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BUSA PRESENTATION ON EE & ES Amendments

This presentation provides the general comments and areas of agreement and disagreement from BUSA on the Employment Services Bill. BUSA aims to facilitate employment and job creation in South Africa and supports the intent of the Bill.

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BUSA PRESENTATION ON EE & ES Amendments

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  1. BUSA PRESENTATION ON EE & ES Amendments PARLIAMENTARY HEARINGS 8 AUGUST 2013

  2. Who we are… • Confederation of business organisations including Chamber of Commerce and Industry. • Voice of business in South Africa • Represent RSA businesses on macro economic issues at national and international levels. • Main aim is to ensure that business plays a constructive role in the country’s economic growth, development and transformation. • We want to create an environment in which businesses of all sizes and in all sectors can thrive, expand and be more competitive.

  3. Who we are… • Our members include associations representing small, medium and big businesses including chambers of commerce, financial institutions, professional organisations, constructions, manufacturing, engineering, PEA, finance, retail, roads and transport, IT, etc • We represent Business at NEDLAC • Member of International Labour Organisation • Member of the SADC Employer Group • Member of the B20 • Member of the OECD Business Industry Advisory Committee • This submission is supported by all BUSA members

  4. BUSA COMMENTS EMPLOYMENT SERVICES BILL

  5. General Comments • The key thrust of the ES Bill is to facilitate employment and job creation amongst other objectives • BUSA supports the intent and spirit of this Bill and confirms that there was substantial agreement on many areas of the Bill following consultations at NEDLAC. • One of SA’s key challenges is unemployment. The unemployment rate is a major concern including the inability of many industries to create new jobs and retain existing jobs • We therefore support the need to provide for mechanisms to facilitate employment particularly amongst the Youth. • The NDP has identified the need to lower employment costs to enable the private sector, particularly Small Medium Enterprises to play its role effectively in job creation.

  6. Areas of Agreement

  7. Areas of Agreement

  8. BUSA’s Comments on Areas of Agreement • While we support many areas of the Bill, BUSA is concerned that Employment Services for the promotion of employment requires a number of elements in practice that will be pivotal to the ES Bills achieving its objectives. • These elements are: • Speedy and responsive processes, implementation and decision making • Easy access to Employment Services • Reduced administrative burden, particularly for small business • Alignment and integration with Skills Development • Capacity in Employment Services to achieve objectives

  9. Areas of Disagreement

  10. BUSA’s Areas of Concern • Under Section 6, BUSA supports the need to promote employment of youth and other vulnerable work seekers. Under this section, we note our support of a youth wage subsidy or incentive . The high unemployment rate amongst the youth, requires interventions that will assist business to create jobs for the inexperienced youth. • Sections 7, the provisions pertaining to job retention are too narrow. These should cover the scope of the Training Layoff Scheme. During deliberations at NEDLAC on this matter, parties agreed to include measures to ‘avoid’ retrenchment in addition to minimising the retrenchment. It is unclear why these have since then been deleted. • Implementation of Section 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 (especially scarce skills). BUSA is of the view that should the Minister be involved with this process, it will delay the already very slow process which is experienced with the involvement of the Department of Home Affairs and the Department of Trade and Industry, especially in terms of acquiring corporate visas.

  11. BUSA’s Areas of Concern • BUSA is unable to support Section 10 (2) as we believe it could potentially place unnecessary administration burden on employer’s particularly small businesses and the overall Departments capacity to implement. • The provision relating to Section 19 dealing with cancellation of registration of a private employment agency is supported but seeks a provision that deals with when deregistration or refusal to register occurs: • a review application to have the effect of suspending the Registrar’s decision to withdraw an existing registration or refusal to issue a registration certificate to an existing Private Employment Agency. • The registration should remain valid until the process is finalised in order to avoid job loss and problems with business continuity.

  12. BUSA’s Areas of Concern • BUSA welcomes the proposed establishment of the Employment Services Board as stipulated in Section 20, and recommends that the appointment of representatives be through the nominating constituencies in NEDLAC. • In terms of Schedule 3, we support 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.

