4 planned changes that every South African business should know about

Lawmakers are currently considering a number of draft pieces of legislation which are likely to have a direct impact on South African workers.

The draft laws cover a range of issues including BEE, the wage gap, and the hiring of foreign workers. All of these proposals are set to be discussed further, or even implemented, sometime in 2021.

BEE and transformation

Parliament’s Portfolio Committee on Employment and Labour published the Employment Equity Amendment Bill for public comment in December 2020.

The bill will empower the Employment and Labour minister to regulate the setting of sector-specific employment equity targets across most of South Africa’s major industries.

Under the legislation, the minister will first need to publish a notice in the gazette identifying national economic sectors which will be impacted.

After consulting the individual sectors, and on the advice of the Commission for Employment Equity (CEE), the minister may set numerical employment equity targets for any sector or part of a sector by notice in a gazette.

The department said that the notice may set different numerical targets for different occupational levels, sub-sectors or regions.

The bill stipulates that a draft of any notice that the minister proposes must be published in the gazette and interested parties must be permitted at least 30 days to comment.

Some of the factors which the minister will consider when setting sector targets include:

  • The qualification, skills and experience required to be employed in a particular occupational level;
  • The rate of turn-over and natural attrition in a sector;
  • Recruitment and promotional trends within a sector.

The closing date for written submissions on the bill is 19 February 2021. You can find out more about the submission process here.

Hiring of foreign workers 

The IFP plans to introduce a private member’s bill to parliament which will introduce further regulations around the hiring of foreign workers in South Africa.

The draft bill aims to amend the current Employment Services Act, with the intention to regulate the recruitment of foreign nationals in certain economic sectors and to strengthen the current regulatory framework regarding the recruitment of foreign nationals in South Africa.

“The draft bill requires that when recruiting potential employees, an employer must confirm that there are no suitable South African citizens that can be employed in that position, prior to recruiting a foreign national,” said the IFP’s Liezl Van der Merwe.

“The bill further proposes that the Minister must publish a notice that provides for the identification of certain sectors in the workforce for the purpose of ensuring that suitable qualified South African citizens are equitably represented in those sectors and furthermore that the minister must set numerical targets for the identified economic sectors.”

The Department of Labour and Home Affairs is also currently involved in a process of developing legislation that will address employment of non-South Africans in all sectors of the economy, including road freight.

In a July 2020 interview, Labour minister Thulas Nxesi said that the new legislation would not be limited to the road and freight sector but also apply to other industries which employ a high number of foreign workers.

These include:

  • The hospitality sector;
  • Restaurants;
  • Security;
  • Farming and agriculture.

Changes for small businesses

Small Business Development minister Khumbudzo Ntshavheni gazetted the National Small Enterprise Amendment Bill in December 2020.

The bill aims to further regulate the country’s small, medium and micro-enterprises (SMME) sector, and will provide for the establishment of a Small Enterprise Ombud Service which will act as a support function to the minister.

The bill will also give the minister and ombudsman powers to further regulate small businesses in South Africa in issues of ‘unfair trading practices’.

On recommendation by the ombudsman, the bill will allow the minister to declare certain practices in relation to small enterprises to be prohibited unfair trading practices.

The minister may also make regulations requiring specified enterprises to provide in the prescribed manner, information about their contracting and payment practices and policies relating to small enterprises.

Wage gap 

The Companies Amendment Bill is also expected to gain further traction in 2021 after first being mooted in 2018.

The bill proposes substantial changes to the South African Companies Act, including further disclosures around executive remuneration in the country.

It is proposed that remuneration and other benefits received by “prescribed officers”, in addition to directors, must be also be disclosed.

These so-called “prescribed officers” are typically executives who are in a position to influence the management of the company or one of its significant divisions. The directors of a public company will also have to prepare a directors’ remuneration report for presentation to shareholders at the AGM.


Source: Business Tech

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