COSATU Submission on the Employment Equity Bill
Presented to the Portfolio Committee on Labour
22 July 1998

COSATU’s overall approach to the Bill
Core areas of concern
• Closing the apartheid wage gap
• Definition of designated employer
Addressing opponents of the Bill
• Annexure A: Reducing the Apartheid Wage Gap
• Annexure B: Designated Employers and Collective Bargaining
• Annexure C: COSATU's Proposed Technical Amendments

1. The National Party’s apartheid rule left a distorted and highly segmented labour market. This include excessive and bureaucratic control, hostile labour relations, reliance on cheap labour system, and a host of discriminatory legislation and practices, which came to be accepted as the norm by business and certain sections of our society. As a result our country faces a legacy of discrimination on the basis of race, class, gender and disability. South Africa is also renowned for its massive income inequalities, which have been analysed by various studies including the ILO Country Review (1996) and the Report on Poverty and Inequality (1998). Labour market inequalities and discrimination were reinforced by extra labour market inequalities such as unequal access to education and training, racially skewed patterns of ownership, gender inequality, lack of housing, medical care and transport.

2. The Green Paper on Employment Equity and the explanatory memorandum accompanying the version of the Bill tabled for negotiation in NEDLAC, provides a comprehensive analysis of such discrimination in the labour market including the legacy of massive income inequalities. This is what has come to be known within COSATU as "the island of prosperity and opulence surrounded by a sea of mass poverty". Or as the President of the ANC and Deputy president of the country put it as two nations situations – the haves and the have-nots. It is our view that the debate in the Portfolio Committee as well as the subsequent report and amendments, should take cognisance of the analysis made in the various reports including the Green Paper and the initial Bill tabled at NEDLAC.

3. The ILO Review of the South African Labour Market (1996) and the Presidential Commission to Investigate Labour Market Policy in South Africa (1995) documented the persistence of employment inequities on the basis of race, gender, occupation, disability, job status and income. Both studies have found stark employment inequalities within and outside the labour market which interact to create a systematic pattern of discrimination and inequality that is self-sustaining and reproduces itself over and over again - hence the need for corrective action to break this cycle of inequality and redress past imbalances.

4. There are acute ‘diseconomies’ associated with the lingering inequality in the labour market. In the context of South Africa where the majority has been excluded by discriminatory practices, this means that a substantial portion of the productive population is under-utilised. This also means that the level of participation is skewed in favour of the minority albeit with the negligible participation of sections of the previously oppressed and exploited. The minority market is also too narrow to provide a basis for expanded economic growth. This ultimately undermines economic development. Employment Equity is, therefore, not only a moral imperative but also a precondition for sustainable reconstruction and development of our society.

5. The above mentioned inequalities will not disappear of their own accord. To redress these imbalances requires not only outlawing discrimination but also implementation of conscious programmes designed to achieve broader representivity in the workforce, i.e. affirmative action – commonly known appropriately in Afrikaans speaking circles as "regstellende aksie". All of us know regardless of protestations to the contrary, that outlawing formal discrimination is not sufficient to ensure substantive equality. Underpinning the Constitution is the recognition that to achieve substantive equality, programmes should be implemented to ameliorate historical imbalances on the basis of race, sex and disability.

6. However, measures to achieve equitable representation of previously disadvantaged persons at each level of the occupational hierarchy alone are not adequate to address these historical imbalances. Such measures must be linked to among others efforts to democratise the workplace, flatten hierarchies, reduce wage inequality and invest in skills development. Without the required change in organisation, culture and decision-making in the workplace, affirmative action will simply be assimilationist. Put differently, people from designated groups will be forced to assimilate in ‘alien’ organisational environments, which will ultimately frustrate them and defeat the purpose of affirmative action programmes. Employment equity therefore requires a comprehensive and integrated strategy of which affirmative action is only one, albeit central pillar.

7. It is our view that located within the aforementioned, the Employment Equity Bill (hereafter the "Bill") will usher in a new dispensation in the South African Labour market. In its five year programme, which COSATU supports, the Department of Labour made a commitment to transforming the labour market, and this Bill constitute one of the measures to realise that vision. The submission will provide COSATU’s overall approach to the Bill, respond to those opposed to the Bill; and register our broad concerns. Detailed amendments to the Bill are contained in Annexure A, which is part of the submission. As our reference we use the Green Paper, the Bill as introduced in the National Assembly and the version tabled at NEDLAC for negotiation.

