COSATU

1. Introduction

    1. COSATU welcomes the opportunity to participate in the hearings on the Employment Equity Act (EEA) organised by the Portfolio Committee: Labour. The purpose of the hearings according to the committee is twofold: "(a) to raise awareness on the impact of implementation of the EEA on employers and employees and (b) to ascertain the Act’s impact on the stakeholders." At this stage it is not possible to give a comprehensive review of the implementation of the Act due to the fact that it has been recently put into operation.

    2. The Unfair Discrimination part (Chapter 2) came into force in August 1999 and the rest of the Act came into force in December 1999. According to the Department of Labour, employers with 150+ workers are expected to submit their reports in June this year while their counterparts with fewer than 150 workers are expected to report in December 2000. To facilitate the preparation of reports and equity plans the Department of Labour issued regulations in November 1999 (Government Gazette No.6674) and a user’s guide on preparing an Employment Equity Plan.

    3. Despite the fact that the EEA came into force recently it is necessary to review the process thus far. It has not been possible to conduct a comprehensive survey of all our affiliates. For the purpose of this submission, however, we conducted a snap survey of five of our affiliates operating in the private and public sectors, namely SACCAWU, NUMSA, CEPPWAWU, CWU and NEHAWU. The enquiry focused on (a) whether the unions were consulted by employers; (b) whether there is a collective agreement on employment equity; and (c) the impact of the Act on the Union. The results of the survey are summarised in the section ‘assessment of progress in implementing the EEA’. Although the results are based on a limited survey, they reveal both positive and negative trends, which may require further investigation. Consideration should be given to a comprehensive investigation to assess progress with the implementation of the Act.

    4. The submission will also highlight two landmark judgements by the Labour Court and the Labour Appeal Court. In a case dealing with wage equity and racial discrimination the Labour Court Judgement by Judge Landman (23 November 1999) in the matter between Michael Louw and Golden Arrow raises the issue of onus or burden of proof. Although dealt with under the LRA, it clearly shows the importance of this question. The recent ruling by the Labour Appeal Court (3 April 2000) in the matter between Woolworth and Beverly Whitehead has far reaching ramifications for gender equality in the workplace, specifically upward mobility for women. Both cases highlight the role of the courts in advancing or inhibiting the realisation of the objectives of the EEA. The fact that the hearings takes place immediately after the Labour Appeal Court ruling is timely and the committee should consider whether certain steps are necessary to transform the courts.

    5. The submission will address a set of residual matters, which require clarification, further regulation and guidelines. The issue of HIV/AIDS requires clarity as employer organisations have argued that the EEA prohibits all forms of HIV/AIDS testing including on a voluntary basis. The regulations on norms and standards on wage equity are urgently required to address the yawning gap between high and low-income earners. The concept of inherent requirements of a job requires further regulation to avoid abuse by employers. Linked to this is the relationship between the EEA and the recently promulgated Promotion of Equality and the Prevention of Unfair Discrimination Act No.4 of 2000 (the Equality Act) and the Promotion of Access to Information Act, Act No.2 of 2000.

 

2. The Need for an Employment Equity Legislation

    1. The EEA was one of the centerpieces of transformative legislation piloted by the democratic government. It seeks to address the legacy of inequality and discrimination in the labour market inherited from the apartheid system. The labour market was a key site of control by various white minority regimes to ensure a constant supply of cheap labour. South Africa faces an entrenched legacy of discrimination on the basis of race, class, gender and disability. It is one of the most unequal societies in the world, until recently second only to Brazil. There are indications that we are steadily even surpassing Brazil. While the democratic government has begun to reprioritise and redistribute towards the historically disadvantaged inequality is still entrenched and in some respects it may be widening.

    2. COSATU supports the EEA as a tool to deal with discrimination and to address inequality within the labour market. Some have questioned the need for legislation of this nature and have argued for a ‘voluntary’ approach. In our view this approach is flawed because South African businesses have largely failed to achieve employment equity in the absence of legislation. More fundamentally, COSATU believes that the inequalities inherited from apartheid will not disappear on their own accord. The elimination of discrimination and inequality require positive measures and an enforceable instrument such as legislation. In any event, the Act strikes a balance between compulsion by the state, and a process of self-regulation by employers and workers, as well as between rigid and negotiated targets.

