DEPARTMENT OF LABOUR

DEPARTMENT OF LABOUR RESPONSE ON THE EMPLOYMENT SERVICES BILL, 2012 PUBLIC COMMENTS

Response to concerns raised on the Employment Services Bill (Public hearings on 7-8/08/13) 1. Parliamentary hearings on amendments on EEA and PES Bills were held on 7-8/08/2013. 2. Both oral and written submissions were received and comments were made on proposed amendments on various sections of the Employment Services Billl 3. Responses have been prepared in relation to what has been raised by the public on each section of the Bill.

Preamble Disability Workshop Development Enterprises (DWDE) • The issue of employment of persons with disabilities should be addressed within the framework created by international human rights instruments, most notably the Convention on the Rights of Persons with Disabilities (CRPD) as well as Convention 168 of the ILO. The Centre for. Responses by DOL: In the drafting of the ES Bill, an attempt was made to align it with a number of relevant UN and ILO conventions, including the CRPD. It is not necessary to make reference to or stipulate such Conventions in the preamble to the Bill. • Clause 3(b) of the Bill refers to “any relevant international labour standard”, Wherever reference is made in the ES Bill to “Protected Employment Enterprises”, the word “protected” could be replaced with the word “supported” to comply with the UN Convetion.

Section 1: Definitions DoL Response “Employment services” includes, amongst others, the provision of temporary employment services. The functions of public employment services are limited to those provided for in section 5 (1)(a)-(j) and (2) of the Bill. Inclusions and exclusions of different categories of work opportunities and employers will be provided for in the regulations as per Section 10(2) of the ES Bill. Confederation of Associations in the Private Employment Sector (CAPES) • “employment services” – the definition is too broad when considering services such as psychometric testing, career and guidance counseling and may lead to many businesses ending up contravening the law. • “work opportunity” - definition is too broad

Section 1: Definitions Centre for Constitutional Rights (CFCR) – a unit of the FW de Klerk Foundation DoL Response NEDLAC Social Partners agreed not to define vulnerable groups as they are well known The ES Bill can be amended to make reference to any statutory definition of the term provided for in any other existing legislation.. • “vulnerable work seekers” - that in order to ensure legal certainty in relation to interpretation of the Bill, “vulnerable work seekers” should be properly defined

Section 1: Definitions Disability Workshop Development Enterprises (DWDE) DoL Response The Bill will can be amended to make reference to the definition of “persons with disabilities” as provided for in the Employment Equity Act, 1998 or use the term as defined and not repeat it in the ES Bill. Agree that Section 42(1) is amended in line with the UN Convention. “Specialised employment services” shall include the provision of such services as: career/employment counseling, psychometric assessment etc. • definition of “persons with disabilities”, or reference to other statutory definitions such as section 1 of the Employment Equity Act, 1998. • Proposed new definition as set out in the Convention on the Rights of Persons with Disabilities especially for Chapter 6: “persons with disabilities include those who have long-term physical, mental, intellectual or sensory impairments which in interaction with various barriers may hinder their full and effective participation in society on an equal basis with others” • “specialized services” - as applicable to persons with disabilities to include the following (with the meaning of each term also clarified in turn) • Work assessment; • Assistive devices; • Career counseling; • Job coaching; and • Supported employment.

Section 1: Definitions University of South Africa (UNISA) DoL Response The State Law Advisors to advice usage of means or includes NEDLAC Social partners agreed not to define vulnerable workers Any definition that reference any statutory definition provided for in any other existing legislation is welcomed. • Definition of “employment services” the word “includes” should be replaced with “means”. As it might convey the impression that there are also other functions which could be included at the behest of the functionaries. • The word “vulnerable” should be defined to avoid creating expectations in areas which the Act does not intend addressing.

Section 1: Definitions Constructional Engineering Association - Labour Broking Division (CEA LBD) DoL Response TES definition in Section 1 bears the same meaning as defined in Section 198 of the Labour Relations Act The Certificate of Registration will indicate areas that TES is registered for. Regulations will cove aspects related to responsibilities and obligations. • Temporary Employment Services TES’s obligations and responsibilities must be spelt out clearly.