COSATU’s overall approach to the Bill

1. The labour movement has for long maintained the view that the discussion around affirmative action in South Africa runs the risk of focussing narrowly on the promotion of a small number of individuals, leaving the pattern of apartheid labour market discrimination and inequality fundamentally undisturbed. We therefore welcome the underlying philosophy of the Bill. The Bill:
• advances the need for a comprehensive approach to redressing the legacy of discrimination and inequality in the labour market, in order to achieve the goal of employment equity.
• argues that the mere repeal of past discriminatory laws is insufficient to tackle this legacy, and that left to itself the market will continue to replicate these inequalities, and social imbalances.
• calls for a programme of positive measures to overcome the inequities in the labour market, focusing on the systematic advancement of historically disadvantaged groups, rather than the promotion of a few individuals from among the disadvantaged.
• argues that far from acting as a barrier to economic growth, such measures are a necessary condition for sustainable economic development, to unleash the potential suppressed by apartheid underdevelopment, particularly of our human resources.
• this approach is rooted in the equality clause, section 9 (2) of the Constitution, which lays the basis for legislative and other measures to achieve equality for those disadvantaged by unfair discrimination, as well as ILO Convention No. 111 aimed at the elimination of discrimination in respect of Employment and Occupation.

2. In most respects we support the broad strategy outlined in the Bill for the achievement of Employment Equity, with certain important qualifications. Of importance is the fact that:
• they provide a comprehensive and integrated strategy to advance all historically disadvantaged groups by linking employment equity to the reorganisation of hierarchies, training and recognition of prior learning, recruitment, promotion and collective empowerment;
• they appreciate that for employment equity to be effective there will have to be a fundamental change in organisation culture, democratisation of decision making, and collective involvement of workers in transforming the apartheid workplace;
• they provide a tool for the targeting of employment equity measures at those disadvantaged by apartheid through the establishment of the concept of "designated groups" (black people, women and disabled);
• they set up a two-pronged engine to drive the implementation of positive measures for employment equity. This is the employment equity audit or analysis and the employment equity plan.

3. The Bill attempts to strike 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. In broad terms, we agree with the thrust of this approach. A narrow, state-driven strategy, relying exclusively on the imposition of affirmative action quotas, would have a serious drawback. In particular, it would have focussed in a one-sided way on the promotion of a few individuals into management positions. This would amount to tokenism and not advance a genuine process of empowerment. Secondly, it would have rigidly imposed targets from above which failed to take into account the concrete conditions and problems of industries and individual enterprises. Thirdly, it would have undermined the collective bargaining process of employment transformation encouraged by the LRA, and failed to link the process of employment equity to a range of processes of transformation of the economy in general and of the workplace in particular that are being negotiated by trade unions.

4. On the other hand, the other extreme – of abandoning state intervention – would be equally disastrous. It is a fallacy (as it is being suggested by some employer organisations notably the South African Foundation), that this process of "self-regulation" can be successfully pursued without a strong element of enforcement and compulsion by government. If employers were willing and able to implement employment equity measures without government intervention, there would have been no need for the legislation. If anything, the record since 1994 elections demonstrates that left to their own devices, employers in this country have in most cases resisted the type of transformation outlined in the Bill. After all, today’s employers are the same employers of yesterday.

5. Those who argue that there is no need for legislation since employers are committed to the spirit of the Bill, or already have negotiated agreements with the trade unions have nothing to fear. The Bill will only compel those who even while paying lip service to employment equity of women, blacks and the disabled, discriminate against them in practice.

6. COSATU supports the view that lack of previous experience should not be used to discriminate against employees. In particular, new entrants to the labour market, especially the youth, should not face excessively prohibitive previous experience requirements. Secondly, affirmative action should be developmental and take into account the potential of employees to acquire the requisite ability to perform the work. Thus a need for investment in skill development. We therefore support section 20(3)(b) of the Bill. This gives expression to the demand which both labour and the community constituency have advanced in the Job Summit process.

