Employment Equity: hearings

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Employment and Labour

12 May 2003
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Meeting report

LABOUR PORTFOLIO COMMITTEE
13 May 2003
EMPLOYMENT EQUITY: HEARINGS

Chairperson:
Mr M S Manie (ANC)

Documents handed out:
Commission for Employment Equity presentation

Commission for Employment Equity: Annual Report 2001/2002
Review of Employment Equity 2003: Submission by the Black Management Forum (BMF)
Chinese Association of South Africa (CASA): Request for Amendment to Employment Equity Act
Gender and Employment Equity in Institutions of Higher Learning: Gender Equity Unit, University of the Western Cape

SUMMARY
The Commission for Employment Equity briefed the Committee on its key achievements during its term and its analysis of the employment equity in the public service and private sector. It focussed particularly on discrimination in the workplace, gender, disability and HIV/AIDS. The Black Management Forum in their submission made mention of the fact that labour inspectors needed to be more visible in monitoring the progress of employment equity.

Representations by the Commission on Employment Equity, the Black Management Forum (BMF) and the Federation of African Business and Consumer Services (Fabcos) painted a gloomy picture of employment equity in private sector organisations, suggesting that more aggressive mechanisms to enforce compliance with the Act might eventually be required in order to more effectively address widespread issues of workplace inequality. Although heavily subsidised by the State, tertiary education institutions appeared also to have resisted change. This had been exacerbated by conflicting visions for higher education and employment equity. Business organisations falling outside the provisions of the Act by virtue of employee numbers of fifty and below also gave cause for concern, since employers in this sector were widely perceived to be the least concerned with employment equity issues and employees the most vulnerable to discrimination. Organised labour was particularly conspicuous in its absence from the hearings and no written submission was received from the Congress of South African Trade Unions (Cosatu).

MINUTES
The Chair noted that the purpose of the hearings was for the Portfolio Committee to fulfill its mandate in exercising an oversight role overall the labour institutions. The objective of the Employment Equity Act is to provide equal opportunities for the designated group and prevent unfair discrimination in the workplace.

Commission on Employment Equity briefing
Commissioner Madontsela explained that the mandate of the Commission was to advise the Minister of Labour on the implementation of the Employment Equity Act and on the development of various codes of conducts. These include a code of good practice on employment of people with disabilities, technical assistance guidelines on employment of people with disabilities, technical assistance guidelines on key aspects of HIV/Aids and employment.

The Commission also highlighted findings of a study carried out amongst 782 companies across the country. This study found, inter alia:
-The work force of South Africa is composed of 77% of Black staff and 23% white staff. Black staff included African, Indians and Coloureds.
-Of the total work force 35% are women.
-80% of top management is white.
-88% of top management is male.

The Employment Equity reports submitted by companies mostly lacked a systematic profile of people with disabilities. However, studies in 2000/2001 revealed that the public sector was doing better than the private sector in meeting the objectives of the Employment Equity Act. In respect of people with disabilities, both sectors were failing to meet the employment equity targets as there was less than 0.2% of people with disabilities in both these sectors.

Black Management Forum submission
The submissions by the BMF focused on the assessment of the trends of employment equity over the last two years. The BMF argued that, during the past two years, there has been no significant change in the profile of employment by race, gender and person with disabilities and that could be attributed to the lack of proper monitoring mechanism. Labour inspectors were not visible enough and there was a lack of commitment on the part of business. Hence, the BMF proposed that there was a need for the services of an independent agency to verify and monitor the progress of employment equity in various companies. The Commission for Employment Equity should be dissolved because it has failed to meet its mandate.

Commission for Conciliation, Mediation and Arbitration submission
Representatives of the Commission for Conciliation, Mediation and Arbitration (CCMA) were then invited to present their perspectives on the implications of the Employment and Occupational Equity Act of 1998 (EEA) forthe work of the Council.

The Committee was advised that it was generally at the conciliation stage of the CCMA process that workplace discrimination surfaced as an underlying issue in the types of disputes brought before the Council. There tended not to be many cases in which the plaintiff cited unfair discrimination as the primary motivation in seeking CCMA intervention. Employees experienced difficulty in differentiating between direct and indirect discrimination, while many were unaware of the mechanisms available for exercising their rights. Nevertheless, where such cases had been referred to the CCMA, the courts had been found to be in line not only with the broad definitions of discrimination underpinning the Act but also with those used by the International Labour Organisation (ILO).