Section 2: Purpose of Act SA Board for People Practices (SABPP) • Section 2(2)(c) encourages partnerships including in the provision of employment services. In view of the fact that there is a well-established industry of private employment service providers it would seem that there is considerable potential to establish fruitful partnerships rather than stretching the manpower of the Department of Labour unduly. DoL Response: • The comment does not affect the current ES Bill but rather emphasizes an operational collaboration matter. • The Department of Labour has already established long-standing working relationship with both the Federation of African Professional Staffing Organisations (APSO) and the Confederation of Associations in the Private Employment Sector (CAPES).

Section 2: Purpose of Act Solidarity Trade Union The ES Bill is an unnecessary piece of proposed legislation aimed at establishing state control through unwarranted state intervention in the labour market. DoL response: • Employment Services is already provided for in terms of the Skills Development Act, 1998. The latter repealed the Career Guidance and Placement Act of 1981. • The provision for ES is provided for in the various UN and ILO Conventions and forms part of the core functions of Ministries of Labour and Employment in the world • NEDLAC Social partners, Cabinet, the General Public endorsed the need for ES services. • ES is more critical RSA given our high levels of structural unemployment.

Section 2: Purpose of Act University of South Africa (UNISA) • Noted that section 2(1)(f) “facilitate access to training for work seekers, in particular vulnerable work seekers”. UNISA proposed the addition of “tertiary education” as reference “training” only, may create the impression that only practical subjects should be part of the task. DoL response: • Concur with the proposed addition of tertiary education and or education and skills development.

Section 5: Public Employment Services SA Board for People Practices (SABPP) • Section 5(1)(e) provides that ES include advising workers on access to education and training. This section seems to be poorly worded as it would, on current drafting, exclude work seekers from such advice. There is also no definition of “worker” • There could be overlap with the work of the South African Qualifications Authority (SAQA) DoL response: • State Law Advisors to check the legal drafting • Worker is already defined in the Labour Relations Act, 1995 or in the Basic Conditions of Employment Act, 1997. • Provision of advice is done by various agencies and overlap is not necessarily a problem as different clients will approach various government entities for information. • Broad agreement was reached with SAQA and DHET/DBE on the following: DHET and DBE to provide Vocational Guidance in schools and institutions; DOL provides Employment Counseling in Labour Centers and SAQA to provides Career Information and Standards for Counselors.

Section 5: Public Employment Services Confederation of Associations in the Private Employment Sector (CAPES) • The Department will not be able to deliver on this mandate without placing a significant strain on its insufficient resources. Public-Private-Partnerships are necessary and need to be formalized before the bill is enacted. DoL response: • The comment has no bearing on the Bill • The Department of Labour has a long-standing working relationship with both the Federation of African Professional Staffing Organisations (APSO) and the Confederation of Associations in the Private Employment Sector (CAPES), • DOL is involved in a separate process with the National Treasury regarding resources needed for the implementation of the ES Bill.

Section 5: Public Employment Services Disability Workshop Development Enterprises (DWDE) • A serious omission on mechanism for the funding of assistive devices for employment of persons with disabilities. DoL response: • The provision of assistive devices is already provided for in terms of the Skills Development Act, 1998. • Section 6(1) of the ES Bill provides for work schemes, and assistive devices could be considered by the ES Board for purposes of enabling youth and other vulnerable work seekers to enter employment, remain in employment or be placed in opportunities for self-employment.

Section 5: Public Employment Services Ministry of Finance, Economic Development and Tourism (Western Cape Government) • Section 5(1)(d) of the Bill takes the role of “facilitating” the placing of work seekers with employers or in other work opportunities away from the Private Sector . This places the state in direct competition with the private employment agencies. Smaller private employment agencies in the private sector may have to close their businesses because of the competition they will encounter with government. • Furthermore, the Bill intends to shift the liability for the “placement fee” from the worker to the client. This places the client at a financial disadvantage. It increases the cost of labour to those clients who wish to make use of private agencies. DoL response: The State has a duty to intervene in ensuring that vulnerable workers are protected and assisted to find employment. • The existence of both Public Employment Services and Private Employment Agencies is already provided for in the Bill and for them to work in partnership in line with the applicable ILO Conventions.

