The Employment Services Act (ESA South Africa) was assented to by the President on 3 April 2014. Since then, interested parties such as temporary employment services and recruitment agencies have been anticipating the promulgation of the Act, which is aimed at addressing the gross unemployment levels in South Africa. During a roadshow to explain the recent slew of labour law amendments, the Department of Labour's Director of Public Services, Martin Ratshivhanda put an end to the uncertainty, announcing that the Act is expected to take effect in July 2015.

Inez Moosa,  Associate in the Employment practice at Cliffe Dekker Hofmeyr, notes that the stated purpose of the Act includes promoting employment and decreasing levels of unemployment in South Africa as well as providing training for unskilled workers. Affirming this purpose, Ratshivhanda emphasised that the Act is intended "to reduce unemployment reliance on social security grants".

Ratshivhanda confirmed that the promulgation of the Act will be followed by the development of regulations that will control the operations of Private Employment Services (PES) and that the processes established are intended to "re-route beneficiaries of social grants into full employment".

Katlego Letlonkane, Associate in the Employment practice notes further that one of the key tools to achieve the Act's objectives is the creation of public employment services which will be established and managed by the State.

"In addition to establishing state-run employment entities, the Act encroaches on the independence of private employment agencies, calling for mandatory registration of recruitment agencies and temporary employment services, more commonly known as labour brokers," she says.

Letlonkane explains that the Act is by no means unique to South Africa. In 2011, the State of Namibia signed into law the Employment Services Act, 8 of 2011 (ESA Namibia), which came into effect on 1 September 2012. A comparison of the ESA South Africa and the ESA Namibia reveals striking similarities. Both pieces of legislation are driven by a common purpose, which is to facilitate the exchange of information among labour market participants as well as regulate the operation of PES. The recent spate of amendments to the South African labour law have sought to bring parity between non-standard employees and permanent employees by enacting provisions that oblige employers to ensure that non-standard employees are treated no less favourably than permanent employees. The ESA Namibia has taken a similar approach and imposed a duty on private employment agencies to ensure that all placements are not to be treated on terms that are less favourable than the employer's incumbent employees.

"While the formal attempt to address unemployment in the country should be welcomed, only time will tell if the Act, and its honourable intentions, will prove successful," Letlonkane adds.

Contact: Inez Moosa, Associate, Employment, Cliffe Dekker Hofmeyr
Katlego Letlonkane, Associate, Employment, Cliffe Dekker Hofmeyr