Effective implementation of the Act required all stakeholders, and particularly employers, to buy into and internalise its values in respect of employment relationships and the equal treatment of employees. In this regard, in-house employment equity committees could play a key role in focusing compliance strategies within their organisations on policy and practice rather than numbers and percentages. An ongoing concern was that in the vast majority of cases brought before the CCMA complainants could not afford legal representation. This needed to be addressed, together with concerns regarding the capacity of the Department’s inspectorate to monitor implementation.

Chinese Association of South Africa (CASA) submission
Mr P Chong: Chairman, CASA, briefed Members on legislation determining the racial classification of Chinese South Africans under the old dispensation. In theory, as ‘coloured’ citizens, Chinese South Africans should fall within the designated groups of people whose treatment in the workplace the EEA sought to address and rectify. In practice, however, they were not recognised as historically disadvantaged individuals (HDIs). They tended to be overlooked by employers complying with the Act not only as work-seekers but also as candidates for staff development and promotion. With this in mind, CASA sought an amendment to the Act, proposing several options that would ensure the recognition of Chinese South Africans as HDIs. This request was not intended to single out Chinese South Africans as a separate ethnic group but was made with a view to ensuring equal treatment of all South Africans in the workplace, in keeping with the spirit and letter of the Act.

Discussion
Mr S Mshudulu (ANC) emphasised the need for employers to develop policies on employment equity (EE) rather than adopt a statistical approach to compliance with the Act. He enquired whether data from organisational audits was being utilised by Sectoral Education and Training Authorities (SETAs) to inform training strategies. He suggested that employers citing inadequate levels of skills or management capacity as reasons for failing to comply with the Act be targeted by SETAs for appropriate training and skills development programmes. On the issue of EE committees, he asked representatives of the Department for information on the programme of action in place to ensure that such committees had been established and were functioning as required. He also asked what was being done to monitor training and skills development. He expressed grave concern about the absence of trade union representatives at the hearings.

Prince N Zulu (IFP) reminded Members that the Minister had referred to workshops on EE rather than talk shops, expressing concern that there appeared to be more talk than action on the issue of EE. He asked the Commission for Employment Equity whether EE and affirmative action policies had been found to impact negatively on productivity. He suggested that if this was so this could explain an apparent reluctance on the part of employers to comply with the Act.

While commending the Commission on its impressive statistics, Mr G Oliphant (ANC) commented that EE was, nevertheless, far from becoming a reality. He asked the Department for clarity on the objectives driving the EE compliance process and on the motivation behind the concept of EE awards. On the issue of the exclusion of Chinese South Africans from designated groups targeted by the Act, he expressed concern and regret at this apparent oversight.

Ms H Matlanyane (ANC) commented that, in her understanding, Chinese South Africans had been classified as ‘honorary whites’ under the old dispensation, thanking the CASA delegation for alerting the committee to the need for an amendment to the Act. She then asked the Commission for information on the Solidarity Union court case, as well as on what steps would be taken in respect of employers failing to comply with the Act. In this regard, she enquired whether the Commission had its own inspectorate or whether this was shared with the Department.

Mr R Moropa (ANC) noted the considerable progress made by public sector employers in implementing EE as an instrument of social transformation. He emphasised the need for urgent action in response to low levels of compliance in the private sector, particularly at senior management level. He asked whether there had been any appreciable improvement in respect of income differentiation between designated and non-designated groups.

Mr Moropa also commented that, in his view, white females could not be equated with women from other population groups since they had benefited from ready access to education and training opportunities under the old dispensation. On this basis, he questioned the rationale behind including white women in the designated groups targeted by the Act. He then suggested that the appointment of external employee representatives to in-house EE committees might address a perception that these were driven by employer needs and agendas. Regarding the plight of Chinese South Africans, he asked for copies of the relevant sections of the Population Registration Act of 1950 and its Amendment in 1967.