Section 5: Public Employment Services Constructional Engineering Association - Labour Broking Division (CEA LBD) • Questions whether the Department of Labour has the expertise, resources and the knowledge to provide all such professional services. Their opinion is that it should be left to the TES industry and the Private Employment Agencies. DoL response: The Comment has no bearing on the ES Bill. Capacity development is an on-going feature of every organisation to meet the challenges of the future. The DOL is already providing PES to both work seekers and the Employers and has a long term vision to attract employers and work seekers to utilise its free services based on quality and efficiency • .

Section 6: Promotion of employment of youth and other vulnerable work seekers Cape Chamber of Commerce and Industry • Many schemes such as the training lay-off scheme are brilliant ideas but have not produced the results anyone would have expected. Despite the brilliance of the scheme, it has merely been seen as something good on paper as opposed to something in reality. • A youth wage subsidy would prove much more practical. DoL response: Employment schemes are measures necessary in case of high unemployment rate and literature review provides a range of scheme that has had major impact in other countries and locally e.g. Public Works Programmes and DOL schemes for the Unemployed. The Employment Conditions Commission (ECC) has a responsibility in setting conditions of employment for vulnerable groups

Section 7: Job retention Confederation of Associations in the Private Employment Sector (CAPES) • Currently the training lay-off scheme has not been successful. How is it envisaged that this would prove any different? DoL response: The ES Bill provides for a legislative framework to assist in TLS types schemes. The legislative vacuum including responsible mandates partly contributed to current challenges.

Section 7: Job retention Business Unity South Africa (BUSA) • The provisions pertaining to job retention appear to have been narrowed since the NEDLAC negotiations in a manner that is too limiting and could be interpreted to only apply to employees of “Protected Employment Enterprises” where else Nedlac, dealt with job retention on a broader basis so as to cover the scope of the Training Lay-off Scheme. . DoL response: • Concur with Business that Section 7(1) of the Bill is amended by deleting reference to Protected Employment Enterprises.

Section 7: Job retention Congress of south African Trade Unions (COSATU) • Called for the amendment of subsection 7(1) to require the Minister to consult with NEDLAC, as opposed to the Employment Services Board. In COSATU’s view such schemes constitute policy matters of a socio-economic nature.. DoL response: • The DOL will welcome appropriate wording in this regard. • NEDLAC broadly remains a forum for policy discussion on broad matters and any new policy will still be referred there. • The ECC under the BCEA is already empowered to deal with matters relating to conditions of employment for people on schemes

Section 8: Employment of foreign nationals Confederation of Associations in the Private Employment Sector (CAPES) • This could drive xenophobia. Practical queries about how far one would have to go to show that the skill required is not available in South Africa DoL response: • Section 8 (2)(a) and (b) of the Bill provides for the process to be undertaken in the recruitment of a foreign national. • The regulations will further clarify the process.

Section 8: Employment of foreign nationals SA Board for People Practices (SABPP) • Proposed an additional clause “ Notwithstanding the provision of the Bill as set out in section 8 (2)(a), a company operating internationally and in South Africa may obtain a general permission from the Minister to transfer into positions in South Africa any of their foreign employees, paying due attention to the availability in South Africa of such skills as each foreign employee might have, for a specified time and a DoL response: • Intra-company transfer of workers is already provided for under the Immigration Act, 2002.

Section 8: Employment of foreign nationals Centre for Constitutional Rights (CFCR) – a unit of the FW de Klerk Foundation • Section 8(2)(a) and regulations in terms of this section may lead to unjustified and possibly unconstitutional preferential treatment of South African workers at the expense of foreign nationals who are legally in South Africa and who are entitled to work in South Africa legally after having obtained the necessary documents in terms of South African immigration legislation. Vodacom (Proprietary) Limited) This section duplicates and undermines the Immigration Act. There is also no reference to permanent residents who ought to have the same opportunities for employment as South African citizens. It is also suggested that an exception for multinational companies should be considered. DoL response: • “Foreign national” means an individual who is not a South African citizen or does not have a permanent residence permit issued in terms of the Immigration Act, 2002. • Any foreign national who has a permanent residence permit will not be discriminated against.

