Employment Equity Amendment Bill; Employment Services Bill: public hearings Day 2

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Employment and Labour

08 August 2013
Chairperson: Mr M Nchabeleng (ANC)
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Meeting Summary

The Committee met for a very packed second and final day of public hearings on the Employment Equity Amendment Bill and the Employment Services Bill, listening to the oral submissions of eight organisations.

Solidarity, the trade union, focused on three issues: the legally and morally bankrupt government policy of race-based affirmative action, amendments to section 42 of the Employment Equity Amendment Bill and comments on an alternative model for affirmative action.

Members raised questions around non-compliance, how long until Solidarity envisaged equity in the workplace and what Solidarity thought was an equal society. The Chairperson said that the time to forget about the past was not now as the past determined the future. He emphasised the need for dialogue because as long as each sector of society was not in proportion to racial demographics, people would always raise concerns.

The Centre for Constitutional Rights (CCR) from the FW de Klerk Foundation looked at equality as defined by Section 9 of the Constitution and how labour legislation needed to be looked at in this context, and also equality and compliance in the labour market.

Members asked if the CFCR was saying the EEA Bill would contribute to higher unemployment figures in this country, asked about its view of the definition of foreign nationals in section 1, and spoke about the context in which the Constitution was made which no longer applied now.

The Association for Test Publishers (ATP) submission focused on the clause amending Section 8 in the Employment Equity Amendment Bill and its concern over the word “psychometric” and the implications of the proposed amendment.

Members questioned the relationship between the ATP and the Health Professions Council of South Africa (HPCSA) which had made a submission the day before.

Business Unity South Africa (BUSA) was largely in support of both Bills. It noted concern specifically about employment services, the increased unemployment rate amongst the youth, administrative burdens and the specification of fines in the Employment Equity Amendment Bill. The second part of the submission focused on the Employment Services Bill noting its concern about enforcement, compliance and fines.

The Committee discussed the resistance of business towards compliance, NEDLAC and the need for social dialogue, BUSA membership and, particularly, non-compliance.

The Society for Industrial and Organisational Psychology of South Africa (SIOPSA) commented on the need for control of certain types of assessment, the broad definition of assessment in section 8, the way forward and gave recommendations.

Members questioned the “unprofessional” comments made about the HPCSA, its recommendations for changes in the Employment Equity Amendment Bill and about the differences between the HPCSA and SIOPSA.

The South African Disability Alliance (SADA) looked at the Employment Services Bill and commented on sheltered factories, the 2008 UN Convention on the Rights of Persons with Disabilities and recommendations for the Employment Services Board. It said the Bill was not in conformity with the UN Convention which called for the integration of those with disabilities into employment. Sheltered employment factories were segregated and did not respect the rights of people with disabilities to work in mainstream society with the support when they should need that. It advocated a move away from segregated workplaces and a move toward towards the open labour market, promote productivity through the employment of non-disabled workers alongside disabled workers and towards the gradual commercialisation of facilities for supported employment.  The employment situation of people with disabilities had not changed much since 1994. The Employment Services Bill, in its current form, was repeating the traditional message to people with disabilities that they were unlikely to be economically productive condemning them to lives of poverty and unemployment.

The Committee discussed sheltered employment factories, where the Bill should be going in this regard and what the possible alternatives were.

The South African Institute for Race Relations (SAIRR) looked at the Employment Equity Amendment Bill and its wide ranging changes, key assumptions and increased penalties. The submission moved onto the Employment Services Bill in terms of its administrative burden and the regulations of private employment agencies. The submission was not completed as the Chairperson cut it short due to it running over the allocated 20 minutes.

The Members raised points about the position of the SAIRR on certain matters and sought clarity on  comments made during the submission.

The eighth and final submission was made by the Congress of South African Trade Unions (COSATU) which was broadly in support of both Bills. On the Employment Equity Amendment Bill, it supported the amended definitions and the inclusions of certain provisions, commenting on the streamlining of compliance and enforcement mechanisms and fines. On the Employment Services Bill, private employment agencies were discussed amongst other provisions.

The Committee discussed labour broking and the union’s stance on foreign labourers.

The Committee would now go forward with the deliberations taking in account the submissions made over the past two days.

Meeting report

The Chairperson made it clear there would be 15 minutes allocated for each submission after which there would be a question and answer session. He advised the organisations to leave more time for question and answers for Members to ask questions of clarification as they already had the submission and could still go through it during deliberations. The more time for Q and A the better.

Solidarity submission
Mr Johan Kruger, Head of Solidarity’s Research Institute, said the submission would focus on three aspects of the Bills which related to the legally and morally bankrupt government policy of race-based affirmative action, amendments to section 42 of the Employment Equity Act Amendment Bill (EEAAB) and comments on an alternative model for affirmative action. 

Looking at affirmative action and representivity, he said the government’s policy was driven by an outcomes-based affirmative action programme based on racial numbers and not an input-based programme focused on training and development. Solidarity considered this demographic representivity as legally bankrupt as the Constitution only allowed for two instances where broad representation was required - this was in section 195 (1)(i) and section 174(2) which contradicted the notion that demographic representation was required and/or sanctioned. These sections of the Constitution spoke to the Public Service and the Bench. Representivity represented a form of social engineering which was designed to mechanically use gender and racial representation for the future. The programme was not looking to the past but was social engineering for the future and was contrary to the Employment Equity Act. He highlighted the ongoing case in the Western Cape between Solidarity and the Department of Correctional Services where even in the designated racial group, posts were being based on pure racial profiling. This policy was not showcasing South Africa’s rich diversity but instead sought a workplace where everything looked the same. It was a policy based on race, numbers and statistical calculations with little to do with corrective action. This was also seen in the case of Naidoo vs. the South African Police Service (SAPS). He gave examples of the mathematics that was used to ensure representivity. Against this backdrop, it was important to look at why some of the amendments were being proposed by government.

Mr Kruger then turned to the proposed amendments to section 42 which stated that important factors must be taken into account when assessing whether a designated employer was implementing affirmative action in compliance with the Act were scrapped. Factors that must currently be taken into account were a pool of suitably qualified people from designated groups from which the employer may reasonably be expected to promote or appoint employees, economic factors relevant to the sector in which the employer operates, present and anticipated economic and financial circumstances of the employer, the number of present and planned vacancies that exist in the various categories and levels and the employer’s labour turnover and, lastly, progress made in implementing employment equity by other designated employers operating under comparable circumstances and within the same sector. The situation now was that national racial demographics was the most important factor and the factors mentioned above were being taken into account less. This was a step backwards and was Solidarity’s big critique.

Further critiques for section 42 were that the Minister, after consulting NEDLAC (National Economic Development and Labour Council) would be empowered to issue regulations forcing companies to apply the national demographics in regions. This meant an unwarranted expansion of the Minister’s powers and would empower the state to impose national demographics and disregard unique regional differences.

Mr Kruger said an alternative model should be considered whereby people would be affirmed by fostering a culture of training in SA to enable people enter the labour market. There should also be an emphasis on the improvement of education which would enable people to enter the work environment and improve skills supply which would lead to economic growth and job opportunities. Poverty, inequality and unemployment would be addressed in this way. Affirmative action should be applied in a more nuanced way as representation could not be managed as a quota. Affirmative action should also be applied within the framework of the Constitution to ensure excellent service delivery and the right of all citizens to equal access. With an input model, affirmative action could help toward building human capital so that the individual may access economic opportunities, investments were made in people and values such as self-reliance and hard work were taught by religious and education institutions.

