessarily ignored, it also was not receiving enough value in the Committee's discussions. It made the business community despondent to have spent two years negotiating and reaching compromises and then have these negotiations ignored.

Mr Nyekemba asked for specific areas in which the Chamber felt that the Parliament was undermining Nedlac. Why was it so difficult for employers to observe the laws of compliance?

Mr Bagraim provided the examples of the “six months to the three months” and the “balloting of the trade unions” (which was a Department of Labour proposal) as examples of Parliament undermining Nedlac; however, these examples were not relevant to this discussion.

Mr Motau asked where the failure was in regards to the law not being able to procure enforcement.

Ms Makhubela-Mashele wanted to emphasize the issue between Nedlac and Parliament. Members applied their own in minds within the law making process and whatever they decided, it was the best fit for the nation. She asked that the work of Parliament be respected. Why were businesses not investing locally?

Mr Bagraim replied that there was a perception in the business community that returns would not be good.

Mr Williams also responded about Nedlac and stated that Nedlac merely assisted in the decision-making. He also wanted clarity on the intention of business. The understanding was there was little compliance and Mr Bagraim admitted that business was breaking the compliance law. Mr Williams was under the impression that business wanted to continue to break the law and in turn also have fewer penalties as well as decreased legislation. What was business asking for at this point?

Mr Nyekemba asked why the Chamber was suggesting an increase in the number of inspectors. What was the point of more inspectors since it was already out in the open that business was not complying?

Mr Bagraim replied that compliance was at an all time low and there was a need to make sure that the issue of businesses breaking the law was put to an end.

The Acting Chairperson wanted to raise a few points of emphasis. Firstly, the budget of the Department of Labour was in fact stretched and required an increase. The Committee had previously discussed better training and higher wages for inspectors and as such they were in unison with that point. He found it interesting that there was a differentiation between businesses breaking the law versus individuals. The intention of the amendment of the laws was to criminalise non-compliance and what the inspectors had exposed, was ignored by business. The Acting Chairperson thanked all those who presented their submissions.

The meeting was adjourned.
 

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