    3. Another important objective of the EEA is to close the apartheid wage gap. The issue of closing the massive income gap between the various strata of the work force, between management and low paid worker, men and women, black and white, blue collar and white collar, should be a central element of any meaningful employment equity strategy in South Africa. This is needed to ensure that employment equity does not just remain a formality, but is achieved in a substantive way. In particular, the act should not be confined to a degree of "horizontal equity", where there is racial and gender representivity within a particular strata of the labour market, while there continues to exist huge "vertically inequity" – between those at the bottom and those at the top. Failure to do this would tend merely change the complexion of inequality, without fundamentally altering its structure. It is for this reason that COSATU vigorously campaigned for inclusion of a clause to address the wage gap in the EEA.

    4. In short COSATU supports the EEA as it will address the legacy of inequality inherited from apartheid. It will encourage a diverse and representative work force particularly at the upper echelons as well as close the apartheid wages gap. As such, it will transform the apartheid labour market by addressing one of the lingering effects of apartheid – workplace inequality. The drive towards employment equality will assist workplace restructuring by ensuring flat hierarchies. Above all, it will unlock the potential latent in our labour force by drawing more people into the economic mainstream, thereby transforming the apartheid economy.

 

3. Assessment of Progress in Implementing the EEA

 

Hostility to the EEA

    1. The survey reveals a number of positive and negative trends. There is entrenched hostility towards employment equity by employers and conservative trade unions in some sectors. The role of opposition parties in fuelling such hostile attitudes should also be taken into account. SACCAWU and NUMSA (particularly in the motor retail sector) indicate that some employers are either totally hostile to employment equity or do not involve unions and workers in the assessment of the workplace as required by the EEA. In one instance, SACCAWU has declared a dispute with an employer on this issue. The hostility is to be expected given the fact that the Act directly challenges inherited privileges. This underlines the need for systematic programme to implement the legislation. While it is important to address legitimate fears and suspicion through a process of education and training. This should not result in further delay in the implementation of the law.

    2. Despite the fact that Public Service has an affirmative action policy in addition to the EEA, employment equity has not received the necessary attention in the Public Service Co-ordinating Bargaining Council (PSCBC). In some cases, such as the Motor Retail sector employers have indicated that they will act once the law is in place when the union demanded discussions on affirmative action. This argument indicates the employer’s fundamental opposition to employment equity and absence of legislation is used as a scapegoat. The need for legislative interventions to address past imbalance is vindicated by obstructive actions.

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      Consultation Process

    3. On the positive side, processes are in motion to comply with the act, including consultations with the unions in some of the sectors. For example companies such as Sun International, Pick & Pay, Edgars have commenced consultation process with the unions. Within the public sector, Telkom is making strides to ensure a representative workforce and include representivity in its mission statement. Joint workshops have been organised with the unions to discuss employment equity and skills development. In some sectors such as engineering organised by NUMSA there is a collective agreement on affirmative action and the EEA will further boost this agreement.

    4. CEPPWAWU has entered into collective agreements with some employers, however some of those agreements have not yet been signed and the process of negotiations is still continuing. These agreements involve ways in which the EEA will be implemented in those particular workplaces. The Union is now in the process of developing a model agreement, which is going to be used by shopstewards in their workplaces when they negotiate with employers on this issue. The union has at all times initiated these negotiations.

    5. At this point the CEPPWAWU relies on the Equity Committees to monitor the impact of the Act. These Equity Committees were established in the workplaces in accordance with the requirement of the Employment Equity Framework Agreement. They comprise of 75% employee representation and 25% employer representation. Their mandate is to monitor issues such as promotions, recruitment, closing the wage gap etc.

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      Capacity in the Unions

    6. The responsibility for driving employment equity lies with organising and collective bargaining units in the union. At a national level there is a fair understanding of the EEA, compared to the shop-floor level. It is therefore imperative to build the capacity of the shop stewards so that they can understand the act and to empower them to negotiate from a position of strength.