Mr K Moonsamy (ANC) advised Members that Japanese, not Chinese, South Africans had been designated ‘honorary whites’ under the old dispensation. He then expressed extreme dismay at the low levels of progress made with EE since the promulgation of the Act. He referred to a media statement by the Minister of Labour on the contents of the Commission’s annual report for 2001/2002 (
www.labour.gov.za) and the launch of the Employment Equity Public Register on 24 April 2003. He reminded Members of the extent to which employers had readily complied with the apartheid legislation from which they had so obviously benefited. He appealed for penalties to be imposed for non-compliance with new legislation. In his view, the ANC would be seen to have failed in its role as governing party and the principal agent of social transformation if employers were not forced to respect and comply with the requirements of the Act. He asked whether any had been prosecuted for non-compliance.

The Chairman observed that an EE plan within a certain timeframe and annual reports were, in fact, the only requirements of the Act in respect of employers and that this might lie at the heart of the problem. The Commission appeared to have neither the power nor the tools to address this. With this in mind, he questioned whether the Act could meet expectations or even achieve its intended results. He then asked the CCMA how the separate programmes in place for EE and skills development could be linked more effectively. Referring to the negative attitudes towards designated groups alluded to in the Black Management Forum (BMF) representation, he commented that attitude change could not be legislated and enquired what BMF members were themselves doing to address this issue within their own organisations.

In response, the CCMA representative advised that the Department was required to facilitate the EE and skills development programmes in such a way that opportunities for linkages were optimised. There was therefore no need for such linkages to be legislated.

Ms T Madonsela suggested that the scope of the issues covered by members’ questions and comments might justify a second hearing on the part of the Commission. She was advised by the Chair that input at the hearings would be consolidated so that the Commission could identify salient points and make recommendations to the Department and the committee for a way forward.

Ms Madontsela outlined the progress made in developing codes of good practice for key aspects of human resource management in respect of EE. These would be used to guide employers on benchmarks and targets in implementing the Act as well as the CCMA and the courts in responding to complaints of discrimination. By unpacking the issues, it was envisaged that the codes would also inform training programmes. She observed that while, in her view, the provisions of the Act were adequate, mechanisms for administering it might not be. It had been assumed that the unions would play an important role in EE committees and that employer goodwill would drive the implementation process. However, this had proved not to be the case. Consequently, aggressive public education and advocacy programmes were needed to raise awareness among employers of their obligations in respect of the Act, and employees of their rights.

Members were advised that the structure of the annual EE report required of employers might need to be amended so that the reports themselves could then be used more effectively as instruments for enforcing compliance with the Act. In its present format, the report did not adequately reflect organisational behaviour. It allowed employers to gloss over certain key issues without providing the level of detail needed for non-compliance on EE imperatives to be monitored and addressed. The section of the employer report on EE policy was one example of this. Research had been commissioned to obtain information not provided by the majority of employer reports, while steps had been taken to improve the efficiency of the Department’s inspectorate in collecting data for analysis by the Commission.

While productivity levels might drop temporarily as a result of EE interventions required by the Act, this should be viewed as a short-term cost in a process that, by harnessing diverse resources across the spectrum of designated groups, would ultimately improve employee morale and productivity.

The employment equity award system was being explored as an incentive for the implementation of EE programmes. Similar award systems in Australia, Canada and the United States of America had successfully built upon the importance of peer approval among employers, creating models of excellence and good practice for others to emulate.

Ms Madonsela advised Members that the Commission would prefer to wait until representatives of the Solidarity Union had presented their submission before commenting on the court case in question.

Cautioning Members that the exclusion of Chinese South Africans from designated groups targeted by the Act might be more complex that it appeared, Ms Madsonsela observed that protective laws had been enforced under the old dispensation in such a way that attitudes had become entrenched. Structural disparities remained in place despite new legislation aimed at addressing them. With this in mind, the definition of ‘Chinese South African’ might need to be explored by the Department as a first step in addressing this matter.

On behalf of the Black Management Forum, Mr Lindie advised Members that, in terms of the Act, the onus was on employers and employees themselves to address EE imperatives and that, in the event of non-compliance, the Department was required to take the appropriate action. On this basis, and in the light of the low levels of compliance reported, he enquired what was being done. The extension of deadlines for compliance in respect of EE plans and reports tended to imply an overall disregard for the Act and its requirements by all parties concerned. The Commission had been mandated to oversee compliance and it had now become clear that self-regulation by employers was not producing the desired results. The Committee should therefore set targets and deadlines and request the Commission to monitor these closely. Corporate culture tended to affect individual and group attitudes, which were difficult to change. However, imposing penalties for non-compliance could strengthen certain provisions of the Act in this regard.

