Promotion of Equality & Prevention of Unfair Discrimination Bill [B57-99]

Part A:

Section 6 (3): Direct interference with the judicial process is questionable. The shifting of the burden of proof is also very disturbing.

Part B:

Section 8 (c ): The concept should be clarified as to indicate how “racial tokenism” is proved in terms of this bill

Section 8 (e ): The section should be deleted and replaced with: “The use of language which is being recognized as being discriminatory and have an intent of hurt or abuse”
Part C:

Section 14 (e ):The concept of “contracting” is vague and unclear

Section 14 (f ): In addition FEDUSA would also like to propose that the Equal pay provision is broadened and encoded as a supplement to the Employment Equity Act. One of the purposes of the Employment Equity Act is to achieve equity in the workplace by promoting equal opportunity and fair treatment in employment through the elimination of unfair discrimination.
There should be an equal pay provision. The provision should address the problem of enforcing pay equity beyond the simple situation where a woman performs the same work as a man but is paid less. The equal pay provision should guarantee remuneration for work of equal value. If the employment sector were eliminated from the Bill or if the Bill were highly simplified, this provision would be lost. However, equal pay for work of equal value is a very complex subject. Equal pay requires its own Code to address the issue properly.
Section 14 (g): The interpretation of reasonable accommodation is questionable, e.g. does it reflect on physical accommodation, workplace environment or does it refer to the accommodation of the individual?
Part F:

Section 22 (a): The purpose should be defined in relation to the constitutional rights of the individual

Section 22 (e): The practicality of this provision is questionable
Part G:

The impact of this provision on the insurance industry is foreseen to result in an increase of premiums for the end user, as insurers will have to risk taking all individuals irrespective of the individuals medical condition.

Part I:

Section 32 (d): The meaning of this provision needs to be simplified in clear language

Part L:

The provisions are clear but FEDUSA would like to raise the concern that professional groupings formed on the basis of “color or race” should be defined as unfair and that uniformity in the bodies representing professionals should be acquired.

Chapter 5:

This chapter should form part of a new draft minimalist bill as it defines the constitutional rights as contemplated in the constitution.

FEDUSA would like to propose the elimination of the sectors contained in Parts C – L. The provisions listed in the sectors could comprise a separate set of guidelines.
In addition FEDUSA would suggest the drafting of an entirely new, minimalist Bill. Such a Bill would have one definition of discrimination, one test for unfairness, and one set of defenses. Properly drafted, a single definition could address the concerns raised.

3. THE RELATIONSHIP BETWEEN THE EMPLOYMENT EQUITY ACT AND THE EQUALITY BILL

FEDUSA questions the relationship between the employment coverage of the Promotion of Equality Bill in Part C and the Employment Equity Act. This aspect reflects the main area of contention for FEDUSA as it results in the proliferation of legislation. Section 5 of the Employment Equity Act states that “ every employer must take reasonable steps to promote equal opportunities in the workplace by eliminating unfair discrimination in any employment policy or practice. “
The Employment Equity Act in Section 5(2) states: “If any conflict relating to a matter dealt with in this Act arises between this Act and the provisions of any other law, other than the Constitution or an Act of Parliament expressly amending this Act, the provisions of this Act must prevail; Provided that this Act only applies to unfair discrimination in respect of issues relating to employment to the extent that it deals with issues which are not regulated by the Employment Equity Act, 1998.”
Though this provision is not very clear, it seems to mean that this Act only applies to matters not regulated by the Employment Equity Act. As a result of this the provision of Part C dealing with Employment should be deleted in total. The legislation would create unnecessary and confusing conceptualizations regarding equity and equality. The Employment Equity Act has an existing priority application to employment. FEDUSA would like to propose that Part C of this bill is legislated as a code of regulations for the Employment Equity Act to ensure that a single piece of legislation regulates the employment relationship. It would not be a great problem if Part C, the employment sector, were eliminated, as this section seems to be duplicating the provisions of the Employment Equity Act, which results in unnecessary proliferation of the legislation. The only important provision that would be lost would be the equal pay provision that should be encoded in the Employment Equity Act. Many of the issues are a matter of definition, which would not be greatly affected by eliminating Part C.

However, FEDUSA would unequivocally state that in attempting to achieve these aims it remains essential that the necessary checks and safeguards are in place to prevent reverse discrimination, nepotism and tokenism from taking root in the workplace, in the guise of employment equity. The problem becomes even greater when we add the problem of administering the legislation. There is a real danger that the legislation will only be a piece of paper with little or no effect on equality.