  13. BUSA COMMENTS EMPLOYMENT EQUITY AMENDMENT BILL

  14. Areas of Agreement

  15. BUSA’s Comments on Areas of Agreement • We participated in the NEDLAC deliberations on this Bill in meaningful social dialogue • There is substantial and significant consensus between all parties on the proposed Amendments. Significant areas of agreement include: • Section 6 and s11- equal pay for equal work and the onus of proof are included in way that is consistent with the Constitution. • Section 10 and s48 - discrimination matters can be referred to CCMA for arbitration, provided there is a full right of appeal to the Labour Court. This was a compromise agreement to promote accessibility, and also ensure full recourse to justice before the Court.

  16. BUSA’s Comments on Areas of Agreement • Section 21 and 55 – enables annual reporting for all sized businesses. We note our agreement to remove the requirement for separate reporting for small business into an option. We note that this agreement was on condition that there needs to be a note in the Explanatory Memorandum in this regard. • Section 42- assessment of compliance with the deletion and addition of certain clauses. This was a compromise agreement. • Section 45 - failure to comply with DG request or recommendations provisions have been strengthened together with the opportunity for employer’s to have certainty within a specified time.

  17. Areas of Disagreement

  18. BUSA’s Comments on Areas of Concern ENFORCEMENT & COMPLIANCE • BUSA supports improved compliance and greater accountability in order to promote employment equity. • Amendments are targeted at improving the efficiency and effectiveness of enforcement in relation to employment equity. • Welcome the intention, and support the streamlining of the process. • Recognise the increased resourcing and improvements and efforts made by the Department to enhance the capacity of Inspection Services. • Recognise that employment equity is part of everyday business process. • We particularly welcome ratification by South Africa of ILO Convention 81 on inspections this year. This should be taken into account with these provisions.

  19. BUSA’s Comments on Areas of Concern • BUSA strongly supports an independent, professional and capable inspectorate as contemplated in the ILO Convention 81. • Convention 81 is a priority Convention, which specifies: • Article 3 that the functions of the labour inspectorate include: securing enforcement of legal provisions by inspectorate as far a 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 of the competent authority. • Article 7 requires labour inspectors to be recruited with sole regard to their qualifications and performance and that labour inspectors shall be adequately trained for the performance of their duties. • Article 10 and 11 require sufficient labour inspectors and resources for them to discharge their duties • Article 15 provides there should be a prohibition on conflict of interest and effective disciplinary measures and penalties, and confidentiality in the work of the inspectorate in national laws and regulations. These provisions should be incorporated into the BCEA Amendments and the EEA Amendments to ensure a compliant, credible and professional inspectorate. • The amendments do not go far enough to align with Convention 81

  20. BUSA’s Comments on Areas of Concern ENFORCEMENT & COMPLIANCE – SUCCESSES AND CHALLENGES • Many BUSA members have participated in DG reviews • DG reviews have identified weaknesses and improved compliance • There is recognition of progress in the CEE Annual Report and the Indaba • This is a positive and constructive process which should be enhanced • The DG review shifts attitudes and promotes transformation at the highest levels • Failures of enforcement can be because of: • Deliberately non-compliant employers • Businesses, which do not understand • Businesses, which do not have the capacity to implement • Inspectors who do not interpret the laws consistently and effectively • Inspections on Employment Equity should support improved compliance • We need many professional, qualified, capable, inspectors with technical knowledge and insight who raise the right issues and tackle the correct problems • We need effective allocation of resources of the inspectorate • We need cases to be prosecuted for the right reasons to ensure transformation

  21. BUSA’s Comments on Areas of Disagreement • BUSA will support the repeal of Objections and Appeals against Compliance Orders (sections 39 and 40) provided there is an additional step added: • To go directly to Court, without a prior attempt at alternative dispute resolution, to correct weaknesses or clarify requirements, is contrary to the foundation of our labour law that encourage dispute resolution. • The trend in South Africa and elsewhere in Africa is to encourage alternative dispute resolution even outside employment law. (See for example, the imminent introduction of mediation by the Department of Justice in the civil justice system). Additional Proposal: • BUSA proposes that should compliance order objections and appeals be removed as per the amendment, and that in addition there should also be the option of a voluntary and speedy conciliation process, preferably under the auspices of the CCMA, before a matter is referred to the Labour Court.