7. We are aware that BSA has used the bill’s formulation of the NEDLAC agreement on suitable qualifications as an excuse for withdrawing its support for the principle described above. BSA contends that government violated the NEDLAC agreement and that section 20(3) of the bill is bad policy. COSATU submits that the draft bill is entirely consistent with the agreement at NEDLAC and is good policy.

8. It must be remembered that it is business—not labour or government—that wanted the bill to include a definition of persons who are "suitably qualified." Business contended that it should not be expected to employ workforces that reflect the population of the country as a whole because there may not be enough qualified black or female candidates for particular jobs to mirror the population. Labour reluctantly agreed to treat the availability of qualified people as one of the factors to be considered in evaluating an employer’s progress toward employment equity. Our agreement was predicated on the inclusion of language in the bill ensuring that people who lack experience would not be deemed unqualified.

9. Labour’s position was based on the fact that employers routinely place people in jobs which they cannot fully perform without some training. For entry level jobs, this training is generally of short duration. For more highly technical or unique jobs, the training may be quite extensive. Given this practice of training newly hired employees, employers should not be permitted to claim that there are not sufficient qualified employees from designated groups when there are plenty who will be able to do so with a reasonable amount of training.

10. For these reasons, in the NEDLAC report at page 7, all parties agreed that the legal drafters should amend what is now section 20(3) of the bill to ensure that "persons without previous experience should not be discriminated against." The drafters did so. The bill provides that people are deemed "suitably qualified" for a job if they will become proficient within a reasonable time. The concept of a reasonable time is a flexible one, the application of which will depend, among other things, on the nature of the job. This language of the bill is appropriate and necessary, and must be retained. Otherwise the notion of "suitably qualified" will undercut the entire thrust of the bill.

Core areas of concern
1. Notwithstanding our broad support for the Bill there are two core issues on which we wish to raise our concerns i.e. closing the wage gap and the definition of designated employer.

Closing the apartheid wage gap
2. The apartheid wage gap is characterised by a concentration of low wage, low skill employment, particularly amongst African and women workers, at one end of the spectrum. At the other end of the spectrum are the high paying managerial and executive positions monopolised disproportionately by white men. NALEDI estimates that the difference between a manager’s salary and that of a worker is 15-20 times in South Africa. When it comes to top executives, the disparity is even greater: it is estimated that the average ratio in South Africa of the Managing Director to the lowest paid worker is about 100:1, while in Japan it is on average 7:1.

3. Within those extremes, even the gradations between unskilled, semi-skilled and artisans, blue collar, production and technical/professional reflect disparities in incomes which are huge by international standards. This is the legacy of cheap labour, repressive policies applied to black workers, and their denial of formal skills/education. On the other side the protectionist policy of job reservation, monopoly of skills/education, and economic power of the minority enabled them to institutionalise disproportionate rewards and perks.

4. This has resulted in a hierarchy, which drains economic resources into the higher occupation layers, often, the least productive strata of the economy. Bloated management, administrative, supervisory and other layers take the lion’s share of the wage and salary bill. This picture is further confirmed by the NPI study, which showed that about 60% of the national wage and salary bill went to salaried staff, i.e. white collar and above.

5. It is widely recognised internationally and in South Africa – except maybe by the DP, NP and the business community who were the architects and beneficiaries of apartheid – that the huge disparities in income are directly a result of apartheid, and without parallel on a world scale. The Draft Bill and the Green Paper identified this apartheid legacy as a central concern in the pursuit of employment equity. Thus the Draft Bill lays the basis, in the Preamble, for legislative action to address this problem as part of the employment equity strategy.

6. In COSATU's view the formulation contained in the Bill section 6 (4) fails dismally to address the issue of closing the apartheid wage gap. As indicated in the NEDLAC Report (p.13), and in the COSATU CEC decision, which was communicated to NEDLAC "Labour has expressed a reservation that the agreement to insert a new section 6 as captured in point 3 of this report would not adequately address its concerns regarding the wage gap". Placing this clause in the chapter on unfair discrimination focuses narrowly on wage discrimination involving those doing similar work and does not adequately address this issue. This is in any event covered by the Constitution. The issue of wage inequalities, to be dealt with effectively, would have to be placed in the core mechanisms of the Bill; the audit, the plan, and reporting provisions in Chapter 3.

