NEWS  


PROPOSED AMENDMENTS TO THE EMPLOYMENT EQUITY ACT AND THE REGULATIONS
2018/10/18

It has been twenty years since the promulgation of the Employment Equity Act 55 of 1998. (“EEA”).

 

In recent times the Commission for Employment Equity (established in terms of Section 28 of the EEA) has escalated its monitoring and enforcement of the Employment Equity Act provisions via labour inspectors, whose powers are provided for in Section 35 of the EEA.

 

The drive has been to focus on substance over form.  The evidence reported on, in the statutory Section 21 Report (EEA2) is not the focus – from a mere compliance (reporting) point of view.  The focus is on meaningful consultation, as evidenced in signed minutes of the forum / committee established in terms of Section 16 of the EEA, a thorough and accurate analysis (EEA12) and employment equity plan (EEA13) which demonstrate the extent to which the employer has implemented employment equity, taking into account, inter alia, the extent to which suitably qualified people (as defined) from amongst the different designated groups are equitably represented within each occupational level in relation to the demographic profile of the national and regional economically active population, the reasonable steps taken by the employer to implement its employment equity plan, the extent to which the employer has made progress in eliminating employment barriers that adversely affect people from designated groups, and the reasonable steps taken by the employer to appoint and promote suitably qualified people from designated groups.

 

Many an employer has been held to be non compliant, simply because its own analysis, plan and report (which are all separate requirements) contradict each other.

 

In tandem with the increased and in-depth scrutiny, Cabinet has now approved the proposed amendments to the EEA and its regulations.

 

For the last twenty years the EEA and its regulations have not provided for any numerical targets or quota system.  It was left to each designated employer to set its targets and goals.

 

Given the diversity between industries and sectors it always seemed logical that  targets or quotas would be difficult to set.  The assumption was that self-imposed numerical targets and goals would work.

 

The question of course is have they worked?

 

Given the proposed amendments the answer is an obvious no.

 

In the build up to the proposed amendments, the Commission for Employment Equity, in its key findings released in June 2018, revealed the status quo (after twenty years).

 

In summary –

 

Ø   white people occupy 67.7% of top management jobs.

 

Ø   males occupy 77.1% of these jobs.

 

Ø   white people occupy 71.1% of these positions in the private sector

 

Ø   persons with disabilities occupy 1.3% of these jobs.

 

Ø   black people (as defined)  occupy 83.5% of positions at the unskilled level.

 

Ø   in senior management males occupy 66.2% of the jobs.

 

Ø   white people occupy 56.1% of these positions.

 

One of course cannot generalize when asking if employers have made reasonable progress.  Some employers may have (more so in the public sector), others not.

 

Whatever the differing opinions are government is clearly of the view that progress has been completely insufficient.

 

This view is patently evidenced in the fact that the proposed amendments now provide for sector – specific numerical targets.

 

The Minister of Labour, in consultation with the stakeholders of a particular sector, will set employment equity sector – specific targets. The commission stated that sector – specific targets were necessary because business was not achieving the demanding targets determined on the basis of the nationally economic population (EAP).

 

From this one could surmize that the statutory targets will not necessarily be pegged against the EAP data.  The Commission has indicated that it may use current statistics as to what has already been achieved in certain sectors.  It is envisaged that eighteen sectors will be identified.  Publication of the sectors and sector – specific targets is imminent.

 

Public hearings are being conducted into the proposed legislative amendments and the regulations.  The focus is on the introduction of the regulatory requirements for the promulgation of the new Section 53 (to ensure that companies who contract with the state comply in full with the EEA), and on the setting of numerically based sector targets.  A template for the submission of public comments (by 21 November 2018) is available on the Department of Labour’s website.

 

The Employment Equity Amendment Bill, 2018 was published on 21 September 2018.

 

In the executive summary thereto it is stated that “employers tend to only use EAP distribution as a long term benchmark for the setting of self-imposed targets….there is not short-to-medium term benchmarks for the setting of numerical targets and goals…”

 

“…..in the light of this it became prudent to promulgate Section 53 of the Act, which was never previously promulgated”, (albeit that it appeared since inception of the EEA).  In essence, the state will not contract with an employer which is not certified to be compliant.

 

In support of the proposal of sector – specific targets, Section 14 (voluntary compliance) of the EEA is proposed to be deleted, and the proposed new Section 15 A reads as follows –

 

15A Establishment of sectoral targets

 

(1)       The Minister may publish a notice in the Gazette identifying national economic sectors for the purposes of this Act, having regard to any relevant code contained in the Standard Industrial Classification of all Economic Activities published by Statistics South Africa.

 

(2)   The Minister may, after consulting the relevant sectors and with the advice of the Commission, for the purpose of ensuring the equitable representation of suitably qualified people from designated groups at all occupational levels in the workforce, by notice in the Gazette set numerical targets for any sector or part of a sector identified in terms of subsection (1).

 

(3)   A notice issued in terms of subsection (2) may set different numerical targets for different occupational levels, or regions within a sector or on the basis of any other relevant factor.

 

(4)   A draft of any notice that the Minister proposes to issue in terms of subsection (3) must be published in the Gazette and interested parties must be permitted at least 30 days to comment on the draft notice.

 

(5)   The Minister may issue regulations prescribing the criteria to be taken into account in determining a numerical target in terms of subsection (2)”.

 

Section 20 (employment equity plan) is proposed to be amended to record -

 

Section 20 is amended by the insertion of the following after subsection (2) –

 

 “(2A) The numerical goals set by an employer in terms of subsection (2) must comply with any sectoral target in terms of section 15A that applies it. “

 

 

Section 42 (Assessment of Compliance) is proposed to be amended to read –

 

“42 Assessment of compliance

(1)    In determining whether a designated employer is implementing employment equity in compliance with this Act, the Director-General or any person or body applying this Act may, in addition to the factors stated in section 15, take the following into account:

(a)   The extent to which suitably qualified people from and amongst the different designated groups are equitably represented within each occupational level in that employer\\\'s workforce in relation to the demographic profile of the national [and] or regional economically active population;

(aA)  whether or not the employer has achieved any sectoral target set in terms of   section 15A applicable to that employer;

(b)    reasonable steps taken by a designated employer to train suitably qualified people  from the designated groups;

(c)   reasonable steps taken by a designated employer to implement its employment equity plan;

(d)   the extent to which the designated employer has made progress in eliminating employment barriers that adversely affect people from designated groups;

(dA)  reasonable steps taken by an employer to appoint and promote suitably qualified  people from the designated groups; and

(e)       any other prescribed factor.”

 

For more information on the proposed changes, contact one of our experienced consultants.  


Kusile Consulting Services 

011 609 2630

kusile@yourside.co.za 

 



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