  22. BUSA’s Comments on Areas of Concern • We do not support the Amendment to make it voluntary for an inspector to request an undertaking of compliance by an employer (s36(1)). • Convention 81 requires that an employer should at least have an opportunity to voluntarily comply before being issued with a compliance order or in some instances being taken directly to Court. • We will support the Amendments that certain matters to go directly to Labour Court, without even a compliance order being required (s20(7) and s21(6)) provided the word ‘compliant’ is removed. • Agree that failure to submit an employment equity plan, and failure to submit an employment equity report should be swiftly dealt with. • The word ‘compliant’ is problematic as it becomes an interpretative issue. • Once there is interpretation required, a pre-step is required to see if the issue can be resolved by clarification prior to going to Court.

  23. BUSA’s Comments on Areas of Concern FINES We do not support a number of the Amendments to Fines (Schedule 1). • We support the need to have more severe category of fines we believe that these fines must be related to the transgression and should be targeted at securing the desired behaviour. • The 2010 Regulatory Impact Assessment (pages 73 – 80) cautioned against this turnover option as an appropriate and effective mechanism to deal with non-compliance. • It was noted that the situation is different in the context of the Competition Act where non-compliance typically results in economic gains that should not have occurred. Turnover has no relationship to employment equity and is merely punitive. • Turnover has no relationship to the offence (it is a basic principle of law that the ‘fine must fit the crime’).

  24. BUSA’s Comments on Areas of Concern Alternative Proposal: • BUSA proposed that a better approach would be to • focus on DG reviews (these are having a positive impact) • to adjust the fines upwards by 300% (200% is the trend in the BCEA and other revisions of fines, so this is a higher amount) • to address the CPI increases since last amended, and to provide for annual CPI increases. • As another alternative, if turnover is retained, BUSA proposed the inclusion of a clause, similar to that in the Competition Act, that provides that the ‘Court, when having regard to the fine to impose would consider: 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.’ 

  25. BUSA’s Comments on areas of Omission Duplication of Fines • Duplication and splitting of fines should be avoided. For example, it is inappropriate to have both s16 and 17 as both being subject to separate fines: s16 contains the obligation to consult, whereas s17 simply lists the matters for consultation. • We agreed and it is captured in the NEDLAC Report that we should avoid duplication and splitting of fines for offences that are part of the same transgression. • This NEDLAC agreement has been omitted from the Amendment Bill and should be incorporated. New Fines • It is also important to note that the inclusion of s24 (assignment of a senior manager), s25 (duty to inform) and s26 (duty to keep records) were never part of the matters tabled initially as part of the NEDLAC negotiations and Report. The addition of these sections as additional categories for highly onerous fines is not acceptable as it has been unilaterally altered after the conclusion and contrary to the Nedlac Agreement. There are existing enforcement mechanisms for such infringements in any event. • These post-NEDLAC additions to fines should be deleted.

  26. Concluding Remarks • BUSA acknowledges the constructive role played by the CCMA in assisting the parties at NEDLAC to achieve much higher degrees of consensus in the negotiation of these two Bills. • BUSA supports transformation in the workplace by promoting equal opportunity and fair treatment in employment through the elimination of unfair discrimination • We support the implementation of affirmative action measures to redress the disadvantages in employment in order to ensure equitable representation in all occupational categories and levels in the workforce • We remain committed to ensure that every employer take steps to promote equal opportunity in the workplace and that no one is unfairly discriminated against. • We acknowledge that 19 years into South Africa’s new democracy, black people, women and people with disabilities continue to be under-represented in the country’s workforce and company boards. • BUSA has committed to work with its members to support transformation programmes for social and economic transformation. • We also welcome the initiatives by a number of companies who continue to show commitment to transformation as reported in the recent CEE Report.

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