This was a call for a national debate - in a mature democracy, solutions should be sort around a table before legal steps were taken. A climate for social dialogue should be created. A new national debate and consensus on affirmative action should be sought as stricter legislation would not bring about a more equal society. The ESB was deemed unworkable and unrealistic in its current format, establishing
state control through unwarranted state intervention in the labour market.

Mr F Maserumule (ANC) was interested in the name Solidarity and asked if it had anything to do with Poland. He asked if Solidarity were given an ideal practical situation in the past 20 years, in the farming communities in the Western Cape for example, to deal with non-compliance what would they do.

Mr S Motau (DA) said the submission sounded absolutely brilliant at an intellectual level, however, the history of the country was that white South Africans had benefitted from job reservation under apartheid but Solidarity had done a complete turnaround on affirmative action as they critiqued it now. Here was a gap which needed to be bridged and how could this be done. He asked what Solidarity believed needed to be done to create the right climate as social dialogue was through NEDLAC. What would they do to create that climate of social dialogue that was not working in NEDLAC?

Mr A Williams (ANC) read out statistics from the Employment Equity Commission’s Annual Report 2012/13 which found that, at top management, 72.6% were white and 80% were males, in senior management, 62% were white and of 69% were males and for those professionally qualified, 45% were white and 58% were male while there were only 1.4% of people with disabilities in the workplace. Fundamentally after 19 years of democracy, this was what happened. So how long did Solidarity envisage until there was equity in the workplace? There had not been much transformation at all while Solidarity thought the legislation to speed up this process was detrimental. For 19 years, the change had not been much so were they envisaging change over 500 years?

Mr E Nyekemba (ANC) welcomed the submission and asked if Solidarity’s proposal was dealing with the present or trying to deal with the past? He sought elaboration on Solidarity’s idea of an “equal” society as he did not hear them talk to those with disabilities and they were not separate to the society that was spoken about. One of the requirements of affirmative action was to make sure women were affirmed, regardless of race, and he did not hear them say anything about women.

Mr Kruger said they were not related to Solidarity in Poland but started as a mine workers union 110 years ago. He said non-compliance was linked to effectiveness on the side of the Department of Labour (DoL) to assess whether employers were compliant or not. Using a bigger stick to dish out bigger fines was not the answer to non-compliance but what currently stood in the EEA needed to be enforced more efficiently. He noted that Members were saying nothing had changed in 19 years but the question was whether this was the correct tool to measure change. Should other means be looked at such as input-based affirmation action as their submission had stated?

Mr Dirk Groenewald, from Solidarity, looked at the case of the farm worker saying the amendments were taking away section 43 which enabled any employee or organisation to go to the Department of Labour (DoL) and report non-compliance. For example, if employers were just taking into consideration the pool of suitably qualified but not taking into account the broader socio-economic population or vacancies. With the proposed amendments, the employee would be in a much worse position than under the current Act which provided for a means whereby employees could complain.

Mr Nick Arnold, Solidarity: Head of Legal Services, added that Solidarity was also concerned about the difficult social issues in the country and would like to be part of and contribute to the solution through social dialogue. At times, debate outside of NEDLAC brought many solutions, as was established with the mines under the leadership of Kgalema Motlanthe, and he did not see why something similar could be established, not necessarily through NEDLAC, but where all stakeholders were involved. This was just one example. He noted the employment equity statistics but said most South Africans lived in poverty. If these people were used to fill managerial positions, would this contribute to the solution? This was Solidarity’s concern - they wanted to see a model of affirmative action which contributed to the lives of the majority and to look further than inflexible numeric targets which was not the real solution. This was a question for all role-players so that the legislature served the purpose of bettering the lives of South Africans.

Mr Kruger said with the model the government tried to achieve, people on the ground would never be affirmed because the model currently being sort was only one of the answers. To continue along this path, within the next 500 years, equity would probably not be reached. He fully understood that affirmative action was dealing with the past history of SA and Solidarity had no problem with affirmative action per se but they did have a problem with the current model. There was a future-looking model that gave people the skills and education to enter the labour market. They agreed with the provisions on women and those with disabilities but this submission was mainly focused on race because that was where they saw a lot of issues. The affirmation of those with disabilities and women of all people needed to be addressed. However, as shown in the case with the Department of Correctional Services and the Barnard case which was on appeal in the Supreme Court of Appeal, there was number crunching of races amongst women too.

Mr Groenewald added that the section 42 factors were the checks and balances for affirmative action and without them, each and every court would be required to rule on a subjective level whether there was compliance with the Act. This would go back years in our current jurisprudence with regard to affirmative action and would result in a number of different judgements with no precedent for what was right or wrong. With the current situation of the courts, this would open the floodgates.

The Chairperson said that Solidarity was not the only ones to raise that issue of the courts and lack of precedent and the Committee would take this up. What happened in the past 19 years was not indicative of transformation. There was no doubt about the power of certain racial groupings within the economy which determined the level and extent of transformation in society. The point “to forget about the past” as people so often said, was not now. The past determined the present state of many racial groupings and it could not be asked of these people to forget about the past. Perhaps, we should ask those who benefitted from the past under apartheid to forego their benefits, but this would be unfair and plunge the country into crisis. Every opportunity afforded must be for dialogue and engagement in NEDLAC, civil society and everywhere else which must also be followed by action which can be seen. On the basis of some statistics, there was an impatience for transformation and this could result in the majority revolting as those who held the economic power were not willing to comply. One needed to be sensitive to the fact that, at the end of the day, transformation would be judged on the basis of numbers and not the vacancies left open because employers could not find a suitably qualified black, coloured or Indian person as was suggested as this was extremely ridiculous. As long as sectors of society were not in relation to the proportion of racial demographics, people would always raise concerns.

Centre For Constitutional Rights (CFCR) submission
Mr Johan Kruger, CFCR Director, highlight the key points of the submission. The adoption of the new Constitution meant the nation needed to work in a particular framework in terms of particular constitutional values. One of these values was real, substantive equality which went hand in hand with dignity.

Mr Kruger went on to quote Justice Ngcobo in the Constitutional Court’s judgement in Affordable Medicines Trust and others v Minister of Health and others, which was important to the discussion, “what is at stake is more than one’s right to earn a living, important though that is. Freedom to choose a vocation is intrinsic to the nature of society based on human dignity as contemplated by the Constitution. One’s work is part of one’s identity and is constitutive of one’s dignity”. This statement cut across race and gender and did not speak to one particular race. This was the mindset which the Committee needed to have when considering new legislation relating to the labour dispensation.

He explained that labour legislation needed to be looked at in the context of equality in principle and particularly, substantive equality and creating an environment where there was effective, restorative justice where everyone benefited. The benchmark here would be the Van Heerden case heard in the Constitutional Court which raised a number of questions for the interpretation of Section 9. The past could never be forgotten but what was dealt with here was the future of SA and children that would have to earn a living in terms of the Bills considered for adoption.

With labour legislation, real transformation or restorative justice could not be looked at in a vacuum - there was a need for substantive, real jobs where various factors needed to be considered such as education and growing the economy. The labour environment needed to be fed with skilled, educated and well-trained people where they could make applications on an equal par regardless of race or gender.

