Democratic Party (DP)
MOTIVATION FOR DEMOCRATIC PARTY'S PROPOSED AMENDMENTS TO THE EMPLOYMENT EQUITY BILL.

Preamble
The Democratic Party supports policies and practices to develop and empower all people who have been disadvantaged in the past. The DP, however, cannot support the Employment Equity Bill in its present form as it believes the Bill to be cumbersome to the small business person, will re-racialise the workforce and will strain economic growth and thus have a negative impact on the creation of jobs. The main thrust of the key provisions of the Bill is punitive and coercive. The DP approach believes in a bushel of carrots, and a paucity of sticks.

Unemployment is the most important cause of poverty and inequality in South Africa today. It afflicts 25% of the overall South African population.

The DP is aware of the imbalances caused by the apartheid regime and does support the elimination of unfair discrimination in the labour market and the creation of equal opportunities in order to address these past imbalances. The economic realities facing South Africa, however, have to be taken into account and special consideration has to be given to the financial circumstances of the employer, to training and education in order to create a pool of suitably skilled and appropriately qualified persons, to ensuring investment confidence in South Africa and liberalising the South Africa labour market to make it attractive to foreign investors and the world economy.

The Bill in its present form will discourage the creation of jobs as it places onerous obligations on the employer, will increase government interference in the economy and is likely to provide a disincentive against private sector investment. South Africa should strive to address the problems of unemployment and poverty by concentrating on education, training, literacy, health, welfare and population development.

The DP believes that the Employment Equity Bill tilts the balance against the individual and leans too heavily in favour of the group. It is true that apartheid was a group-based discrimination system. It is equally true that certain individuals within the "designated groups" the Bill intends to benefit require no assistance at all from measures of this kind. Equally persons who fall outside the Bill's definition might well have been discriminated against and are entitled to the redress proposed by the legislation. Thus the DP approach, in line with the Constitution's definition of redress, is to individuate the claims of those seeking benefit or advantage under the Bill. Equally. the Bill as drafted sees the "designated groups" as cast in stone, for all time. Presumably, as employment practices and patterns change, fewer persons from the "designated groups" will require the preferment’s offered by this Bill. There is thus no flexibility in the draft legislation, whereas the DP amendments set their face against such rigidity.

GEAR's main objective should be to create additional jobs, however the Employment Equity Bill will make it harder to achieve this goal. The Democratic Party's proposed amendments strive to ensure legislation which will address past imbalances while still creating an economic environment that encourages the creation of jobs.

1. Chapter 1
Ad Definitions
(a) Designated employer definition:
There are concerns that the Bill will affect an untold number of small and even micro
businesses by imposing on them the onerous obligations of the Act. This will make the Act impossible to implement and will impact negatively on job creation.
By amending the definition of a designated employer the small and micro business sector will be excluded from the Act and it will encourage entrepreneurs to create jobs without the administrative burdens of the Act.

Turnover is not a cut and dried indication of administrative capacity or profitability. Small businesses may lack the necessary funds and infrastructure to adhere to the provisions of the Act. This amendment will mean that the small business person will only have to adhere to Chapter II of the Act and not Chapter III.

(b) Designated groups definition:
By amending the definition of the designated groups, the wording of the Bill will be in line with section 9(2) of the South African Constitution. This will address the past imbalances by focusing on the individual. The problems associated with race classification will be avoided and any persons or categories of persons who were truly disadvantaged in the past will be able to reap the benefits of the Act.

(c) Employment policy or practice definition:
Job assignments should not fall under the definition of employment policy or practice as it infringes on managerial prerogative, is impractical to implement and will give the
State wide powers to interfere with the day to day running of a business.

2. Chapter II
Ad section 6(4) Prohibition of unfair discrimination
The current wording of the Bill refers to collective bargaining as the first and most important measure to address the wage gap. This implies a de facto duty to bargain, which was strenuously resisted in negotiating the Labour Relations Act. Employers and employees should be able to address the wage gap in any manner appropriate to their particular circumstances.

3. Ad section 10(2) Disputes concerning this Act
The disputes concerning this Act should be referred to the CCMA within 30 days as provided for in the Labour Relations Act. This will ensure that we have a clear standard which applies to the whole of South Africa's labour legislation.