7. It remains our view that the enormous wage differentials caused and exacerbated by Apartheid must also be addressed in the Employment Equity Bill. This is the only way it can become meaningful, particularly for the unskilled and lowly paid workers. As an alternative to the wording tabled at NEDLAC we propose a set of amendments contained in Annexure A. The intention of the amendment is to ensure that closing the wage gap is reflected in the purpose of the Act; it is an explicit goal of affirmative action measures; it is reflected in the audit/analysis and the employment equity plan; and it forms part of the criteria for assessing compliance. This will provide a framework for ensuring that this issue is put on the agenda of every workplace. However this Bill alone will not achieve this objective. It must be combined with negotiations at national and sectoral levels.

8. The issue of closing the massive gaps between the various strata of the work force, between management and low paid workers, men and women, black and white, blue collar and white collar, needs to 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 be huge "vertical inequity" - between those at the bottom and those at the top. Failure to do this would tend to merely change the complexion of inequality, without fundamentally altering its structure.

9. The employment equity plan envisaged in the legislation should be broadened to include commitment by the company to reorganisation of the occupational structures, flattening of hierarchies, taking a new approach to grading and training and reduction of the wage gap within specific time frames. The Plan, to be submitted by each company to government should set out targets for wage equity over a period of years, in accordance with guidelines set out at national and sectoral level. The organisational audit would need to contain an organisational ‘map’: information about the ratio between, and the income of, all layers of the workforce up to the directors and management, including all perks, benefits, share options, etc. Targets would need to be set for the reduction of these ratios, within specified timeframes. The legislation needs to ensure that companies are compelled to disclose all necessary information around remuneration levels. The Minister will need to publish guidelines to ensure a uniform measure for the analysis, plan, and reporting of this matter (see proposed amendment).

10. A national approach would be important in ensuring that those companies flattening the wage structure are not put at a disadvantage, insofar as it may lead to flight of skills to companies not implementing wage equity proposals. Such national campaigns are not without precedent. Norway for example adopted the "Solidarity Alternative" a deliberate national policy of reducing the wage gap by giving the lowest paid the highest increases.

11. Closing the wage gap does not necessarily mean on balance a massive increase in the wage bill above aggregate levels of productivity. There is considerable room, because of the current diversion of resources to the upper strata, for re-organisation and redistribution within the current overall levels of remuneration.

12. The public sector seems to be leading the way in closing the wage gap. Modest but significant gains have been made in closing the wage gap. According to the ILO, public sector differentials in South Africa were about 25:1 from top to bottom in 1994. As a result of negotiation these were reduced to 20:1 in 1995, with a deliberate policy of freezing the top, and raising the bottom. Government has now set a target of bringing the ratio down to 12:1 by 1999. If the employment equity legislation is not designed to encourage a closure of the wage gap in the private sector, progress made in the public sector shall be undermined, as it will encourage a "brain drain" from the public to the private sector.

Definition of designated employer
13. COSATU believes that whatever the threshold for designated employer, all employers should, as far as is possible have obligations to ensure equity in the workplace. We support the Draft Bill in this regard. Further, we do not want a situation where industry wide collective agreements on employment equity cannot be implemented because not all employers are designated. Lastly that the threshold should take into account of turnover as in the Small Business Act.

14. COSATU therefore supports section 1(b) of the Bill which states that: "designated employer means: (b) a person who employs fewer than 50 employees but has a total annual turnover that is equal to or above the applicable minimum annual turnover of small business in term of the Schedule to the National Small Business Act." However, this only deals with the concern around turnover but does not address the need to ensure that employers implement industry wide collective bargain agreement on affirmative action and the need to ensure that as far as possible all employers should implement employment equity. Therefore, we are proposing amendments to the definition section, section (1) of the Bill, and section 14 dealing with voluntary compliance. These are contained in the appended document.

Addressing opponents of the Bill
1.We note that certain forces in our society are opposed to the Bill – mainly business representatives, opposition parties, especially the Democratic Party and the National Party as well as the South African Institute of Race Relations. In the main these groupings use a façade of: defending standards, the need to keep the state out of the market, concerns that the Bill ‘re-racialises’ South African society, and the need for labour market ‘flexibility", as their justification for opposing the Bill.