Mr Kruger emphasised that nowhere in the Constitution was there reference to numbers and we needed to be very careful of reengineering society based on race because this was not what the Constitution called for nor what equality or restorative justice was all about. The Constitution stated that no one would be discriminated against on any basis but with the caveat that we had to restore justice and create equality in terms of the imbalances of the past but not in terms of numbers or demographic representation. The closest that the Constitution comes to calling for demographic representation was with the specific reference to the public service, the national prosecuting authority and the judiciary and even then, the Constitution said broadly reflective of society based on race and gender. This was what needed to be considered when amending labour legislation in general.

With regard to equality and compliance in the labour market, the commercial environment needed to be viable as business in its very nature needed to make money otherwise there was no sense in having a business. Within in this context business had to choose the best person for the job regardless of race and gender. But in the context of education, training and economic development, the skills needed to be provided. He was not advocating for businesses but, in the context of justice, the nature of the industry needed to be kept in mind, based on the fact that business was about making money. Race and gender had nothing to do with this- if one was good and well-trained, one would always have a job and be on top. This was bearing in mind that one had the right education, skills and experience. The legislation needed to provide for that within the context of the Constitution.

Mr Kruger said the CFCR’s written submission made many comments on technical drafting which he would not go through but in principle their comments came down to constitutional constraints.

Mr Maserumule said it was an honour to engage with someone who was from FW De Klerk’s Foundation. He was about to say something which the presenter should not take personally - he was an Afrikaans speaking advocate brought up in that environment, schooled in that environment, attained values and norms under those conditions. Although he was subject to engagement, it was not wrong for him to conclude that he was not exposed to the conditions of ordinary workers in the mines, the farms or any other key area of the economy. He asked if the presenter had ever read about the conditions of the poor Afrikaners and how would he compare affirmative action as it stood under the current conditions of this government and how long should it take, on average, for this affirmative action to deliver quality services with regard to transformation and improving the quality of life of ordinary workers and poor Afrikaners.

Mr A Van der Westhuizen (DA) asked if the CFCR was saying this Bill impacted on future economic growth and contributed to the high unemployment figures in this country.

The Chairperson wanted to understand why the CFCR said the Bill was about the future and not the past – did they mean it should not be used as an instrument to correct past imbalances which were still present? CFCR also spoke about making the law in context. He understood what they meant and he agreed with this but it should be noted that this law did not exist on its own and other departments also took responsibility to ensure that this law was complied with in all components of government. We should not shy away from the fact that the law must foster equality and the spirit of the Constitution and the law could not wait for certain conditions to appear but should be used to ensure that it facilitates these conditions to occur. One of yesterday’s submissions said the Employment Equity Act was interpreted by some as being there to get rid of unfair discrimination which implied that "there could be fair discrimination" and the Chairperson wanted Mr Kruger’s opinion on this.

Mr Kruger said that he was indeed an Afrikaans speaking lawyer by trade but he grew up beyond the borders of the country, not necessarily in an Afrikaans community. He spent a large part of his career working in the office of the previous Minister of Defence, Mosiuoa Lekota, where he was exposed to the horrible conditions surrounding soldiers and the plight of the weak in society who were unprotected. Based on this, he felt he was adequately equipped to speak about the suffering of a variety of groupings when it came to the issue of human rights. With regard to the interpretation of affirmative action and the difference between the past and today was that today, we lived in a constitutional democracy which was not the case previously. Today, we lived in an environment where two wrongs did not make a right and so we could not use examples of the past to justify the actions of the present. Today, there was one test and one test only - whether it was constitutional bearing in mind the damages and suffering of the past. He thought what the government was trying to do to ensure an equal footing was honourable but it was veering from this path. Mutual respect needed to be emphasised.

On the notion of fair discrimination, he certainly saw grounds for this which the Constitution provided for in section 9(5) and the interpretation of this section was exactly what was being discussed in the Van Heerden case where he felt Judge Sachs had expressed himself quite eloquently when he said that section 9(2) of the Constitution needed to be read seamlessly with section 9(5) which made it clear that before there was discrimination it needed to be established that this discrimination was fair and aimed at real restorative justice. Judge Sachs said there can be discrimination but it had to be deemed fair under section 9(5). This was the point of discussion in determining what equality was and what was fair.

With regard to labour legislation being part of an array of government legislation to take on inequality, Mr Kruger fully agreed with this as labour legislation in itself could not guarantee equality and was one of the tools which could ensure equality if it was supported by other tools such as quality education, fair treatment in society, job creation and economic growth. Inequality in the workplace needed to be treated as a current issue as the situation might not be the same in five years time or as it was five years ago. This meant this legislation was relevant for its time and so it must be reviewed in the context of the Constitution.

Mr Nyekemba said the amendment of the Bill under section 1 emphasised inclusion of even foreign nationals that were in the country before 1994, who were not necessarily regarded as citizens of the country before 27 February 1994. Was it correct to say the CFCR’s view was that we must not, as a country, include them even if they passed the relevant immigration tests?

Mr Kruger said this was just the opposite. The CFCR agreed to that fact that employees must be protected but their reading of the amendments to section 1 of the Bill would exclude certain foreigners in SA who were here legitimately, were allowed to work but would not benefit from this legislation. This was their concern. This was not about race but the issue of equality as certain people could not be excluded on the basis of their nationality especially if they were here legally. This may be an incorrect reading but was how they understood it.

The Chairperson said his logic around the lobbying made in context and if the law did not apply that it needed to be changed did not make sense as the context in which the Constitution was made was completely different in the context of a Government of National Unity and transitional settlement between the ruling party and those that used to rule in the past. This context no longer applied now

Mr Kruger proceeded to respond but the Chairperson stopped him as this was not for reply as his time was done.

Association Of Test Publishers (ATP) submission
Mr Hendrick Kriek, ATP Chairperson, introduced the ATP as a group of individuals and groups that design and publish tests which could be used in industry for selection purposes or the development of employees. His submission would focus on section 8(d) in clause 4 of the Employment Equity Bill.

He highlighted that people working within the industrial psychology field were concerned about the word “psychometric” where there was a suggestion to broaden the definition to all other tests in the Bill. The rationale behind this was the interference of interviews, performance management systems and different kinds of assessment. The suggestion was to change the word “psychometric” to “psychological” and all other test assessments which would broaden the scope. All assessments must be fair, must be scientific and must be reliable. ATP was happy with this clause as it ensured that employers complied with scientific requirements and they were very pleased with this.

Mr Kriek said clause 4 amended section 8(d) in the EEA by adding the specific requirement that tests or assessments must be certified by the Health Professions Council of SA (HPCSA). The ATP’s concern with this was that the HPCSA would have to classify each interview, which he thought was not the intention. As it currently stood, this clause could cause more confusion. In line with the HPCSA, psychometric tests could be thought of as a medicine – some tests were very complicated which could be compared to schedule four medicines. On the other hand, there were tests used in the screening process for employees which looked at the minimum requirements which were frequently available on line for Human Resources (HR) for use in industry on a day to day basis. These kinds of assessments, the ATP felt, did not need to be certified by the HPCSA. The way that the Bill currently read was that the HPCSA would need to classify all these tests. The ATP felt this amendment inserting section 8(d) was redundant and problematic.