4. Ad section 11 Burden of Proof
The current wording places a burden on the employer and is a reversal of the normal judicial onus. It is difficult to prove a negative and it poses a fundamental departure from the legal principal of being presumed innocent until proven guilty.

5. Chapter III
Ad section 15(c) Affirmative action measures
An employer can only accommodate persons of designated groups if the accommodation does not impose undue hardship on the employer. Undue hardship qualifies the reasonable accommodation principle and should thus be expressly included. If the undue hardship qualification is not included in this section many employers will have to make structural changes to their premises, premises which often do not belong to them, in order to accommodate, for example access to persons in wheel chairs.

The undue hardship principal is firmly entrenched in both the Canadian and American law of employment discrimination. If this proposed amendment is made. our Bill be inline with international legislation.

6. Ad section 17 Matters for consultation
It would be impractical and time consuming if the employer had to consult the parties on the analysis, the equity plan and the subsequent report. By consulting the parties on the broad issue of the purposes of the Act, the employer could still have the necessary input from the parties, but without having the administrative burden of having to consult at least three times.

7. Ad section 20 (1) Employment Equity Plan
As "reasonable progress" is not defined in the Bill, the proposed wording would give employers clearer guidelines along which to prepare their equity plans. It is virtually impossible to prepare and implement an equity plan if one is a designated employer but is, for example, currently facing a financial crisis and cannot afford to appoint anyone.

8. Ad section 20(3)(b)
In the current wording the additional concept of potential in (b) undermines the objective criteria stated in subsection (a). It is virtually impossible for the employer to determine future potential and the employee might not be suitably qualified at all. Many employees might have the potential to do the job, but might in fact not have the necessary skills to actually do the job, given their lack of training or experience. By employing a person who might not live up to his or her potential the employer faces a situation where he must retain and promote such a person, with disastrous consequences.

9. Ad section 20(4)
The current wording of the Bill supersedes the requirements of formal qualifications. prior learning or experience, in favour of mere potential. As stated above, mere potential is simply not enough to prove that an employee will develop the necessary skills to be able to do the job.

10. Ad section 21 Report
This proposed amendment was a footnote in the original Bill which would provide a guideline to employers when implementing their plans. Many employers will have to prepare and implement equity plans for the first time and the proposed amendments will give greater guidance to the employer.

Chapter IV
11. Ad section 28(1) and 28(2)(c) Composition of Commission for Employment Equity
The interests of organised labour, organised business and persons who represent the organisations of community and development should be the most important for purposes of implementing this Act.

12. Ad section 29(2)(b)
There are concerns that any research into areas concerning this Bill should preferably be done by persons who have legal experience or come from a legal background. Concepts like "numerical goals" are often problematic and should be researched by persons who have a working knowledge of employment discrimination law. The Commission's expertise should rather be used to offer practical guidance to the Minister.

Chapter V
13. New section 45
This section will provide incentives to employers to comply with the provisions of the Act. By providing these incentives workplace empowerment will be encouraged which in rum will be beneficial both to the employer and the employee. If employers are encouraged to comply with this Act job creation can only benefit.

14. Ad section 49(2)(b) Punitive damages
The concept of punitive damages is foreign to South African law and should be deleted. As employment discrimination law is already an unknown area of law to most South African legal practitioners, the use of punitive damages will only create greater uncertainty in labour law. The South African legal concept of "damages" as is currently used will be sufficient to achieve the purposes of this Act.

15. Ad section 52 State contracts
The Democratic Party's proposed amendment to this section will make it more attractive for employers to comply with the provisions of the Act. The use of incentives rather than punitive measures will encourage employers to actively endeavour to redress past imbalances and to strive towards a more representative workforce.

16. Ad sections 54 and 55 Codes of Good Practice and Regulations
These should only be issued by the Minister on recommendation of the Commission and in consultation with Nedlac. This will ensure that the regulations and codes of good practice will be drafted to accommodate the needs and interest of both employers and employees.

17. Ad section 58(i) and (ii) Liability of employers
In order to achieve better working relations between employers and employees, employees should be encouraged to approach their employers with their on grievances. The employer and employee should work together in order to remedy this situation. Only if the employer fails to take the necessary steps to address the employee's complaints, then should the employer be held vicariously liable.

