BUSA PRESENTATION ON THE WEGE BILL

1. BUSA PRESENTATION ON THE WEGE BILL PARLIAMENTARY HEARINGS 29 JANUARY 2014

2. Who we are… • Confederation of business organisations including Chamber of Commerce and Industry. • Voice of business in South Africa • Represent RSA businesses on macro economic issues at national and international levels. • Main aim is to ensure that business plays a constructive role in the country’s economic growth, development and transformation. • We want to create an environment in which businesses of all sizes and in all sectors can thrive, expand and be more competitive.

3. Who we are… • Our members include associations representing small, medium and big businesses including chambers of commerce, financial institutions, professional organisations, constructions, manufacturing, engineering, PEA, finance, retail, roads and transport, IT, etc • We represent Business at NEDLAC • Member of International Labour Organisation • Member of the SADC Employer Group • Member of the B20 • Member of the OECD Business Industry Advisory Committee • This submission is supported by all BUSA members

4. BUSA COMMENTS WEGE BILL

5. GENERAL COMMENTS ON PROCESS • This Bill was tabled at NEDLAC for deliberations and BUSA participated in the task team meetings which convened on the following dates 25 January 2013; 12 March 2013; 26 March 2013;4 April 2013; and 26 April 2013 • Following fruitless engagements on this matter, ALL social partners agreed to the withdrawal of the BILL for reasons stated in the NEDLAC Report • Chief amongst them was failure by the Department to explain the rationalefor introducing the Bill and its linkages with other relevant and related legislation • This resulted in the withdrawal of the BILL from NEDLAC, a decision which was approved by the NEDLAC MANCO and communicated to the Minister

6. GENERAL COMMENTS ON THE BILL • While appreciating an introduction of the WEGE Bill, BUSA would rather support an integration of the various pieces of legislation that are already in place to address issues of discrimination and equality at the workplace, such as EEA, BBBEE & PEPUDA • The said legislation have also given rise to international law obligations, including: • Convention on the Elimination of all Forms of Racial Discrimination; • Convention on the Elimination of all Forms of Discrimination against Women • BUSA does not support the BILL for the following reasons: • 1. It sets unrealistic objectives and targets • The objectives of the Bill only apply to undefined ‘designated bodies’. This undermines certainty and will certainly create confusion and duplication. • The Bill requires the progressive realisation of 50% equal representation of women in all decision making structures. While we support the progressive realisation of substantive equality –the target is unrealistic

7. GENERAL COMMENTS ON THE BILL • 1. It sets unrealistic objectives and targets • These targets are entirely unrealistic and unattainableand will criminalise employers for not being able to achieve the impossible: • The labour pool from which employers draw their employees does not contain 50% of women in all occupations. • Men and Women make career choices that influence the gender composition of the labour pool and hence women tend to be more prevalent in certain occupations, whereas men are predominant in other occupations. • According to the HSRC Report, the gender breakdown of qualified graduate personnel per occupation is roughly as follows:

8. GENERAL COMMENTS ON THE BILL

9. GENERAL COMMENTS ON THE BILL • BUSA does not support the BILL for the following reasons: • 2. Does not take into account EEA and BBBEE legislation and other relevant legislation • The proposed 50% target will weaken existing laws and may overlap with provisions in Employment Equity Act and Broad-Based Black Economic Empowerment Act. • EEA is designed to promote affirmative action, particularly racial and gender transformation • EEA provides more realistic and attainable approach to target setting, • EEA targets are set with reference to a combination of factors including the pool of qualified persons • The WEGE Bill overrides this and imposes arbitrary and unattainable targets • This will result in unfair penalties – the unintended consequences could include job losses, slow economic growth and investment

10. GENERAL COMMENTS ON THE BILL • BUSA does not support the BILL for the following reasons: • 3. The Bill’s probable negative impact on investment and economic growth • RSA is an overly regulated labour market environment • We need to access international capital (FDI) in order to grow and create employment • We have to compete with other developing countries for a share of global investment • investors are increasingly black-listing South Africa as an investment destination, largely because its regulatory environment has become overly onerous and does not compare favourably with other investment destinations • The WEGE Bill will only add to an already onerous regulatory environment and will further deter investment by local as well as international investors. • RSA does not need another piece of legislation that is confusing, unclear, and most importantly legislation that will punish employers for not achieving the impossible.

11. SPECIFIC COMMENTS • Application of the Act – not clear to whom the Bill will apply to, designated bodies are undefined – this will only result in confusion, more confusion and frustration • Education and Training - The section requires designated bodies to develop and implement plans in accordance with applicable legislation and international agreements. The legislation and international agreements are not referred to. In many instances the international agreements are obligations on the state, and not all citizens and other bodies. • Health and Public Education - it is not clear as to substantive obligations, the scope of application of this section and which bodies will be designated. The provisions requiring submission of plans and measures without guidance as to the content and format - it is submitted that there are limited resources to evaluate the plans and measures within the implementing department. • Economic Empowerment - The Black Economic Empowerment Act already provides for measures to enhance the economic empowerment of designated groups, which include women. Preferential Procurement Policy Framework also promotes public procurement from women owned enterprises

12. SPECIFIC COMMENTS • Schedule 1– The list of numerous pieces of “applicable legislation” contained in schedule 1 fall within the responsibility of other line function of government departments. • BUSA needs a detailed explanation of the linkages of the WEGE Bill with other related relevant legislation. A request previously made at NEDLAC • It remains unclear how issues such as compliance and enforcement would be dealt with.

13. Concluding Remarks • A number of the Bill’s provisions are vague and ambiguous. • The Bill assumes a position of a “super Bill” in that it nullifies what other pieces of legislation have already set as targets. The EEA and BBBE are but some of the examples. • Enforcement provisions are weak and unclear. • The impact of these provisions will result in increased uncertainty, litigation, administrative burden and increase in the cost of employment without delivering the objectives and benefits of the Bill. • This will overall result in undermining the objectives of the Bill.

14. Concluding Remarks • The Bill as it stands currently faces many short comings in its structure and objectives. It will be impossible to implement its provisions. It will be difficult to enforce and should be reconsidered • Once again, this Bill was withdrawn from NEDLAC due to its vagueness and ambiguity

15. THANKS Vanessa Phala Executive Director: Social & Transformation Policy Business Unity South Africa vanessa.phala@busa.org.za 071 382 7788