In terms of context, “psycho” meant person and “metric” meant test so a psychometric test was a test of the person where a psychological test was closer to psychological constructs such as psychological profiling. Based on this, the ATP's advice was for the Bill to rather speak about psychometric tests as it was broad and included many aspects as opposed to psychological tests.

Mr Kriek explained the HPCSA was currently reviewing and revisiting their classification of these tests according to a medicine class one or two. At the moment there was a backlog of almost three years for some tests which still needed to be classified while in the last year, only one test had been classified. With the proposed amendment, the HPCSA would have to overcome the backlog and classify each and every interview and test which was a concern for the ATP.

Mr Nyekemba understood that the submission was around section 8(d). For clarity, he questioned the involvement of the HPCSA in this section.

Mr Motau asked if this issue had been taken up with the HPCSA because perhaps they could find common ground.

Mr Maserumule questioned how they viewed bodies which were outside the scope of health professionals such as traditional healers - were they viewed as unprofessional and different?

The Chairperson asked if they were averse to engagement with the HPCSA.

Mr Kriek was concerned about the phrase “or assessments” which included interviews held in all organisations in SA - as this was an assessment by definition and these questions needed to be certified by the HPCSA. From this, one could imagine the burden on the HPCSA or any other body to work through the applications. Hence they were concerned about the practical feasibility - no matter which body was responsible.

Over the years, the ATP, and all other such bodies, had engaged with the HPCSA about the framework of classifying tests. Some tests were not within the domain of the HPCSA as they had nothing to do with health or psychology but were within the domain of the DoL which looked at the certification of artisanal assessments.

Mr Kriek replied about traditional healers saying they were accommodated in the HPCSA but some of their medicines fell outside of the schedules and scope of the HPCSA. This was the ATP’s point regarding certain tests and psychological assessments as they could be used wrongly and were dangerous if applied wrongly. The ATP’s recommendation was to either remove section 8(d) or to classify it as “psychological tests” certified by the HPCSA. The proposed wording was in the ATP technical document

Business Unity South Africa (BUSA) submission
Ms Vanessa Phala, BUSA Executive Director: Social and Transformation Policy, said she was speaking on behalf of businesses belonging to BUSA and those engaging in the NEDLAC forums. Business understood that transformation made sense to move the country forward. BUSA had a dedicated portfolio to deal with transformation. Within NEDLAC, there had been agreement on these two Bills which was not the case with the previous two Labour Bills.

BUSA supported the Employment Services Bill, in particular, its mechanisms to facilitate youth unemployment. Ms Phala explained that while BUSA supported many areas of the ES Bill, they were concerned that employment services for the promotion of employment required a number of elements in practice that would be pivotal to the ES Bill achieving its objectives. These elements were speedy and responsive processes, implementation and decision-making, easy access to employment services and, particularly for small business, reduced administrative burden.

As much as there were areas of agreement, there were also areas of disagreement with particular clauses of the ES Bill. Under clause 6, BUSA supported the need to promote employment of youth and other vulnerable work seekers. Under this clause, they note their support for a youth wage subsidy or incentive. The high unemployment rate amongst the youth, required interventions that would assist business to create jobs for the inexperienced youth. BUSA was aware that National Treasury was working on something to deal with the youth wage subsidy and they were eagerly waiting to engage them on this.

Implementation of clause 8 as proposed could lead to unnecessary delays. The Minister should be enabling and regulating foreign nationals in order to promote the acquisition of skills and work seekers. BUSA was unable to support clause 10(2) as they believed it could potentially place unnecessary administration burden on employers, particularly small businesses and the department's capacity to implement. BUSA welcomed the proposed establishment of the Employment Services Board as stipulated in clause 20 and recommended that the constituents in NEDLAC and, in terms of schedule three, supported the list of offences for which fines can be imposed but for the purpose of certainty would request that the maximum fine per offence be specified.

Ms Tanya Cohen, BUSA negotiator, looked at BUSA’s comments on the Employment Equity Amendment Bill (EEAB). She said there were a number of areas of agreement but within the context that business did not plan an adequate role and the Act needed to be supported by other mechanisms. Significant areas of agreement included section 6 which dealt with equal pay for equal work and the onus of proof were included in the way that it was consistent with the Constitution. This was an area looked at carefully in NEDLAC and was a key area of consensus and compromise. There was also agreement on section 10, also linked with section 48, which said that discrimination matters and sexual harassment could be referred to the Commission for Conciliation, Mediation and Arbitration (CCMA) provided there was a full right of appeal. This was supported by BUSA as it promoted speedy accessibility and ensured full recourse to justice before the Court to protect the rights of dignity and equality.

In section 21 and 55, BUSA agreed to remove the requirement for separate reporting for small business as an option. They noted that this agreement was on condition that there needed to be a note in the Explanatory Memorandum in this regard. In section 42, there was a compromise agreement on the assessment of compliance with the deletion and addition of certain clauses. In section 45, BUSA supported that the failure to comply with the Director General's request or recommendations provisions had been strengthened together with the opportunity for employers to have certainty within a specified time.

Ms Cohen said there were two areas of concern relating to enforcement and compliance and fines. In terms of enforcement and compliance, BUSA supported improved compliance and greater accountability in order to promote employment equity and welcomed the intention and supported the streamlining of the process. BUSA recognised the increased resourcing and improvements and efforts made by the Department to enhance the capacity of Inspection Services and recognised that employment equity was part of the everyday business process especially by industries that had been around for longer. BUSA particularly welcomed ratification by the government of the International Labour Organisation’s (ILO) Convention 81 on inspections this year. This should be taken into account with these provisions. Convention 81 was a priority Convention which specified, in Article three, that the functions of the labour inspectorate included securing enforcement of legal provisions by the inspectorate as far as legally enforceable and to supply technical information and advice to employers and workers concerning the most effective means to comply with legal provisions; failing which, to bring this to the attention of the competent authority.

She turned to look at the DG reviews noting that many BUSA members had participated in them. From this there was recognition of progress in the Employment Equity Commission annual report and the indaba. In terms of failures with enforcement, this could be deliberately non-compliant employers which problem should be dealt with in a serious way, businesses which did not understand, which was where the role of inspection services came in, businesses which did not have the capacity to implement and inspectors who did not interpret the laws consistently and effectively. Inspections on employment equity should support improved compliance and professional, qualified, capable inspectors were needed to raise the right issues and tackle the correct problems. For this, effective allocation of resources for the inspectorate was needed.

BUSA supported the repeal of objections and appeals against compliance orders (sections 39 and 40) provided there was an additional step added: BUSA proposed that should compliance order objections and appeals be removed as per the amendment, that in addition, there should the option of a voluntary and speedy conciliation process, preferably under the auspices of the CCMA, before a matter was referred to the Labour Court. This was important as an option, not a compulsory step, and was not intended as a delay but formed part of the pre-process and voluntary compliance, which came out in NEDLAC. This option might iron out mistakes or misunderstandings before bogging down the courts and building a type of resistance.

BUSA did not support the amendment to make it voluntary for an inspector to request an undertaking of compliance by an employer. They would support the amendments that certain matters go directly to Labour Court without even a compliance order being required, provided the word 'compliant' was removed. The word “compliant” was problematic as it became an interpretive issue. Once interpretation was required, a pre-step was required to see if the issue could be resolved by clarification prior to going to court.