18. Ad schedule I Maximum permissible fines
The fines stated in the current wording of the Bill will have a negative impact on the smaller business sector, which will simply not be able to pay these fines, however innocent and technical their contravention’s in respect of this Act might be.

19. Conclusion
The Democratic Party believes that its proposed amendments are not only practical to implement but also will ensure a more harmonious work place. It makes good sense in terms of race relations, job creation and the general prosperity of all South Africans. If we all work together to make the Act one which is acceptable to both organised labour and organised business the Act will be a success, putting the South African labour market on the road to recovery.

23 July 1998
A J Leon

Employment Equity Bill
Democratic Party Proposed Amendments

Chapter 1
Ad Definitions - Page 6 Line 46
Delete and insert:
designated employer" means -
a person who employs 100 or more employees;
(b) a person who employs fewer than 100 employees, but has a total annual turnover that is equal to or above the applicable [minimum annual] turnover of a small business in terms of Schedule 5 of this Act, unless the employer has in appropriate circumstances and on good cause shown applied to the Minister for exemption from all or part of the Act;

Copy of schedule attached.
Delete and insert;
"designated groups" means -
any persons or categories of persons disadvantaged by unfair discrimination;

Delete and insert;
"employment policy or practice" includes , but is not limited to -
(e) job assignments;

Chapter II
Ad section 6(4) Prohibition of unfair discrimination - Page 14 Line 13
Delete and insert;
"Where instances of unfair discrimination occurs in relation to wage differentials employers must attempt to address these in a manner appropriate to their circumstances, which may include collective bargaining or other measures such as those provided for in the Basic Conditions of Employment Act 75 of 1997.

Ad section 10(2) Disputes concerning this Chapter - Page 16 Line 5
Delete and insert:
"Any party to a dispute concerning this Chapter, other than an allegation of harassment, may refer the dispute in writing to the CCMA within 30 days after the act or omission that allegedly constitutes unfair discrimination."

Ad section 11 Burden of Proof - Page 16 Line 22
"Whenever unfair discrimination is alleged in terms of this Act, the person so alleging must prove that the act or omission is unfair."

Chapter III
Ad section 15(2)(c) Affirmative action measures - Page 18 Line 20
Delete and insert:
"making reasonable accommodation for people from designated groups in order to ensure that they enjoy equal opportunities and are equitably represented in the workplace of a designated employer, except where the taking of such measures would cause undue hardship to the employer;"

Ad section 17 Matters for consultation - Page 20 Line 13
Delete and insert:
"A designated employer must consult the parties referred to in section 16 concerning
(a) the elimination of unfair employment practices; and
(b) achieving the purposes of this Act."

Ad section 20(1) Employment Equity Plan - Page 20 Line 36
Delete and insert:
"A designated employer must prepare and implement an employment equity plan which will achieve reasonable progress towards employment equity in that employer's workforce, taking into consideration the nature and financial circumstances of the employer's workplace."

Ad section 20(3)(b) - Page 22 Line 27
Delete

Ad section 20(4)(b) - Page 22 Line 32
Delete:
"determine whether that person has [either]
[(i)] the ability to do the job in terms of any one of, or any combination of, those factors; [or
(ii) the capacity to acquire that ability within a reasonable time.]"

Ad section 21 Report - Page 24 Line 19
Insert new subsection (6)
"The first report must relate to the initial development of and consultation around an employment equity plan. The subsequent reports must detail the progress made in implementation of the employment equity plan."

Chapter IV
Ad section 28(1) Composition of Commission for Employment Equity - Page 26 Line 18
Delete and insert:
"The Commission consists of a chairperson and seven other members appointed by the Minister to hod office on a part-time basis."

Ad section 28(2)(c) - Page 26 Line 25
Delete and insert:
"one person nominated by those voting members of Nedlac who represent the State; and"

Ad section 29(2)b) - Page 28 Line 31
Delete

Chapter V
Ad section 45 - Page 36 Line 31
Insert new section 45: Incentives
"(1) In order to encourage workplace empowerment and compliance to the provisions of this Act a performance system will be established to offer incentives to employers.

