Tel: (011) 339-4911
Fax: (011) 339-5080/339-6940
Email: donald @ cosatu . org . za
For comments on the website email: firstname.lastname@example.org
Publications | Parliamentary Bulletins
Parliamentary Bulletin Number 1, February 2001
Table of Contents
The workers' voice in Parliament Summary of important legislation passed or considered in the 2000 Parliamentary session Welcome to the First Edition of the COSATU Parliamentary Bulletin. The Bulletin aims to keep COSATU members updated on developments in Parliament, especially around policy and legislation which is particularly significant for the trade union movement.
This edition focuses on legislation of particular interest to COSATU, passed or introduced in 2000. It summarises key highlights of these Bills, outlines COSATU's key interventions and indicates their strategic relevance for workers and COSATU. This first Bulletin also contains a practical guide on classification of Bills, how they are processed, and how to get copies.
Comrades should use this edition of the Parliamentary Bulletin as a tool, to familiarise themselves with issues it covers and use it as a reference in future. It is designed as a pull-out so that you can keep it both as a practical guide and for education purposes in our structures. Those wanting more detail on key pieces of legislation or policy, and COSATU's positions on these, are able to access these - dating back to 1995 - on COSATU's home page at www.COSATU.org.za in the Policy section.
While this edition is a wrap-up of 2000, future editions will follow a different format, and will go into some issues in more depth. Suggestions from readers on what you would like to see in future editions should be sent to the Editor Shopsteward, or the COSATU Parliamentary Office (Phone: 021 461 3835 Fax: 021 461 4034 Email: email@example.com).
Know your rights: Claim your rights
Why is the battle to achieve progressive legislation important? This may seem like an obvious question, but we sometimes tend to forget, because of our history - when legislation was used to oppress people and deny them their rights- that legislation can be a key instrument to protect people and provide the legal basis for social transformation.
Once you have a right entrenched in law, it is difficult for that right to be taken away, unless the law is changed by parliament, or undermined by conservative court rulings.
Once this has happened the institutions have to be set up to ensure the law operates effectively. Progressive social forces, particularly organised labour, have to mobilise to ensure they claim and take forward the rights contained in the legislation.
To claim your rights, you obviously have to know what these are. Therefore the first step for workers is to familiarise themselves, not with every technical detail in the legislation, but with the core rights afforded by a particular Act.
Once you know that you have these rights, you can seek advice on the detail to ensure that you have a strong case in law. Unions also need to have a clear strategy to use particular legislation as part of their organisational drive.
This Bulletin therefore highlights key legislation or draft legislation from 2000, and indicates where these are relevant to organised labour. It is necessarily brief. Where you need to utilise a particular law, you should look at the Acts themselves. Further, the summaries contained here are only a small part of a much larger body of legislation that is important to workers.
These remaining areas are largely captured in the Accelerating Transformation document, which deals with key areas of policy and legislation from 1994-1999 (which is available on COSATU's home page, or from COSATU locals - which should have at least one copy, for reference purposes).
A review of the 2000 Parliamentary session reveals a mixed picture for labour. Parliament enacted 70 Bills during the year. Some key pieces of transformatory legislation were passed, with COSATU's input.
These include legislation required by the Constitution, including:
- The Equality Act, Access to Information Act, and Administrative Justice Act, which all have a fundamental impact on the rights of working people, enable citizens to act against abuse of power by the private sector or the state and promote their constitutional rights;
- The Adult Basic Education Act which is an important counterpart to the Skills Development Act; and
- The Municipal Systems Act which is a key piece of legislation underpinning developmental local government.
COSATU also managed to prevent the passage of retrogressive legislation or provisions, in particular a Bill giving traditional leaders problematic powers in relation to local government, and a tax provision attempting to remove VAT zero-rating on certain foodstuffs.
There were a number of amendments to existing Acts, which, although not groundbreaking, were nevertheless beneficial to labour. These included amendments to the Competition Act.
It was however disappointing that key legislation which was due to be passed was not tabled or finalised in this session, including the National Health Act, the Unemployment Insurance Act, legislation aimed at governing processes of restructuring of state assets, and legislation preventing employers from gaining access to pensions surpluses.
While there were several pieces of legislation of some concern to COSATU which did not take on board issues raised by us, possibly the most problematic were those dealing with restructuring of state assets. Others remain the subject of ongoing engagement, including the issue of the role of traditional leaders in local government, restructuring of Eskom, migration legislation and water regulations.
The important pieces of labour legislation tabled for discussion in 2000 were the Unemployment Insurance Bill, which will be finalised in the 2001 parliamentary session, and the proposed amendments of the labour market review.
These latter amendments (to the LRA BCEA and Insolvency Act) have effectively been withdrawn pending the outcome of negotiations between the parties, and therefore will only be dealt with in the next Bulletin. An analysis of gains and setbacks reveals that on balance 2000 was a positive year for labour on the legislative front, even if there was not as much transformatory policy and legislation as in previous years.