    7. The mooted publicity and education campaign by the Department of Labour will go a long way in creating awareness and debunking the myths around employment equity. The guidelines to be produced by the department will also play an important role in clarifying stakeholders on how to develop plans, draft reports and so forth.

    8. Broadly speaking, the experiences canvassed in this presentation show that:

 

4. Matters Requiring Further Clarification and Regulation

 

Closing the Wage Gap

    1. The adequacy of the provisions to deal with the closure of the apartheid wage gap remains to be tested. COSATU’s initial proposal was that the closure of the apartheid wage gap should be part of the core mechanisms of the Act such as the Equity Plans. In terms of section 27(1) of the EEA every designated employer must submit a statement to the Employment Conditions Commission (ECC) on the remuneration and benefits received in each occupational category and level of that employer’s workforce. In the event that the statement reveals disproportionate income differentials the employer must take measure to progressively reduce income differentials subject to regulations issued by the Minister. Measures to close the wage gap include collective bargaining, sectoral determination and norms and benchmarks set by the ECC.

    2. The regulations issued in November included a guide on how to compile an income differential statement. However, the substantive issues of Ministerial regulations envisaged by section 27(2); sectoral determinations envisaged in section 27(3)(b) and the norms and benchmarks envisaged by section 27(3)(c) have not been adequately clarified. The timeframes for the ECC investigation into the norms and benchmarks to address income differentials envisaged by section 27(4) and sectoral determinations is unclear. Clarity is therefore required on when the ECC will commence and conclude its investigation and the timeframe for ministerial sectoral determinations. The implementation of the wage equity clause hinges on these norms and benchmarks and sectoral determinations.

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      HIV/AIDS Testing

    3. Employer organisations have bemoaned the fact that the prohibition on HIV/AIDS testing imposed by section 7(2) of the EEA will prohibit all testing including where consent has been granted. Against, this background, employer organisations have tabled a proposal in NEDLAC to amend section 7(2) of the EEA.

    4. The AIDS Law Project advanced an argument against the amendment of the EEA for the following reasons. The claims for amending the EEA are based on a narrow and literal reading of section 7(2) of the EEA. On the basis of such interpretation it is argued that voluntary HIV testing (for instance after an occupational accident where there may have been a risk of HIV infection) would be unlawful if conducted at a clinic run by the employer. It is also being suggested that the Act prevent a workplace clinic from conducting an HIV test at the voluntary request of the employee.

    5. The provision to prohibit HIV/AIDS testing was included on the basis of recommendation of the South African Law Commission. The purpose of the prohibition is to stop HIV testing conducted at the request or initiative of the employer with the purpose of denying employment or employee benefits to a person with HIV. By contrast, voluntary HIV testing carried out in the interest of the individual and public health would not fall foul of the prohibition.

    6. Finally, it is proposed that the employer’s concerns can be addressed via a code of good practice issued by the ECC rather than amending the Act. Further, the Minister of Health has issued regulations on HIV testing which will address the employers concerns. Against this background, COSATU believe that there is no need to amend the EEA as it does not prohibit testing for public health interest and for the workers sake. Rather it prohibits testing for the sole intention of discriminating against workers who suffer from HIV. We also believe that the code of good practice and the regulations issued by the Minister of Health should address the concerns raised by employer organisations.

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      Inherent Requirements of a Job

    7. In terms of section 6(2)(b) of the EEA it is not unfair discrimination to "distinguish, exclude or prefer any person on the basis of an inherent requirement of a job." The Act does not, however, define the meaning of inherent requirement of a job. The potential to abuse this clause exists because it protects discrimination, which on the surface is based on a ‘neutral’ and ‘objectively’ determinable factor – inherent requirement of a job. The application of such standards tends to have discriminatory effects. It is therefore, important that guidelines are developed on this aspect.

 

5. Gender Equity

    1. COSATU regards the recent judgement by the Labour Appeal Court as a major setback for gender equality in the workplace. It has far reaching consequences for women upward mobility in the workplace, as it is likely to impair such mobility. The judgement overturns the order of the Labour Court for Woolworths to pay R200 000 compensation to Beverly Whitehead. The Labour Court had found that Woolworths unfairly discriminated against the prospective employee, Beverly Whitehead because she was pregnant. According to media reports, Whitehead was offered a full-time position in the company’s information technology department, which was withdrawn because she disclosed her pregnancy. Instead she was offered a fixed-term contract.