Mr Chong conceded that the definition of Chinese South African was difficult, as was the case in respect of most immigrants granted South African citizenship. He suggested that a tendency among Chinese immigrants to become employment generators might need to be taken into consideration.

In summarising proceedings during the morning session, the Chair assured CASA that concerns expressed in their submission would be addressed on the basis that all South African citizens were entitled to equal treatment. Another opportunity to interact with the Committee on this issue might facilitate the process. He noted that a one percent improvement in employer compliance with the requirements of the Act since its promulgation nearly five years earlier was clearly not enough. The implementation of EE imperatives need to be accelerated so that all South African citizens could benefit equally from employment opportunities under the new dispensation.

Afternoon session
Federation of African Business and Consumer Services (Fabcos) submission

Mr D Fletcher referred to statistical evidence showing the need to implement the provisions of the Act more aggressively in order to redress historical imbalances in the workplace. These figures appear to suggest that very little had changed in respect of workplace discrimination and blatant disparities in the types of employment opportunities available to designated groups despite the new legislation in place.

Gender Equity Unit of the University of the Western Cape (UWC) submission
Ms M Hames read the submission from the Gender Equity Unit at UWC, concluding that employers still appeared to favour white Anglo Saxon heterosexual males as preferred candidates for middle and senior management positions in tertiary institutions. (Please see attached submission)

Discussion
The Chair asked what strategy would be used to address EE imperatives in organisations with fifty employees or less. Noting that these organisations were not covered by the Act and the increasing numbers of workers affected by this, he suggested that this situation needed careful monitoring.

In response, Ms Madsela explained that organisations with less than fifty employees but annual turnovers in excess of R 10 million were, in fact, covered by the Act. Nevertheless, available data on organisations in the category of fifty employees or less was limited and largely dependent on information collected by the Unemployment Insurance Fund (UIF) and Workmen’s Compensation Commission. As a result, it was not yet clear what percentage of the total South African workforce was employed in this category. She undertook to revert to the Committee on the issue.

The Chair then reiterated his request for information on the strategy used to promote EE imperatives in the employer category of fifty or less employees. He was advised that, in order to qualify for public sector procurement tenders, many employers in that category had chosen to participate in the EE process out of expediency. Since the inspectorate was collecting information on employer practices across the spectrum, regardless of the size of each organisation concerned, many employers in the category not required by law to comply with the Act were, in fact, already being monitored. Nevertheless, noting that this category tended to include the least EE-friendly employers and the most vulnerable employees, the concerns expressed were justified although affected employees could appeal to the CCMA for assistance or notify the inspectorate of problems requiring attention.

The Chair observed that, since the capacity of the inspectorate was already insufficient to meet the demands of all the legislation concerned, the issue required urgent attention. He was referred to the Commission’s report for 2001/2002 for statistics that could throw light on the matter, with an undertaking from Ms Madonsela that the Commission would revert to the Committee as soon as possible with the information required.

Regarding public education and advocacy programmes to familiarise employers and employees with the requirements of the Act, Mr M Mzondeki (ANC) enquired what measures were being used to empower unemployed people in designated groups in respect of the implications of the Act for the recruitment of new employees. He observed that slow progress on EE was also impacting on resignations and asked for information on this.

Ms N Kahn (Department of Labour) conceded that, while the reasons for resignations and the strong possibility that EE-related matters could feature among them was an important issue, no information was currently available. This needed to be addressed.

Ms Madonsela advised Members that research was already underway that could provide this information. She then confirmed that the provisions of the Act included discrimination at the point of recruitment and the implications of this for prospective employees. The Department was raising awareness of this and related issues among employers and employees.

Ms Kahn confirmed this, advising Members of an aggressive campaign nationally and provincially to familiarise all parties concerned with the requirements of the Act, particularly in the light of the new reporting period currently in progress.

Mr S Mshudulu enquired what Fabcos members themselves were doing to ensure compliance with the Act, since they tended to employ smaller numbers of employees in their businesses and therefore often fell within the category of fifty employees or less. He also suggested that, since tertiary institutions tended to produce the managers whose practices and attitudes in the workplace would eventually be affected by the requirements of the Act, they, too, might need to look at ways of increasing awareness of the Act as part of their curricula. He asked what was being done by the Gender Equity Unit to change governance structures and policies at UWC itself.

