Employment Equity Draft Bill – some key points to note

Editor’s note: please be very wary of the new Employment Equity Bill. In our view it gives excessive powers to the Department of Labour which could make employers’ lives very difficult.

On the 20th July 2020, the latest draft of the Employment Equity Bill was published and will be on its way to Parliament.

This Bill gives the Minister far greater powers to intervene and has increased the requirements for the employer to comply. One of the amendments includes Section 53 which requires that an annual certificate of compliance is issued and failure to receive this certificate will affect your ability to do business with the State and its Organs.

One of the biggest changes taking place, which I believe will hugely impact employers’ ability to comply, is the introduction of sectoral targets. The Minister will now establish numerical targets for employers in specific economic sectors and employers must comply with these targets. It is not clear whether these targets will be further drilled down to include other factors such as business type; location; size business and turnover of business which could largely affect employer’s ability to meet the targets.

In August 2019 the Employment and Labour Minister reiterated that those that did not comply would be punished and that the need for Sectoral Targets was due to the continued non-compliance of Employers.

These amendments clearly indicate “unhappiness” at the slow rate of transformation of business in South Africa and seem to be trying to force employers to transform at a faster rate. Whether this is feasible remains to be seen but feasible or not it is still coming, and business needs to start preparing.

Our biggest concern is that while the intention is for this to impact employers who supply services to public entities, it will be rolled out through the BEE legislation and impact all employers wishing to get a valid BEE rating e.g. the DTI may require a certificate of employment equity compliance before a rating is given. This would be extremely problematic in our eyes particularly where the Minister is setting targets. Imagine a scenario where the Minister sets targets for an industry in JHB where an employer might have access to a wide labour pool yet the same targets might apply for an organization in the Western Cape where the labour demographics are different…and how long might all employers have to comply…there are just too many variables and unknowns here for a Ministry that has shown little pragmatism in the past.

What to do in the short term…?

It is clear from the proposed amendments and the many inspections that the expectations for employers to transform and to comply is high.

Many employers partially comply either because they don’t fully understand the requirements OR they don’t have time to get it all done.

The consequence for not complying are serious with hefty fines of R1,5 million and above. Even more worrying is that in the case of non-compliance for the Employment Equity Plan the Director-General can apply directly to Labour Court for the fine to be issued to the employer without having to first issue written undertakings or compliance orders.

For more information on the requirements of a designated employer please join our free webinar on 30th September 2020 at 09h00. To register please click on the link Employment Equity Webinar Registration

In the meantime please feel free to complete our EE Compliance Questionnaire. This questionnaire takes less than 5 minutes and will give you an immediate snapshot of possible areas of concern.

Domestic workers included in new COID Bill

On 10 September 2020 the Minister of Employment and Labour introduced the Compensation for Occupational Injuries and Diseases Amendment Bill to Parliament. Most noticeable of the amendments is the change to the existing definition of an “employee” to include (as opposed to exclude) domestic workers. Currently, domestic workers and gardeners are not included in the definition of an employee in the COID Act and can only claim against the Unemployment Insurance Fund.

While it is nice to see this from an equity perspective, we are concerned with the practical implementation of this change. It is unlikely domestic employers will be able to manage the challenges dealing with the compensation fund nor will the Compensation fund be able to manage the additional 5 million new employers that would need to be included. Most likely this is going to result in further tension between employers and employees…

To view the Bill, follow the link.

Department of Labour – Employment Equity Inspection Targets

Editor: We have been stressing for a while the emphasis placed on employment equity audits to raise funds for the Department of Labour. This is supported by the statistics below and our own anecdotal experience from clients.

The Department of Labour have indicated the following planned inspection targets for 2017 / 2018.