2. The argument presented by these groups suggests that what was required in South Africa was the elimination of formal discrimination in the form of repeal of discriminatory legislation and that the market will redress past imbalances with no state intervention. This approach is flawed for a number of reasons. First, without concrete programmes to redress past imbalances the market will simply perpetuate inequality on the basis of race, gender disability and income. This becomes even more serious if we take into account extra labour market inequalities. The playing field will not be level as discriminatory laws and practices have historically advantaged some groups in society.

3. In our view the market cannot be relied upon to correct these anomalies without the creation of the correct regulatory environment by the state. The reality is that the so-called market with the complicity of the private sector played a major role in perpetuating inequalities in the labour market for its profitability. Ultimately, the realisation of employment equity depends on intervention by the state, a commitment by employers to implement affirmative action measures and an active role of trade unions.

4. With regard to the argument that employment equity will lower standards, it must be borne in mind that under apartheid standards were lowered to ease-in individuals from the advantaged groups. Perhaps a broader question is what standards are being referred to? COSATU is not prepared to accept outmoded and racist practices under the guise of "standards" which effectively serve as a barrier for historically disadvantaged communities. Hence we lay stress in the need to review employment practices and workplace culture, the need to democratise the workplace and flattening hierarchies. In our view standards are not ‘neutral’, super-realities imposed from without, but reflect social conditions.

5. The Democratic Party in its document "The Death of the Rainbow Nation: Unmasking the ANC programme of re-racialisation (1998)", equates affirmative action and employment equity to re-racialisation of South African society. The Democratic Party and others of its ilk are attempting to create paranoia about affirmative action. We call on white South Africans not to allow themselves to be lead up a dead-end road by people who are seeking to win votes by using scare tactics. Just as the old National Party used "rooi-gevaar and swart-gevaar" to perpetuate the status quo, Tony Leon’s Democratic Party and their friends in business are now poisoning whites with "affirmative action-gevaar" and "transformation-gevaar."

6. All South Africans, particularly whites and the business community must realise that their future lies with an expanded de-racialised economy. To be misled along a path of separatism and resistance to change at this juncture would be courting disaster. A non-racial society will only be built through corrective action, which enables us to overcome our racist history. People who are trying to tell others that non-racialism is to be achieved through maintaining the status quo and leaving the inherited structures of privilege undisturbed are, indeed, trying to block off opportunities to the majority of the people.

7. For the record, the ANC-COSATU-SACP Alliance has never wavered from the vision of a non-racial society. The DP is, therefore being disingenuous when it claims that "the ANC used the rhetoric of ‘non-racialism’ and reconciliation as big lies, primarily to diffuse any resistance by minorities until it has consolidated power." It is, in fact, parties from the old order who are trying to re-racialise South Africa politics in order to consolidate a white support base.

8. This is a dangerous and shortsighted route as it threatens to deepen South Africa’s racial schisms. What must be stated clearly is that no amount of mischief by the DP or other minority parties will detract the Alliance from its course of actively transforming South Africa into a non-racial, non-sexist democratic and prosperous society. We trust that our fellow South Africans of all races will find it in their hearts to participate in this transformation process, building the foundations for long term successes as a nation.

9. It has become fashionable to use the argument that efforts to transform the labour market are making it rigid, as an attempt to block the transformation process. Over the past few months we have been bombarded with arguments that the Employment Equity Bill – indeed all legislation forming part of the Department of Labour’s five-year programme – is imposing rigidities in the labour market. These argument fly in the face of the findings of the ILO Review which cogently argued that the labour market is very ‘flexible’, especially at the lower end. Significantly, the ILO Review pointed out that rigidities in the labour market are located at the top echelons, owing to the shortage of skills in our society. Our proposals to flatten hierarchies, re-organise the workplace, and for wage equity attempt to unblock these rigidities at the top. As stated before, we however, reject notions about labour market "flexibility" as an attempt to take our country back to the apartheid dispensation of cheap labour.