Section 8: Employment of foreign nationals Centre for Constitutional Rights (CFCR) – a unit of the FW de Klerk Foundation • Strict and immediate implementation of the proposed measures might cause significant disruption to employers who might not in the short to medium term be able to replace illegal workers with suitably qualified South African workers. The government would have to consider how it would best be able to maintain, house and feed hundreds of thousands of undocumented foreigners and their families while their cases are processed, bearing in mind the requirement that it would have to do so in a manner that would be consistent with South Africa’s obligations in terms of the relevant international conventions on migration and refugees. DoL response: • Employers employing undocumented migrant workers will be dealt with in accordance with the Immigration Act, the same applies to undocumented migrant workers.

Section 8: Employment of foreign nationals South African Institute of Race Relations (SAIRR) Ministry of Finance, Economic Development and Tourism (Western Cape Government) ABSA Bank Limited • These obligations could prove more onerous than the 2010 requirements in that employers wanting to employ foreigners will now have to show that a countrywide search has turned up no other suitable applicant. This might be a deterrent to companies wanting to establish new operations in South Africa and to staff them with their own people to get them up and running. • The Bill also introduces a parallel system of requirements for the employment of foreigners, over and above those already contained in the Immigration Act DoL response: • DOL has worked with the DHA on the current draft and continues to do so in processing applications for Individual and Corporate VISA under the Immigration Act. • The obligation to first exhaust the local labour market by employers before importing a skill into the country has always been there in terms of the Immigration Act, 2002. • The Department of Home Affairs is currently reviewing the Immigration Act, 2002 to enable the Department of Labour to effectively regulate the labour market.

Section 8: Employment of foreign nationals University of South Africa (UNISA) • Noted that section 8 of the Bill prohibits the employment of foreign nationals without work permits and that no sanction for failure to comply with this provision have been included. • It is submitted that some reference to a sanction be included even it only consists of a reference to the Immigration Act DoL response: • The Immigration Act prohibits such employment applicable penalties will be used • State Law advisors to explore cross reference or introduction of a new section 8(1)(b) to read “An employer who employs the services of a foreign national without a valid work visa will be dealt with in terms of the Immigration Act, 2002”.

Section 10: Reporting on Vacancies and Filling of Positions -Cape Chamber of Commerce and Industry ; Confederation of Associations in the Private Employment Sector (CAPES); Solidarity Trade Union (“Solidarity”); Centre for Constitutional Rights (CFCR) – a unit of the FW de Klerk Foundation; BUSA and South African Institute of Race Relations (SAIRR; UNISA; VODACOM • Reporting on vacancies and the filling of positions should be left to private enterprise and not placed on the shoulders of a government. • The period it will take to consult the DOL regarding filling of vacancies • Administrative burden to small employers DoL response: • Original Section 10(1) was changed from must to may at NEDLAC and is consistent with the existing provision in the SDA 1998. • Employers access to PES provides them with free access to a diverse pool of suitably qualified work seekers, this reduces turn-around time for recruitment by employers, saves them massive advertisement costs and assist in placement of work seekers.

Section 11: Employment Information SA Board for People Practices (SABPP) • Welcomed intentions to improve the availability and quality of data on employment trends. The Department of Higher Education and Training also has such intentions and we hope that both departments, together with universities and research institutions, will work together to develop one integrated research and information system. DoL response: • Comment is welcome and has more to do with collaboration and no bearing on the Bill

Section 12: Financing of Public Employment Services Confederation of Associations in the Private Employment Sector (CAPES) • Objection to monies which are for specific purposes being used for PES. DoL response: • This remains one of the areas of disagreement. Both government and organised labour agree on the need for such funding.

Section 13: Registration and certification of Private Employment Agencies South African Institute of Race Relations (SAIRR) • Under the current Bill, private employment agencies “may not operate” in accordance with the provisions of the new statute and the terms of the agency’s registration. They are expressly barred from “providing any employment service they are not authorized to perform under their certificates of registration”. This provision could be used to achieve a ban on labour broking, without such a prohibition being written into the statute. DoL response: • Government, the business constituency, and FEDUSA have agreed at Nedlac to regulate temporary employment services and not to prohibit the practice.

