Parliamentary Portfolio Committee on Labour

July 1998
Cape Town Office

1. Introduction
The Employment Equity Bill ("the bill") is an important and strategic statute, and one which realises an aspect of the legislation envisaged in section 9(4) of the Bill of Rights. It will go a long way towards addressing substantive equality in attempting to bring about equitable representivity in the workforce. The Human Rights Commission ("the Commission") welcomes this bill.

The Commission would like to comment on certain aspects of the legislation, and make recommendations for the attention of the Parliamentary Portfolio Committee. The comments are divided into four areas: the ambit of the bill, the definitions contained in the bill, primary defences and procedural issues.

In addition, the Commission would like to draw the Committee’s attention to a dissenting opinion of Commissioner Helen Suzman, a copy of which is annexed to this submission.
2. Ambit of the bill
2.1 Framework of the Bill
Chapter 2 – Prohibition of unfair discrimination
Chapter 3 – Affirmative Action
It has been argued that the Chapter 2 of the bill, which contains broad anti-discrimination provisions, is inappropriate in a bill of this nature, and that these provisions are more appropriately contained in equality legislation. One of the motivations for this argument is that "discrimination" needs to be defined more closely, in order for any provisions to be effective, and that this definition needs to apply uniformly to all spheres where discrimination might take place, and not only the labour market.
However, the Commission strongly recommends that Chapter 2 be retained. Firstly, all forms of discrimination need to be addressed in the arena of employment, and secondly, the impact of the Chapter 3 of the bill, which is targeted at women, black people and the disabled, needs to be balanced by a generally applicable equality section.
The Commission submits that the overall structure of the bill, containing broad anti-discrimination provisions, followed by provisions dealing with special measures for certain groups is appropriate, and should be retained.

2.2 Unfair discrimination by colleagues
Section 5 – Prohibition of unfair discrimination
Section 49(2) – Powers of Labour Court
Section 59(2) – Liability of employers
Section 5 of the bill prohibits unfair discrimination by any "person". Accordingly, the bill does not merely outlaw discrimination against employees by employers, but extends its protection to discrimination suffered by an employee from another employee.
This is significant in light of the fact that section 59(2) of the bill makes an employer liable for a contravention of the bill by an employee, unless reasonable steps had been taken to prevent such contravention. It is clear that much will depend on the interpretation of "reasonable steps", and a wide interpretation may effectively bar a remedy. The Commission requests that attention be given to this aspect of the bill, with a view to possibly fleshing out the notion of "reasonable steps".

This explicit inclusion of co-workers as potential culprits is important and laudable, particularly in the sphere of harassment. (The fact that procedures for addressing discrimination in the form of harassment has been removed from the bill is problematic, and will be addressed hereunder). However, the provision may be undermined by section 49(2), which provides for an order to be made by the Labour Court, should it be decided that "… an employer has unfairly discriminated against any employee…" An argument could be raised that the section does not apply to cases of vicarious liability of an employer for the unfair discrimination of an employee. Such orders should be competent against employers for the actions of their employees.

The Commission requests that the Committee consider the wording of section 59(2), with a view to preventing the possible exclusion of a remedy.
The Commission recommends that the Committee give attention to a possible amendment to section 49, so as to introduce explicit powers to the Labour Court to make orders against an employer for the actions of their employees.

3. Designated employers
Section 12 – Designated employers
Section 64 - Definitions
The new version of the bill has increased the number of employers who are obliged generate employment equity plans. In addition to employers who employ more than fifty staff members, small businesses with a certain level of turnover have been included, as are certain municipalities.

This amendment is welcomed as it includes smaller enterprises that were previously left out. This inclusion will also aid the penetration of the spirit of the bill into smaller towns and rural areas.
It is challenging to develop workable proposals for the extension of the proactive steps to achieve employment equity to all employers. Possibilities such as tax incentives or penalties for smaller companies who do or do not comply could be pursued.

The Commission welcomes the broadened definition of designated employers, and requests that attention be given to encouraging compliance by smaller enterprises.

3. Designated groups
Section 11 – Designated groups
Section 64 - Definitions
The targeting of the benefits of employment equity to certain designated groups is controversial. It has been argued that legislation which protects and advances certain persons to such specific categories, should either be accompanied by a sunset clause providing a time limit to such focussed protection, or alternatively, the legislation should be targeted more broadly.