BUSA did not support a number of the amendments relating to fines. They supported the principle to have a more severe category of fines but believed the fines must be related to the transgression and should be targeted at securing the desired behaviour. Turnover had no relationship to the offence and was not suitable measure as it was a basic principle of law that the “fine must fit the crime”. Furthermore, the 2010 Regulatory Impact Assessment cautioned against turnover as an appropriate and effective mechanism to deal with non-compliance. BUSA provided two alternatives. One was to adjust the fines upwards by 300% or, if turnover was retained, to include a clause, similar to that in the Competition Commission, that considered the size of the business, the number of employees employed, the nature, gravity and number of contraventions, previous contraventions, steps taken to comply, turnover, profit after tax and the impact of the fine on the sustainability of the business and employment in the business.

In the area of omissions, and the duplication of fines, BUSA felt the duplication and splitting of fines should be avoided as it was a failure of consultation. This NEDLAC agreement had been omitted from the Amendment Bill and should be incorporated. In addition, the post-NEDLAC additions to fines should be deleted.

In conclusion, BUSA acknowledged the constructive role played by the CCMA in assisting the parties at NEDLAC to achieve much higher degrees of consensus in the negotiations on both these Bills. BUSA supported transformation in the workplace and the implementation of affirmative action measures to redress disadvantages in employment to ensure equitable representation in all occupational categories and levels in the workforce. They acknowledged that 19 years into SA's new democracy, black people, women and people with disabilities continued to be underrepresented in the country’s workforce and company boards. BUSA, as organised business, had committed to work with its members to support programmes for social and economic transformation.

Mr Nyekemba, as interim Chairperson, thanked the presenters. He opened the floor to Members noting comments were welcome but not political speeches.

Mr Maserumule said it was refreshing to engage with the captains of industry who took fundamental economic decisions. There could not be continual discussion without implementation especially after 19 years from the 1990 Groote Schuur Minute, the Pretoria Minute and so on until the transitional constitution - this engagement had to stop for implementation to occur. Practically, there was always resistance from big business to comply or an argument for business being slow to come on board. He asked if they were government, what would they do about non-compliance? Business was here and answers were needed as they could not continually merely talk.

Mr Motau wanted to hear BUSA’s comments on the perception that NEDLAC was seen as a talk-shop because decisions sometimes came out of NEDLAC but then fell by the wayside. He noted many presenters called for social dialogue but should this be done outside NEDLAC or was there anything to make NEDLAC effective? He wanted BUSA’s comments on the distrust among the social partners with (big) business on the one side and the government and trade unions on the other but never the twain shall meet.

Mr Williams saw the sections BUSA did not agree with were those dealing with the equity plan and the shortness of the time between being found non-compliant and the sanctions for not complying and the sanctions themselves. He wanted to know if there was any self-regulating component within BUSA, did a member just join and pay the fees or did they choose their members. There should be a better labour inspectorate but he also believed the time had come for government to take a hard-line with businesses which did not comply with the legislation. For 15 years (since the Act first came out in 1998) there had not been compliance by business purposefully as they would just pay the fines for non-compliance. Now that it was related to turnover there was more pressure. For business to use the excuse that 'they just did not know what do' was ignorant. Government could not pussy-foot around this issue and business had had enough time. If this legislation had been implemented 100% when it first came out, we would be in a much different SA today. He questioned if BUSA had any standards for business or could anybody join.

Ms Phala said BUSA acknowledged NEDLAC as a very important structure to drive social dialogue and there were good things about NEDLAC itself and the problem was not so much the structure but what was going in the structure itself. NEDLAC was needed to drive social dialogue and have conversations on key issues. A review of NEDLAC itself was very critical. The vision that everyone needed to have collectively was lost where everyone was pushing the mandate of the constituents without looking at the broader vision which needed to be shared. This also brought in the elements of distrust.

Ms Cohen said that if BUSA were government, they would do what was in the Act which was strengthening the mechanisms of enforcement, streamlining and emphasising areas which required more work. They would also ramp up enforcement big-time as, essentially, if there was a well resourced and independent inspectorate there would be greater achievements. Business also needed to look at and understand more what their motivators were in terms of transformation, since not enough businesses saw it as imperative and that it was about more than just compliance.

Ms Phala added if business were government, they would emphasise issues which came out of the plan such as barriers to transformation existing within employers which did not encourage the spirit of employment equity. Statistics and numbers needed to be looked at in conjunction with qualitative information to interrogate why there was not movement in the way there should be; and thus look at interventions along those lines as well.

Ms Cohen clarified that the BUSA recommendations were on intermediary steps to achieving outcomes to enable voluntary compliance where there was room for misunderstanding on both sides.

She said BUSA members paid to become members and there were no restrictions on who could become members. They agreed that a new time was coming and a hard-line on non-compliance was needed. Cases should not be bogged down in court which was were the role of intermediary steps came in and the position of BUSA was not to protect these members but ensure a zero-tolerance approach. There were some businesses which 'did not know' as these provisions were not simple and it was sometimes quite hard to get them in place especially if they did not have HR resources. There needed to be provisions for these businesses to avoid the costly court process.

Mr Nyekemba concluded that Parliament was not present at NEDLAC meetings but the public hearings helped them to understand in which areas they differed and what they differed on. This assisted the Committee when deliberating. He noted one of the MECs for the Western Cape was meant to make the next submission but had left.

Society for Industrial and Organisational Psychology of South Africa (SIOPSA) submission
Ms Kim Dowdeswell, SIOPSA Chair, gave come background to the Society which was established to ensure testing existed in the SA context as a value adding and ethical practice. Their activities included promoting fair assessments in the workplace. The submission had been compiled by People Assessment in Industry (PAI), an interest group of SIOPSA on behalf of their members. The Society gave input on the wording related to psychological testing in section 8 of the EEA. PAI had also brought out a number of publications dedicated to providing guidance to practitioners in terms of ethical test use.

In terms of the EEAB, individual members and SIOPSA as a whole, acknowledged the need for control to be exercised over certain types of assessments. This control can be achieved through the establishment of a considered and comprehensive test classification framework that differentiates between levels of testing and was a matter which rested with the HPCSA.

She highlighted the issues around section eight of the current Act which had a much broader definition of assessment than the current classification framework of the HPCSA. The current wording pointed to the fact that employees can experience unfair disadvantage through decisions based on information derived from tools other than psychological testing. Furthermore, when considering the certification-or classification- of tests and assessment devices, the different aims of using instruments to gather information about people must be distinguished between.

Ms Dowdeswell looked at the way forward and recommendations, saying SIOPSA opposed the proposed amendments to section 8 of the EEA as it was anticipated that it would result in an unsustainable situation. Added to this, practical and sustainable issues need to be considered from an implementation perspective. SIOPSA recommended the need for control over certain types of assessments. This control could be achieved through the establishment of a considered and comprehensive test classification framework that differentiated appropriately between the different types of assessments.

Mr Williams looked at the amendments and asked how the inclusion of “any other body which may be authorised by law” would change what currently existed. He did not see how the inclusion of these words would make a big difference.

Mr Maserumule asked if she was a practising fortune teller and what was it that SIOPSA did differently to what the HPCSA was doing.

Mr Nyekemba said the HPCSA did not have a problem with the insertion of section 8(d) but they wanted it to be changed so that it read that the appointment of any other body must be done by them. What he got from SIOPSA and the ATP was that they were not comfortable with that, especially when they referred to the capacity and resources of the HPCSA. He felt this was not professional to undermine the existence of the HPCSA and in this way was foul play.

