Tag Archive | labour laws

Employment Equity regulations unexpected

Employment Equity Act surprises on race issues….

The reality of the Employment Equity Amendment Bill passed in Parliament last October is now beginning to kick in with the enforcement of the Bill by the regulatory process.   The Bill has now become an Act but the regulations are not what were expected on the race issue insofar as equity returns are concerned.

Oddly enough there were few objections or queries on the Bill when the draft Bill was presented for public comment by the department of labour (DoL) over eighteen months ago.  The legislation looked destined for an easy passage through Parliament but opposition party DA members appeared to be divided on a number of issues.

In an unusual turn of events, the Bill, when introduced into Parliament, allowed for foreigners whose applications for citizenship were turned down before 1994 on the basis of their skin colour and such persons can be included in employment equity (EE) returns in future.    This occupied much of the discussion in Parliament and MPs appeared to be relaxed that employment in terms of BEE would be regulated by DoL according to the demographics in the related areas.

Fines based on turnover

Fines were proposed in relation to turnover of the entity in question which could fall into eleven categories varying from agriculture to manufacturing, quarrying and mining to catering and transport and from wholesale, trade and commercial agencies to finance and business services.   Electricity, gas and water entities were mentioned, as were construction and community and personal services – all with total annual turnover thresholds given.

Most public comment in the parliamentary public hearings warned of criminalising business and strong objections were voiced on this issue.

Furthermore, the provisions of the Bill allowed for all white, Indian and coloured women who had been gender disadvantaged in terms of statutory law at any stage will also qualify for inclusion in terms of equity reporting.     The Employment Equity Bill was the third in a raft of four new labour bills presented to Parliament last year.

Business lagging in action

In its briefing to Parliament before the parliamentary public hearings, DoL suggested to parliamentarians that “business and industry has been riding roughshod over the law which had been unrevised for nearly 15 years and it was time now that provision was made in their budgets for considerably more than the negligible fines of the past.”

At the time of the Bill, it was assumed by most in the public hearings that the reference to “equity in terms of national or regional demographics” would mean that employers could set equity targets or make plans as called for in what could be interpreted as reasonable and according to the geographic area each company or entity was located.

The Bill said that “guidance would be given” on this provision by the DoL. The Bill was passed and became an Act with, as always happens, the regulations awaited – a matter then purely between DoL and the employer.

Race proportional representation

It appears from press reports that the regulations “giving guidance” on the issue of race demographics are a far more contentious item than the issue of the fines objected in the public hearings in Parliament.

The employment equity plan that each company must draw up, it is reported, now call in terms of the regulations issued for the targets to represent national demographics, not regional demographics as was expected, but still wherever the entity is of 150 employees or more wherever that entity is located.

It is unlikely that this matter will be debated in Parliament again unless a legal challenge results over the particular portion of the regulations concerned or the whole Bill is overturned constitutionally, which seems unlikely. Pressure on government to relax in general terms the consequences of new labour laws is coming from a number of directions.

Previous articles in this subject
http://parlyreportsa.co.za//bee/employment-equity-amendment-bill-looks-set-easy-passage/
http://parlyreportsa.co.za//labour/employment-equity-bill-criminalises-offenders/
http://parlyreportsa.co.za//bee/turnover-fines-employment-equity-breaches/
http://parlyreportsa.co.za//bee/court-ruling-equity-quotas-affects-bee/

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Turnover fines for employment equity breaches

Getting tough…

Ntsoaki+MamashelaFines that have been unrevised for a number of years for breaches in employment equity in terms of the Employment Equity Act are now proposed as being implemented on the basis of a direct link to balance sheet turnover, meaning a major increase in the size of penalty for medium and big business. The department of labour (DOL) have now briefed Parliament on the Employment Equity Act (EEA) Amendment Bill which was tabled during the last session of Parliament.

Hearings before Parliament from business are expected to be vociferous in their response. Business and industry have been facing a raft of new and more radical amendments to existing labour laws indicating a move from the voluntary nature of BEE participation through charters, to a legislative background of enforcement.

DOL suggested business and industry has been riding roughshod over the law which had been unrevised for nearly 15 years and it was  time now that provision was made in their budgets for considerably more than the “negligible fines” of the past.