It is not clear how the Equality Bill and the Employment Equity Act would work together on the subject of reasonable accommodation. It is even in contradiction on the subject. In terms of the Employment Equity Act, employers of fewer than 50 employees would not be required to reasonably accommodate their employees. In terms of Section 5(2) of this Bill would the Employment Equity Act be considered to have regulated the issue of reasonable accommodation in that circumstance, thereby not requiring it? Or would the employees be able to point to the Bill’s definition of unfair discrimination that requires reasonable accommodation.
The Employment Equity Act 55 of 1998 addresses unfair discrimination in the employment context, and outlines certain steps to be taken by employers to ensure the advancement of persons form previously disadvantaged groups, including women. The equality legislation in its’ current form also addresses the issue of employment. This results in duplication and could effect negatively on the workplace and even eventually result in the judicial process having to pronounce on the conflictive or confusing provisions.

There should also be explicit links between the defense.

4. THE BILL’S REGULATORY MECHANISM AND ENFORCEMENT

The Bill’s regulatory framework as set out in Chapter 4, creates the Equality Courts which is yet another body governing equality which can result in over-regulation or dualism. The Employment Equity Act dealt with the monitoring, enforcement and legal proceedings to deal with unfair discrimination in the employment situation. FEDUSA would like to propose that the same Chapter V be extended to this bill to enable proper regulation as well as prohibiting of unfair discrimination.

However, FEDUSA wants to caution that adequate provision for enforcement should be made by securing proper financial support and trained personnel in the Courts, State Departments as well as the Human Rights Commission, otherwise enforcement will be frustrated and delayed, consideration could also be given to create (special) courts to deal specifically with these equity and discriminative issue within the existing court structure and applicable legislation. this will prevent an additional administrative and financial support system from being created. the existing system need only be extended. The Human Rights Commission should also be allocated a greater role of monitoring unfair discrimination issues.
I thank you for allowing FEDUSA this opportunity to comment on this important piece of legislation.
Financial Services Board

FINANCIAL SERVICES BOARD

PROMOTION OF EQUALITY AND PREVENTION OF UNFAIR DISCRIMINATION BILL
1. Thank you for your telefax of 10 November 1999 forwarding extracts from the above Bill.
2. The FSB was neither consulted by the authors of the Bill, nor approached for its specific comment.
3. We are writing to provide you with preliminary comments on the principles of those provisions of the Bill relating to the insurance and pension funds industry.
4. Much of the language contained in the Bill is vague, undefined and uncertain, which makes it extremely difficult to gauge the impact of such a law on the financial services industry . What will be “unfair”, “unequal”, or “discriminatory” largely depends on a subjective interpretation of these concepts, making the application of the law unpredictable and uncertain. If anything, law must be certain. Those subject to a law must know for certain what the law says, how it affects them and how it will be applied. Laudable as the principles expounded by the Bill may be, if they fall foul of clarity the law to be pronounced thereunder will not stand the test of time and will be loopholed and challenged at every opportunity.
5. It appears that the drafters of the Bill have not consulted with industry practitioners. Communications which this office has received from industry confirm that bodies such as the South African Insurance Association (SAIA), the Life Offices’ Association (LOA) and the Banking Council of South Africa have not been consulted. Comments are likely to be received from a wide spectrum of associations and institutions, making the deadline of 17 November 1999 almost unattainable, let alone the proper consideration of those comments before the Bill is advanced along the legislative process.
6. It may be expected that the insurance and pension fund industries will be expressing valid concerns at the Bill in its present form. The essence of insurance business is to evaluate and accept risk at an appropriate price or to reject unacceptable risks. No law should be allowed to interfere with the fundamental principle of insurance that an underwriter should have an unfettered discretion to assess the likelihood of a claim arising before rating and ultimately assuming or declining the transfer of risk.
7. The Bill as presently worded will have the effect of interfering with that discretion. “Prohibited grounds” as defined in the Bill, apart from being open-ended through the use of the words “any other ground”, affects grounds which need to be taken into consideration in assessing a risk, not because the insurer intends unfair discrimination but because the considerations have a distinct bearing on the risk which is being assessed. Risk will differ from instance to instance, including on the grounds specified by the Bill. It makes no sense to attempt to dictate that all clients of insurers should pay the same rate for cover irrespective of individual circumstances.
8. Concern needs to be expressed at the potential for serious damage to the solvency margins of insurers if they were compelled to apply communal rating and

the denial of the right of an insurer to turn away a risk. If they are allowed a choice, they would either increase premiums or decline the business. In fact, implementation of the Bill will therefore result in discrimination against those clients who have instituted prudent measures in order to minimise risk, and have consequently enjoyed the benefit of cover at a reasonable premium.

