DEPARTMENT OF LABOUR

EMPLOYMENT EQUITY AMENDMENT BILL, 2012

1. To give effect to fundamental Constitutional rights, e.g. right to equality, fair labour practices and protection against unfair discrimination;

2. To strengthen the implementation and enforcement mechanisms of the Act, e.g. increased fines for non-compliance; and

3. To ensure South Africa’s compliance with International Labour Standards (Conventions 100 & 111);

Objectives of the Amendments to the EEA

Definitions – Section 1

Definition of designated groups is revised to ensure that:

Beneficiaries of Affirmative Action are limited to persons who were citizens of South Africa before the democratic era (27 April 1994), or those who would have been entitled to citizenships, but due to Apartheid policies could not, and their descendants.

Foreign nationals or those that became citizens subsequent to 1994 do not assist employers to achieve their AA targets and goals at the expense of the designated South Africans.

Status: Agreed

Prohibition of unfair discrimination (Section 6 (1))

Section 6(1) which prohibits unfair discrimination is amended to clarify that:

Discrimination is not permitted, either on a ground listed in the section or on any arbitrary ground.

This change is consistent with the terminology of section 187(1)(f) of LRA, which prohibits discriminatory dismissals.

Status: Agreed

Equal pay for work of equal value (Section 6(4))

A new section 6(4) is inserted to:

Deal explicitly with unfair discrimination by employers in respect of terms and conditions of employment of employees doing the same work, similar work or work of equal value; and

Differences in pay/conditions of work between employees performing the same or substantially the same work or work of equal value will amount to unfair discrimination unless the employer can show that differences are fair in relation to experience, skill, responsibility and qualifications.

Status: Agreed

Equal pay for work of equal value (Section 6(5))

Section 6(5) is inserted to enable the Minister to issue a regulation dealing with the criteria and methodologies for evaluation of work of equal value.

Status: Agreed

Psychometric testing (Section 8)

Section 8 dealing Psychometric and similar tests of employees is amended to ensure that:

Only psychometric tests and similar assessment tests certified by the Health Professions Council of South Africa, or another body which is authorized to certify such tests may be used to test employees.

Status: Agreed

Arbitration of certain unfair discrimination claims by the CCMA (Section 10(6))

Section 10(6) is amended to:

Allow employees an option of referring unfair discrimination cases for arbitration in the CCMA in two circumstances:

If the employee’s cause of action arises from an allegation of sexual harassment on a prescribed ground; or

Lower paid employees (those earning less than the earnings threshold prescribed under the section 6(3) of the BCEA) will be entitled to refer any discrimination claim to the CCMA for arbitration.

Status: Agreed

Onus of proof in discrimination claims (Section 11)

Section 11 is amended to:

Bring consistency with approach and provisions regulating the onus of proof in discrimination claims as per section 13 of the Promotion of Equality and the Prevention of Unfair Discrimination Act, 2000 (the Equality Act).

Status: Agreed

Onus of proof in discrimination claims (Section 11 Cont...)

If unfair discrimination is alleged on a prohibited ground listed in section 6 (1), e.g. race, gender, HIV status, disability, etc. – employer must prove on a balance of probabilities that discrimination did not take place or was rational or not unfair or justifiable.

However, if unfair discrimination is alleged on an arbitrary ground, the complainant must prove, on a balance of probabilities that conduct was not rational and discrimination is unfair

Status: Agreed

Employment Equity Plan (Section 20)

Section 20 is amended to ensure that:

All designated employers who fail to prepare and implement their EE Plan can be referred directly to the Labour Court by the Director General for a fine, without first securing an undertaking or issuing a compliance order.

Status: Disagreement with business

NB: All reference to ‘occupational categories’ have also been removed in sections 15, 16, 19, 20, 27 & 42 – only occupational levels are remaining.

Status: Agreed

Employment Equity Reporting (Section 21)

Section 21 is amended to ensure that:

All designated employers, irrespective of size submit reports on progress in implementing their Employment Equity Plan on an annual basis.

Failure to submit an EE Report by an employer can be referred directly to the Labour Court by the Director General for a fine without securing an undertaking or issuing of a compliance order.

Status: Agreed

Income Differentials (Section 27)

Section 27 is amended to:

Cater for measures to eliminate unfair discrimination in relation to terms and conditions of employment ; and

To give effect to the provisions of new clauses 6(4) & 6(5) dealing with ‘equal pay for work of equal value’.

Status: Agreed

Enforcement mechanisms (Sections 36 & 37)

Written Undertaking (section 36(1) & (2)) are amended to:

make the power to request employers to make undertaking discretionary; and

empower the Director General to apply to the Labour Court to make such undertaking an order of the Labour Court in instances of non compliance.

Compliance Order (section 37(1) & (3)) are amended to:

Clarify by specifying the sections to which a labour inspector has powers to issue a compliance order; and

Eliminate the step of objections to a compliance order by employers.

Status: Disagreement with organised business on sections 36 & 37

Enforcement mechanisms(Sections 39 & 40)

Section 39: Objections to compliance order Provision has been repealed

Section 40: Appeal from compliance order Provision has been repealed

Simplify and eliminate unnecessary mandatory steps in the enforcement mechanisms of the Act.

