ARTICLE
15 October 2024

Labour Department Raids: Bad Employers, Bad Employers, Whatcha Gonna Do? Whatcha Gonna Do When They Come For You?

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ENS

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ENS is an independent law firm with over 200 years of experience. The firm has over 600 practitioners in 14 offices on the continent, in Ghana, Mauritius, Namibia, Rwanda, South Africa, Tanzania and Uganda.
During September 2024, the Department of Employment and Labour ("Department") conducted over 2500 compliance raids in the hospitality sector.
South Africa Employment and HR

During September 2024, the Department of Employment and Labour ("Department") conducted over 2500 compliance raids in the hospitality sector. This spate of compliance audits was triggered by a TikTok video posted by a former waitress at Babel, a restaurant in Menlyn Park. The waitress' complaint centred around the requirement that she needed to purchase her own uniform and tools of the trade, including a bottle opener and cigar cutter. Additionally, she stated that there was no basic salary in place, and she was required to pay the restaurant various fees, including a portion of her tips and fixed amounts for the use of a runner and breakages.

The Department has announced plans to increase the number of inspectors from 2000 to 20,000 in order to sustain these efforts. While the initial focus was on the hospitality industry, the Department has now moved onto the logistics sector. Thus, no company or sector is insulated from these raids, and the Department aims to expand its focus across various industries.

Compliance inspections can come about in one of a number of ways, not just as a result of viral TikTok videos. They can arise as a result of a particular complaint to the Department (generally in the prescribed manner), as a result of planned sector or company focuses (ie large corporates) or at random (where, for instance, the Department drops inspectors at a specific office park). The inspectors are empowered to conduct these inspections with, or without, notice to the employer.

When inspections arise out of a specific complaint, they are generally not limited to inspections relating to compliance with one piece of labour legislation. Ordinarily, the Department checks for compliance with all pieces of legislation which empower it to conduct these inspections. These include the Labour Relations Act, 1995 ("LRA"), the Basic Conditions of Employment Act, 1997 ("BCEA"), the Employment Equity Act, 1998 ("EEA"), the Compensation for Occupational Injuries and Diseases Act, 1993 ("COIDA"), the Occupational Health and Safety Act, 1993 ("OHSA") and the Employment Services Act, 2014 ("ESA"). The Department of Home Affairs is also, often, involved in these inspections to check for compliance with the Immigration Act, 2002.

Whilst this seems like an overwhelming list, unless the Department is tipped off in relation to a specific issue, the inspections are fairly predictable with the information that the Department inspects being contained on a standard list, which they provide to their inspectors. Having said that though, the inspectors often request the information on the spot. As such, it is important that employers are prepared for these audits. We make this caution against the background of our experience in these inspections, where the inspectors request information outside of the scope of the legislative requirements.

It is also important for employers to ascertain which of the sections of the relevant Acts, the inspectors are seeking to determine compliance to and to understand what information would demonstrate such compliance. Inspectors frequently rely on section 66 of the Basic Conditions of Employment Act to request any and all information regardless of its relevance to the assessment of compliance with any particular Act. In this regard, section 66(1)(a) provides that, "in order to monitor or enforce compliance with an employment law, an inspector may require a person to disclose information, either orally or in writing, and either alone or in the presence of witnesses, on any matter to which an employment law relates, and require that the disclosure be made under oath or affirmation." This power is not all-encompassing and the inspectors can only assess compliance with the Acts that fall within the remit of the definition of 'employment law' contained in the BCEA, which includes the Unemployment Insurance Act, 2001, the Skills Development Act, 1998, the EEA, OHSA and COIDA. As a result, an employer being inspected may not be required (or permitted, in terms of data privacy laws) to share information which falls outside the scope of the legislative requirements.

Accordingly, during the course of an inspection, employers should –

  1. avoid providing information not requested from it; and
  2. where there are any requests which fall outside of the standard information requests, the employer may want to consider obtaining formal advice as to whether it can or should provide the additional information requested, or any portion thereof, to the Department.

So, where an employer is subject to these inspections, it should, in all instances, seek to establish: (i) the section of the applicable legislation to which the requested information relates; and (ii) the relevant information the Department is seeking to gather from the requested documents or information.

  • A finding of non-compliance can have serious ramifications for employers, including but not limited to, administrative penalties, fines (up to 10% of annual turnover where non-compliance relates to the Employment Equity Act) and/or imprisonment of responsible parties. Accordingly, it is important that employers ensure that they comply with the provisions of the relevant Acts and maintain full and proper records of their compliance.

Tune into the radio interview on this same topic here.

ENS' specialist employment team has extensive expertise in conducting compliance gap analyses and preparing employers for and supporting them through compliance inspections of this nature. We have developed a compliance checklist to assist clients in navigating compliance inspections specific to the BCEA, EEA, COIDA, ESA and Immigration Act.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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