Employment Services Bill: deliberations

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Employment and Labour

23 October 2013
Chairperson: Mr M Nchabeleng (ANC)
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Meeting Summary

The Department of Labour (DoL) briefed the Committee again on the purpose of the Employment Services Bill, indicating that the Bill sought to repeal provisions in the Skills Development Act relating to employment services and Productivity SA. It gave a legal framework for the functioning of a repositioned public employment service, and provided a legal basis for the functioning of Productivity SA and Protected Employment Enterprises under the Department of Labour. The Bill made provision for free public employment services, the registration of private employment agencies, and required that an advisory Employment Services Board be established. The briefing emphasised the importance of International Labour Organisation (ILO) Conventions for the Bill. The DoL took Members in detail through the Memorandum on the Objects of the Bill, and then through each of the clauses, outlining what was stated and what they sought to achieve.

The DoL, at the request of the Chairperson, then also recapped some of the concerns raised at the public hearings on 7 August 2013, and its response. There had been questions asked about the definition of “employment services” which would include temporary employment services. It was decided that there was no need for a special definition on vulnerable work seekers, as the general meaning was understood, but there would be inclusion of any other references in other statutes, such as the Employment equity Act. Specialised employment services would include the provisions of such services as careers, employment counselling and psychometric assessments. Solidarity had questioned the inclusion of employment services, but it was pointed out that they had been mentioned already in the Skills Development Act, and COSATU had suggested, but the DoL did not agree, that the Minister should consult NEDLAC on Board appointments, although it would be prepared to re-word the Bill. Members asked how private employment services would be regulated, and how they must register, and the Department responded that there were labour relations issues needing to be dealt with, and that fines being paid rather than compliance enforced was something needing to be addressed.

Meeting report

Employment Services Bill: Department of Labour summary
The Chairperson welcomed everyone, and asked Mr Sam Morotoba, Deputy Director General, Department of Labour, to recap on the deliberations so far on the Employment Services Bill (the Bill).

Mr Sam Morotoba said that he would start by summarising the Memorandum on the Objects of Employment Services Bill. This Bill sought to repeal all the employment services provisions contained in the Skills Development Act, No 97 of 1998 (the Act) as well as the provisions establishing Productivity South Africa. The reason was that the implementation of the Skills Development Act would in future fall under the Department of Higher Education and Training (DHET), so it was necessary to re-incorporate provisions around Productivity SA, which fell under the Department of Labour (DOL or the Department) in new legislation. This Bill now did that, and also strengthened the Productivity SA in order to provide a re-invigorated legal basis for the provision of public employment services. The Department of Labour had also conducted a review of its programmes to determine the effectiveness and to make appropriate adjustments, with the assistance of the International Labour Organisation (ILO). A comparative study was also conducted across the national Ministry of Labour and others in other countries that had similar characteristics, mandates and economic conditions as South Africa. The outcome was that the Department would be prioritising the three areas of Inspection and Enforcement Services, Labour Policy and Industrial Relations and Public Employment Services, inclusive of the Unemployment Insurance Fund (UIF) and the Compensation Fund (CF). All of these programmes were supported by the Administration programme of the DOL.

The Bill sought to allow for the re-organisation of public employment services in line with these priorities. It was contributing to the government’s objectives of more jobs, decent work and sustainable livelihoods’. The Bill repositioned public employment services (PES) to play a major role in employment promotion and employment preservation and would also assist employers and workers to adapt to changing labour market conditions. The Bill sought, amongst other things, to:
-contribute towards reducing unemployment and inequalities and poverty eradication
-promote and preserve employment
-reduce work seeker reliance on the Unemployment Insurance Fund or Social Security grants, and reliance of rehabilitated workers injured on duty on the Compensation Fund
-accelerate employment creation; and employment growth and productivity promotion.

The strategic objectives would be achieved through institutional arrangements that the Department would further establish, to provide free services to citizens, such as registration of job seekers, registering of placement opportunities, matching services, referral to training, and careers information. The private employment agencies would be entitled to charge employers for providing similar services, in accordance with regulations and ILO Conventions.