(2) Factors which will be taken into account in determining an employer's workplace performance are:

(a) the percentage of payroll spent on training low-skill employees;
(b) the speed and extant of advancement of low-skill employees within the company;
(c) literacy levels among low-skill employees, and the rate at which they improve;
(d) productivity levels and the rate of their improvement.

(3) Employers must make application to the Minister on good cause shown for any one incentive suitable to their particular circumstances:

(a) fast-track treatment of applications for exemption from bargaining council agreements;
(b) preferential access to loans from state-funded enterprise promotion agencies;
(c) preferment in allocation of state tenders.

(4) Each year the Department of Labour shall publish a list of the employers who have complied with the provisions of this Act."

Ad section 49(2)(b) Punitive damages - Page 38 Line 37
Delete

Ad section 52(1)(a)- Page 42 Line 12
Delete and insert:
"may -

(i) if it is a designated employer, comply with Chapters II and III of this Act; or
(ii) if it is not a designated employer, comply with Chapter II of this Act; and"

Insert new subsection (c):
"The employer's workplace empowerment performance as referred to in section 45 will be taken into account for preferment in allocation of State tenders."

Ad section 53(1) Codes of good practice - Page 44 Line 2
Insert:
"The Minister may -
(a) issue any code of good practice; and
(b) change or replace any code of good practice
on the recommendation of the Commission and in consultation with Nedlac."

Ad section 54(1) Regulations- Page 44 Line 9
Insert:
"The Minister may, by notice in the Government Gazette, make any regulation regarding -
(a) any matter that this Act requires or permits to be prescribed; and
(b) any administrative or procedural matters that may be necessary; or expedient
to achieve the proper and effective administration of this Act on the recommendation of the Commission and in consultation with Nedlac."

Ad section 58(1) Liability of employers - Page 46 Line 4
Delete and insert:
"If it is alleged that an employee, while at work, contravened a provision of this Act, or engaged in any conduct that, if engaged in by that employee's employer, would constitute a contravention of a provision of this Act, the alleged conduct must immediately be brought to the attention of the employer

Ad section 58(2) - Page 46 Line 8
Insert new subsection (2):
"The employer must consult all relevant parties and must take the necessary steps to eliminate the alleged conduct and comply with the provisions of the Act."

Insert new subsection (3):
"If the employer fails to take the necessary steps, both the employee and the employer will be deemed to have contravened the provision."

Insert subsection (4):
"Despite subsection (3), an employer is not liable for the conduct of an employee if that employer is able to prove that it did all that was reasonably practicable to ensure that the employee would not act in contravention of this Act."

Ad schedule 1 Maximum permissible fines that may be imposed for contravening this Act - Page 50
Delete and insert:
PREVIOUS CONTRAVENTION CONTRAVENTIONS OF ANY
PROVISION OF SECTIONS
16,19,20,21,22 AND 23

No previous contravention - R100 000

A previous contravention in respect of - 200 000
the same provision

A previous contravention within the - R300 000
previous 12 months or two previous
contravention’s in respect of the same
provision within three years

Four previous contravention’s in - R500 000
respect of the same provision
within three years

SCHEDULE 5
Turnover threshold applicable to designated employers
Employers who employ between 50 and 100 employees and have a total annual turnover that is equal to or above the turnover as set out in this schedule shall be deemed to be designated employers for the purpose of Chapter III of this Act.

COLUMN 1 COLUMN 2
Sector or Sub-sector in accordance with Total annual turnover*
the standard industrial classification
Agriculture - R 2 million
Mining and quarrying - R 7,5 million
Manufacturing - R 10 million
Electricity, Gas and Water - R 10 million
Construction - R 5 million
Retail Trade, Motor Trade and Repair - R 15 million
Services
Wholesale, Trade, Commercial Agents and - R 25 million
Allied Services
Catering Accommodation - R 5 million
Transport, Storage and Communications - R 10 million
Finance and Business Services - R 10 million
Community, Social and Personal Services - R 5 million

*These figures shall rise on 1 February each year in accordance with the rate of
increase in the consumer price index over the preceding calendar year.
23 July 1998
A J Leon