10. A variant of the 'flexible labour market' argument was presented by Business South Africa (BSA) in its submission to the Portfolio Committee on the 21 July 1998. Business employs scare tactics by arguing that the Bill will lead to job losses as employers will be forced to mechanise and discourage investment, especially foreign investment. This has become a swan song of the business community, masking their opposition to the transformation of the labour market. Rather than making threats, we challenge business to make up its mind whether it supports the Bill.

1.COSATU agrees with the need for an Employment Equity Statute to redress injustices of the past. This post – apartheid legacy is not a natural phenomenon but a result of National Party rule with the support of business, white parties as well as sections of the white population.

2. The same parties and institutions that denied us our rights are the ones who have come before the committee to defend the status quo. You should tell them to go to hell. Your message should be a resounding yes to social transformation at all levels including the workplace.

3. At the same time as we agree with the need for the statute as well as its overall approach, we however, believe that it is fundamentally flawed in its current form – particularly its failure to deal in any effective way with the issue of the wage gap as well as ensuring that no employer who is part of a collective bargaining council agreement refuses to implement the Bill simply because they are not classified as a designated employer.

4. These and the technical amendments are the changes we would want to see reflected in the Bill for it to enjoy our unqualified support. Without such changes, the Bill will be meaningless for the majority of unskilled and low paid workers. It will have quarantined the workplace from real changes.

5. Furthermore, our submission has also dealt with the fact that indeed there are areas where there was agreement in NEDLAC, but which does not appear to have been captured during legal drafting. Unlike BSA, our concern is not the exact wording, but their inclusion in one form or another which gives legal meaning to the agreement. We however, reject the proposal by Vic van Vuuren that what should be reflected on the wage gap should be the combined view of government and employers. What he ignores is that while they are opposed to the elimination of the apartheid wage gap, the government is not.
6. This was further supported by BMF and the Community Constituency during the negotiations. In fact, if we took the route of following majoritarianism, rather than consensus, BSA would have nothing to show for the agreement. This is a dangerous game they are playing, one they may live to regret.

7. We wish to thank the Portfolio Committee for affording us the opportunity to participate in the public hearings. We commend the Department of Labour for developing the Bill.

8. Once more we reiterate our view that failure to address fundamental challenges we have raised, will render the Bill problematic as it will benefit a negligible section of the previously disadvantaged. The main beneficiaries will then be those who already possess skills and qualifications as they would immediately be recognised as "suitably qualified". As alluded to in our submission, redressing past imbalances is not only a moral imperative, but also a precondition for sustainable development. Redressing past inequalities is the only sustainable route and solution to the "two nation scenario" as identified by the Deputy President Thabo Mbeki.

9. As for the DP, NP and other who have opposed the Bill, all we can offer them is sanctuary in a museum of past dinosaurs.

Annexure A: Reducing the Apartheid Wage Gap
COSATU believes that the enormous wage differentials cause d and exacerbated by Apartheid must also be addressed in the Employment Equity Bill. COSATU’s proposed amendments are set out below.

Item Sections Suggested amendment
1 Section 1
Definitions Add in the following definition:
"Occupational category or level" refers to all categories or levels of employees including chief executive officers and other managers.

2 Section 2
Purpose of the Act Add in sub-clause 2(c) so that this section reads:
The purpose of this Act is to achieve equity in the workplace by –
(a) promoting equal opportunity and fair treatment in employment through the elimination of unfair discrimination; and
(b)implementing affirmative action measures to redress the disadvantages in employment experienced by designated groups, in order to ensure their equitable representation in all occupational categories and levels in the workforce; and
(c) promoting the reduction of income differentials between all occupational categories or levels of employees in the workforce

3 Section 6
Prohibition of unfair discrimination Delete sub-section 6(4).

4 Section 15A
(new clause)
Measures to promote the reduction of income differentials Add in the following new clause
15A(1) A designated employer must implement measures to promote the progressive reduction of income differentials between occupational categories or levels of employees in the workplace.
15A(2) These measures must include –
(a) measures to identify the income differentials between employees in the respective occupational categories or levels;
(b) the setting of targets or ratios for the progressive reduction of these income differentials;
(c) measures to ensure compliance with-
(i) collective agreements concluded at bargaining
(ii) the income differentiation within the employer’s workforce as a whole, using a measure of income differentiation prescribed by the Minister.