Ms Dowdeswell said the inclusion of “any other body by law” only to be appointed by the HPCSA was not their position. The HPCSA had jurisdiction over the area of psychological testing and the standards applied to psychological testing and if they were going to be delegating to another organisation or body, that body needed to be knowledgeable of psychological tests.

On the point of foul play, the concern came from experience and the backlog seen in the tests submitted to  HPCSA for classification and the length of time it took. Another concern from a business perspective was the impact caused by having all businesses submit assessments which were not psychological to the HPCSA or another body which was appointed. This would result in a pile of paperwork which was not sustainable to get through.

She was not claiming to be a practising fortune teller but what industrial psychologists did was to take the science around people and their work behaviour and link this, scientifically, to certain requirements when recruiting for a particular job together with professional judgements. She used the example of an air traffic controller.

Ms Dowdeswell explained the ambit of the HPCSA was around matters psychological and people involved in that needed to be registered with the HPCSA. The EEA did not only deal with psychological tests but a range of other assessments and skills tests which was the core distinction.

The Chairperson thanked her for the submission noting the Committee would take the submission into account.

South African Disability Alliance (SADA) submission
Ms Undere Deglon, Disability Workshop Development Enterprise CEO, said the SA Disability Alliance represented and served as an umbrella body for a variety of specific organisations. SADA consisted of the QuadPara Association of South Africa (QASA), National Council for People with Physical Disabilities, Cheshire Homes, National Council for People with Cerebral Palsy, Deaf Federation of SA, Disabled Children’s Action Group, Down Syndrome SA, Autism SA, the South African Federation for Mental Health, Epilepsy SA, SA National Council for the Blind and Disabled People SA. Together, they had submitted extensive input on the Employment Services Bill.

One of the problems was that disability in the workplace was not looked at as if it were racism or gender discrimination. This was because the Employment Services Bill (ESB) catered for the creation of sheltered factories to allow those with disabilities to gain employment. The problem with SA was that disabilities were used as the blame for not finding employment. SADA wanted disabilities to be looked at from a social model and not a medical model since not having employment was not the cause of the disability but due to the unwillingness of employers to employ or provide accessibility for those with physical or intellectual disabilities or the unwillingness of society with a discriminatory attitude.

South Africa had signed the 2008 UN Convention on the Rights of Persons with Disabilities but the Employment Services Bill was not in conformity with the UN Convention. The Convention called for the integration of those with disabilities in all aspects of society including employment. It recognised the right to equal access to a work environment that was open and inclusive of people with disabilities as was stipulated in Article 27 “Work and Employment”. Sheltered employment factories were segregated and not open and did not respect the rights of people with disabilities to work in mainstream society with the support when they should need that.

Ms Deglon then looked at the comments of specific organisations. The first was the proposal by QASA to move away from segregated workplaces and to move toward open environments, side by side as equals. QASA noted that the existing “service product factories” had no track record in respect of promoting the employment of persons with disabilities. The South African Disability Development Trust (SADDT) and the SA National Council for the Blind said the Bill should promote the following principles: encourage personal development and advancement into the open labour market, promote productivity through the employment of non-disabled workers alongside disabled workers and point towards the gradual commercialisation of facilities for supported employment.

It was recommended that the membership of the Employment Services Board be expanded to include two persons, one woman and one man, with disabilities themselves. Furthermore, the Bill should allow for assistive services to ensure broader access to speech and the written word. There were also proposals for the establishment of a specific disability training chamber which should consist of one member nominated by NEDLAC to represent organised labour, one member nominated by NEDLAC to represent organised business, one member of the Department of Women, Children and Persons with Disabilities and three persons nominated by NEDLAC to represent the community constituency who were representing people with disabilities.

Ms Deglon reiterated that the sector had made substantive written submissions. Some SADA members were calling for the Bill to be halted and sent back to the “drawing board” to start anew. This strong reaction was due to the Bill’s failure to grapple with the required fundamental changes to the employment environment and the lack of systematic engagement with people with disabilities about the Bill and their employment aspirations and capabilities. SA had a legacy of segregated provision for people with disabilities in school, training and to a large extent in the labour market. The employment situation of people with disabilities had not changed much since 1994. In the absence of a fundamental change, this situation was guaranteed to worsen. The ESB, in its current form, was reiterating the traditional message to people with disabilities that they were unlikely to be economically productive or economically independent and condemned them to lives of poverty and unemployment.

Mr Motau simply said, "We have heard you".

Mr Nyekemba explained that with the sheltered employment factories, the Bill was trying to move away from that history and they should exist on the same footing as any other enterprise. He asked whether SADA felt this Bill was not addressing the issues of people with disabilities. He acknowledged that  government was not overseeing its target of 2% employment of people with disabilities. What was the alternative to sheltered employment factories?

Ms Deglon said she did not have a solution to sheltered employment factories but acknowledged they had a history and they could not be wished away. She asked why these factories were being amplified and being spoken about in the Bill. She felt the Bill, as a new piece of legislation, needed to encompass the spirit of the UN Convention which called for inclusivity and equality.

Mr Shuaib Chalklen, Special Rapporteur on Disability to the UN, said he had made a written submission on section 6 and the Bill, in its current form, was inconsistent with the UN Convention on the Rights of People with Disabilities which was ratified by the SA government. Chapter 6 was inconsistent with the Convention as it sort to regulate what should be done away with. He said there were many alternatives like supported employment practices and the Bill was a missed opportunity to address these challenges and encourage the employment of people with disabilities. He felt the obstacles hindering the attainment of the low target of 2% needed to be looked at and what should be done to get to that 2%.

Ms Terreblanche, Occupational Therapist, explained that from sheltered employment, people needed to move onto the open labour market. Sheltered employment factories were not the answer for promoting persons with disabilities into the open labour market as people with disabilities had the right to work in the open labour market but the support was not being provided by employers. NGOs were stepping into this role supporting people with disabilities in the open labour market with no extra funding. To find employment was one thing but to retain labour was a different matter.

The Chairperson said extensive deliberations would be held on the issue of sheltered employment. To be frank, he asked how sheltered employment could be made viable to actively contribute to the economy. He added the Committee had obtained a different perspective after meeting with the Portfolio Committee on Women, Children and People with Disabilities. The role of sheltered employment, as was now, was to facilitate employment into the open labour market, at least.

He echoed Mr Motau in that the Committee had heard and would take the points made into consideration. At 1.4%, not much progress had been made but this was also with other disadvantaged sectors of society. All these issues would be taken into consideration during the Committee’s deliberations.

SA Institute of Race Relations (SAIRR) submission
Ms Anthea Jeffery, SAIRR Head of Special Research, began with the EEAB noting that during the negotiations, all parties to the talks, including the ruling ANC, agreed on the need for affirmative action-based training and the provision of excellent education and not quotas or demographic representivity. However the quality of schooling had remained poor since 1994 with many pupils struggling to become literate or numerate on top of the high dropout rate. This had translated into a number of unemployed Africans as shown in the latest employment figures which had grown exponentially since 1994. Among African youths, this figure was even higher standing at 50% on the expanded definition. The number one aspiration of these people was to get a job, as studies had shown, while grants were not directed toward jobless adults. Having an income was also the foundation for self-reliance which was recognised by Finance Minister, Pravin Gordhan.