In addition, the Bill allowed the Minister of Labour (the Minister) to issue regulations requiring employers to register vacancies in specified categories of work. The Bill further permitted the Minister to introduce schemes to promote the employment of unemployed work seekers, to assist employees facing retrenchment to remain in employment, and to promote the rehabilitation and re-entry into employment of employees injured on duty or those who had contracted an occupational disease.

The Minister could also introduce regulations dealing with the employment of foreign nationals, so as to protect the conditions of employment of South African citizens and permanent residents, where foreign workers may be employed. The Department would collaborate with a number of players and bodies already functioning within employment services, to achieve its objectives.

Mr Morotoba then highlighted each of the clauses of the Bill

Chapter 1: Definitions, Purpose, Interpretation and Administration of the Act
Clause 1 provided for definitions for the purpose of interpretation.

Clause 2 outlined the purposes of the Act and specified the measures and institutional frameworks that would be used to achieve its purpose.

Clause 3 provided for the interpretation of the Act to give effect to its purpose, the Constitution and applicable international treaties on employment services.

Clause 4 provided for the administration of the Act by the Director-General and required that the Department maintain adequately resourced labour centres to enable the public to access public employment services.

Chapter 2 dealt with Public Employment Services

Clause 5 provided for the functions that the public employment services provided free of charge. These functions included matching work seekers with available work opportunities, registering work seekers, registering job vacancies and other work opportunities, and facilitating the placing of work seekers with employers or in other work opportunities. PES would also be advising workers on access to social security benefits, providing specialised services to assist vulnerable work seekers - including youths and new entrants - into the labour market, and giving specific assistance to disabled persons and members of rural communities. PES would further facilitate the exchange of information among labour market participants, including employers and work seekers, careers counselling, assessment of work seekers to determine suitability and other related life skills necessary to secure employment.

Clause 6 gave powers to the Minister to establish schemes to promote the employment of youth and other unemployed persons and to provide opportunities for self-employment.

Clause 7 gave the Minister power to establish schemes to minimise retrenchments in Protected Employment Enterprises that were in economic distress. These included providing for turn-around strategies, lay-offs, re-training and alternative employment opportunities.

Clause 8 was the clause seeking to protect the employment conditions and opportunities of South African citizens and permanent residents. The employment of foreign nationals would be prohibited, without a valid work permit issued in terms of the Immigration Act, No 13 of 2002.The Minister was empowered to make regulations setting out the procedures that employers must undertake before employing foreign nationals. In appropriate cases, the Minister may require the preparation of skills transfer plans for positions in which foreign nationals were engaged. Clause 8 also provided, in line with decisions of the Labour Court, that foreign nationals who were employed without the necessary visas were nevertheless entitled to enforce claims in terms of their contracts of employment or under statutes such as the Basic Conditions of Employment Act (BCEA), No 75 of 1997.

Clause 9 prohibited an employer from requiring or permitting a foreign national to perform work for which such foreign national was not authorised to perform, in terms of his or her work permit.

Clause 10 enabled the Minister to make regulations for the reporting and registration of existing or new vacancies by employers, with the Public Employment Services. This provision was consistent with the current wording of the Skills Development Act.

Clause 11 provided for the type of statistical information that the Department would collect to inform the provision of employment service.

Clause 12 provided for sources of funding that could be utilised to provide employment services in terms of the Bill. It further specified the purposes for which these funds could be used, including the provision of subsidies to organisations providing work opportunities for vulnerable work seekers, and any other project that promoted the provision of public employment services.

Chapter 3 covered the position of the Private Employment Agencies.

Clause 13 provided for the registration of private employment agencies. The Minister, after consulting the Employment Services Board, would prescribe registration criteria, and these would differentiate between private employment agencies who were registered as temporary employment services (TES) – also referred to as labour brokers - and private employment agencies that performed other employment services. Clause 13 also provided for the appointment of a registrar of private employment agencies and private employment agencies that performed other employment services.