The Commission understands the rationale for targeting, and supports both the notion, and the specific groups highlighted out in the bill. However, the Commission would like to note that the exclusion of other groupings will, in all probability, give rise to a constitutional challenge, and accordingly requests that the Committee apply its mind to this aspect of the bill.

The Commission supports the notion of designated groups, and requests that the Committee gives this particular attention in light of the likelihood of a constitutional challenge to this aspect of the legislation.

3. Excluded agencies
Section 3(3) – Application of the Act
The South African National Defence Force, the National Intelligence Agency and the South African Secret Service are all excluded from the definition of designated employer. This exclusion follows the trend of the Labour Relations Act.

This blanket exclusion has been identified as problematic, particularly given the history of the organisations, and their need for transformation. The justification that has been raised regarding the exclusion, is that the agencies have special activities, and accordingly have special requirements for employees. However, these arguments ignore the existing safeguard in the bill, which tolerates discrimination, if it is based on the "inherent requirement of a job".

The Commission has received numerous complaints from members of these agencies, alleging various forms of discrimination. The Commission believes that the agencies should fall under the ambit of the bill.

The Commission motivates for the removal of the blanket exclusion for the South African Defence Force the National Intelligence Agency, and the South African Secret Service.
6. Grounds of discrimination
2.6.1 Family responsibility
Section 5(1) – Prohibition of unfair discrimination
The addition of "family responsibility" to the grounds of discrimination is a welcome introduction. This is particularly relevant to women, who continue to carry the primary responsibility for child rearing in our society, and who often suffer discrimination in the workplace as a result of these duties.

The Commission welcomes the inclusion of "family responsibility" as a ground of discrimination, which will have a particularly significant impact on women in the workplace.

2.6.2 Wage differential
Section 5(4) – Prohibition of unfair discrimination
In the latest version of the bill, Section 5(4) introduces the notion of unfair discrimination as it relates to wage differentials. Employers are mandated to address this through various avenues. This is an important introduction, and confronts the issue of levels of remuneration for the first time.

The Commission supports this introduction, and motivates strongly for its retention.
2.6.3 Sexual Harassment
Section 5(3) – Prohibition of unfair discrimination
Section 9(2) – Disputes about this Chapter
Some criticism has been levelled at the absence of any mention of "sexual harassment" either as a specific form of discrimination, or as an additional qualifier on the broad concept of "harassment". Given the legacy and currency of partriachy, the likelihood that employees, employers, inspectors and the Labour Court will identify certain forms of behaviour as sexual harassment has been doubted.

The Commission recommends the inclusion of "sexual harassment" where the bill refers to harassment (i.e. a reference such as "harassment, including sexual harassment"). However, it is not necessary to include a definition, as the courts have already built up a considerable jurisprudence on this subject, which can be consolidated and developed through the existence and use of the bill.

The Commission requests the Committee to give attention to the specific inclusion of "sexual harassment" into the notion of "harassment.
3. Definitions
1. Disability
Section 64 - Definition
The definition of "disability" is problematic, containing internal qualifiers such as "long term" and "recurring". It also qualifies the impairment as having to be one which "… substantially limits their prospects of entry into, or advancement in, employment." This qualification effectively inserts an onus of proof in order to fall under the definition. It is recommended that the definition of "people with disabilities" be re-worked calling upon expert agencies for assistance.

The Commission requests that the definition of "disability" be reworked, drawing on the technical assistance of specialised agencies.
1. Reasonable progress
Section 20 – Employment equity plan
The bill sets out that any employment equity plan must make "reasonable progress" towards equity in the workplace. No indication is provided as to what constitutes reasonable progress, and no timeframes are provided. It would be inappropriate for specific timeframes to be contained in a statute.

The notion of "reasonable progress" is probably one which would be best developed by the courts, in the same way that the concept of "progressive steps" to be taken by the state in the realisation of socio-economic rights is best interpreted on a case-by case basis by the Constitutional Court.

However, the new version of the bill makes reference to the demographics of the "economically active population" as a guiding factor to be taken into account when assessing compliance with the bill. This appears to set up a circular logic, as the removal of unemployed people from the demographics amounts to an exclusion which may impact on members of the designated groups, in so far as difficulties to enter employment are faced by the designated groups.

The Commission does not support the introduction of the demographics of the "economically active population" as a guideline for compliance, and requests that the Committee revisits this area.