She said the EEAB introduced many wide-ranging changes with negative implications for economic growth and the generation of new jobs. Furthermore, the Bill brushes aside skills shortages and economic constraints. The EE Act also partially recognised the difficulties firms faced in meeting racial targets in these circumstances by allowing employers who fail to do so to cite the skills deficit in their defence. Whoever, these provisions, which provided at least some level of protection for employers against the unrealistic expectations of the EE Act, were to be removed under the Employment Equity Amendment Bill.

Ms Jeffery said the key assumptions underpinning the EE Act were unrealistic concerning the target for African representation at board and management levels which employers were expected to meet. This was unrealistic because the African population was both youthful and, for a variety of historical and other reasons, poorly skilled and experienced. Hence relatively few Africans had the tertiary qualifications appropriate for management posts. Linked to this, the skills shortage remained real which was compounded by the poor performance of the schooling system which resulted in an acute skills deficit where employers were paying premiums of between 30 and 40% to attract and retain the services of black managers and other skilled black professionals. These premiums underscored the skills shortage which showed this was the key issue which needed to be addressed.

The other key concern was that of increased penalties. At present, maximum fines for “offences” of this kind range from R500 000 for a first transgression to R900 000 for a fifth transgression within three years. Under the Bill, by contrast, maximum fines for any failure to meet specified racial targets would start at R1.5 million, which was three times the current maximum, or 2% of annual turnover, whichever amount was the greater. For a fifth similar offence within three years, maximum fines would be either R2.7 million, again three times the current maximum, or 10% of annual turnover, whichever was the largest. So at the very minimum, maximum fines were to triple and could go even higher. These fines were extraordinarily severe, given the skills deficit, as the government’s own Regulatory Impact Analysis had warned, and were high enough to put many firms out of business. This could cost the country more job losses while hobbling the growth rate. In this way, the Bill would be bringing further harm instead of help to victims of apartheid and redress was unlikely to be met through the EE Bill. This was all while the most important need in the country was jobs - as the Unilever study had found and which the Finance Minister and Reserve Bank Governor had emphasised.

Ms Jeffery argued that, in terms of the EE Bill, Parliament’s duty was to care for those who needed jobs rather than benefiting only a relatively small elite within the black population. The emphasis on racial quotas was contrary to the Constitution. In her view, the Committee should reject the EE Amendment Bill in its entirety.

Ms Jeffery moved onto the Employment Services Bill, saying that in seeking to employ foreign nationals, it was making it more difficult by introducing a parallel system. In the words of the Reserve Bank Governor, we should be encouraging skilled foreigners into the country which could generate six to eight new jobs for other people and this should not be placed in danger by the parallel system under the ES Bill.

The ES Bill was an administrative burden as it obliged all employers to notify the Department of Labour of all vacancies. The Bill thus empowered the Minister of Labour to make regulations requiring employers to notify the Department of any vacancy or new position and the employment of any work seeker referred by a labour centre. This was particularly burdensome for small businesses which were already struggling to cope with the large amounts of red tape. This was compounded by the development of an employment information system where a Regulatory Impact Assessment warned that the compulsory reporting of vacancies could add R3.1 billion a year to the department’s costs on top of the administrative burdens on private employment agencies and all employers.

On the regulation of private employment agencies, Ms Jeffery said the Bill required all private employment agencies to be registered and licensed by the state. This made it clear the Bill was intent on controlling labour broking while labour broking, according to Adcorp (a labour broker and private employment agency itself) had introduced 5.4 million people to the world of work. Labour broking was also now a R45 billion industry which employed around 20 000 internal staff, keeping about one million people in temporary jobs on any given day. Critically, the sector provided a stepping stone for those who were inexperienced to find permanent employment. Ms Jeffery said there seemed to be no reason for the Bill.

Mr Williams asked how the SAIRR reconciled its position that the EE Bill be rejected given that it was agreed to by NEDLAC.

Ms Jeffery said they were concerned more about the poor and unemployed while NEDLAC represented big business, labour and government. It was easier for big business to agree to provisions in the Bill which would be more damaging to smaller businesses, the poor and unemployed. Business was also wary to engage government on big policy issues and was not as frank as they could be in a forum such as NEDLAC.

The Chairperson wanted clarity - was the SAIRR saying the government should not adopt laws which in their spirit promoted equality and demographic representation as the provision for these laws did not exist. Should the government wait on the schools to enact such laws? He was confused.

Ms Jeffery said they should be primarily and deeply concerned about the plight of the poor which were disadvantaged under apartheid but we needed to be realistic about providing redress. The EE Act benefited a few people while employment was growing worse and economic growth was faltering. We should asking if we were on the right path for providing redress. If skills were increased, investment was increased and there was more economic growth, we would be providing more opportunities to more people and would supplement government social grants. The county could not afford laws which made it more difficult to generate jobs.

The Chairperson said he was more confused than before she started. He hoped that he would get more clarity as he reread the submission on what the SAIRR’s position was.

Ms Jeffery added that we needed to identify what we were doing wrong with our policy choices which made it harder for us to grow - while it was easier for others to do so, as evident in the mines in Chile.

Congress of South African Trade Unions (COSATU) submission
Ms Prakashnee Govender, Head of COSATU Parliamentary Office, said COSATU broadly supported both bills which arose out of fairly robust engagement and consensus. In this process, COSATU was mindful about the socio-economic context given that employment currently stood at 25.6%. These trends point to the need for more and strategic intervention into the labour market. She would not make extensive comments as this was done in the NEDLAC process so the submission would focus on key provisions in both bills.

Under the Employment Equity Amendment Bill, COSATU supported the definitions of “designated employers” which was expanded to include local government in relation to chapter three entailing implementing employment equity plans. In COSATU’s view the exclusion of municipalities never made sense.

Ms Govender said COSATU also supported the definition of “designated groups” which had been qualified and limited to black people, women and people with disabilities who, in the case of naturalised citizens, must have acquired citizenship before 27 April 1994 or were entitled to acquire it prior to this date but were precluded from doing so by apartheid policies.

Ms Govender explained, according to COSATU’s historical stance, affirmative action must address in particular the position of black women who were the most marginalised in the labour market which was entrenched by other factors way beyond what any other group experienced.

COSATU strongly supported the inclusion of the provisions that would prohibit unfair discrimination for work of equal value. This would assist in addressing unfair discrimination in wages and other employment conditions and was in line with recommendations made by the ILO. Historically, this had been discrimination along the lines of gender.

She noted the prohibition of discrimination "on any other arbitrary ground” as many workers were discriminated against, doing the same work but getting vastly different remuneration or being subjected to different employment terms and conditions. It was an important advancement that there was now redress to address discrimination on an arbitrary ground.

Ms Govender moved to the streamlining of compliance and enforcement mechanisms under Chapter Three for certain processes which was used to block the EE Act. The first in section 36 and amendments to section 45 which were intended to complement the powers of the DG to conduct reviews of employers’ compliance in terms of section 43. The amendments now provided that the DG may apply to the Labour Court either to direct the employer to comply or to impose a fine on employers who failed to justify their non-compliance. COSATU supported this direct process which removed steps which actually delayed the process.