Mr Fletcher assured Members that, since the restructuring of Fabcos, members were being appropriately educated and trained in respect of EE imperatives and their responsibilities in this regard.

Ms Hames explained that her submission had been generic to all tertiary institutions. While the University of the Western Cape was leading the way in many respects, she conceded that more could be done. Employment policies were currently being reviewed with this in mind. However, the vision of the National Plan for Higher Education of 2001 and related legislation would need to be brought in line with the Skills Development Act of 1998 and the EEA if employee demographics at tertiary institutions were to more adequately reflect EE imperatives, particularly in respect of gender. Regarding curriculum development and change in order to address the issues concerned and prepare graduates more appropriately, she noted that the Gender Equity Unit at UWC tended not to be represented on executive management structures where these types of decisions were made. However, women and gender studies were available at most tertiary institutions, although enrolments for the courses concerned were voluntary.

Mr Lindie told the Committee that, while BMF members were encouraged to act as change agents within their respective organisations, senior black managers did not always adhere to legislative requirements. Every effort was being made to make members more accountable in this regard. When asked by the Chair whether the BMF had a formal structure for dealing with complaints on EE-related issues, he was advised that this matter was still being debated. The Chair then suggested that one of the criteria for membership of BMF might need to be proven compliance with the requirements of the Act.

Prince N Zulu (IFP) appealed for drastic action in respect of monitoring and enforcing compliance with the Act. Acknowledging that the proposed award system could serve as an incentive to compliance, he suggested that the experiences of countries with different experiences of discrimination to those in South Africa might not necessarily be relevant. An award system for employers in South Africa might be interpreted by some as an acknowledgement of failure to enforce compliance and an attempt at appeasement.

In response, Ms Madonsela said that provision for an award system had been included in the Act and in the programme of work for the Commission. Although an award system in the context of South Africa’s past had political implications, the Commission itself was not uncomfortable with being seen to have adopted a conciliatory approach to EE, particularly if this produced the desired results.

Mr T Boya endorsed his colleague’s view, advising that, while enforcement was not currently part of the Commission’s strategy, should there be no marked improvement in the situation by the end of the five-year period concerned in 2004, enforcement would need to be considered. Speaking as a representative of organised business, he told Members that the co-operation agreement now in place between key umbrella employer organisations should address concerns in respect of the employer category of fifty or less employees.

Ms Kahn told Members that many compliance orders had been issued during the aggressive inspection campaign conducted during the past six months and that prosecutions would follow.

Noting that existing business excellence awards tended not to include EEA compliance as a qualifying criterion, her colleague, Mr F Mponyane, advised the Committee that the award system envisaged by the Commission would obviously be different in this regard. Furthermore, the annual reports on EE would in future provide employers with an opportunity to articulate their concerns about the constraints facing businesses in complying with the Act. These would be used in developing an appropriate award system. The Department was also working with other regulatory bodies with a view to encouraging and enforcing compliance. By way of example, failure to comply with the requirements of the Act could be a motivating factor in revoking a casino licence. Discussions were also underway with the National Tender Board on this issue, to complement the measures already in place in respect of procurement policy. Regarding tertiary education institutions, it was envisaged that the proposed mergers would address EE issues over time.

In closing, the Chair commended the Department on its efforts noting that, despite low levels of implementation, effective mechanisms appeared to be in place to fast-track the process. He suggested that, in the light of efforts being made by some employers to progress beyond the essential requirements of the Act, a rating system be put in place. The system would distinguish between those complying out of a sense of commitment and those complying because they had no alternative might be one way of acknowledging the former. The Committee might need to engage further with the Commission on this.

He then read the contents of a letter received from the Congress of South African Trade Unions (Cosatu), apologising for not participating in the hearings. They cited insufficient information to form an accurate picture of developments among its affiliates as the reason for not making a written submission. Expressing regret at this and the fact that the Federation of Unions of South Africa (Fedusa) had not arrived to make its submission to the Committee at the allotted time, he emphasised the important role played by trade unions in ensuring compliance with the requirements of the Act. The hearings would undoubtedly have been far richer had the perspectives of both unions been included. Nevertheless, the process had sensitised Members to many important issues and had been a rewarding one in that respect.

The meeting was adjourned.

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