Strict SA labour laws could turn foreign business away
World markets are reacting to South Africa’s new and strict laws which have been put in place to ensure the protection of South African businesses, workers and resources.
A lot of censure and discussion is being had around the New Employment Equity Act and foreign organisations are evaluating whether doing business in South Africa is worth the extensive procedures and scrutiny. Into SA gives a breakdown of the amended act:
1. Extension of grounds of discrimination to include “any other arbitrary ground”
In the past the grounds for discrimination were limited to issues such as age, race, gender, etc. Whilst this was not an exhaustive list, the extension bars unfair discrimination on any arbitrary ground.
2. Equal treatment included
This topic has been the point of much discussion as the concept is not fully or consistently understood by all parties. This led to a group of Employment Equity Commissioners visiting foreign shores to research the topic and return to our shores with some definitive direction. It is important to note that the concept goes beyond “equal work for equal pay” and is all encompassing. In a nutshell “equal treatment” means that unless you have justification for differential treatment on the grounds listed, you will be in breach of the Act. This principle also finds a home in the new Labour Relations Act which calls for equal treatment between your perm staff and your TES, fixed term or part-time staff earning below the threshold (R205 433.30 per annum) and after 3 months service unless you have a justifiable reason for differential treatment.
3. More CCMA oversight
One of the controversial changes is that the CCMA is to be given jurisdiction in sexual harassment matters; or in unfair discrimination matters where employees earn below the threshold; or finally by consent. This not only represents a departure from the norm in terms of the settled process of dispute resolution involving the Labour Court as the forum where such disputes were previously exclusively settled, but also raises the question of whether damages will be claimable in the CCMA.
4. The most controversial of the changes must be the increase of fines
There will be a variety of fines ranging from 2% – 10% of turnover with alternative rand values should they be greater than a fine based on turnover, or for certain offences. Whilst non–compliance is not condoned, what is concerning is that discretion is given to labour inspectors in terms of their assessment of compliance. This, linked to the ability to refer matters straight to the Labour Court (applying discretion) will pose a massive challenge in respect of possible corruption and the increase in litigation.
5. Historical background to the changes
Employment Equity and the principle of affirmative action have a long history of incorrect application. Originally, when the Act was released some companies retrenched their white staff and replaced them with staff of colour. One of the judgements in the recent past, which has provided much needed clarity as to the correct application of Employment Equity and has thrust Employment Equity into the spotlight, is the case of Solidarity on behalf of Barnard versus the South African Police Services, shortly followed by the Department of Correctional Services’ case in Cape Town. The principle that is enunciated in the earlier judgement is that when we have two candidates, one who is part of the designated group we are looking for in terms of our Workforce Profile Analysis and Employment Equity Plan and the other not, the question is: are they of the similar level in terms of scoring for the job competencies or not?
If they are a suitably qualified person, you can apply affirmative action and pick the person in the group you are looking for in terms of your Employment Equity plan. If the candidate of the particular designated grouping you are looking for is far below that of your (as an example) white male, then the white male still gets employed. This is clearly the correct application of affirmative action and is what has been lacking often in the past.
Companies need to ensure that they comply with the new provisions of the legislation to ensure that they meet the requirements of law, are not fined, but also enter into these matters in the spirit of transformation. Only once we link our transformations strategy to the overall business one will we be successful and ensure overall compliance. Into SA has experts waiting to assist you in complying before losing hard earned millions to the Department of Labour. Jackson M Makgamatha Into SA, Johannesburg.