New power to labour

The fourth of four of new labour laws, the EEA Amendment Bill, was presented to Parliament in a briefing to the portfolio committee on labour by the department’s equity director, Ntsoaki Mamashela (see picture).   The Labour Relations Amendment Bill, the Employment Services Bill and the Basic Conditions of Employment Amendment Bill have all be endorsed by the Nedlac process, following approval by cabinet; the Labour Relations Act changes failing to pass in the last parliamentary session due to lack of a quorum.

Ms Mamashela assured business that they had “nothing to fear” if they followed the basic rules which were now well-known throughout the country. The proposed amendments demand that the proportions of demographics on an employer’s staff role reflect the demographics of the territory in which the business or industry operates.

The proposed EEA changes apply to companies with 150 employees or more and the Bill makes it quite clear that the proposals refer to “black” people only.

Wording specific about racial categories

The wording of the new Bill states unambiguously “where under representation of people from designated groups has been identified by the analysis, the numerical goals to achieve the equitable representation of suitably qualified people from designated groups within each occupational [category and] level in the workforce, the timetable within which this is to be achieved, and the strategies intended to achieve those goals are not met”, the Bill states, then the minister may apply to the labour court for a fine to be imposed.

The fines are extensive, particularly where previous convictions are concerned, and reach nearly R3m. The department of labour  is also, the proposals state, given the right to refer those cases who have not made returns, or made false returns in respect of their employment equity registers, directly to the labour courts.

Public hearings before the portfolio committee continue.

Refer previous articles in this category
http://parlyreportsa.co.za//uncategorized/business-and-government-miles-apart-on-labour-laws/
http://parlyreportsa.co.za//cabinetpresidential/labour-nobody-at-top-biting-the-bullet/
http://parlyreportsa.co.za//cabinetpresidential/parliament-delays-process-on-labour-relations-bill/

Posted in BEE, Facebook and Twitter, Labour, LinkedIn, Trade & Industry0 Comments

Deliberations reaching final stage on labour laws

Two days of parliamentary hearings and weeks of debate on the proposed Basic Conditions of Employment and the Labour Relations amendment bills were based  on the fact that the parliamentary portfolio committee on labour laws in no doubt that business in general, representative employment bodies and in many case government’s own utilities saw no benefit for the country as a whole if the new labour legislation, as it was originally drafted, had been passed in its original form.

The original issue that caused much of the furore was the labour broking issue but the draft Bills cover considerably more issues than just this matter alone, representing as they do, an overhaul on a number of contentious labour matters.

In well attended public hearings a considerable number of parties mostly with a commercial background complained that the Bills as they were originally proposed would in all likelihood set back South Africa’s investment programme; would probably also result in more jobs lost than gained and in many cases said the provisions were either counter-productive, unclearly defined and mostly unfair to employers, sufficiently so as to be legally unenforceable.

Now in mid-November, the Labour Relations amendments have reached a delicate stage where parliamentary legal teams are considering a final draft with most of the clauses now being agreed, particularly on aspects of workability and constitutionality. Their is a clear divide in discussions on the two issue: policy issues and legal issues and chairperson Elleck Nchabaleng (ANC) has been at pains to maintain this division as the committee has set about debate the legislation clause by clause. Adv Gordon and Adv Barbara Loots have been present at most meetings as members of the parliamentary legal team.

A major issue of recent has been wording in respect of the retrenchment of senior and higher paid employers and furthermore wording that would reflect a wish to unclog the CCMA from cases put before them. Another issue has been the matter where clauses have been so altered or new wording adopted that the sections concerned bear little relationship to the documents perused during public hearings.

The amendments to the Basic Conditions of Employment Amendment Bill  which was tabled in tandem seem have reached a more conclusive stage on the subject of committee deliberation.

Among the organisations making inputs originally were the SA Chamber of Commerce and Industry, the Mr Price Group, the Banking Association of SA, the SA Society for Labour Law and the Federation of Unions of SA and Cosatu.

The main thrust of Cosatu’s presentation was to inform parliamentarians that their official stance to the committee on labour broking had been revised and their insistence that the legislation before them have provisions banning labour broking in any form had been reviewed. Also, as a consequence, they were not objecting to the process of labour broking registration.