9. Therefore the purported objective of the Bill to extend services to the previously disadvantaged may well be questioned. Rather the Bill will have the opposite effect of causing a contraction of services offered or increased costs to the detriment of existing customers. SAIA has informed us that an overseas-owned insurer will review their local market participation if this legislation is passed in the current form.
10. In conclusion it should be stated that it is accepted internationally that differentiation on sound underwriting principles and actuarial grounds, such as those expounded in the Long-term Insurance Act, 1998, does not constitute unreasonable discrimination. Examples which could be referred to are the Canadian and New Zealand laws relating to human rights which contain exceptions for the insurance industry.
11. As stated earlier, in view of the time constraints these comments should be considered as preliminary. The FSB will certainly welcome the opportunity of discussing the issues and, if allowed to, to supplement these comments at a later stage.
R G COTTRELL

EXECUTIVE OFFICER

Freedom of Commercial Speech Trust

THE FREEDOM OF COMMERCIAL SPEECH TRUST

ON THE PROMOTION OF EQUALITY AND THE PREVENTION OF UNFAIR DISCRIMINATION BILL 1999
FREEDOM OF COMMERCIAL SPEECH TRUST: BACKGROUND

1.The Freedom of Commercial Speech Trust was formed to defend the right, as enshrined in the Constitution, to freedom of speech in the commercial sense, on behalf of the marketing and communications industries in South Africa. We are also supported through association by a variety of organised business and consumer bodies, as Associate members.

2. As such, the Trust represents, inter alia, the Association of Marketers (ASOM), the Association of Advertising Agencies (AAA), the Print Media Association (PMA), the National Association of Broadcasters (NAB), the Outdoor Advertising Association of SA (OAASA), the Direct Marketing Association (DMA), the Franchise Association of SA (FASA), the Grocery Manufacturers Association (GMA), the International Advertising Association (IAA), the Public Relations Institute of SA (PRISA), the International Association of Business Communicators (IABC), the Direct selling Association (DSA), the Afrikaanse Handelsinstituut (AHI), the American Chamber of Business (AMCHAM), the South African Chamber of Business (SACOB), The Council of South African Banks (COSAB), and the Institute of Directors (IOD). The above organisations represent an aggregate membership in excess of 85 000.
3. We thus represent a large and important section of the South African business community, who between them make a major contribution to the South African economy, inter alia by providing hundreds of thousands of jobs to South African workers, and by paying hundreds of millions of rands in taxation and duties.
4. We are a body that exists to defend a principle, not individual products, and to defend the legitimate business interests of our members.
5. The Trust operates on two basic beliefs:
5.1 to negotiate openly and in good faith on matters of freedom of commercial speech with all relevant parties, including government; and
5.2 to provide the South African consumer with more information about products, rather than less, on the basis that if a product is legally manufactured and sold, it has the right to be responsibly promoted.
6. The Trust accepts that freedom of commercial speech, as enshrined in section 16 of the Constitution, is not absolute and that restrictions of this freedom must be accepted within the boundaries as stipulated in section 36 of the Constitution. However, in determining and applying these boundaries the Trust is totally committed to self-regulation. Self-regulation has been proved world-wide to be the most effective manner of regulation of a dynamic industry, such as the commercial communications industry and the financial markets.
THE PROMOTION OF EQUALITY AND THE PREVENTION OF UNFAIR DISCRIMINATION BILL 1999
SUBSTANTIVE LAW

7. The Freedom of Commercial Speech Trust supports the basic principles of The Promotion of Equality and the Prevention of Unfair Discrimination Bill 1999 (“the Bill”), but the strict application of these principles and the procedural provisions may have a negative, if unintended effect, on the marketing communications industry.

8. Part M of the proposed Bill, which has been left out of the present Bill, gives an indication as to the ambit envisaged by the Bill. It is clear from clause 45(c) that advertisements were expressly included. Clause 45(d), which for the most part protected dignity and privacy, fell outside the ambit of the Bill as stated in the Preamble and its exclusion is to be welcomed.
9. The clauses in the Bill that are of substantive law that concern the Freedom of Commercial Speech Trust are the following:

“6. (1) …

(2) No person may -

(a) disseminate or broadcast any information;

(b) publish or display any advertisement or notice,

that indicates or could reasonably be understood to indicate an intention to unfairly discriminate.”

and
“8. All forms of racial discrimination or racism, including the following are prohibited:

(a) The dissemination of any propaganda or idea, suggesting the racial superiority or inferiority of any person or group of persons, including incitement to, or participation in, any form of racial violence;

(b) … “
10. These provisions are extremely restrictive in respect of commercial communications, and this will have the effect that certain advertisements that are accepted and well-liked by the whole community, like the Castrol advertisements (“They all look alike/Doubles” and “It clings to the parts” ) could be seen to fall foul of clause 8. It cannot be accepted that this was the intention with the Bill and as such it should be seen as unduly restrictive.
11. It should also be pointed out that commercial communications can be seen to be discriminatory per se, as certain markets, income levels, gender/sex/ and ethnic groups are targeted. Although this “discrimination” could be seen as “reasonable and justifiable” in terms of clause 43 of the Bill, the application of the procedural provisions of the Bill will present a problem for the advertiser/agency and medium concerned.
PROCEDURAL LAW