4. Primary Defences
1. Inherent requirements of a job
Section 5 – Prohibition of unfair discrimination
In section 5 of the Bill, it is stated that it is not unfair discrimination to "… distinguish, exclude or prefer any person on the basis of an inherent requirement of a job." Common sense indicates that this will be the primary defence to a claim of unfair discrimination. This being the case, the incorrect interpretation of this provision will eliminate the effectiveness of the provision. The concept is new in our legal system, and there is no existing case law on the subject, and the phrase is not defined in the bill.

It is necessary to provide some guideline, or definition to the concept of "inherent requirement of a job", and provide some internal limitation to a defence which is currently uncomfortably elastic. Suggestions have been made that this concept is linked to the notion of "reasonable accommodation", through an explicit expansion of the definition to incorporate the qualification "… unless the needs of that person or group cannot be reasonably accommodated."
This would shift the interpretation to the notion of "reasonable accommodation", which appears elsewhere in the bill, and which is discussed below.

A similar proposal is to qualify "inherent requirement of a job" with the same limitation which has been used to qualify "reasonable accommodation" in other jurisdictions – the concept of "undue hardship". The defence of inherent job requirements could only be relied upon if it was shown that these could not be changed without undue hardship on the employer.

It is clear that raising the requirements of a job will be in response to direct discrimination. As such, it seems clear that race could not be raised as an inherent requirement, save possibly in the context of a dramatic performance in the interests of authenticity. The issue will be more significant in relation to gender and disability. Further, it should be made clear that this defence is only available at the entry point into a position, and cannot be raised at a later stage.

The Commission recommends that consideration be given to the inclusion of "reasonable accommodation" and/ or "undue hardship" into the notion of "inherent requirements of a job".

4.2 Reasonable accommodation
Section 15 – Affirmative action measures
"Reasonable accommodation" is listed in section 15(2) as one of the positive measures to be taken by employers to ensure that people from the designated groups have equal opportunities and equitable representation in the workplace. As such it relates to the employment equity component of the bill. It has been suggested that the notion should also be introduced into the component outlawing discrimination, in order to expand the process of the elimination of discrimination to embrace proactive steps.

Accordingly, section 4 of the bill could have a further provision stating: "The elimination of unfair discrimination may entail the requirement of reasonable accommodation by an employer." This augments the notion of equity, and is in line with the Constitutional approval given to positive measures to achieve equality. Further, given that the second component of the bill dealing with employment equity applies only to black people, disabled people and women, the extension of positive measures via the requirement of reasonable accommodation into the first component provides a measure of protection to those suffering discrimination on other grounds.

"Reasonable accommodation" appears as a central concept in the bill, and its interpretation is critical for the correct and appropriate understanding and implementation of the bill. North America has a well-developed jurisprudence on "reasonable accommodation". The concept is widely used in statutes and codes prohibiting discrimination. It is almost always explicitly defined, with some guidelines as to what constitutes reasonable accommodation, or alternatively, what the outer limit to accommodation might be. The most widely used, workable and well-accepted internal limitation is the notion of "undue hardship". A definition may be expanded to include: "Reasonable accommodation cannot be found to have taken place unless the employer has changed the work environment short of undue hardship."

If reasonable accommodation is required to the point of undue hardship, the latter concept must, in turn, be defined. American jurisprudence has, through a long history of court decisions, fleshed out the notion of "undue hardship" and provided concrete and specific guidelines as the interpretation and limit of this concept. These guidelines entail setting out a range of factors for assessing "undue hardship", which must amount to significant difficulty or expense. These vary state to state, but examples are:
• quantifiable and demonstrable financial cost
• size and resources of enterprise, relative to the number of employees
• interchangeability of workforce and facilities
• potential for spreading costs, or recovering costs
• outside sources of funding
• business convenience and efficiency
• significant health or safety risk to other employees or to the public
• effect on contractual obligations
• effect on collective agreement
• effect on, or substantial interference with, rights of other employees
• disruption to the public.

It is advisable to pre-empt juristic interpretations of the "reasonable accommodation" and "undue hardship" by providing more detailed definitions in the bill, or by providing guidelines, either by way of regulation or a code-of-conduct.