    2. The majority of the court ruled that it was ‘economically irrational" for an employer not to take into account the pregnancy of a prospective employee, adding that the recruitment of pregnant women could impact negatively on the capacity of the economy." The dissenting judgment found that the company did unfairly discriminate against the complainant.

    1. The judgement is reminiscent of an era where women had to lie about their pregnancy status for fear of being fired and sets a bad precedent. The judgement in our view goes against the spirit and letter of the Constitution, which prohibits unfair discrimination on one or more grounds. It also goes against section 6 of the EEA, which prohibits discrimination on the one or more grounds including sex and pregnancy. This judgement place women in the insidious position of having to choose between employment and motherhood.

    2. The ruling is likely to open the floodgates, as more employers will deem it fit to discriminate against pregnant women. The whole purpose of institutionalising maternity leave is to allow women to freely participate in the world of work and for society to provide the guarantee that they women will have their jobs without fear of discrimination. For this reason, we believe that a wedge between motherhood and employment is unnecessary, and does not make economic sense if we consider the fact that women constitute the majority of the population. The judgement further imposes a burden on women. The implicit suggestion is that once pregnant women are unable to return to work. This suggests it is the sole responsibility of women to raise children.

    3. COSATU is currently assessing its options whether to lodge an appeal in the Constitutional Court against the judgement.

    4. There is a need for certainty with respect to the Codes on Sexual Harassment. Nedlac developed a Code of Good Practice on the Handling of Sexual Harassment in terms of section 203 of the LRA. However, this Code has not been carried over into the EEA in terms of section 54 of the EEA. We propose that the Gazette be reissued in terms of section 54 of the EEA, because at the moment it is still under the LRA provision, whereas all discrimination matters are now handled in terms of the EEA rather than the LRA. Although, this is a technical point, lawyers can use the loophole to frustrate sexual harassment cases.

 

6. Linkage with the Equality Act

    1. The promulgation of the Equality Act must be seen as a further boost to employment equity. The Equality Act is a law of general application dealing with equality and discrimination in the broader society on any of the prohibited grounds of discrimination. It therefore, serves as a standard bearer for sectoral legislation such as the EEA. However, the relation and interaction with the Equality Act is a complex issue, which requires further attention.

    2. The Equality Act complements and in certain respects reinforces the EEA. First, the Equality Act will provide protection to employees that are excluded from the EEA, such as members of the defense force. Secondly, employers that do no meet the threshold of the EEA of designated employers will have to promote equality by adopting measures to combat unfair discrimination and inequality subject to Ministerial regulation.

    3. Section 27 of the Equality Act imposes a general duty on all persons to promote equality. It goes further to mandate the Minister of Justice and the relevant Minister to develop regulations, which require companies, closed corporations, and partnerships and so forth to prepare equity plans. The regulations should also take into account the size of the organisation and impose obligations proportional to size. The Minister of Labour therefore has a responsibility in terms of the Equality Act to develop regulations for small businesses, which fall below the threshold of the EEA.

    4. A key element of the Equality Act that needs to be read with the EEA is the onus or burden of proof provisions. In terms of the Equality Act, the complainant must make out a prima facie case of discrimination. The onus shifts to the respondent to prove that discrimination did not occur or to prove that it was not unfair. Often it is too difficult for victims of discrimination to prove unfair discrimination either because they do not control the manner in which decisions are made or the factors leading to discrimination. Requiring the victims to prove unfair discrimination is a double burden: having to make a prima facie case and then having to prove unfair discrimination.

    5. The importance of ensuring that the onus or burden of proof rests with the perpetrator of discrimination is made more urgent by the recent labour Court Judgement in the matter between Michael Louw and Golden Arrow Bus Services heard in terms of the LRA. The Judge could not find in favour of the complainant because he ‘has not acquitted the onus of proof resting on him." While the case was not settled in favour of the applicant the judge observed that the applicant has been historically discriminated against as regards his salary on the ground of race.

