AI, ESG, LRA, POPI, and BCEA may be unwieldy acronyms to many, but the business world is fast waking up to their impact on reputations, bottom lines and the need for social justice. 

Zaeem Soofie, a senior partner at Dentons in SA, the world's largest law firm, told the recent HR Leadership Summit at the Sandton Convention Centre that it is essential for business leaders and HR professionals to familiarise themselves “with what is coming down the tracks”, citing recent changes to the Employment Equity Act (as amended) and designated groups, the Companies Act in respect of remuneration disclosures and approvals and the AI Policy Framework published by the Department of Communications and Digital Technologies, as well as experiences in other markets.  

“What’s more is that if you see it as a tick box exercise, it will amount to nothing more than malicious compliance, defeating the objectives of sustainable progress and transformation.”

Among the significant changes will be how the law, HR, and companies manage the “rise of the machine” (AI, or artificial intelligence) which has seen the globalisation of the labour market, job redistribution and a heightened need for risk detection and mitigation in systems and processes where large fines and reputational harm loom for those who get it wrong. Added to this is the continued need for social justice and salary equity in the workplace and a balanced approach to workplace policy and corporate financial and strategic planning.

For instance, many people do a Google search on AI and realise they must contend with a “data mountain.” 

“The risks are high if wrong decisions are made on how this new technology is harnessed across an organisation,” said Soofie.

Moreover, drafting more specific AI regulations and transforming existing legislation is a pressing concern. South Africa has no existing legislation or regulatory framework to govern the use of AI. Thus, South Africa is heavily dependent on the application of data protection legislation for the regulation of AI.  AI regulation in South Africa is presently enforced through the Protection of Personal Information Act (POPIA), the Consumer Protection Act, the Electronic Communications Act, and the Electronic Communications and Transactions Act, among others. The department of communications and digital development recently published the draft National AI Policy Framework for public input.

Soofie said that while the Framework lays out 12 strategic pillars and charts a progressive way forward into the AI economy, including recognising the critical need for transparency and the avoidance of data processing bias, it is only the start—it is expected to  be followed by a policy document and  new or amended laws and  regulations to support the steps regulators, enterprises and individuals should take to participate in the AI economy

“With data, machine learning and AI reshaping the business world, it is important to get ahead of these changes and not be taken by surprise. The mobile economy will open up many new avenues for work that will need to be managed and legally protected,” he said.

Soofie went on to say that the drive for social justice, transparency, and pay equity continues, and executives in particular need to be fully aware of them.  The days of hundred-fold pay disparity between lowest and highest paid employees may well be drawing to a close he said given the marked shift globally and the ever present challenges locally in wage negotiations, restructuring and retrenchments over the years. 

In this regard, President Cyril Ramaphosa recently signed the Companies Amendment Act into law. This law is directly linked to the Employment Equity Amendment Act, 2022, particularly section 27, which refers to the statement of income differentials required from designated employers. Companies will need to disclose the average and median total remuneration of all employees, the remuneration gap between the total remuneration of the top 5% highest paid employees, and the total remuneration of the bottom 5% lowest paid employees.

Other key changes on the labour front include the declaration invalid of the provisions of sections 25, 25A, 25B and 25C of the Basic Conditions of Employment Act no 75 of 1997 (BCEA) and the corresponding provisions of the Unemployment Insurance Fund Act no 63 of 2001 (UIF Act), sections 24, 26A, 27, and 29A, because they are inconsistent with sections 9 and 10 of the Constitution. This means an employee who is a single parent is entitled, and employees, who are a pair of parents, are collectively entitled, to at least four months' consecutive months' parental leave.

In Van Wyk and Others v Minister of Employment and Labour, the seminal case leading to the above changes and in which Dentons represented one of the successful litigants, the court said the declaration of invalidity is suspended for two years from the date of this judgment to allow Parliament to cure the defects.

“However, companies need to act now in terms of the interim order to ensure their parental leave policies and related payments are in line with the changes, especially practical steps to manage “inter-parent” leave sharing,” said Soofie. 

Soofie says another area to watch closely is the treatment of staff during a merger. Section 187(1)(g) of the Labour Relations Act holds that it is automatically unfair to dismiss an employee for a reason related to a business transfer covered by section 197.

“Our courts have recently thrown out attempts by businesses to avoid the consequences of section 197. They look at whether a business has been transferred as a going concern objectively. Businesses will need to review the wording of their merger agreements carefully, undertake the necessary pre-emptive deal due diligence, and be prepared to compromise on merger conditions aimed at protecting job security.”

Summing it all up, he urged attendees to get ahead of the issues, balance the policy and business needs, adopt practical tools and processes borrowed from the school fees paid elsewhere, and above all ensure buy-in.  As the saying goes, if you fail to plan, you should plan to fail” he concluded.