 Dol Reviews Annual Target Q1 Q2 Q3 Q4
1. EE DG Reviews (EEA) 192 38 58 38 58
2. EE Inspections (EEA) 900 180 270 180 270
3. Vulnerable workers (BCEA) 35,496 7,099 10,649 7,099 10,649
4. High Risk Sectors (OHS) 5,520 1,104 1,656 1,104 1,656
5. Employer Audits (UIA) Procedural 2,160 432 648 432 648
6. UI Payroll Audits 218 43 65 43 65

Employment Equity Filing Deadline

Editor’s Note: We really encourage employers to get organised to submit their employment equity reports on time. As mentioned in previous editions this is a real area of focus for government to levy fines and penalise employers.

Submit Employment Equity Reports by 15 January 2018.

Failure to comply could result in a fine of up to R1.5m.

Employment Equity is a legislative requirement for all companies deemed to be designated employers. A designated employer means:

  • A person who employs 50 or more employees
  • A person who employs fewer than 50 employees but has a total turnover that is equal to or above the applicable annual turnover of a small business in terms of Schedule 4 of this Act.

If you have more than 50 employees your organisation is deemed to be a designated employer and is therefore required to comply with the Employment Equity Act.

As designated employers, you are required to comply with the following in terms of the Employment Equity Act: 

  1. Submit Employment Equity Reports and Income Differential Statement, manually by 1 October, or submit electronically by 15 January 2018
  2. Assign a Senior Manager
  3. Establish a Consultative Forum
  4. Prepare an Employment Equity Plan

Employment Equity Filing Deadline

Editor: We really encourage employers to get organised to submit their employment equity reports on time. As mentioned in previous editions this is a real area of focus for government to levy fines and penalise employers.

Submit Employment Equity Reports by 15 January 2017
Failure to comply could result in a fine of up to R1.5m.

Employment Equity is a legislative requirement for all companies deemed to be designated employers. A designated employer means:

  • A person who employs 50 or more employees.
  • A person who employs fewer than 50 employees but has a total turnover that is equal to or above the applicable annual turnover of a small business in terms of Schedule 4 of this Act.

If you have more than 50 employees your organisation is deemed to be a designated employer and is therefore required to comply with the Employment Equity Act.

As designated employers, you are required to comply with the following in terms of the Employment Equity Act:

  1. Submit Employment Equity Reports and Income Differential statement, manually by 1 October, or submit electronically by 15 January 2017
  2. Assign a Senior Manager
  3. Establish a Consultative Forum
  4. Prepare an Employment Equity Plan

Employment Equity Filing Deadline

Editor: We really encourage employers to get organised to submit their employment equity reports on time. As mentioned in previous editions this is a real area of focus for government to levy fines and penalise employers.

Submit Employment Equity Reports by 15 January 2017
Failure to comply could result in a fine of up to R1.5m.

Employment Equity is a legislative requirement for all companies deemed to be designated employers. A designated employer means: a.

  • A person who employs 50 or more employees.
  • A person who employs fewer than 50 employees but has a total turnover that is equal to or above the applicable annual turnover of a small business in terms of Schedule 4 of this Act.

If you have more than 50 employees your organisation is deemed to be a designated employer and is therefore required to comply with the Employment Equity Act.

As designated employers, you are required to comply with the following in terms of the Employment Equity Act:

  1. Submit Employment Equity Reports and Income Differential statement, manually by 1 October, or submit electronically by 15 January 2017
  2. Assign a Senior Manager
  3. Establish a Consultative Forum
  4. Prepare an Employment Equity Plan

Employment Equity Workshops

An introduction to the Employment Equity Act, Reports and Committee Responsibilities

Half Day Workshop with Dennis Cogzell

The workshop will be led by Dennis Cogzell, an HR Consultant, registered as a Chartered HR Professional with the South African Board for People Practitioners (SABPP). He has more than 35 years’ experience within the Human Resources field, and has provided consulting and training services to numerous small and large companies.

At the end of the workshop, learners will be able to:

  • Understand the various requirements of the Employment Equity Act in respect of discrimination and affirmative action.
  • Understand the requirements for completing and submitting the Employment Equity Report.
  • Have the ability to review policies, practices and working conditions with the view of identifying barriers to employment equity and affirmative action.
  • Understand the Amendments to the Employment Equity Act.
  • Understand the workings of an Employment Equity Committee.