Status: Disagreement with organised business on sections 39 & 40

Enforcement mechanisms (Section 42)

Assessment of compliance (section 42) is amended to:

empower the Minister to make regulations dealing with the assessment of compliance, including specifying circumstances in which it should be assessed by reference to the national or regional economically active population; and

make it explicit that an employer may raise any reasonable ground to justify why it has not complied.

Status: Agreed

Enforcement mechanisms Cont…(Sections 45)

Section 45 is amended:

To empower the Director General to apply to the Labour Court for an order directing an employer to comply with a request made during a review of the employer’s compliance with the Act or a recommendation made as a result of such a review.

If the employer notifies the DG that it does not accept a request or recommendation, the request or recommendation lapses unless the DG institutes proceedings within the stipulated period, i.e. 90 days for a request and 120 days for a recommendation.

Status: Agreed

Arbitrations (Section 48(2)) and Powers of the Labour Court (Section 50(h)) Section 48(2) is amended:

To empower an arbitrator hearing an unfair discrimination claim to make an award.

Section 50(h) is amended:

To ensure that the power of the Labour Court to review an administration action in terms of the Act is made consistent with the Promotion of Administrative Justice Act, 2000

Status: Agreed

Code of good practice (Section 53(5))

A new section 53(5) is inserted to:

Empower the Minister to make a code of good practice dealing with the assessment of whether employers are complying with the Act for the purpose of awarding state contracts.

Status: Agreed

Simplified forms and procedures (Section 55(2))

Section 55(2) is amended to:

Ensure that the Minister is got discretionary powers to make simplified rules and procedures for employers that employ fewer than 150 employees in relation to the reporting requirements.

Status: Agreed

Delegations (Section 56(1))

Delegations - Section 56(1) is amended:

To Ensure that the Minister’s power to issue certificates of compliance with the Act is a delegable power. This will allow for section 53, which requires persons contracting with the state to comply with the Act, to be brought into effect.

Status: Agreed

Temporary employment services (Section 57)

Temporary employment services - Section 57 is amended:

To be consistent with the new approach to temporary employment services proposed in the LRA Bill.

For the purposes of Affirmative Action, employees who are placed by a temporary employment service with a client for longer than 3 months will be deemed to be employees of the client.

Status: Agreed

Criminal Penalties (Sections 59 & 61)

Sections 59 and 61 are amended:

To increase the maximum fines that can be imposed for criminal offences in terms of the Act is increase from R10 000 to R30 000.

To ensure that the Minister may exercise the power to adjust the maximum fine to counter inflation without the concurrence of the minister of Justice.

Status: Agreed

Adjustment of annual turnover threshold (section 64A)

A new section 64A is inserted to:

To empower the Minister to adjust the annual turnover threshold, which is used to determine whether employers are classified as designated employers in line with inflation.

Status: Agreed

Increase in fines (Schedule 1) Schedule 1 is amended to:

Adjust the maximum fines that may be imposed for contravention of the Act to reflect the change in the value of money.

In addition, the employer’s turnover may be taken into account in determining the maximum fine that may be imposed for substantive failures to comply with the Act.

Status: Disagreement with organised business on linking of fines

to turnover

Maximum permissible fines that may be imposed for contravening this Act (Schedule 1)

Previous Contravention Contravention of any provision sections 16 (read with 17), 19, 22, 24, 25 and 43(2)

Contravention of any provisions of sections 20, 21, 23 and 44(b)

No previous contravention [R500 000] R1 500 000 The greater of R1 500 000 or 2% of the employer’s turnover

A previous contravention in respect of the same provision

[R600 000] R1 800 000 The greater of R1 800 000 or 4% of the employer’s turnover

A previous contravention within the previous 12 months or two previous contraventions in respect of the same provision within three years

[R700 000] R2 100 000 The greater of R2 100 000 or 6% of the employer’s turnover

Maximum permissible fines that may be imposed for contravening this Act (Schedule 1) Cont…

Previous Contravention Contravention of any provision sections 16 (read with 17), 19, 22, 24, 25 and 43(2)

Contravention of any provisions of sections 20, 21, 23 and 44(b)

Three previous contravention in respect of the same provision within three years

[R800 000] R2 400 000 The greater of R2 400 000 or 8% of the employer’s turnover

Four previous contravention in respect of the same provision within three years

[R900 000] R2 700 000 The greater of R2 700 000 or 10% of the employer’s turnover

Turnover threshold applicable to designated employers (Schedule 4)

Schedule 4 is amended to:

Increase by 200% the total annual turnover that an employer must exceed to be classified as a designated employer.

Status: Agreed

Summary of the NEDLAC Report

Areas of agreement

• Section 1• Section 6• Section 8• Section 10• Section 11• Section 21• Section 42• Section 45• Section 48

Areas of disagreement

• Section 20• Section 36• Section 37• Section 39• Section 40• Schedule 1

Summary of the NEDLAC ReportCont…

Areas of agreement

• Section 50• Section 53• Section 55• Section 56• Section 59 • Section 61• Section 64(A)• Schedule 4

Areas of disagreement

Thank You…