But there was also no legislation amounting to major attacks on labour or rolling back of existing rights, although it was only through massive mobilisation that COSATU managed to resist the introduction of problematic amendments to labour legislation. This will be an ongoing battle in 2001.
A growing trend which emerged in 2000 is the importance of engaging with so-called 'secondary legislation' or regulations and codes of good practice, to ensure that progressive legislation is taken forward. Some of these engagements are reflected in the summary below. Our analysis of political engagement with the legislative process in 2000 re-emphasises the following lessons:
- It is vital to continue to have a coherent strategy to engage with all issues of importance to labour at national, regional and local levels. Failure to engage concedes the ground to reactionary forces;
- We need to become more proactive in popularising gains which have been made and educating workers about their rights;
- Rights in legislation remain paper rights unless we drive a programme to claim them and implement legislative gains.
Summary of Important Legislation passed or considered in the 2000 Parliamentary Session
The analysis of legislation which follows is divided into three parts:
- Acts passed in 2000
- Bills held over to 2001
Chapter 2 of the Constitution, the Bill of Rights, requires specific national legislation to be passed to give full effect to various rights which are entrenched in Sections 9, 32 and 33 of the Constitution. The Constitution gave Parliament until 4 February 2000, to pass the Equality, Access to Information, Administrative Justice and Procurement Laws.
It is important for COSATU members to familiarise themselves with the main provisions of these Acts, which attempt to redress and reverse commonplace violations of workers' rights and the rights of the poor in general.
The Promotion of Equality Act gives workers a weapon to combat unfair discrimination, both in the workplace and society at large. It also obliges the state to take certain measures to promote equality, including the drawing up by all ministers of equality plans to combat unfair discrimination and inequality, and where necessary to introduce legislation.
The Act prohibits unfair discrimination based on various specified grounds2 . Although a number of other grounds are specified, special emphasis is placed in the Act on measures to combat unfair discrimination, and promote equality, with respect to race, gender and disability.
The Act applies to the state and all persons, including private bodies. Workers experiencing discrimination in the workplace are also covered by the Act, to the extent that such workers are not covered by the Employment Equity Act.
Any person who believes they have been discriminated against may approach any of the equality courts to be set up according to the provisions of this Act and may initiate a case provided they are able to set out the facts demonstrating that an act of discrimination took place. The case may be also be initiated by persons or 'associations' (including trade unions) acting in the interest of the person concerned, or a group or class of persons.
In terms of section 21, the court is empowered to make a wide range of orders if it finds in favour of the complainant, including an order to end unfair discriminatory practices, awarding of damages, or to rectify the specific act complained of.
The schedule to the Act lists examples of unfair practices in certain 'sectors' to illustrate the type of unfair discrimination the Act is intended to combat. The sectors listed, although the list may still be amended, include labour and employment, education, health services, housing and land, insurance, pensions and provision of services.
The employment sector lists four practices, including recruitment, selection and human resource procedures, which discriminate or create barriers to equal access to employment opportunities, and perpetuate disproportionate income differentials deriving from past unfair discrimination.
In the process of finalising the Act, various controversial issues were ultimately resolved largely in favour of progressive forces, partly as a result of the Alliance between COSATU and various NGOs3. These included:
- Under pressure from business, the draft Bill contained a provision which would have protected unfair discrimination, providing there were certain commercial or economic grounds. This meant that even once unfair discrimination was established, the act could be deemed as 'reasonable and justifiable' based on commercial considerations. COSATU successfully argued for its removal, but the extent to which commercial considerations will be given weight by the courts in determining whether an act of discrimination was unfair, is still to be determined by the way in which the courts interpret the law, or the emerging 'jurisprudence'.
- The draft Bill proposed that a complainant must prove a prima facie case of unfair discrimination. This placed too onerous a burden on the complainant, who would have had to prove that the discrimination was unfair. The way in which the issue was resolved in the Act was that a complainant only has to make out a prima facie case that an act of discrimination took place. Thereafter the burden shifts to the perpetrator to prove either that the alleged discrimination did not occur or that it was fair4.
- Four important areas of discrimination which COSATU, NGOs and ANC MPs wanted included were not listed in the Act as prohibited grounds of unfair discrimination - nationality, socio-economic status, HIV/AIDS status, and family responsibility. After pressure on this issue the four grounds, while not specifically listed as prohibited grounds, have been included in the Bill as "directive principles".
The Act contains a provision requiring the Minister to consider including them as prohibited grounds, following an investigation and recommendations by the Equality Review Committee. In terms of the final Act, cases may still be brought around discrimination on any of these four grounds, but unless the courts interpret otherwise, they do not yet have the status of specifically listed grounds.
Working people in South Africa have for decades been subjected to arbitrary and petty actions by officials in virtually every area of their lives.
Reasons for decisions taken in many areas, including the workplace, by government officials, in banks etc. have not been open to challenge, or even known to those affected, even though they have a major impact on our lives. This era is now coming to an end with the introduction of the Promotion of Administrative Justice Act.