GENERAL

12. It is submitted that the problem areas are not much the substantive law in the Bill, but the procedural provisions.
12.1 The claimant must merely prove a prima facie case of unfair discrimination in terms of clause 45(1). The burden is then on the respondent to prove that the discrimination is not based on one of the prohibited grounds. If the respondent cannot prove this, i.e. the discrimination is on one of the prohibited grounds, the only other venue open is to prove that the discrimination was reasonable and justifiable in terms of clause 43. It should be noted therefore that there is a numerus clausus defences available and that no common law principles will apply. It is submitted that this clause is subject to Constitutional scrutiny as it appears to be in contravention of the right to freedom and security of the person, contained in section 12(1) of the Constitution and also violates the presumption of innocence contained in section 35(3)(h).
12.2 The only defences available to respondent in the event of unfair discrimination, will be if it can be proved that the act or omission is reasonable and justifiable in the circumstances (Clause 43(1)). Certain factors that can be taken into account in deciding whether the act is reasonable and justifiable are:

12.2.1 the purpose of the unfair discrimination;

12.2.2 the nature and extent of the unfair discrimination, including the nature and extent of the resultant disadvantage;

12.2.3 the relationship between the unfair discrimination and its purpose and

12.2.4 whether there are less restrictive and disadvantageous means to achieve the purpose.
It will not be a defence to a claim of unfair discrimination that the claimant’s membership of a group identified by one or more of the prohibited grounds was not the dominant or substantial cause of the unfair discrimination (Clause 44).
12.3 If there was unfair discrimination there cannot be a finding that it was reasonable and justifiable if the group discriminated against cannot be accommodated without unjustifiable hardship. In determining “unjustifiable hardship” all relevant circumstances must be taken into account, including the factors as set out in clause 43(4)((a) – (e).
13. Against the background of the reversal of the burden of proof, the above obligations on the advertiser/agency/media owner are severe, especially if the incidence of advertising and the costs involved in advertising are taken into account
COMPLAINANT

14. The complainant does not have to be the person/s discriminated against. The following persons may institute action in terms of the Bill:

14.1 any person acting in that person’s interest;

14.2 any person acting on behalf of a person who cannot act in his/her own name (due to minority etc.);

14.3 any person acting as a member of or on behalf of a group or class of persons;

14.4 any person acting in the public interest;

14.5 any association acting in the interest of its members;

14.6 the SA Human Rights Commission.

15. It should be noted that a person includes a legal person, which could have the effect that a competitor could act on behalf of all the black or white males in the example of the Castrol advertisement. The Bill does not provide that the person acting should prove an interest, which has the effect that the person acting for the complainant could even do it against the latter’s wishes.
EVALUATION

16. As stated in 7 above, the Freedom of Commercial Speech fully endorses the aims and the spirit of the Bill. However, the following issues are of concern in respect of the practical implementation of the provisions of the Bill:

16.1 Clauses 6(2) and 8 are extremely wide and could severely restrict commercial communications. This is possible due to the fact that Clause 6(2) states, inter alia, that nobody may broadcast any information that could reasonably be understood to indicate an intention to discriminate. This test is extremely strict, and even a racial parody could be prohibited, as the test is objective in terms of a subjective fact. In other words, the test would be what the reasonable man would perceive to have been the intention of the person making the broadcast. Whether that was in actual fact his intention would not be relevant, and the person making the broadcast will not be successful in a defence if he/she can prove that it was not his/her intention.
16.2 A lack of intention will not be a defence due to the fact that:
16.2.1 Clause 43 lists the only defence as that of proof that the action was reasonable and justifiable under the circumstances. If an advertisement is aimed at a particular section of society, e.g. black males, and thereby discriminates against e.g. white females, it could be proved that it is reasonable and justifiable as a particular section of the public was targeted, for pure commercial reasons.
16.2.2 An apparent harmless parody, like the Castrol television commercials, would not pass the objective test of “reasonable and justifiable” and even if it is possible, an equity court must decide it
16.2.3 It should also be noted that a dualistic intention, with the main intention not being to discriminate, will not be justification for discrimination (Clause 44)
16.3 The ability and propensity of South Africans to innocently joke about themselves and about others, is a factor that is conducive to normalising the society. Especially in South Africa with its highly diverse cultures, this process, which is facilitated and enhanced by commercial communications, should not be hampered.
16.4 The procedural aspects will be the biggest problem in the area of commercial communication, as it should be noted that in the commercial communication, it will not only be the consumer that will be affected, but also the competitor/s. This dualism would be important especially if it is taken into account that the person discriminated against does not have to be the complainant in terms of clause 46 of the Bill. This could therefore have the effect that a competitor could institute a complaint on behalf of the person discriminated against, even if the latter does not want to institute action.