For the assessment of compliance, section 42 dealt with the powers of the DG when assessing the implementation of employment equity plans. Controversially, an initial draft of the Bill in 2010, deleted the words “national and regional” from section 42(1) which required the DG to consider the racial demographic profile of the national and regional economically active population for determining when designated groups were equitably represented in the workplace. This raised concerns of how this may be used in specific regional demographic areas. In the current draft, however, the wording was retained. The concerns were around unintended consequences and how the section would technically be interpreted. For example, in national companies which had a regional presence and national companies which did not. COSATU thought the redrafted section addressed these concerns adequately when they were initially raised.

Looking at the fines and noting the increase to account for inflation, she said COSATU felt these were too lenient but distinguished between contraventions of sections 16, 19, 22, 24, 25, 26 and 43.

Ms Govender said the Employment Services Bill, unlike the EEA which had a common thread, consisted of a range of employment related matters which were disconnected. Some of these were mainly to effect technical amendments as opposed to introducing new policy such as the provisions reinstating the DoL as the line function department under which Productivity SA fell.

In terms of comments on specific section, the ESB required the DoL to provide a range of public employment services free of charge which COSATU felt was important especially as many of the unemployed lacked access to information about employment vacancies. It was understood that it worked by having employers register vacancies and the Department could then refer work seekers to those employers. This was an example of good government intervention.

Clause 6 authorised the Minister to establish work schemes for facilitating entry of youth and other vulnerable work seekers into employment. COSATU generally supported this clause but was calling for an amendment to clause 6(1) to replace the words “the Board” with “NEDLAC” as the scheme related to socio-economic policy.

Ms Govender looked at the provisions dealing with the employment of foreign nationals covered under clauses 8 and 9 of the Bill. For the purposes of the Bill, a “foreign national” excluded permanent residents who were afforded the same status as SA citizens. The emphasis was to employ only foreign nationals who had valid immigration documentation and employers must “satisfy themselves” that no SA citizen or permanent resident had the skills to fill a vacancy before recruiting a foreign national person. The concern was that employers often relied on undocumented labour that was forced to work under inferior working conditions. This contributed to a multi-tiered labour market which in turn led to xenophobia with local workers incorrectly targeting immigrant workers as opposed to the bosses who perpetrated the exploitation. COSATU also supported the provision which stated that an undocumented foreign national may still enforce his/her rights against an employer which was in line with a ruling by the CCMA. The approach of clauses 8 and 9 correctly made the employer the target for compliance with labour and immigration laws as opposed to vulnerable migrant workers.

With regard to private employment agencies (PES), COSATU noted they were not limited to labour brokers or “temporary employment services” but included agencies which provided other employment services such as assisting clients with recruiting employees without entering into a triangular employment relationship. COSATU generally supported the clauses notwithstanding their continued call for the ban on labour broking. Clause 13 introduced a new requirement for a PES to apply for registration, and together with clauses 14, 16 and 17, it set out further requirements and standards on the maintenance, retention and confidentiality of information. COSATU also supported clause 15 which provided a PES may not charge fees for providing employment services which was in line with Article 7 of the ILO’s Private Employment Agencies Convention.

She turned to the promotion of protected work for persons with disabilities in Chapter 6 of the Bill, ranging from clauses 42 to 47. COSATU understood this was to regulate “service factories” to be reconstituted as “protected employment services” and as such they would operate as a national government component which would bring them closer under the administration of the Department. COSATU supported this provision notwithstanding its view that there was a need for further policy processes to ensure that workers with disabilities were able to work in the mainstream labour market. They were concerned as sheltered employment tended to marginalise workers and they became a dead end option rather than a transitional measure. In COSATU’s view there was a need for further policy measures to be developed in an inclusive manner in consultation with all stakeholders including organisations representing people with disabilities.

Mr Motau wanted to understand why COSATU wanted labour brokering banned as he did not see that it would pass constitutional muster or how it facilitated employment. His view on labour law was that it had to facilitate employment creation and retention. He asked if he was missing something.

The Chairperson reminded Members the meeting was about the two Bills. The Committee had several bouts.

Mr Van der Westhuizen appreciated the positive stance on foreign labourers but questioned COSATU’s stance on the new definition which had more of an effect on South African workers.

Mr Williams asked if there were any other suggested or recommended amendments.

Mr Nyekemba could see they supported the amendments but asked if COSATU ever came across the difficulty of getting black people to occupy managerial positions as was alleged earlier in the meeting.

Ms Govender said she would focus very briefly on labour brokers as it was not the focus of the submission. For COSATU, there was the experience of abuse and costs for workers under labour brokers compared to workers who were employed privately. It also came down to the mathematical distribution of costs.

Regarding foreign workers, a distinction needed to be drawn between how foreign nationals were dealt with under the ESB versus the EEA. COSATU supported the protection of documented foreign workers and were opposed to a multi-tiered labour market. This issue was different under the EEA which dealt with redress of apartheid legislation. It was important to look at this year’s Employment Equity report which illustrated the minimal progress over the past 15 years was not acceptable. On this basis, there were difficulties and challenges and more needed to be done.

A representative from a COSATU affiliate office spoke about labour broking, emphasising workers did not have rights but were owned by somebody else and sold to somebody else. This was different to temporary employment services as agencies provided workers to companies but they then went on to be employed by that company and the agency was then paid by the company and not the worker. The very first labour broking in the Western Cape was seen in PortNet with workers offloading ships. This was termed modern day slavery. Although there were many difficulties with affirmative action, historically, there had been much disadvantage and these people needed to be moved forward.

Another representative from a COSATU affiliate office said he was not going to go into the issue of labour-broking as so much had been said about it, it was mind-blowing. He said working for a labour-broker would change one's perspective. For foreign nationals, they needed to have exceptional skills as was seen in the emerging energy sector in SA which required expertise. It was important that when foreign nationals were employed in SA, they needed to leave something behind through skills and technology transfer which needed binding agreements. He used the example of the wind turbines in Klipheuval, outside of Cape Town, were the maintenance of these turbines were done by Danish foreign nationals. More turbines would need to be serviced each year and there needed to be an incremental approach to train locals to occupy these positions. The skills of foreign nationals needed to be left behind to build our own expertise and build the SA economy.

The Chairperson thanked everyone for the submissions and their attendance over the past two days. The Committee would now go forward with the deliberations. They would be taking what came out of NEDLAC quite seriously as was done with the other legislation. He emphasised the need for balance particularly on spects which were not agreed to under NEDLAC. But the Committee would be taking the NEDLAC deliberations as well as the public hearings quite seriously as they had done with the other two Bills. The Committee would take into account that there were historical injustices which was the essence of the EE Amendment Bill.

As part of oversight the Committee would be looking at the Department in ensuring that there was compliance. The Committee had consistently argued for more money during the budget votes as they agreed with the trade unions, business, civil society and everyone that made submissions in that there was a need to ensure compliance. It was important to put the interests of the workers, the poor and those not represented to the fore especially as many small businesses did not belong to unions and so were the most vulnerable and the law did not protect their workers. The job of the Committee was to make it easier for small businesses to resolve labour disputes because it was in no one’s interest to have these disputes drag on.

A whole range of other critical issues were raised such as sheltered employment, whether the Employment Equity Amendment Bill justified discrimination, and employment creation particularly for young people. He noted the process of registering vacancies with the Department had made some progress. The Committee and individual Members were still available for engagement with anybody on all issues even though the formal process of oral submissions was now closed. They were open to lobbying and persuasion up until the Bill was adopted.

The meeting was adjourned.


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