The intention of the Act is to create accountability and transparency, to improve the effectiveness of the public service, in line with Batho Pele, and to ensure procedurally fair administrative action in both government departments and the private sector when they undertake administrative actions affecting the public5.
This legislation is very important for the poor and workers, as they are subject to administrative procedures e.g. when receiving UIF, pensions, accessing public health care facilities, etc. It complements the Access to Information Act.
The Act provides that every person undertaking administrative action should follow lawful and fair procedures. Where such action denies a person his/her right, such person should be given notice and clear details of the proposed action, an opportunity to make representations, the right to appeal, and importantly the right to request reasons for such an action.
For example, where an official responsible for pension pay-outs withholds a pension from an individual, such official should provide details of the action, inform the pensioner of their rights, and on request provide adequate written reasons for such an action.
The individual concerned should request such written reasons within a period of 90 days, and the official would have to supply reasons within 90 days of the request being lodged. However, on urgent matters the time period may be varied.
The aggrieved party may seek recourse through an internal review or where necessary the court may exempt such a person from the obligation of going through an internal review. In such exceptional cases the aggrieved party will be allowed to apply for relief directly to the court.
In the case of administrative actions which are likely to have a negative impact on the public, the Act provides for public enquiries or periods for public comment, before the action can be undertaken.
How does a community threatened by pollution get access to information about emissions from a neighbouring factory? Or a housing co-op wanting local government development plans, to assist in taking forward projects? Or farm workers wanting information about a planned buy-out of a farm which threatens their jobs?
Until recently, people in these and many other situations faced enormous frustrations in compelling state organs or private bodies to make such information available. The Promotion of Access to Information Act now promises to change this situation, provided unions, workers and other civil society actors take advantage of its provisions.
The intention of this Act is to deepen the culture of transparency that has been unfolding since the democratic breakthrough and to ensure access to information from all organs of state by ordinary citizens. The 'horizontal application' of the Act also gives government and persons the right to access information held by private bodies.
State and private sector bodies are obliged to appoint information officers to process requests in terms of the Act. The Act gives effect to the constitutional right of access to:
(i) Any information held by the State; and
(ii) Any information held by another person that is "required for the exercise or protection of any rights".
The Act sets out procedures for requesting information, grounds on which information may be withheld and mechanisms for appealing decisions.
The Act provides persons with remedies where access to information is denied. A person who has been denied access to information may lodge an internal appeal with the authority concerned or approach the court.
The Act provides a number of grounds for refusal of access to information, including where that information would constitute an invasion of privacy, or where it affects the sensitive commercial information of a company, or economic interests of the state7 .
There is however a 'public interest' override which compels public or private bodies to provide such information where:
(a) The disclosure of the record would reveal evidence of-
(i) A substantial contravention of, or failure to comply with, the law; or
(ii) Imminent and serious public safety or environmental risk; and
(b) The public interest in the disclosure of the record clearly outweighs the harm contemplated in the provision in question".
Further the Act gives persons the right to know by providing for automatic publication of certain classes of information by the state and private bodies. This means that people will only have to go through the process of requesting information if it is not automatically provided.
This Act does not apply to information held by Cabinet and its Committees, members of Parliament and Provincial Legislatures, the Courts and the Special Tribunal established for the special investigating units.
COSATU engaged intensively in negotiations around the drafting of this Act from its initial stages. The Act takes forward most of the issues COSATU and our allies raised. It is important as, amongst other things, it assists workers who wish to access information held by the state or their employers in order to exercise their own rights.
Access to private sector information goes beyond the provisions of the LRA which limits access to information to recognised unions. The Act is therefore also important in assisting unorganised workers, or communities who require information from companies.
Workers uncovering corrupt or illegal practices in the workplace, known as 'whistleblowers' often face the difficult choice of risking victimisation if they expose employers or senior management, or allowing the practice to continue by keeping quiet.
Introduction of the Protected Disclosures Act now promises to assist whistleblowers in combating corruption and criminality in the public and private sectors.
The Protected Disclosures Act was initially part of the Promotion of Access to Information Act, but was extracted from that Act to create a separate piece of legislation focussing on the protection of whistleblowers.
The Act protects workers in the public and private sector from victimisation or any form of harassment where they disclose incriminating information, as long as they follow prescribed procedures8, make the allegations in good faith and do not make the disclosure for personal gain.
Section 4 of the Act provides the employee with remedies where he/she has suffered any form of "occupational detriment" as a result of him/her disclosing information about the employer. These include instituting legal action or requesting a transfer under the same terms and conditions.
A dismissal as a result of disclosing information will be deemed to be automatically unfair. The Act also renders any employment contract which purports to exclude the provisions of this Act as void.
The state procures billions of rands worth of goods and services every year. This can potentially be used as leverage to advance developmental objectives. This legislation prescribes a framework for the implementation of a preferential procurement policy by state bodies as set out in S217 of the Constitution.
This Section requires state organs to have a procurement system that is fair, equitable, transparent and cost-effective and may provide for categories of preference in the allocation of contracts and the protection or advancement of people disadvantaged by unfair discrimination.
To create a policy of this nature, the Act provides for a preference points system. Additional points may be scored for the achievement of specified goals that may include RDP principles, with the exact manner of calculating preferential points to be specified in the tendering conditions. The contract will be awarded to the tenderer who scores the highest, unless exceptional circumstances justify a different result.
COSATU proposed that the Act be given more content, in particular, the goals for which points are awarded should be tightened up and the RDP goal should be broken down into its components.
The federation proposed that the promotion of local content, promotion of best practice labour standards and worker rights, compliance with all relevant labour legislation and employment creation be the central aspects of this criterion. However the Act does not incorporate these proposals, with an emphasis being placed instead on company ownership by the historically disadvantaged.
The Department subsequently published draft regulations but they were poorly prepared and failed to take on board our proposals. COSATU submitted comments on these through Nedlac and at the time of writing we were awaiting the publication of the final regulations.
Once these are finalised COSATU structures need to utilise the space which may exist, no matter how narrow, to engage with tender processes to promote employment creation, fair labour standards etc.
Adult basic education and training is important for workers and their families who have been deprived of educational opportunities in the past. The Adult Education and Training Act sets outs a framework for the establishment of public adult learning centres and for registration of private adult learning centres, and regulates the governance of such centres.
COSATU broadly supported the Act and proposed the strengthening of various provisions. These proposals included broadening access to ABET, ensuring its provision in all 11 official languages, the setting of quantifiable targets for ABET and improved synergy between the Act and the Skills Development Act. The Department took some of COSATU's proposals on board.
Affiliates and COSATU's education and training policy desk need to develop an implementation strategy to take forward provisions of this Act, in conjunction with the skills development strategy.
Many workers experience the problem of banks refusing to lend to people in the communities where they live, based on the argument that they are a 'bad risk'. This is the practice of 'red-lining', which COSATU and the SACP have been campaigning against.
The introduction of the Home Loans and Mortgage Disclosure Act last year raised the possibility that government may compel banks to change these practices.
The Act intends to promote fair lending practices in financial institutions which provide home loans and require them to disclose certain information about their lending practices and annual financial statements.
It establishes an Office of Disclosure to monitor compliance with the disclosure requirements of the Act, to rate financial institutions and make such ratings public, and to amend the definition of housing loans in the Usury Act.
Further, the Act empowers the Minister to introduce measures through regulation to promote the sustainable provision of home loans to disadvantaged segments of the population.
COSATU's concern is that the Act relies heavily on self-regulation by the banks. The mechanism proposed by the Act to ensure disclosure of information is unduly bureaucratic and denies consumers direct access to information.
Further the Act provides no mechanism to act against banks when the information reveals that unfair discrimination is indeed taking place.
COSATU's proposals to include community reinvestment provisions to compel banks to lend to lower income communities were not taken on board. The Government has however, undertaken to introduce Community Reinvestment Legislation in 2001.
1.4 Competition Amendment Act, 39 of 2000
Difficulties have been experienced with the implementation of the Competition Act. As a result, it was proposed the Act be amended in relation to the jurisdiction of the competition authorities, their structure and functions, and by changing various procedures.
COSATU called for improved participation of trade unions in competition matters, for merging partners to be compelled to disclose the implications of the merger on employment and for the amendments dealing with jurisdiction of competition authorities to be tightened up to close unnecessary loopholes and to avoid ambiguity.
Our concern was that extending the jurisdiction over public enterprises could potentially hinder their meeting of objectives such as universal service delivery.
The formulation around the jurisdiction of the competition authorities was slightly tightened up by Parliament to try to avoid unintended consequences. The Bill was also amended to provide for improved union participation in competition proceedings.
Specifically, unions will now be able to refer an intermediate merger which has been approved by the Competition Commission to the Competition Tribunal and take a decision of the Competition Tribunal on a small, intermediate or large merger to the Competition Appeal Court.
Increased participation in competition proceedings has been identified by COSATU as a way of protecting jobs and intervening in industrial structure
The final phase of restructuring the local government system is in the process of completion9 . Demarcation aimed at creating non-racial integrated and viable municipalities, together with the creation of different types of local government, including metropolitan government, paved the way for South Africa's first truly democratic local government elections in December last year.
A number of important pieces of legislation were crafted to put this system in place. The Municipal Systems Act is a key piece of legislation designed to take forward government's vision of developmental local government. In terms of the Act, each municipal council is required to adopt a single, inclusive, integrated development plan (IDP) for the development of the municipality.
The national Minister for local government may set general key performance indicators that apply to all municipalities. Each municipality must ensure that all members of the local community are provided with basic municipal services and they must be provided in a manner that is equitable and accessible, as well as financially and environmentally sustainable.
A municipality may provide a service internally or through a service delivery agreement with a third party. If it decides to explore the possibility of service provision through a service delivery agreement, it must meet a number of requirements before taking a decision.
Firstly, the local community must be given notice of the municipality's intention to consider a service delivery agreement. Secondly, the various costs and benefits of entering into such an agreement must be carefully considered. Municipalities must consider its impact on the environment, the community, and employment and development patterns in the area.
The views of the local community and organised labour should be considered. The capacity and potential future capacity of any prospective service provider should be thoroughly assessed to ensure that the service provider has the necessary skills, expertise and resources for the provision of the service.
COSATU proposed, inter alia, that the Act should take into account the National Framework Agreement signed by government and COSATU, reinforce the public sector as the option to deliver municipal services, incorporate the regulatory framework for private providers outlined in the framework agreement and municipalities be required to implement measures to ensure a basic level of municipal service and mechanisms to assist the poor. Most of COSATU's proposals were taken on board.
COSATU locals need to play a role in ensuring that the provisions of this Act are properly enforced, including through engaging with the finalisation of IDPs. This should be one of the priorities for 2001.
South African Airways Unallocatable Debt Act, 7 of 2000, Transnet Pension Fund Amendment Act, 41 of 2000, and South African Rail Commuter Corporation Limited Financial Arrangement Act, 64 of 2000 .
The restructuring of state assets has come up in parliament in an indirect way, often through the financial implications of such restructuring. Transnet and its components have huge debts, largely accrued through pension fund obligations. The Government sees this debt as an obstacle to restructuring or to general performance. These three Acts dealt with this issue in different though related ways.
The South African Airways Unallocatable Debt Act enabled the government to pay R1.333 billion to discharge a portion of the debt of Transnet attributable to SAA at its incorporation, apparently to make SAA more attractive for privatisation. COSATU opposed this and proposed that alternatives be found to deal with the Transnet debt which do not involve the transfer of public funds.
COSATU proposed that the Bill either needed to be withdrawn in its entirety, or government should provide the amount requested as a long-term loan to Transnet. While the Committee had some sympathy for COSATU's proposals they were not taken on board, and government went ahead to settle the debt.
The Transnet Pension Fund Amendment Act provided for the establishment of a second statutory pension fund (defined benefit) for Transnet, to which members would be transferred.
Given COSATU's opposition to the wholesale restructuring of Transnet, we argued that if public resources were to be injected into Transnet to deal with the debt burden or other aspects of restructuring, these should be an investment into Transnet better fulfilling its public mandate and not an effective subsidisation of future private shareholders or partial owners.
The Act excludes labour representation on the Board, which is not in line with general legislation on pension funds. COSATU also proposed that the Act should address the issue of employees of Transnet who were not classified as full employees during the apartheid era. These matters remain unresolved.
The South African Rail Commuter Corporation Limited Financial Arrangement Act provided for assuming the bulk of the Corporation's debt, and removed its future borrowing powers.
COSATU raised concerns about the impact of withdrawing the borrowing powers on the corporation's financial situation, particularly its ability to make necessary capital investments and to ensure affordable public transport services, in the absence of any assurance that the necessary finance will in future be made available to meet this gap.
It was also not clear whether the corporation's debt burden is intended to make it more attractive for privatisation, rationalisation, concessioning out, etc. Parliament did not hold any public hearings on the Bill and the Act was passed without clarifying these issues.
Given that government has not tabled any overarching legislation to guide the restructuring process, the unions' engagement has been disjointed and parliament's engagement has been minimal. While continuing to contest aspects of restructuring as they emerge in the legislative process, COSATU believes the NFA and Alliance will need to be strengthened to deal comprehensively with issues of restructuring.
The Act aims to restructure the country's land transport system. It prescribes uniform guidelines, norms and standards for all provinces to transform and restructure the public transport system, increase utilisation of public transport by the general public, and identifies principles of the land transport policy such as safety and affordability.
COSATU's position is that where transport services are already in government hands, the status quo should remain. Proposals were also submitted to strengthen the Bill in relation to labour standards and safety.
A number of COSATU's proposals were taken on board but some of the more principled issues remain unresolved. In particular the Act opens the way for privatisation of municipal transport.
Monitoring and appropriate interventions will need to be made at local level to try and contain the fragmentation, contracting out and privatisation of these services.
This Act amends several Tax Acts. In making its submission on the need for restructuring the tax system, COSATU argued for:
- The overall review of the corporate taxation system, including agreement on minimum proportion of total revenue which should be contributed by companies;
- A minimum effective tax on companies;
- The elimination of tax avoidance and evasion;
- The progressivity in the corporate tax system based on enterprise size, and a differentiated VAT system
COSATU proposed that the Committee should request the Department of Finance to urgently finalise the Money Bills Amendment Procedure Bill, allowing parliament to amend the budget.
The federation further rejected Clause 110, which calls for the removal of VAT zero-rating on certain basic goods. As a result of this intervention the proposed removal of VAT zero-rating was removed from the Bill.
COSATU will continue to campaign in 2001 for restructuring in the tax system, and in particular support the introduction of Capital Gains Tax, which introduces tax on gains from various capital investments, including speculative investment.
The Firearms Control Act requires gun owners to be over 21 and certified as competent to use a gun before obtaining a license, and introduces a system of periodic renewal of licenses.
It limits the number of guns an ordinary person may own and expands police powers to seize illegal firearms and prosecute offenders. It allows certain areas or types of premises to be declared gun-free zones and stipulates that all weapons possessed above the new limits will have to be sold or surrendered to the state over five years.
COSATU supports this legislation in as far as it will minimise the proliferation of unlawful firearms, promote the responsible use of firearms by owners and contribute towards the demilitarisation of our society, essential to reducing and ultimately eradicating violence.
This Act is a response to the UN's call for uniform legislation to govern cross-border insolvency cases. The principal objects of the UN model law include the promotion of co-operation between courts of different countries in cross-border insolvency matters, greater legal certainty for trade and investment and protection of the interests of all creditors and affected third parties.
COSATU's participation in this legislation was driven by a need to ensure that the recognition of foreign creditors does not affect COSATU's proposal for workers' claims to be ranked above secured creditors and to ensure the Act has a reciprocity clause.
The Act only partly incorporates these proposals. COSATU will need to consider pushing for further amendments as part of the general overhaul of insolvency legislation.
The Act provides for the establishment of the Construction Industry Development Board, to implement an integrated strategy for the reconstruction, growth and development of the construction industry.
COSATU's position on the Act was that labour should also be represented on the Board, and that measures be put in place to develop standards and guidelines to improve labour relations in the construction industry, in line with existing labour legislation.
The Department has incorporated some of COSATU's proposals in the Act and indicated that they would incorporate a number of them in the Regulations, which are currently being drafted.
A number of Bills were published for comment in the form of Draft Bills by Departments, or introduced in parliament in 2000, but not passed in final form as Acts. Below, we summarise some of the most important of these Bills or Draft Bills, which are expected to be finalised this year.
The plight of millions of the unemployed in South Africa is worsened by the fact that there is no universal unemployment insurance system, or comprehensive social security. Only those who have contributed for a certain period and have recently had a job qualify for the existing UIF, and then only for 6 months, at a level of 45% of their last salary.
Various categories of workers are excluded from the Act. In effect this means that less than one in ten unemployed workers receive benefits. COSATU's approach to the issue of support for the unemployed has therefore been twofold:
- To look at the introduction of a universal basic income grant to give a minimum level of income support to all, regardless of whether they have previously been employed; and
- To reform the existing UIF to improve the level of benefits, and extend it to categories of workers who are currently excluded, particularly domestic and public service workers.
On the latter issue, COSATU has been engaged in intensive negotiations at Nedlac around two Bills designed to repeal the Unemployment Insurance Act, 1966 - the Unemployment Insurance Bill and the Unemployment Insurance Contributions Bill10.
The objectives of these Bills are to ensure that those who were previously excluded from the UIF are now covered, that both employers and employees contribute to the fund and the efficient management of the fund.
The draft that goes to Parliament in 2001 will reflect a number of important agreements reached at Nedlac, although some major disagreements will have to be resolved at the level of Parliament.
Most of the areas of disagreement relate to attempts by the Department of Finance to restrict the scope of the Fund, to limit the financial implications for government.
COSATU's proposals on the Bill included the incorporation of public servants and domestic workers in the fund. Government should underwrite the Fund, or provide financial guarantees for it.
COSATU supported the provision exempting benefits from tax. The Bill should be brought in line with the BCEA provision to guarantee four months maternity leave11 , without affecting the women's UIF benefits.
COSATU proposed the retention of the existing four-year ceiling within which to apply for unemployment benefits; the Bill currently proposes that contributors should apply within six months of being unemployed.
The federation supported the extension of the period of benefits, and the introduction of progressivity to the Fund, with higher earners now contributing, but lower earners receiving a greater proportion of their salaries as benefits.
Consideration of the Bill at Nedlac was concluded with some of the issues still unresolved. The most important outstanding issues are the exclusion of public servants and domestic workers from the UIF, the removal of the four-year ceiling within which to apply for UIF and the financial role of government in ensuring the viability of the fund.
COSATU is currently seeking legal advice on the constitutionality of excluding public sector workers from the Fund.
This is the most important piece of legislation currently on the parliamentary agenda for the labour movement. A more detailed briefing on the Bill will be circulated shortly, and the next COSATU Parliamentary Bulletin will carry a progress report.
The conditions of immigrant workers, particularly from Southern Africa, are critical to the trade union movement. The rampant exploitation of immigrants, illegal employment, and violation of worker and human rights, undermines not only migrant workers, but the trade union movement as a whole.
This is worsened by the stirring up of xenophobia (feelings of hatred of 'foreigners') and the use of these divisions to weaken organisation. In this context, COSATU has identified immigration policy and legislation as a priority. The introduction of the White Paper and Bill on migration in 2000 was therefore of keen interest to the organisation.
The Draft Bill regulating the admission and departure of people from South Africa has been a highly controversial document. It suggests a contradictory approach to the issue of labour standards.
The Department of Labour may issue work permits if it has confirmed that the terms and conditions under which the prospective employer intends to employ the foreigner are not inferior to those prevailing in the relevant market segment for citizens and residents.
On the other hand the Bill makes provision for the exemption of foreigners from labour standards and BC agreements in particular sectors. It therefore entrenches exploitation of migrants.
The Bill provides for the deportation and detention of illegal foreigners in accordance with a prescribed procedure, and provides for the establishment of Immigration Courts. It sets out various duties and obligations. Employers, for example, are forbidden to employ foreigners who do not comply with the provisions of the Bill. Learning institutions are forbidden to offer training to such foreigners.
The introduction of the Immigration Draft Bill both in Nedlac and Parliament was suspended, because COSATU and the Portfolio Committee insisted that migration policy first be finalised in the form of the Migration White Paper, and the Bill then brought in line with the White Paper. The White Paper has itself been subjected to intensive negotiations in Nedlac, and remains the subject of major controversy in Parliament, with the parliamentary committee having deadlocked with the Department of Home Affairs.
COSATU's key proposals are procedural and substantive. Firstly, procedurally, the White Paper should first be finalised in parliament and then the Bill redrafted in line with the White Paper.
Secondly, foreigners should be employed under the same terms and conditions as South Africans and that labour laws should apply to foreigners to avoid the legal entrenchment of a two-tier labour market.
Thirdly, we call on the Department to review the policy of compulsory deferred pay to make it more favourable to workers.
2.3 Draft Gas Bill
The Draft Gas Bill seeks to promote the efficient and orderly development and operation of gas transmission, storage and distribution facilities.
Given that energy is one of the strategic sectors of the economy and gas is set to become increasingly important within this sector, COSATU advocated a leading role for the state in the promotion of the gas industry, possibly through a National Gas Utility.
We argued in a submission to the Department for a moratorium on the privatisation of state owned assets in the gas industry, pending further discussions and decisions on a National Gas Utility, into which the assets of Gascor/Sasol should be incorporated, through either share-swapping or nationalisation, and that the draft Bill should promote compliance with South Africa's labour legislation. We await the tabling of the Bill in Parliament for further engagement.
The Bill amends the Municipal Structures Act, 1998, to provide for the role and functions of traditional authorities. The amendments are a response to mobilisation by traditional leaders against the local government elections on the basis that the new municipal boundaries, and powers of local government, would result in loss of control over the various functions that they 'traditionally' perform.
COSATU and other organisations raised fundamental concerns about the implications of the proposed Bill for democracy at local level (including the implications for local development of entrenching chiefs control over land), and argued that a redrafted Bill should only be tabled once policy was finalised in the form of a White Paper.
The chiefs on their side want to be given even greater powers than those contained in the Bill, and for constitutional amendments to be introduced to support these.
COSATU, supported by SALGA and the Commission on Gender Equality, argued that the Bill was unconstitutional both on procedural and substantive grounds.
It was then withdrawn after parliament ascertained that it was indeed in violation of the Constitution, in particular S154(2), which requires a process of public participation. The Bill, or an amended version of it, will be retabled for public hearings early in 2001.
It is important that, in addition to continuing national engagement, local and regional structures of COSATU, particularly in the rural areas, begin to engage with public representatives on this issue, to ensure that our concerns are registered. Because this is 'tagged' as a Bill which is of direct concern to the Provinces, the NCOP will have to get a mandate from the Provinces before it is able to vote on the Bill. COSATU Regions should therefore request that public hearings are held on this matter, where appropriate.
The Eskom Conversion Draft Bill is a follow-up to the Eskom Succession Act and essentially seeks to convert Eskom into a public company, Eskom Limited.
At a bilateral with the government, COSATU raised concerns that private ownership, or a more commercialised structure, would shift Eskom's focus towards profit maximisation at the expense of national objectives including the extension of services to poor or rural areas, and that corporatisation could push electricity tariffs higher.
These may also have a negative impact on the conditions of service and job security for workers. Government has made a commitment to consult COSATU before any further processes around the proposed legislation.
Regulations (or 'secondary legislation') are issued by the Minister in terms of the principal Act. They often contain a lot of the implementation detail not contained in the original Act, but may not conflict with the provisions of the Act. As more legislation is finalised and reaches its implementation phase, COSATU increasingly has to engage with the Regulations and codes of practice which are being issued.
Some, but not all, Regulations are being opened up for engagement, either being published for general public comment, introduced in Nedlac, or introduced in parliament (and sometimes all three14) . It is important to ensure that these Regulations take on board our concerns; otherwise advances which have been made in the legislation can often be undermined by problematic Regulations.
3.1 Regulations in terms of the Insolvency Act, 1936 ( section 98A)
The new S98A is intended to increase the extent of workers' claims in the event of insolvency. According to the regulations, an employee has a preferent claim against the insolvent estate in respect of:
a) Any salary or wages for a period not exceeding three months;
b) Any leave pay which has accrued as a result of employment in the year of the employer's insolvency or the previous year, whether or not payment in respect of such leave is due at the date of sequestration;
c) Any payment due in respect of any other form of paid absence for a period not exceeding three months prior to the date of sequestration, and
d) Any severance or retrenchment pay due to the employee in terms of any law or agreement.
The free residue (remaining amount) must also be applied to pay contributions owing by the former employer in respect of an employee's pension, provident, medical aid, sick pay, holiday, unemployment or training scheme.
COSATU proposed that workers' claims be ranked above other secured creditors. Section 98A of the Insolvency Act is not intended to constitute a comprehensive review of the Insolvency Act as proposed by COSATU. It does not adequately address the problem of the ranking of workers' claims above secured creditors. However, COSATU acknowledges that it provides some improvements on the previous position.
Essentially, the amendment raises the rank of workers' specified claims to their employers' insolvent estate higher than the claims of most other preferential creditors, including the state.
The claims may be based on wages and salaries for up to three months, leave-pay and severance packages among other employment obligations. Workers' claims are to be limited to a prescribed amount.
Section 98A, and these regulations, are transitional provisions which will be overtaken by comprehensive amendments to insolvency legislation. This is part of the labour law review discussions which are currently taking place. In the interim, unions need to use S98A to make claims in the event of insolvency.
The Government Gazette of 19 May 2000 (No.21203, GN 1994 of 2000) published the proposed regulations for public comment. They aim to "restrict production of very thin non-reusable plastic bags that are indiscriminately dumped into the environment and to promote recycling by specifying a minimum thickness for plastic shopping bags". COSATU argues that the proposed regulations are likely to lead to job losses and add additional costs to consumers.
COSATU proposed that other measures - recycling, anti-littering and public environmental awareness - be used to promote environmental sustainability. The Regulations have been referred to Nedlac for further consultation.
The aim of the Regulations is to provide a framework for contracts between water service authorities and water service providers. Section 19 (5) provides for the Minister to prescribe:
(a) Matters which must be regulated by a contract between a water services provider and a water services authority; (b) Compulsory provisions to be included in such a contract; and
(c) Requirements for a joint venture between a water service authority and a water services institution.
Section 73 (1) (h) provides for the Minister to "issue guidelines to water services institutions on performing their functions in terms of this Act".
COSATU argued in public hearings that the regulations undermine the commitment to public sector delivery contained in the Act, and proposed that:
- Clear guidelines for the setting of tariffs should be developed;
- A lifeline should be provided to all irrespective of income, and
- The Nelspruit and Dolphin Coast and other contracts must be evaluated and brought in line with the regulations.
- The Water Service Authority should ensure there is adequate human and physical infrastructure in place for monitoring the performance of the water service provider before engaging a water service authority.
COSATU's proposal to refer the Regulations to Nedlac before being finalised was accepted.
You should be able to get a copy of any of the tabled bills mentioned above on the Parliament web site at www.parliament.gov.za or www.polity.org.za (Note: You need the Adobe Acrobat Reader to view most bills. If you do not have it, it can be downloaded for free.)
Alternatively, contact the COSATU Parliamentary Office or your local constituency office and ask for help in obtaining the bills you desire. Or you can order bills directly from the Government Printer. Printed copies cost R5 each. Send a cheque or postal order to: The Government Printer, Private Bag X85, Pretoria 0001. Be sure to specify each bill number and title and include your name and address.
1This summary therefore excludes policy documents such as Green and White Papers considered during 2000.
2Race, gender, pregnancy, marital status, ethnic or social origin, age religion, culture, sexual oriatation, belief, disability, conscience, language birth or any other ground that undermines human dignity, affects a person's rights or causes disadvantage, and
3Similar alliances were formed in relation to the Open Democracy Bill and Administrative Justice Bill.
4 Discrimination could be regarded as fair if for example it is to promote the historically disadvantaged, or to impose differential obligations on the rich and the poor.
9 The most important pieces of legislation have been finalised. Nevertheless some legislation is still awaited, including the Bill governing the role of traditional leaders in local government (see below) and possible legislation on public private partnerships.
10 The Uunemployment Iinsurance Bill (piloted by the Department of Labourt) has been split into two, because the Ggovernment's view was that issues dealing with contributions required a separate Money Bill (to be handled by the Department of Finance).
14 Ministers are usually not bound to submit Regulations to Parliament, but itbut it is becoming a growing practice. Some legislation, such as the Water Services Act, requires parliament to finalise the Regulations.