5 Section 20
Employment Equity Plan Add in sub-clauses 20(2)(e) and (f) and renumber the remaining sub-clauses accordingly:
(e) the measures to be implemented as required by section 15A(2);
(f) the timetable for the consultation of matters pertaining to the progressive reduction of income differentials between all categories or levels of employees and the timetable for the implementation of those reductions;

6 Section 41
Assessment of Compliance Add the underlined portion:
In determining whether a designated employer is implementing employment equity in compliance with this Act, the Director-General or any person or body applying this Act must, in addition to the factors stated in sections 15 and 15A , take into account all the following:
Add in sub-sections (c), (d) and (e) and renumber the remaining sub-clauses accordingly:
(c) the extent to which the designated employer has consulted about measures to reduce the income differentials between occupational categories or levels of employees within its workforce;
(d) the extent to which the designated employer has implemented measures to reduce the income differentials between occupational categories or levels of employees within its workforce;
(e) the extent to which the designated employer has reduced income differentials between occupational categories or levels of employees within its workforce.

Annexure B: Designated Employers and Collective Bargaining
COSATU believes that all employers should as far as possible have obligations to ensure equity in the workplace. COSATU also wishes to prevent a situation where collective agreements concluded at a bargaining council and which deal with employment equity are capable of not being implemented by certain employers because they do not meet the threshold set in the Act. COSATU’s proposed amendments to address these problems are set out below.

Item Sections Suggested amendment
1 Section 1
Definitions Designated employer should be defined as:
Designated employer means –
(a) any person who employs 50 or more employees;
(b) a person who employs fewer than 50 employees but has a total turnover that is equal to or above the applicable minimum turnover of a small business in terms of the Schedule to the National Small Business Act, 1996 (Act No. 102 of 1996); or
(e) any employer as contemplated in section 14.

2 Section 14
Voluntary Compliance with this Chapter
Replace this provision with:
(1) An employer may become a designated employer if –
(a) it agrees in writing to be a "designated employer" for purposes of this Act; or
(b) the employer is bound by a collective agreement -
(i) which appoints the employer as a "designated employer" in terms of this Act; and
(ii) which was concluded by a bargaining council and extended by the Minister in terms of the Labour Relations Act 1995 (Act no 66 of 1995).
(2) Upon becoming a designated employer in terms of sub-section (1)(a) the employer must notify the Director-General that it will comply with this Chapter as if it were a designated employer.
(2) Upon employers becoming designated employers in terms of sub-section (1)(b) the bargaining council must notify the Director-General accordingly.

3 Section 20
Report Add in sub-section (6)
(6) If an employer is a designated employer in terms of section 14 then –
(a) the employer must comply with the reporting provisions contained in the agreement in terms of which that employer became a designated employer; or
(b) if that agreement does not provide for reporting, then the employer must report in accordance with this section.

Annexure C: COSATU's Proposed Technical Amendments
These submissions are made in addition to those concerning the scope of a designated employer and collective bargaining and the need to reduce the Apartheid wage gap.

Item Section Suggested Amendment Comment
1 Section 1
Definitions Delete "local spheres of government" from the definition of "an organ of state" This will ensure that designated employers who wish to conclude contracts with local governments would have to comply with the provisions of this Act. See section 52. There is no reason why contracts with local government are excluded.

2 Section 6 Delete sub-section 6(4) While COSATU wishes to associate itself with the issues raised in this clause, it believes that it should be re-located. There are two reasons for this:
Measures to redress income differentials should fall within Chapter III of the Act. Chapter II deals with the prohibition.
The way it is drafted at the moment may cause serious problems for workers. If they allege that a practice connected to wage differentials constitutes unfair discrimination the employer may be able to oppose any relief sought on the basis that he or she is addressing it through, for example, collective bargaining or other bargaining.
Sub-clause 6(4)(c) makes no sense because there is no measure provided in the BCEA which the employer may use to address any unfair discrimination in relation to wage differentials.
COSATU believes that the addition of sections to address the Apartheid wage gap address this.
3 Section 7
Medical Testing Replace section 7 with the following:
(1)The medical testing of an employee is prohibited, unless –
(a) legislation permits or requires the testing; or
(b) it is justifiable in the light of medical facts, employment conditions, social policy, the fair distribution of employee benefits or the inherent requirement of the job.
(2) After consulting with NEDLAC, the Minister must issue a code of good practice about the extent to which the grounds specified in sub-section (1)(b) may justify medical testing. The grounds in sub-clause 7(b) which justify medical testing are so broad that the prohibition on medical testing of employees is rendered almost null en void. What is the scope of a "medical fact"?
COSATU has previously submitted that these grounds must be defined. This was agreed to at NEDLAC. Obviously medical tests cannot discriminate unfairly. But what does this mean? If these grounds are not defined in the Act then COSATU submits that the Minister should at least produce a guideline in the form of a code of good practice after consulting parties at NEDLAC which will define the scope of these grounds.
COSATU believes that the code of good practice must also deal with pre-employment testing.