Prakashnee Govender, the Cosatu representative, however maintained that the “real employer”, not the broker, should assume all employment obligations for the worker contracted where the work was not temporary in nature.

Cosatu also  voiced the view that any trade unions should have to obtain majority support when balloting their members before embarking on industrial action, Govender stating that this constituted a “fundamental attack not only on the right to strike but also on collective bargaining” and that such amounted restrictive practices by employers.

Govender also stated that Cosatu opposed the wording that unions be held liable for damage caused during strikes but said that to allow pickets to be present on “third party premises” was welcomed.

American Chamber of Commerce who were at first was disallowed by the chair to present in their slotted programme time but subsequently allowed to present to MPs after consideration by the chair, made it quite clear that Amcham saw a great number of unintended and unfortunate consequences resulting from the Bills and called for a regulatory impact assessment prior to any such amendments. Amcham’s presentation was eventually made on a later date by a representative of General Motors in SA.

They clearly felt that it was not in South Africa’s economic interests to pursue the Bills as they stood.

AHI supported the idea provided for in the Labour Relations Act amendments of allowing balloting before engaging in a strike but noted that in their experience it would rarely be properly supervised, putting the validity of such an exercise in jeopardy. Other presentations noted that civil strife could follow such procedures as suggested.

AHI was particularly concerned that the proposals would give no benefit to small business, in fact claimed “that since the announcement of these amendments, more than 440,000 small businesses had closed their doors”.

Like most presentations, the need for some amendments were not doubted by various organisations and bodies. Most seemed to support the objectives in a broader sense but such issues as prohibition of sub-contracting; issues surrounding part-time employees becoming full time employees by virtue of the passage of time; and retrenchment conditions on higher income employees were focused upon as being counter-productive.

These were rejected as either not making economic sense, being badly worded, confusing, or, as some submissions stated, having negative or opposite effects on employment conditions. Most submissions rejected whole clauses in totality but few supplied alternative wording.

Now that two months of deliberations have taken place within the Portfolio Committee on Labour, the belief is that final drafts could be put before the National Assembly before the end of the current parliamentary session. Representing the Democratic Alliance on the labour portfolio committee is Sej Motau.

Posted in Finance, economic, Labour, Land,Agriculture, Mining, beneficiation, Trade & Industry, Uncategorized0 Comments

No labour dispensation for SEZs, says DTI

In a media release, the director-general of the department of trade and industry (DTI), Lionel October said labour laws will not be relaxed in the new arrangements for accelerating industrial development through special economic zones.

He was addressing organised labour at the Special Economic Zones Bill public hearings held by the department in Pretoria, yesterday.

Whilst government needs the full support from organised labour and business for the proposed special economic zones to work effectively, he said, “It is not in our best interests to deregulate labour laws in order to attract foreign investors and therefore exploit our workers.”

The timing of the remark would appear that pressure has come from organised labour to say something to the working force as a result of the introduction by President Zuma of special economic zones (SEZs) and their introduction into Parliament by October and the DTI.

October also said in his media release that government needs a regulated labour market to remain competitive and raise living standards for workers.

He went on to say, “The model of special economic zones that the government is pursuing shifts away from competing on the basis of cheap labour to competing on the basis of the quality of services and support measures provided in the zones and their host regions.”

DTI concluded that the challenge as they see it is to develop a comprehensive package of support measures that will be adequate to “attract desired investments but also assist the country to master the desired industrial capabilities”.

Public hearings are shortly to take place members involving the public, organised labour and business the SEZ Bill and government’s policy in this regard. The stated purpose of the Bill being to “accelerate of industrial development and create jobs through the creation of new industrial hubs in under-developed areas and industrial decentralisation from traditional zones by building targeted areas.”

The Bill, gazetted by the minister of trade and industry Dr Rob Davies last month, will be tabled once public hearings conducted by the DTI have taken place

Posted in Finance, economic, Justice, constitutional, Labour, Land,Agriculture, Mining, beneficiation, Public utilities, Trade & Industry, Uncategorized0 Comments


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