Compensation for Occupational Injuries and Diseases Amendment Bill & Employment Equity Amendment Bill: DEL response to public submissions

Meeting report

The Chairperson convened the virtual meeting and welcomed Members and the delegations in attendance. The purpose of the meeting was for the Committee to be briefed by the Department of Employment and Labour (DEL) on its responses to the submissions received during the public hearings on the Employment Equity Amendment Bill [B14B — 2020], and the Compensation for Occupational Injuries and Diseases Amendment Bill [B21B — 2020], currently under consideration.

The delegation from the DEL consisted of Mr Thembinkosi Mkalipi, Chief Director: Labour Relations, Department of Employment and Labour, Ms Ntsoaki Mamashela, Director: Employment Equity, Department of Employment and Labour, Mr Masilo Lefika, Deputy Director: Employment Equity, Department of Labour, Adv Harry Maphologela, Senior Legal Advisor, Department of Employment and Labour and Ms Karabo Magagane, Media Liaison Officer, Department of Employment and Labour. In addition, Mr Vuyo Mafata, Commissioner, Compensation Fund and Ms Milly Ruiters, Director: Occupational Health and Hygiene, Compensation Fund, were also in attendance.

Briefing by the Department of Employment and Labour on its responses to the public hearings and submissions received on the Employment Equity Amendment Bill

The first item on the agenda was for the Committee to be briefed on the responses of the DEL on the submissions received during the public hearings held on the Employment Equity Amendment Bill. Ms Mamashela presented the briefing to the Committee.

Summary of the briefing

The purpose of the Employment Equity Act 55 of 1998 is to promote equal opportunity and fair treatment in employment through the elimination of unfair discrimination,- and to implement affirmative action measures to redress the disadvantages in employment experienced by designated groups, to ensure their equitable representation in all occupational levels in the workplace. In this light, the Employment Equity Amendment Bill was introduced in July 2020.

Public hearings were held, and the key matters that arose from the written and oral submissions received included the Constitutionality of sector-specific employment equity targets and quotas, the consultation with employees on sector-specific employment equity targets under s16, reasonable steps taken by employers versus justifiable, reasonable grounds under s53(6) of the Employment Equity Amendment Bill, the employment equity certificates under s53(6), and penalties as included in Schedule No. 1 of the Employment Equity Act with emphasis on the DEL’s ability and capacity to enforce the proposed amendments.

The public’s submissions and the responses of the DEL were outlined to the Committee in the presentation. It was reported that significant progress has been made by the DEL and the Commission for Employment Equity, including the consultations with economic sectors and relevant stakeholders, started in June 2019. Follow-up engagements are underway regarding the DEL’s proposed targets that were tabled in the initial round of consultation.

Input by the Parliamentary Legal Services

The Chairperson thanked the delegation from the DEL for the briefing made to the Committee and for outlining its responses to the submissions that were made during the public hearings by the relevant stakeholders. He acknowledged that Parliamentary Legal Services (PLS) was in attendance and invited them for comments.

Adv Suraya Williams, Parliamentary Legal Advisor, emphasised that the biggest issue was of procurement compliance and compliance with s217 of the Constitution regarding the employment equity targets. It is required that where there are employment equity targets, the requirements of s217 of the Constitution must not be impeded. The existing Preferential Procurement Policy Framework Act 5 of 2000 is not changed by the amendments, as it is a requirement to have an employment equity certificate issued by the Minister of Employment and Labour. There were also a lot of issues about the consultations with the relevant sectors, where the main concern was whether the Minister of Employment and Labour should be there in-consultation or after-consultation. The legal difference is that during the in-consultation there should be a meeting of the minds, but with after-consultation, the Minister of Employment and Labour will be required to give all relevant sectors a reasonable opportunity to be heard and to then apply his mind to what has been said before making the decision at the end of the day. The concern with having in-consultation is that there may be a deadlock causing difficulty to reach a consensus, and this requires a deadlock-breaking mechanism. Additionally, the Minister of Employment and Labour is the person who has to account to Parliament and give the final prerogative on the matter. With after-consultation, the Minister of Employment and Labour can be held accountable for the matter, which is preferable in this instance as it would be difficult when there was a lack of consensus or a deadlock.

Regarding the issue about the reasonable grounds provided for in s53, where a party has not met its employment equity targets, Adv Williams stated that it is suggested that the DEL is referred to Regulations in which specific grounds will be provided as to when a party can declare that the employment equity targets have not been met. She noted that there are also some drafting issues requiring the removal of some words from certain clauses of the Employment Equity Amendment Bill, as it is paramount that consistent wording is used in the draft legislation. She stated that if any additional clauses are inserted, the Committee will have to enter into the relevant public participation processes once again to get submissions from the public.

Discussion

The Chairperson thanked PLS for the advice provided to the Committee. He reminded Members that this meeting was to ask clarity-seeking questions and that the Committee will have a discussion in its next meeting on the submissions received and the responses that have been given to the Committee by the DEL. During the next meeting, the Committee will also conduct its clause-by-clause analysis of the draft legislation.