Section 13: Registration and certification of Private Employment Agencies University of South Africa (UNISA) Vodacom (Proprietary) Limited Submitted that PEA are registered with the Registrar of Companies in accordance with the relevant provisions of the Companies’ Act and it is not clear as to what would happen to their status under the Companies’ Act if deregistered under the ES Act. DoL response: • The ES Bill, registration of PEA’s for performing ES functions and de-registration will mean seizing to perform such functions. It will not affect their registration status under the companies Act from performing other functions. The State Law Advisors to look at the formulation in this regard.

Section 17: Confidentiality of information collected SA Board for People Practices (SABPP) • Section 17(2)(b) is loosely framed at present. If this is intended to permit the collection of data for trends analysis as contemplated in section 11, then we feel that the section should state so. DoL response: • State Law Advisors to assist with the drafting

Section 17: Confidentiality of information collected University of South Africa (UNISA) • The words “or any other relevant information” in section 17(1)(b) might create uncertainty as to whether a criminal record may be included. It is suggested that this be explicitly addressed. There must be some limit to the record and it is submitted that it should be limited to cases where a person was, after 27 April 1994, convicted and sent to prison without an option of a fine and would always have to include instances where the person was convicted for fraud, theft or forgery as these go to the heart of an employment relationship. DoL response: • The State Law Advisors to assist with the drafting

Section 18: Cancellation of registration of private employment agencies Cape Chamber of Commerce and Industry • The suggestion to be able to cancel the registration of a private employment agency is draconian and would effectively kill an industry which is dedicated to job placement. DoL response: • In terms of section 18 (1) of the Bill, the in in in terms of section 18(1) of the Bill, the Registrar may cancel the registration of agencies for failure to comply with the requirements or any regulations made.

Section 18: Cancellation of registration of private employment agencies Business Unity South Africa (BUSA) South African Institute of Race Relations (SAIRR) • BUSA supports the provision dealing with the cancellation of registration of a private employment agency, but seeks a provision that when deregistration or refusal to register occurs, a review application should be provided for 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 rescinded. The registration should remain valid until the process is finalized in order to avoid job loss and problems with business continuity. DoL response: • During the review process, private employment agencies will be provided with a “Provisional Certificate” until the review process is concluded. • The LPC to consider insertion of Provisional Certificate under Section 13(5)(a) to address instances wherein the applicant may meet some of the requirements or their registration is under review.

Section 21: Composition of the Board Cape Chamber of Commerce and Industry • Doubts the functionality of the Employment Services Board • The Board should: • also make provision for industry experts in the staffing context as a special additional category; • not have the community constituency included in line with current NEDLAC LMC representation. DoL response: • The Nedlac social partners have agreed on the need for the Employment Services Board. • In terms of section 21 (1)(C)(ii)of the Bill,the participation of industry experts in the staffing industry in the ES Board is dependent purely on their nominations by the organized business constituency.

Section 21: Composition of the Board SA Board for People Practices (SABPP) Would like to see the Board constituting committees to exercise oversight over each of the services. Business Unity South Africa (BUSA) • Welcomed the proposed establishment of the Employment Services Board as stipulated in section 20 and its composition in section 21, and recommends that the clause be amended to clarify that the process of appointment will be done through Nedlac. DoL response: • The Board including the Conititution will address the types of Committees to be established • Section 21 already provides for nominations of representatives to be done by NEDLAC Constituencies and for the Minister to do the formal appointment amongst recommended names. The State Law advisors to advice.

Section 21: Composition of the Board Disability Workshop Development Enterprises (DWDE) • The membership of the Board (to be established in terms of Clause 22) should be expanded to include two persons, one woman and one man, with disabilities, appointed by the Minister from public nominations. Such persons should have the skills and knowledge required to provide advice on the promotion of employment of persons with disabilities. DoL response: • In terms of section 21 (1)(C)(iii)of the Bill,the participation of persons with disabilities in the ES Board is dependent purely on their nominations by the organized community and development interest constituency. • DOL will consider increased representation by people with disabilities on the Supported Employment Enterprises Management committee

Section 23: Constitution of the Employment Services Board University of South Africa (UNISA) • Section 23(1) provides as follows: “The Board must, as soon as possible after the appointment of its members and subject to the approval of the Minister, adopt a Constitution. It is suggested that it might create practical problems if the Board were to adopt its own Constitution. In fact, the section provides that rules as to voting must be included in the Constitution. It is suggested that the Minister determines the Constitution by way of a regulation before the Board has its first session. • Section 23 further provides as follows: “At least 30 days’ notice must be given for a meeting of the Board at which an amendment to the constitution or the making of a regulation is to be considered”. It is suggested that the word “making” be amended to “recommendation”. The Board does not make regulations, it only advises the Minister DoL response: • The State Law Advisors to provide advice • Section 23 will be amended accordingly.