4 Section 8
Psychometric Testing Replace this section with the following:
Psychometric testing of an employee is prohibited unless the test being used has been scientifically validated as providing reliable results which do not unfairly discriminate against employees. The section as presently worded is problematic for the following reasons:
• the fairness of the test’s application should not only be limited to "culture". What about race or gender or indeed the other grounds of unfair discrimination specified in clause 6(1)?
• the test should not be biased irrespective of whom it is applied to. The absence of bias should not be limited to people from the designated groups. What about those from non-designated groups? For example, the test should also not be biased against white males. Furthermore it should not be biased against groups who fall within the designated and non-designated groups such as people with a particular sexual orientation.

5 Section 10
Disputes concerning Chapter II Replace sub-section 10(2) with the following:
Any party to a dispute concerning this Chapter, other than an allegation of harassment, may refer the dispute in writing to the CCMA within six months after the act or omission that allegedly constitutes unfair discrimination.
Delete sub-section 10(3) and renumber the other sections accordingly.
Internationally disputes concerning harassment, including sexual harassment, are considered to be disputes about unfair discrimination. Presently, an employee’s remedy for harassment (including sexual harassment) is under item 3(4)(a) read together with item 2(1)(a) of Schedule 7 (Transitional Arrangements) of the Labour Relations Act, 1995 ("LRA"). Item 2(1)(a) outlaws unfair discrimination based on an arbitrary ground. There is no reason why harassment should be distinguished from unfair discrimination. However insofar as there is a debate about this, COSATU’s new sub-clause 10(3) should resolve any possible dispute.
Sub-clause 10(3) as it stands creates real problems because it refers workers to the LRA. The relevant provisions of the LRA (i.e. items 2(1)(a) and 3(4)(a) of Schedule 7) will be repealed by this Act. See schedule 2 of the Employment Equity Act.

6 Section 15
Affirmative Action Measures Replace sub-section 15(1) with the following:
Affirmative Action measures are measures designed to ensure that –
(a) suitably qualified people from designated groups have equal opportunities and are equally represented in all occupational categories and levels in the workforce of a designated employer; and
(b) people from designated groups are trained and developed in order to ensure that persons from designated groups are eligible for jobs in all categories and levels in the workforce.
Add in a new sub-clause 15(3) and renumber the remaining sub-clauses accordingly
Where appropriate, affirmative action measures must address in particular the position of black women. Affirmative action measures should include the objective to train employees from designated groups so that they are eligible for occupations at all levels within the workforce.
The Bill fails to recognise that black women face disadvantages that are qualitatively different and greater than the sum of the disabilities experienced by women generally and black people generally. See also section 41.

7 Section 41
Assessment of Compliance Delete "suitably qualified" from sub-section (a) The inclusion of "suitably qualified in sub-section unnecessarily restricts this section. The qualification is included in sub-sections (i) to (v).

8 Section 53
Codes of good practice Replace sub-clause 53(1) with:
The Minister may, on the recommendation of the Commission and after consultation with NEDLAC –
(a) issue any code of good practice; and
(b) change or replace any code of good practice. The motivation for this is self-evident. Civil society should be consulted in the drafting of such important guidelines.

9 Section 54
Regulations Replace sub-clause 54(1) with:
The Minister may, on the recommendation of the Commission and after consulting NEDLAC, and by notice in the Gazette, make any regulation regarding -… The motivation is the same as the motivation for the amendment to section 53(1).