Date: 7 November 2016
Time: 08h30 to 12h30
Venue: 6 Kikuyu Road, Sunninghill, Johannesburg
Cost: R995.00

To book, please contact Harusha on 031 564 1155 or [email protected].

BOOKINGS ARE NOT CONFIRMED UNTIL BOOKING CONFIRMATION HAS BEEN RECEIVED.

Please Note:

  • All costs exclude VAT.
  • All workshops can be presented in house at your premises.

Employment Equity Half Day Workshop with Nicky Hardwick

Workshop: An introduction to the Employment Equity Act, Reports and Committee Responsibilities

The workshop will be led by Nicky Hardwick a consultant with more than 10 years experience in the field of Employment Equity. Nicky specialises in assisting designated organisations to become legally compliant in terms of the Employment Equity Act. Nicky has provided consulting and training services to numerous small and large companies, NGOs and Government.

At the end of the workshop, learners will be able to:

  • Understand the various requirements of the Employment Equity Act in respect of discrimination and affirmative action.
  • Understand the requirements for completing and submitting the Employment Equity Report.
  • Have the ability to review policies, practices and working conditions with the view of identifying barriers to employment equity and affirmative action.
  • Understand the Amendments to the Employment Equity Act.
  • Understand the workings of an Employment Equity Committee.

Date: 6 October 2016
Time: 08h30 to 12h30
Venue: 163 Umhlanga Rocks Drive, Durban North
Cost: R795.00

To book, please contact Harusha on 031 564 1155 or [email protected].

BOOKINGS ARE NOT CONFIRMED UNTIL BOOKING CONFIRMATION HAS BEEN RECEIVED.

Please Note:

  • All costs exclude VAT.
  • All workshops can be presented in house at your premises.

Workplace equity policies and employment equity legislation

Recently, an interesting article by Professor Hugo Pienaar of Cliffe Decker Hofmeyr was posted on their website dealing with the recent ruling by the constitutional Court on Solidarity and Others v Department of Correctional Services and Others (CCT 78/15) [2016] ZACC.

Without going into too much detail about the case, the ruling indicated that the employer should take into consideration both regional and national demographic targets when setting equity targets for its workforce in its employment equity plan. In the circumstances, the employer had not appointed a number of coloured applicants in the Western Cape because they did not meet their national targets despite coloured candidates being the majority applicants (and demographic representatives) in this region.

Further, on appeal, the Constitutional Court addressed the Barnard Principle (South African Police Service v Solidarity obo Barnard [2014] ZACC 23 which states that an employer may refuse to appoint a candidate who falls within a category of persons that is already adequately represented at a certain occupational level. In this case, the court was required to consider whether the Barnard principle’s application is limited to white people only and whether this principle may also be applied in respect of gender. The court ruled that the Barnard principle is not only limited to white people but rather to candidates from all racial groups as well as both men and women.

So what’s the point you ask?

It appears critical for employers to be very careful before turning down a candidate’s appointment because it doesn’t fit in with their targets in their Employment Equity Plan.

While the legislation and court rulings clearly allow for this, it is not cut and dried and the individual and regional circumstances need to be considered.

Employment Equity Reporting and Plans – Are you compliant?

  • Fines for non-compliance are 2% of turnover OR R1.5million.
  • We are receiving calls from clients regularly where they have been inspected, are non-compliant and face substantial fines.
  • Contact Nicky Hardwick to ensure compliance and for advice.

The Department of Labour are actively conducting audits on all designated employers and have also established a task team to assist them in these audits.

The task team is specifically checking on three aspects of compliance, namely the Employment Equity Plan (EEA13), Employment Equity Report (EEA2) and Income Differential Statement (EEA4).

Part of the element of compliance in this regard is that you must ensure that the EEA2 and EEA13 are displayed in your workplace in an area where staff have access.

Our experience of this task team is that they do not issue employers with a notice of undertaking but rather these employers are being taken to court for failing to comply.

The fine for non-compliance in these areas is 2% of turnover or R1,5 million, whichever is the GREATEST.