Ms H Boshoff (DA, Mpumalanga) noted that the delegation from PLS stated that if any additional clauses are inserted, the Committee will have to enter into the relevant public participation processes once again to get submissions from the public. She asked for clarity on what specific clause of the Employment Equity Amendment Bill was referred to in this regard.

The Chairperson responded that it is s42(a) of the Employment Equity Amendment Bill. He reminded Members that, when the Committee previously engaged with the DEL, it was indicated that there was a mistake on consensus regarding that section, as there was a mistake where it was not included in the Employment Equity Amendment Bill. The Committee then requested advice from the PLS and the Procedural Office, and there were conflicting views on the issues. However, it was decided that the Committee will focus on the Employment Equity Amendment Bill as it is before Members. It has transpired that some stakeholders are making proposed amendments on their own. He asked for clarity from PLS on how the Committee should approach this issue.

Adv Williams responded saying that nothing was stopping the Committee from considering the proposed amendments made by stakeholders, including section 42(a) of the Employment Equity Amendment Bill. She reminded Members that there is a Constitutional Court case where a Committee considered an amendment during its deliberations, and in the matter, the Committee did not consult back with the stakeholders, and subsequently the amendment was unconstitutional. Therefore, the Committee may consider the proposed amendments during deliberations, but there is also a need to ensure that the public is informed that it is a proposed amendment that was not advertised at any stage. There must be some form of consultation before the Committee finalises the proposed amendments. The Committee cannot deliberate on it without a process of public participation.

The Chairperson stated that the Committee will further discuss this issue next week when it starts its deliberations on the Employment Equity Amendment Bill and the COIDA Amendment Bill.

Mr M Mmoiemang (ANC, Northern Cape) referred to the DEL’s response to the issues raised by stakeholders who are against the Employment Equity Amendment Bill. He asked whether the DEL engaged with stakeholders, including NEDLAC, to indicate which issues have been agreed upon. He indicated that at some point there will be a need to engage with the NEDLAC in this regard. Regarding the work of the Employment Equity Commission, he responded to the suggestion of having scientific research done on the meeting of employment equity targets and stated that there is enough evidence in terms of the employment equity reports submitted by labour sectors in terms of its employment equity plans. He asked whether the DEL has engaged with the Employment Equity Commission in this regard and for clarity on what those engagements covered.

The Chairperson stated that even if stakeholders were to agree on all of the proposed amendments, Parliament remains free to consider the proposed legislation and take into account the submissions by other stakeholders, including NEDLAC. Members of NEDLAC are also free to make individual submissions that could be contrary to the decisions that NEDLAC has taken. It is then left up to the DEL to draft the Amendment Bill that takes into account the issues that have been agreed to at the level of NEDLAC and other stakeholders.

Mr Mmoiemang added that the Committee is appreciative of the fact that the Employment Equity Amendment Bill is centred on the key areas informed by the programmes of transformation in the employment sector. However, there is still a need for urgent intervention by the Legislature and the Government to ensure that these transformational ideals are realised, and that South Africa becomes a developmental state. It is paramount that the process of transformation is expedited. It is also important that employment equity plans are implemented for smaller businesses, as it is in the smaller companies and businesses that you will find a brutal and perpetual maintaining of the status quo.

The Chairperson stated that there was a lot of debate on s15A on the issues of determining structural numerical targets. He asked the delegation to provide Members with more information regarding the differences between targets and quotas for the upcoming deliberations of the Committee. What difference would targets make that setting quotas could not? Members have been given the impression that there is no difference between setting targets and setting quotas. How will these sector-specific targets be aligned with the targets set by employers? What will happen if the employers’ targets are not in line with the set annual targets? Regarding the issue of s53, he noted that there was a long debate in terms of clarification, especially on the issue of ‘double punishment’ as raised by the stakeholders. He asked whether it is permissible to use one piece of legislation to ensure the implementation of another piece of legislation. He noted that the PLS will be asked to provide the Committee with further advice on the consultation processes required if the Committee chooses to deliberate on s42(a).

Responses by the Department of Employment and Labour

Mr Mkalipi responded to the question on the issue of ‘double punishment’ in terms of s53 and stated that it has nothing to do with different legislation, but rather about whether someone is 'punished' twice for the same offense. The DEL has provided the Committee with its reasons on why it does not agree with many of the issues that were put forward or raised by stakeholders, such as the issue of reasonable grounds and whether an employer can give a justifiable reason for not complying.

