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What you need to know about the Employment Services Bill

Helen Wilsenach

At the beginning of November, the Department of Labour published the Employment Services Bill, 2012. This follows on from the first draft of the bill, which was published for comment in 2010. It was greeted with dismay by many employers, criticised for being unworkable and placing too much of a burden on employers. Among others, the bill wanted:

  • To elevate opportunities for citizens, over those for foreign workers, by requiring employers to use the public employment service before employing foreign nationals;

  • Employers to submit reasons to the director general of the department about why citizens with suitable profiles could not be employed instead of foreign nationals;

  • Employers (in sectors designated by the Minister of Labour) to notify the department of any new vacancy or new position in their companies within 14 days of that position becoming available or being created. Employers also needed to notify the department that this position had been filled within 14 days of it being filled; and

  • To regulate and provide a licensing system for private employment agents (including recruitment agencies and labour brokers.

While not expressly stated, the bill wanted to ban labour brokers.

So what has changed in the new draft of the bill?

1.    The bill still provides for public employment services, which will be provided free of charge to members of the public, with the aim of:

  • Matching work seekers with available work opportunities;

  • Registering work seekers, job vacancies and other work opportunities;

  • Facilitating the exchange of information among employers, workers and private employment agencies;

  • Providing advice to workers about access to social security benefits; and

  • Providing other specialised services to assist the youth, new entrants into the labour market, and vulnerable work seekers (e.g. persons with disabilities) to find work.

These public employment services may compete with existing private sector businesses in this area, and may partially be funded by licence fees paid by private sector businesses, such as recruitment agencies.

2.    The minister may also establish work schemes to:

-    Enable youth and other vulnerable work seekers to enter and remain in employment; and

-    Minimise employees, who are employed in a protected employment enterprise (employment created for those people with disabilities), being retrenched.

Important: The minister may only establish work schemes like these after consulting with the Employment Services Board, which will comprise representatives from:

  • Government;

  • Labour;

  • Business; and

  • Community and development interests.

The above people will be nominated by Nedlac.

The board’s powers are advisory. It will advise the minister on a range of issues relating to employment services, including:

  • Work opportunities; and

  • Registration and de-registration criteria for private employment.

At first glance, the new bill appears to soften the stance taken in the 2010 bill towards employing foreign nationals. It no longer makes provision for:

  • The minister to publish work categories within which foreign employees may be employed; 

  • Requiring employers to use public employment services; or

  • Employers needing to follow onerous processes before employing a foreign national.

    However, this bill does give the minister the power, after consulting with the board, to make regulations about employing foreign nationals, for example that:

  • Employers must satisfy themselves that there are no other persons in the country with suitable skills to fill the vacancy;

  • Local people must be upskilled if there is a shortage of that particular skill in SA; and

  • An employer may use private employment services or public employment services to recruit SA citizens.

The bill still empowers the minister to prescribe criteria for registering private employment agencies. However, the minister must first consult with the board (which only has an advisory function).

When registering an employment agency, a differentiation will be made between labour brokers and agencies who offer other recruitment services:

  • Any person who wishes to offer employment services must apply to register an agency. The provided registration certificate must specify if the agency is entitled to perform the functions of labour broker. If the agency does not have the required registration certificate, it will not be allowed to operate. It is a criminal offence for an employment services agency to operate without a licence.

The registration of a private employment agency may be cancelled if the agency fails to comply with:

  • The act’s requirements;

  • Any regulation related to the act; or

  • Any prescribed procedure.

The bill makes provision for a review process when there is dissatisfaction with a decision to grant or withdraw a registration certificate. While private employment services may still charge an employer fees for its services, no workseeker may be charged a fee unless government okays this.

As was the case with the 2010 bill, the current bill re-establishes Productivity South Africa, a body which was previously established by the Skills Development Act. Productivity South Africa’s functions are to:

  • Promote a culture of productivity in the workplace; and

  • To implement and oversee related strategies and regulatory matters.

It is unclear how the proposed changes in the bill will, by themselves, give this organisation more teeth or make it more effective at carrying out its mandate.

The Labour Court has jurisdiction about any matters (other than criminal prosecution) which arise from this bill.

Helen Wilsenach is a partner in the employment department of Bowman Gilfillan. Since being admitted as an attorney and notary public, Helen has specialised in employment law and has 10 years experience in this area of the law. She advises mainly employers (both local and international) on a range of issues, including the employment consequences of commercial transactions, restructurings, dismissals, employment contracts, policies and procedures, training, employment equity and discrimination.