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Cape Town - A raft of new labour law amendments published on Friday include provisions to punish employers who contravene employment equity rules with fines of between 2% and 10% of their annual turnover.
The draft employment equity amendment bill removes the maximum fine limit of R900 000 for companies found to be in serial breach of the law on hiring black people, women and disabled employees reflecting national and regional demographics.
Under current law that was the highest fine that could be imposed on an employer who contravened the act four times in three years.
The maximum fine for a first offender was R500 000.
The bill seeks to change this to 2% of annual turnover, while the maximum fine for those guilty of "four previous contraventions in respect of the same provisions within three years" becomes 10% of annual turnover.
These provisions are in line with demands from suspended labour director general Jimmy Manyi, who has urged tougher penalties for recalcitrant companies.
They give the director general the power to apply to the Labour Court to impose fines on companies (in terms of the law those who employ more than 50 people) who fail to prepare and implement equity plans.
The bill is one of four published for comment on Friday after being approved by cabinet on December 8.
As expected, the draft labour relations amendment bill takes aim at the practice of labour broking. It aims to repeal Section 198 of the original act which allows the practice, estimated to give work to about half a million South Africans.
The explanatory memorandum to the bill states this was done to give effect to the concerns about workforce exploitation and labour broking voiced in the ANC's election manifesto.
However, the law changes do not make the outright ban on broking trade federation Cosatu has demanded.
Instead, the new draft employment service bill seeks better regulation of employment placing, and to make it easier for those placed in temporary jobs by labour brokers to have recourse to the law by clearly spelling out who their employer is.
Acting director general Sam Moratoba said the central weakness of the existing law was that those who were exploited in temporary jobs were compromised because it was unclear who had hired them, and therefore who they should report to the authorities.
"Currently, the employer is not defined. So if somebody wanted to go to the CCMA (Commission for Conciliation, Mediation and Arbitration) it was not clear who the employer was. The bill seeks to define who the employer is."
Under new provisions, it would be clear that the third party, or placement agency, serves the actual employer who is defined as being in a primary relationship with the worker.
The bill states that the labour minister must designate a departmental official as the registrar of private employment agencies, and prohibits anybody from running an agency without a licence issued by the registrar.
The bill clearly bans agencies from charging workers fees for placing them in jobs, stating "A private employment agency may only charge a fee to an employer".
It also seeks to regulate the operation of state employment service.
The draft labour relations amendment bill is intended to address the "increased informalisation of labour to ensure that vulnerable categories of workers receive adequate protection and are employed in conditions of decent work".
To this end, the bill inserts a clause into the original act of 1995 stating that "an employee must be permanently employed, unless the employer can establish a justification for employment of a fixed term".
"The purpose of this clause is to prevent the use of 'fixed term' contract as a basis for depriving employees who are engaged for work of indefinite duration of security of employment," the bill's memorandum says.
It proposes that the clause should apply only to workers earning below a threshold to be proclaimed by the minister, thereby excluding managers and other senior staff on fixed contracts from the presumption.
The bill also takes aim at employers who pay workers performing "substantially the same work or work of equal value" different salaries, prohibiting this as unfair discrimination.
The period for public comment on the bills expires on February 17.
The draft employment equity amendment bill removes the maximum fine limit of R900 000 for companies found to be in serial breach of the law on hiring black people, women and disabled employees reflecting national and regional demographics.
Under current law that was the highest fine that could be imposed on an employer who contravened the act four times in three years.
The maximum fine for a first offender was R500 000.
The bill seeks to change this to 2% of annual turnover, while the maximum fine for those guilty of "four previous contraventions in respect of the same provisions within three years" becomes 10% of annual turnover.
These provisions are in line with demands from suspended labour director general Jimmy Manyi, who has urged tougher penalties for recalcitrant companies.
They give the director general the power to apply to the Labour Court to impose fines on companies (in terms of the law those who employ more than 50 people) who fail to prepare and implement equity plans.
The bill is one of four published for comment on Friday after being approved by cabinet on December 8.
As expected, the draft labour relations amendment bill takes aim at the practice of labour broking. It aims to repeal Section 198 of the original act which allows the practice, estimated to give work to about half a million South Africans.
The explanatory memorandum to the bill states this was done to give effect to the concerns about workforce exploitation and labour broking voiced in the ANC's election manifesto.
However, the law changes do not make the outright ban on broking trade federation Cosatu has demanded.
Instead, the new draft employment service bill seeks better regulation of employment placing, and to make it easier for those placed in temporary jobs by labour brokers to have recourse to the law by clearly spelling out who their employer is.
Acting director general Sam Moratoba said the central weakness of the existing law was that those who were exploited in temporary jobs were compromised because it was unclear who had hired them, and therefore who they should report to the authorities.
"Currently, the employer is not defined. So if somebody wanted to go to the CCMA (Commission for Conciliation, Mediation and Arbitration) it was not clear who the employer was. The bill seeks to define who the employer is."
Under new provisions, it would be clear that the third party, or placement agency, serves the actual employer who is defined as being in a primary relationship with the worker.
The bill states that the labour minister must designate a departmental official as the registrar of private employment agencies, and prohibits anybody from running an agency without a licence issued by the registrar.
The bill clearly bans agencies from charging workers fees for placing them in jobs, stating "A private employment agency may only charge a fee to an employer".
It also seeks to regulate the operation of state employment service.
The draft labour relations amendment bill is intended to address the "increased informalisation of labour to ensure that vulnerable categories of workers receive adequate protection and are employed in conditions of decent work".
To this end, the bill inserts a clause into the original act of 1995 stating that "an employee must be permanently employed, unless the employer can establish a justification for employment of a fixed term".
"The purpose of this clause is to prevent the use of 'fixed term' contract as a basis for depriving employees who are engaged for work of indefinite duration of security of employment," the bill's memorandum says.
It proposes that the clause should apply only to workers earning below a threshold to be proclaimed by the minister, thereby excluding managers and other senior staff on fixed contracts from the presumption.
The bill also takes aim at employers who pay workers performing "substantially the same work or work of equal value" different salaries, prohibiting this as unfair discrimination.
The period for public comment on the bills expires on February 17.