Ms Mamashela responded to the question regarding the Employment Equity Commission and whether there was any consensus between the social partners regarding the slow pace of transformation in the labour market. She stated that the Employment Equity Commission consists of social partners, including NEDLAC, and is mandated to look at and analyse the data submitted by employers in the different sectors, and to compile it in a report to be submitted to the Minister of Employment and Labour as a reflection on the employment equity status and the pace of transformation in the labour market. When the Minister of Employment and Labour releases this report, it is then tabled at NEDLAC to update and give feedback to all social partners, and to indicate that drastic measures need to be implemented given the pace of transformation in the workplace is significantly slow. There have only been a 2% increase in the progress made, even though the Employment Equity Act was enacted 23 years ago. Regarding the question on the differences between targets and quotas, she stated that the difference is that if there is a set quota then any failure to comply classifies as non-compliance, which is then referred to the Labour Court for adjudication and the imposition of a penalty. In this case, the employer is not allowed to provide any justification or reasonable grounds as to the reasons for its failure to comply with the set quota. The quota system is more rigid with no room for flexibility. On the other hand, the use of targets requires employers to strive to achieve the set targets in a given timeframe, giving some flexibility to the process. Employment equity applies when new opportunities arise and does not require people to be dismissed to make space for those who are underrepresented. In this regard, the growth of the company and its recruitment opportunities are also considered by the DEL. Thus, targets are more flexible than quotas. She stated that the Minister of Employment and Labour will regulate the sector for after-consultation and set targets with given timeframes, such as a five-year time period. The use of justification or reasonable grounds is to add flexibility to the system for situations where the employer could not adhere to the requirements.

Briefing by the Department of Employment and Labour on its responses to the public hearings and submissions received on the COIDA Amendment Bill

The second item on the agenda was for the Committee to be briefed by the DEL on the submissions received during the public hearings held on the COIDA Amendment Bill. Mr Mkalipi presented the briefing to the Committee.

Summary of the briefing

It was reported that the Socio-Economic Impact Assessment (SEIA) was conducted twice in relation to the COIDA Amendment Bill, once before it was published for public comment in September 2018, and again after incorporating public comments and the input from NEDLAC in August 2019. Consultation processes were undertaken at various stages during the development of the COIDA Amendment Bill. Public hearings were held, and the key matters that arose from the written and oral submissions received included definitional aspects for an accident, the transfer of the Director-General's administrative powers to the Commissioner, notice periods, fines, and penalties, the rehabilitation and return to work of injured employees, and the investment of funds with the Public Investment Corporation (PIC). The public’s submissions and the responses of the DEL were outlined to the Committee in the presentation.

Discussion

The Chairperson thanked the delegation for the briefing made to the Committee. He noted that the bulk of the briefing covered issues that were raised regarding the administration of claims. He stated that the Committee made a decision to engage with those issues outside of the current legislative process and deliberations. He stated that the Committee will invite the Compensation Fund (CF) and complainants to engage with the Committee on these issues in the near future. The Committee will follow up with the issues that have been raised by stakeholders regarding the administration of claims. He requested that Members do not make inputs on those issues during this meeting, as there will be an opportunity to engage thoroughly with the issues that were raised regarding the administration of claims. The Committee will focus on the amendments as presented by the DEL. The Committee is not dismissing the discussions taking place at the level of NEDLAC. He requested that the DEL provide the Committee with a report on which stakeholders’ issues have been responded to regarding the COIDA Amendment Bill, in a similar way that it was presented for the Employment Equity Amendment Bill. This will make it easier for the Committee to conduct its deliberations. He asked that the report be submitted by Friday, 11 March 2022, as the briefing was too general which makes it difficult for the Committee to determine the DEL’s responses to each stakeholder.

Mr M Dangor (ANC, Gauteng) indicated his concern on the issue of pre-funders, which he understands as being debt collectors. He asked for clarity on the pre-funders’ margin of profit, but there was no answer to his questions on this issue in a previous meeting.

Ms Boshoff agreed with the Chairperson on the need for the DEL to provide the Committee with a report on which stakeholders’ issues have been responded to regarding the COIDA Amendment Bill, in a similar way that it was presented for the Employment Equity Amendment Bill. She asked Mr Vuyo Mafata, the Commissioner of the CF, to determine whether the issue faced by the complainant, who indicated that it took 341 days for their claim to be finalised, was a once-off problem or whether it is a recurring problem. Are there any other third-party administrators which have indicated that they are experiencing the same problem regarding time?

Mr Mmoiemang echoed the concerns of Mr Dangor regarding the pre-funders.

Responses by the Department of Employment and Labour

Commissioner Mafata noted the comments and inputs made by Members and confirmed that the required information will be submitted to the Committee, including on the concerns of the pre-funders, so that the issues may be put to rest. He stated it is quite concerning if third-party administrators are deeming themselves as debt collectors, especially if they have played no role in the administration of any claim under the COIDA. The amendments will come with transitional arrangements, especially regarding claims received prior to the amendments.

Adv Harry Maphologela, Senior Legal Advisor, confirmed that the amendments will come with transitional arrangements, especially regarding claims received prior to the amendments and any amendments of the COIDA Amendment Bill that applies retrospectively.

The Chairperson thanked Members and the delegations in attendance for their participation during the meeting. He thanked the delegation from the DEL for the briefings made to the Committee and the information provided to Members. He also thanked all the stakeholders who made submissions and attended the meeting to hear the responses from the DEL. He noted that the Committee will convene next week to start its deliberations on the Employment Equity Amendment Bill and the COIDA Amendment Bill.

The meeting was adjourned.