Employment Services Bill: further deliberations

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Employment and Labour

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

The legal team took the Portfolio Committee on Labour through a list of proposed amendments to the Employment Services Bill.  In discussion, there was considerable interest in the relevance of other legislation to the bill. The legal team pointed out that alignment with the Immigrations Act was a priority. The legal team advised that the Portfolio Committee take a policy decision on the definition of employment services.

A  Member felt that the bill did not make enough provision for public input on exceptional employment interests.  NEDLAC representation on the Employment Services Board aroused interest.  It was seen to be essential. There were strong concerns about the inadequacy of fines and criminal sanctions for contravention of labour laws.  It was pointed out that non-compliance with labour laws was constantly discussed in Parliament.

The Chairperson said that countries like the United States were extremely strict when it came to foreign nationals taking jobs away from citizens. The livelihood of citizens was protected. A Member commented that foreign nationals without valid work permits were being employed by people who were foreign nationals themselves. With regard to the need for more stringent fines, a Member proposed that fines be based on a percentage of turnover of those employers who contravened.  It was then argued that people were currently budgeting for fines. There could not be a behavioural change while fines were considered affordable. The legal team felt that there first had to be monitoring of compliance, before such amendments could be made.

There was agreement in the Committee that there had to be consultation with the Departments and Portfolio Committees of Home Affairs and Trade and Industry.  Legislation was linked, and arbitrary changes could not be made. It was decided that the Portfolio Committee would make every effort to let the bill go through before the rising of Parliament, as it had been one of the goals that the Committee had set itself.

Meeting report

Deliberations on the Employment Services Bill
Mr E Nyekemba (ANC) said that the State law advisors would normally take the Committee through the A list, in conjunction with the Parliamentary legal advisers.

Mr Mongameli Kweta, State law adviser, said that the A list was based on discussions and deliberations, and public hearings. There were inputs from Parliament and stakeholders from the public. The Portfolio Committee had to decide about the proposed amendments.  Mr Kweta proceeded to go through the proposed amendments.

Clause 1

In Clause 1, a definition of “persons with disabilities” was to be inserted.  It was based on clause 42(1).  During discussions, the Department had said that a person with disabilities had to be defined.  There was a new definition of disability. The term “protected” would be omitted, and substituted with “supported”.  In the definition of “work seeker, unemployed and” would be omitted to make it read “any person who is looking for work.”

Clause 5
Mr Sam Morotoba, Deputy Director General: Department of Labour, noted that in Clause 5(1)(e),  “workers” would be omitted and substituted with “and work seekers.”

Clause 7
In Clause 7, “who are employed by employers in Protected Employment Enterprises that are in economic distress,”would be omitted.

Clause 8

Mr Morotoba noted that Clause 8 (1) emphasised the Immigration Act. It was proposed that a special section be inserted about relevant penalties. In Clause 8(4), “contract of unemployment”would be omitted, and substituted with “employment relationship”.  The amendment applied to situations where people were employed without a work permit, such as in construction, domestic work or hospitality. Employers would not enter into a contract if they knew it to be illegal. They would not sign a contract.

The Chairperson remarked that it had to be kept in mind that amendments were also based on other laws, like conditions of employment in the Labour Relations Act.

Mr Nyekemba agreed that the legislation did speak to other legislation and amendments. He had felt lost when Mr Morotoba talked about Clause 8.  He had thought that the A list was based on what had been identified the day before.

The Chairperson said that inputs on the A list had to reflect discussion.

Clause 23

Mr Kweta said that in Clause 23(3), “or the making of regulations” would be removed. The Minister could make resolutions after consultation with the Employment Services Board.

Clause 50

Mr Kweta referred to Clause 50.  Stakeholders had said that Clause 8 only contained the prohibition of employing foreign nationals without a valid work permit.  It had been proposed that subsections be inserted to the effect that employers who contravened section 8(1) would be guilty of an offence and liable on conviction to a fine or imprisonment. The amendment was to align the bill with the Immigration Act.