    1. Although the case was not instituted in terms of the EEA, it has implications for the evolving jurisprudence on unfair discrimination and this issue needs to be monitored. The case was instituted in terms of item 2(1)(a) of the 7th schedule of the LRA, Act 66 of 1995. This transitional arrangement was repealed by the EEA (Schedule 2). Schedule 7 of the LRA was silent on the question of onus or burden of proof and the judge insisted that overall burden of proof remains on the employee at p.32 paragraph 53.

    2. Section 11 of the EEA enshrines the principle of shifting the burden of proof to the perpetrator of discrimination. The Equality Act not only shifts the onus but also includes a test for fairness or unfairness. The committee needs to monitor the development of jurisprudence on this issue to ensure that the intention of the legislators is not frustrated.

 

7. Access to Information

    1. Access to accurate information is in practice pivotal to achieve the goals of employment equity particularly wage and salary parity. This principle is enshrined in the EEA at sections 18 and section 27(6). In terms of section 18 a designated employer should disclose the relevant information for purposes of consultation to the unions. Section 27(6) grant unions the right to access information contained in the income differential statement submitted to the ECC. Subject to the confidentiality of the information. We suggest that the committee monitor the interpretation of this provision to ensure that employers to do use it to deny unions access to information.

    2. Access to information is further consolidated by the recently enacted Promotion of Access to Information Act. The Information Act grant everyone access to information held by the state and by any person. The right to access information held by another person is subject to the condition that such information is required for the exercise or protection of a right. The Information Act, complements the EEA and in certain respects improves on the provisions of the EEA.

    3. Access to information in terms of the EEA is restricted to collective bargaining as stipulated in section 16 of the LRA. In terms of section 16(2) an employer must disclose information to a representative trade union. A representative trade union is defined as a registered trade union, or two or more registered trade unions acting jointly that have as members the majority of the employees employed by an employer in a workplace (section 16(1). As such only representative trade unions can access information from the employer in terms of the LRA. In non-unionised sectors or where there are no representative trade unions the LRA cannot be relied upon to access information. The Promotion of Access to Information Act ameliorates this situation by granting access to information required for the exercise or protection of any right.

    4. Another way in which the EEA restricts access to information is the injunction on the ECC not to reveal information pertaining to individual employees and employers section 27(5). The intention of this clause is to protect the privacy of individuals. While the Promotion of Access to Information Act protects privacy this is subject to a public interest override and under certain circumstances private information can be disclosed.

    5. The disclosure of information such as executive payments will end the current entrenched culture of corporate secrecy with regard to payment of CEOs hiding behind privacy. It must be noted that the disclosure of CEO payments is common practice internationally and is a pre-listing requirement on the London Stock Exchange. The linkage between the EEA and the Promotion of Access to Information Act should be further explored and where appropriate, legislative amendments should be introduced to synchronise the two laws.

 

8. Processing of Reports

    1. From the beginning of June, the Department of Labour will be inundated with reports from employers. How the Department will process and analyse the reports becomes an important issue for consideration. In our understanding, the Department will engage outside expertise to analyse the reports, and it is important that we understand the terms of reference for the process. In addition, the Department should consider setting a reference group inclusive of major stakeholders to interact with the people who will analyse the report. This reference group should include members of parliament from this committee. The reference team could play an important role in generating factors that should be highlighted or analysed in the reports.

    2. Further, it is important to prioritise the major employers to ensure that there is compliance with the law by big companies. For this reason the Department should develop an index of top 200 companies. In addition a sample of small employers across the economy should be developed to also get a sense of the trends. On the basis of such samples there is a need to identify success stories and failures. The sample should also be used to design intervention strategies to address failures and to identify best practice. A focused approach in our view will assist in making EEA a success. This does not mean neglecting the rest of the companies but indicates the need for a method to assess compliance.

 

9. Way Forward

    1. The submission has raised a broad range of issues that the Committee should consider. We hope that the committee will include some of the issues in its reports as well as forward the recommendations to the Department. It is our hope that the submission addressed the issues that the committee wanted to highlight in these hearings. To summarise, we believe that the following issues require further attention: