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The Employment Services Act - The Mechanism for Job Creation?

Reading Time 3 minute read


Labour, Employment & Human Rights Bulletin

In his 2015 State of the Nation address, President Jacob Zuma identified a nine point plan to create jobs and achieve an annual target of one million job opportunities in order to stimulate growth in the economy.

In an attempt by government to become more involved in the recruitment market, the Employment Services Act ("ESA") came into effect on 9 August 2015. The purpose of the ESA is  to regulate public and private employment agencies; promote employment growth and workplace productivity; improve employment opportunities for vulnerable job seekers and regulate the employment of foreign nationals.

The ESA aims to regulate private employment agencies by requiring such agencies to register with the designated Registrar[1]. A striking feature is the prohibition placed on employment agencies to charge a prospective job seeker a fee. Employers are also prohibited from deducting any amount from an employee's remuneration for the placement of that employee.

The Act gives substance to an employee's right to privacy in that it stipulates what information may be retained by an employment agency and further places a high premium on the confidentiality of that information.

The Minister is empowered to issue regulations to the ESA where employers may be required to report job vacancies to the Minister and further design strategies to combat job losses during times of recession. 

A violation of provisions relating to registration, charging prospective employees and that concerning the retention of information is considered an offence in terms of the Act subject to a fine of R 50 000, which may be imposed by the Labour Court. 

The protection afforded to foreign nationals through the ESA is an important development in the evolution of South African Labour Law. There is a common misconception amongst employers that foreign nationals are not entitled to fair labour practices, a constitutional right afforded to South African citizens. However, the ESA attempts to tighten the noose around employing foreign nationals. The Minister may issue regulations that require an exhaustive procedure to be followed before a foreign national may be employed, more particularly the requirement that a suitable South African national cannot be sourced for the requisite post. 

"Productivity South Africa" is established to promote, measure, improve and cultivate a culture of productivity in the workplace. However the ESA fails to prescribe the means by which this end is to be achieved. It is without a doubt that workplace productivity remains one of the greatest challenges for employers and it is unlikely that legislating such a scheme will be successful in achieving this objective.

It remains to be seen whether the overall strategy and design of the ESA will contribute towards achieving the President's vision of creating one million job opportunities annually.

[1] A designated official of the Department of Labour as appointed by the Minister of Labour to perform the functions of Registrar.

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