It was proposed that “protected” (employment) be amended to “supported ”in every instance where the term “protected”appeared in the Bill.

Mr Kweta advised that the Portfolio Committee should take a policy decision on the definition of employment services.

Mr Nyekemba said that the State law advisers and the Parliamentary legal advisers had to spell out the legal implications of such a policy decision.

Mr Morotoba said that persons with disabilities were to be included in the definition. The question was, who the others were, and who were not included.

Mr Kweta added that Clause 1 stated that employment services included a number of functions. The term “implied” that there could be others.

Mr A Williams (ANC) suggested that if the term “means” was used, rather than “include”, it would have a limiting effect. That applied to the definition of both employment services and of persons with disabilities.

The Chairperson noted that the term “disability” was very broad, but the onus was on the disabled to prove disability.

Employment of foreigners

Mr A van der Westhuizen (DA) referred to the employment of foreigners. The Minister would have to consult with the Board. There had been no opportunity for public input. There was an outside realm to what the Board considered exceptions. There were small entrepreneurs of the kind who would stage an artistic event for one evening, whose interests might not be represented on the Board.

Mr Williams said that there would have to be representatives of NEDLAC on the Board, to help deal with immigration issues. Such persons would be aware of the finer nuances, because they represented business interests.

Mr Nyekemba said that he agreed with Mr Williams about the definition of employment services. The issue was not reflected in the A list.  He asked which subsection of Clause 23 was the one that was to be amended. Constituencies to the Board were stakeholders, in terms of the NEDLAC Act.  It was not advisable to amend that Act.  It would not do to open things up more than the NEDLAC Act stated.

Mr Williams urged that the proposed amendment to Clause 8 not be left out.

The Chairperson said that people would contravene the immigration laws if they felt that they could pay the penalty and still benefit overall.  People who expected to make a million rands would budget for a R50 000 fine. The question was who suffered in the end. The issue had to be handled properly, to avoid a perception of xenophobia.  People would say to immigrants employed that the laws would protect them, even if their documents were not in order. Non-South Africans were being protected.  People had to go to jail for breaking labour laws.

Mr Nyekemba noted that the Department had explained that fines had not been looked at thoroughly. It came up in every debate in Parliament, that labour laws were not being obeyed. Labour laws had to bite.  Advice on penalties was needed.

The Chairperson said that the tightening of labour laws could release jobs for South Africans. Non-South Africans were working, while South Africans were languishing.  Elsewhere it was not possible for an immigrant to get a job, like an unregistered petrol attendant.  Every citizen was entitled to a livelihood.  In the United States, people were locked up if they did business without the approval of the authorities.

Mr Kweta noted that a R50 000 fine was provided for in Clause 49. It was a policy proposal from NEDLAC and others.  Parliament could increase the amount.

Ms L Makhubela-Mashele (ANC) said that foreign nationals were staying in backyards in the villages, and were being employed without valid documents. It was not always a South African who employed them. Sometimes the employer himself had no documents. She asked if the Department of Home Affairs might have to be involved.

Mr Williams said that there had to be pressure on employers regarding employment of non-South Africans. He suggested harsh penalties.  Bringing fines in line with turnover had to be considered. People had to take labour laws seriously.  Those who contravened had to be hit where it hurts, in line with other legislation.  Fines had to be a percentage of turnover.

The Chairperson noted that the principle of fines as a percentage of turnover was contained in other legislation.

Mr M Mncwangu (IFP) agreed that legal advice would be needed.  Legal advisers had to take section 49(3) of the Immigration Act, which prescribed a fine or imprisonment, into account,.

Mr Van der Westhuizen expressed concern about people with scarce skills. Such people and their employers should not be let down.  He urged that people with scarce skills should not be blocked out.  Leave to apply was not in the bill.  If an employer wanted to be legal, he might have to suspend his services, or he might be fined. It was too wide to say that preference would be given to South Africans.

The Chairperson submitted that fines could lead to behavioural change.  Currently, people were simply budgeting for fines and no change was taking place.  Skills that were needed would be sought for. There was interchange of scarce skills through BRICS.  However, it had to be asked if skills were really needed. China was bringing in people whose skills were not sorely needed. There had to be a process with checks and balances. People were being brought in as needed engineers, and then set themselves up as shopkeepers. The legal team had to look at the Labour Relations Act and decide how the bill could be aligned with it. It might be necessary to sit with the Home Affairs Portfolio Committee.

Mr Williams agreed about a meeting with the Home Affairs Portfolio Committee, and possibly with the Trade and Industry Portfolio Committee as well. There had to be proper punishment for the crime.  Engineers operating as shopkeepers amounted to fraud.

Mr K Manamela (ANC) agreed that the two Portfolio Committees had to meet. If the current legislation misrepresented Home Affairs or Trade and Industry, there would be problems. The question was what the objective of the bill was.  Parliament would rise in the following week. Only the following week was available to present the bill before the House. It was ambitious to try and meet with Home Affairs and Trade and Industry in such a brief period. If the matter was not dealt with in the current week, it might have to be handed to the new Portfolio Committee.

The Chairperson said that the objective of the bill was clear.  It dealt with employment, growth, job creation and livelihood issues.  It was unacceptable to have outsiders acquire jobs at South Africans' expense. Some jobs had to be freed. There were jobs for which South Africa did not have skills.  But skilled foreign nationals could not have the same rights as South Africans.  In the USA, questions were constantly asked by immigration officials. There had to be a green card and long citizenship. The government made it hard for people from other countries to get jobs.

Mr Morotoba said that the two subsections inserted into section 50 in the A list, was done to avoid confusion. There was already a law dealing with employment without a work permit.  Any changes would have to involve Home Affairs. There was cross-reference to that legislation. A new set of fines were introduced to avoid confusion.  Immigration Act fines were not included under Clause 49.  Laws had to complement each other.  Legal advisors agreed that fines were low. Compliance would be looked at in a second round of amendments. It would not do to delay the whole bill because of the matter of fines.  How compliant employers were, had to be reviewed. There had been an outcry about employment equity fines.  Clause 49(3) could assist the Minister to publish a set of adjusted fines, but compliance had to be reviewed first.  Although the Portfolio Committee could change the amount, a Labour Court judge could still adjust the fine. The fine could be stated as a minimum.  However, in most legislation a maximum fine was set and then it was left to the discretion of the court.  It was problematic, and not possible during the current round.

Way forward
The Chairperson said that there had been serious changes in the law.  Under the old regime, any association with terrorism led to a minimum five-year sentence, but arbitrary changes could not be made. The legislation was linked.  Matters had to be thought over, and there had to be a follow up in a meeting with Home Affairs. The economic cluster and the security cluster had to be involved, to pave the way for economic development to provide a livelihood for South Africans.

Ms Makhubele asked if the proposed amendments had to be adopted.

The Chairperson answered that another list would be drawn up, and then voting would start. In the next meeting, the Committee would go through the bill clause by clause. Voting would be in the following week.

Mr Manamela asked when the bill would be put before the House.

The Chairperson proposed that the A list be gone through on the following Tuesday, and be voted on.  A report had to be written and adopted.  The Committee would be told when it could be debated.

Mr Manamela proposed that the amendments be adopted on the following Tuesday.  The Committee Secretary had to prepare a draft. The legal team could clean up the bill over the weekend. The voting and report could be done by the following Tuesday.  He proposed that the Committee Chairperson meet with the House Chairperson, to let the bill go through on the following Thursday (7 November), otherwise hearings and deliberations would have been fruitless.

Ms Makhubele said that the legislation had been a goal and objective that the Portfolio Committee had to meet during its term.

The Chairperson noted that Ms Makhubele had seconded the process suggested by Mr Manamela.  He asked Mr Van der Westhuizen if the DA could be ready by the following Thursday.

Adoption of minutes
Minutes of 22, 23 and 29 October were adopted.

The Chairperson adjourned the meeting.



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