Section 26: Dissolution of Board Confederation of Associations in the Private Employment Sector (CAPES) • Concerned with the power of dissolution by the Minister. DoL response: The Minister must have power in terms of Section 26(1) and (2)

Section 33: Establishment and composition of Board of Productivity South Africa Disability Workshop Development Enterprises (DWDE) • The membership of the Productivity South Africa Board (to be established in terms of Clause 29) should similarly be expanded to include two persons with disabilities, appointed by the Minister from public nominations. DoL response: • NEDLAC agreed on the current composition and was of the view that productivity related matters affect the tripartite (government, Business and Labour) and that the inclusion of the broader community may not be appropriate on the Board.

Section 34: Constitution of Board of Productivity South Africa University of South Africa (UNISA) • Section 34(1) provides as follows: “The Board must, as soon as possible after the appointment of its members, prepare and adopt a constitution, subject to the approval of the Minister”. It is suggested that it might create practical problems if the Board were to adopt its own Constitution. In fact, the section provides that rules as to voting must be included in the Constitution. It is suggested that the Minister determines the Constitution by way of a regulation before the Board has its first session. DoL response: Productivity SA is already established and has a constitution under the SDA. Schedule 2 Sub section 3(1) provides transitional provisions

Section 43: Functions of Protected Employment Enterprises Disability Workshop Development Enterprises (DWDE) • It is wholly unsuitable to assign the broader objective of “promoting the employment of persons with disabilities” to “Sheltered Employment Factories” in the way that the Bill currently appears to do in clauses 7 (1)and (2) • Congress of south African Trade Unions (COSATU) • “Protected Employment Enterprises” become a dead end option, rather than a transitional measure promoting reintegration into the mainstream labour market. DoL response: • Comments refers to the ES Bill as published in 2010 for public comment and not the current ES Bill. “Sheltered Employment Factories, amongst others, which was replaced with “Protected Employment Enterprises” • To align with the UN Convention on Rights of People with Disabilities it is accepted that “Protected “Employment Enterprise be replaced with Supported throughout the Bill.

Section 50: Offences and penalties Cape Chamber of Commerce and Industry • Many of the fines suggested are more and more draconian and would to a large degree appear to be trying to criminalise the labour law. University of South Africa (UNISA) Section 50 of the Bill provides for offences and penalties the effect of which would be the criminalization of employment law. It is submitted that this provision will have a chilling effect on business and may be prejudicial to South Africa insofar as international business and investors are concerned. DoL response: • The fines are necessary to ensure compliance to Labour legislation • DOL is also worried that bigger companies will simple budget for non compliance to pay for the very low fines as was demonstrated under the Employment Equity Act and hence the massive increase

Section 52: Regulations Confederation of Associations in the Private Employment Sector (CAPES) A number of matters which are quite pertinent are left up to the discretion of the Minister to implement via regulations – concern with regard to the fairness of same. University of South Africa (UNISA) Subsection (g) provides as follows: “any other matter relating to the provision of public employment services or the regulation of private employment agencies”. Although this power is open to further discussion, it has been held that Parliament may not delegate wide arbitrary powers to e.g. a Minister. DoL response: • The ES Boar is established to advise the Minister on Regulations. • All regulations will be subjected to the public comment process and the State Law Advisors Certification process before they are finally approved by the Minister for Gazetting. • The State Law Advisors to advice on the UNISA comment.

Schedule 3: Business Unity South Africa (BUSA) • BUSA supports the list of offences for which fines can be imposed, but for the purposes of certainty would request that the maximum fine per offence be specified. DoL response: • Section 49(2) of the Bill already provides for the maximum fines • Penalties for permitting a foreign national to work without a permit must be in accordance with the Immigration Act and must be removed from Schedule 3. • Section 50(2) and (30) also outlines penalties for offences in section 50(1)

Thank You…

DEPARTMENT OF LABOUR