The Commission recommends that "undue hardship" be defined or interpreted in a form which limits the factors to be considered to only two issues: cost and health or safety. Further, the cost factor should be further be limited by indicating that this will only amount to undue hardship if they are:
• quantifiable;
• shown to be related to the accommodation, and;
• so substantial that they would alter the essential nature of the enterprise, or;
• so significant that they would substantially affect the viability of the enterprise.
Such a definition of "undue hardship" should make no reference to business inconvenience, decreased productivity or efficiency (without reference to cost, customer preference or third party preference) or collective agreement.

The Commission recommends that the notion of "reasonable accommodation" be incorporated into section 4 of the bill, so as to introduce some requirement of proactive policy to address discrimination on all bases.
The Commission calls upon the Committee to consider the inclusion of "undue hardship" as a qualifier to "reasonable accommodation" so as to provide a clearer guideline to the interpretation of the concept.
The Commission recommends that the definition of "undue hardship" (if used), should be limited to questions of cost, or of health and safety.
5. Procedural issues
5.1 Manner of redress for harassment
Section 5(3) – Prohibition of unfair discrimination
Section 9(2) – Disputes about this Chapter
Section 10 – Burden of proof

In the initial draft of the bill, "harassment" was included as a basis for discrimination. In the latest draft, it forms the subject of a specific section, and is expressly defined as a form of discrimination, rather than a basis therefore (section 5(3)). This is a positive development and is to be welcomed, as it is a more accurate reflection of what harassment constitutes.

However, at the same time as the bill recognises harassment as a form of discrimination, it removes the possibility of claiming redress for discrimination under the Employment Equity Bill, and states that this form of discrimination must be addressed via the Labour Relations Act (section 9(2)).

Removing the redress for harassment from the Employment Equity Bill is problematic on two fronts. Firstly, there is no justification for differentiating between different forms of discrimination, and the creation of alternative routes for redress may have the effect of creating an "ordering" of these different forms.

Secondly, the Employment Equity Bill contains a burden of proof that assists those alleging discrimination, by assuming that the discrimination is unfair, until the contrary is proved (section 10). This burden may not be available to an applicant when using the mechanisms set up by the Labour Relations Act.

The Commission recommends that harassment be treated in the same manner as other forms of discrimination, and be included under the procedural remedies contained in the bill.
Chapter IV – Commission for Employment Equity
Chapter V – Monitoring, enforcement and legal proceedings

The bill introduces wide and sweeping changes to the regulation of the labour sector. The ultimate success in the transformation envisaged by the bill will be the appropriate and proper implementation of the provisions of the bill. This is particularly important given that there appears to be some resistance to the nature and spirit of the bill, notably from big business. Accordingly, the role of labour inspectors, and the monitoring body created by the bill becomes significant.

Given the particular purpose of the bill, it has been suggested that better mechanisms for investigation and enforcement need to be established. The creation of a specialist unit of labour officers to investigate claims of discrimination has been suggested. This is a compelling proposal, given the insidious nature of many forms of discrimination.

The emphasis in the bill is on self-regulation. While this is ultimately the best way for the system to operate, it depends largely on a culture change, which my take a longer time to take place. The Commission is concerned that the bill should not lose its efficacy, and that sufficient attention is given to its implementation and oversight.

Concerns have also been raised at the creation of another Commission to oversee and monitor the bill, and its implementation. Although the Commission on Employment Equity is given a very narrow focus, there are cost implications in the establishment of its infrastructure, together with questions of independence given its accountability to the Minister of Labour.

The Commission requests that the Committee give attention to the creation of effective and appropriate mechanisms for the implementation and oversight of the bill.

Dissenting Opinion

South Africa’s priority need is increased employment to provide jobs for our millions of unemployed people. This Bill is counter-productive – it will inhibit the expansion of existing enterprises and will discourage new investment from local and foreign sources.

It introduces an inflexible labour policy based on race – shades of the job reservation policy of the apartheid regime!

It imposes state intervention in private enterprise to an unwarranted extent.
It will encourage further emigration of skilled white males whose expertise is required for economic growth.

The Employment Equity Bill will be impossible to implement because of the supply factor – there simply are not enough available people to meet the racial targets laid down within the suggested time frame as far as skilled, professional and qualified people are concerned. Such people are already at a premium – as the American experience has demonstrated, such affirmative action as envisaged by the Bill will only be of advantage to an elitist group. It will in no way increase the employment opportunities of other people needing jobs. I believe the cost of attempting to implement the Bill will far exceed the estimate given.