Clause 14 prohibited private employment agencies from performing certain acts, including providing false information, performing functions for which they were not registered, falsifying documents or retaining the original documents of work seekers.

Clause 15 prohibited private employment agencies from generally charging work seekers any fees for services rendered. However, the Minister could permit the charging of fees for specific categories of employees, or for the provision of specialised services. The provision also prevented practices that sought to circumvent this prohibition, or practices that made deductions from employees’ remuneration.

Clauses 16 and 17 specified the information that private employment agencies were required to keep, and said they must safeguard the confidentiality of information relating to work seekers.

Clauses 18 and 19 provided powers and conditions under which the registrar could cancel a private employment agency’s registration, and also provided for a review process in case of dissatisfaction with the registrar’s decision.

Chapter 4 dealt with the setting up of the new Employment Services Board.

Clauses 20 and 21 provided for the establishment of the Employment Services Board and specified its composition. The Employment Services Board (ESB) consisted of an independent chairperson, representatives of the State and representatives of organised labour, organised business, and organisations of community and business development interests, nominated by the National Economic, Development and Labour Council (NEDLAC).

Clause 22 set out the functions of the Employment Services Board, which were to advise the Minister on a range of issues relating to employment services, including work opportunities, registration and de-registration criteria for private employment agencies, and the development of guidelines and criteria to implement the Act.

Clauses 23, 24 25, 27 and 28 provided for the Employment Services Board to adopt a constitution, described the disqualification from membership of the Employment Services Board, set out the procedure for resignation and removal from office of members of the Employment Services Board, and specified the administrative support that had to be provided by the Department to assist the Board to fulfil its functions. They also covered the remuneration of Board members.

Clause 29 said that the funds of the Board consisted of monies defrayed from the budget vote of the Department and that the Director-General, as the accounting officer of the Department, was responsible for these funds.

Clause 30 set out the reporting obligations of the Board and provided that the Board must report to the Minister on its activities.

Chapter 5 now contained the provisions moved across from the Skills Development Act, in relation to Productivity South Africa.

Clauses 31 and 32 provided for the establishment of Productivity South Africa, which was originally established under the Skills Development Act, to promote employment, growth and productivity. The functions of Productivity South Africa were specified.

Clauses 33 and 34 dealt with the establishment and composition of the Board of Productivity South Africa and for the functions of Productivity South Africa. They also specified what matters the Productivity SA constitution must address, to govern its procedures and business, and provided for the remuneration of members of the Board of Productivity South Africa.

Clause 35, amongst other matters, dealt with the appointment of a Chief Executive Officer who was the accounting officer of the Board of Productivity South Africa, and who was responsible for the administration and the general management and control of the day-to-day functioning of Productivity South Africa.

Clause 36 would empower the Minister to dissolve the Board of Productivity South Africa, set out the procedure for such dissolution and the appointment of an administrator.

Clauses 37 and 38 provided for the disqualification from membership of the Board of Productivity South Africa, resignation of and removal from office of members of the Board of Productivity South Africa.

Clauses 39 and 40 provided for the remuneration of members of the Board of Productivity South Africa and financing of Productivity South Africa through state grants, self-funding and donations.

Clause 41 dealt with the reporting obligation of the Board and provided that the Board should report to the Minister on its activities.

Chapter 6 was entitled “Promotion of protected work for persons with disabilities”.  

Clauses 42 to 47 provided for the promotion of employment for persons with disabilities, through the establishment of Protected Employment Enterprises. The service factories which were established in 1948 as the Sheltered Employment Factories (SEFs) were now re-constituted as Protected Employment Enterprises (PEE), which were to operate as a national government component in terms of section 7A of the Public Service Act, 1994, and under Proclamation No 103 of 1994. Their mandate was expanded, to facilitate on-the-job training for persons with disabilities, to promote their access to formal employment and self-employment. The factories were to be managed as viable and sustainable Protected Employment Enterprises that must adapt to changing needs of people with disabilities. Chapter 6 also provided for the functions of Protected Employment Services, appointment of the head of Protected Employment Services, powers and functions of the head of Protected Employment Enterprises, staff of Protected Employment Services and its finances.

Chapter 7 covered the General Provisions.

Clause 48 provided for the jurisdiction of the Labour Court in respect of matters (other than criminal prosecutions) arising from the Bill.

Clause 49 covered the monitoring and enforcement of the provisions of the Bill, in accordance with Chapter 10 and Schedule II of the Basic Conditions of Employment Act. The Labour Court was empowered to impose fines for certain breaches of the Act.

Clauses 50 set out the offences and penalties for contravention of certain provisions of the Bill.

Clause 51 set out the procedures that the Minister would follow when delegating functions to the Director-General.

Clause 52 specified those issues in respect of which the Minister would make regulations to achieve the purposes of the Act.

Clause 53 covered the repeal of laws, and the transitional provisions.

Clause 54 was the short title and commencement.

Mr Morotoba noted that the Employment Services Bill had three schedules. The first provided for the repealing of certain sections of the Skills Development Act. Schedule 2 set out the transitional provisions relating to the regulation of private employment agencies, Productivity South Africa and Protected Employment Enterprises. Schedule 3 gave a table of the contraventions in respect of which fines would be imposed by the Labour Court.

Mr Morotoba noted that the departments and bodies that had been consulted were consulted through the full NEDLAC process. He noted that there would be financial implications, because the DOL had made application to increase the budget of the public employment services component of the Department over the Medium Term Expenditure Framework (MTEF) period, to accommodate the impact of the amendments on its operations.

Finally, Mr Morotoba told the Committee that the State Law Advisers and the Department of Labour were of the opinion that this Bill should be dealt with as a section 75 Bill, since it contained no provisions to which the procedures set out in sections 74or 76 of the Constitution applied. The State Law Advisers were also of the opinion that it was not necessary to refer this Bill to the National House of Traditional Leaders in terms of section 18(1)(a) of the Traditional Leadership and Governance Framework Act, since it did not contain provisions pertaining to customary law or customs of traditional communities.

Responses to concerns raised on the Employment Service Bill at the public hearings held on 07 August 2013
The Chairperson asked Mr Morotoba to recap on some of the concerns that had been raised during the public hearings, and to summarise the DOL response.

Mr Morotoba noted that there were questions asked about the definition of “employment services”, and DoL responded that the definition included the provision of temporary employment services.

The Centre for Constitutional Rights had asked a question about the vulnerable work seekers and the DoL responded that the NEDLAC Social Partners had agreed not to define “vulnerable groups” as their general scope was at the moment well known. The Bill would be amended to make reference to any statutory definitions.

The Disability Workshop Development had asked about the definition of persons with disabilities. The DoL responded that the Bill would be amended to make reference to the definitions of the persons with disabilities, as provided for in the Employment Equity Act 1999. It had further stated that the specialised employment services would include the provisions of such services as careers, employment counselling and psychometric assessments.

DOL had answered the questions raised by Solidarity Trade Union by saying that employment services were already provided for in terms of the Skills Development Act, 1998, and were not a new construct in this Bill.

The Congress of Trade Unions in South Africa (COSATU) had suggested that the Minister should  consult NEDLAC on Board appointments, and the DOL had said that it seemed that COSATU may not have fully understood that part of the Bill and would welcome suggestions on appropriate wording.

Ms L Makhubela-Mashele (ANC) asked about the private employment services, and asked what they would be regulated to do, if they were to be registered.

The Chairperson responded by saying that the issue was really to do with the separation of private and public entities.

Mr Morotoba added that currently the Skills Development Act made provision for private companies, excluding temporary employment. The labour relations issues would have to be dealt with. There was a problem around the fines for non-compliance because the private companies would simply prefer to pay rather than to comply, and this was something that the Department and Committee would need to discuss in more detail.

The meeting was adjourned.


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