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  • The recently gazetted Employment Equity Amendment Bill aims to introduce more detailed affirmative action targets for companies.  
  • Targets will be introduced for specific occupational levels, as well as for sub-sectors of industries and in different regions.
  • Companies that want to do business with government will have to achieve these targets.
  • For more articles, go to www.BusinessInsider.co.za.

Last month, the new Employment Equity Amendment Bill was gazetted, which could pave the way for more specific affirmative action targets in SA workplaces.

Companies which want to do business with government will have to comply with these targets.

If the Bill becomes law in its present form, the minister of employment and labour can determine how many people in a specific occupational level, in sub-sectors, and in regions must come from designated groups.

Government is particularly worried about senior levels of companies, with almost two-thirds of top managers still white, according to the latest Commission for Employment Equity data. Only 15% of managers are African, even though they come from a group that makes up 78% of the population.

Among the biggest companies, the numbers are even more startling, with the latest PricewaterhouseCoopers report into executive directorships in South Africa finding that 86% of CEOs are white, while only 6% are women.

While current legislation already requires companies to comply with employment equity targets, the new targets will be much more specific. 

“This level of detail is to be welcomed, as at present the [employment equity legislation] only provides for only eleven sectors, into which all employers across the entirety of South African economic activity must be fitted," says Bradley Workman-Davies, director at Werksmans Attorneys.

“This can sometimes be problematic and fails to take into account the diversity and needs of operations across a sector as large as the very generic 'Wholesale Trade, Commercial Agents and Allied Services' sector, which is one of the current eleven categories. 

Employers will have to set goals for how many people from designated groups they aim to employ at, for example, various different levels of their organisations – and these goals must be in line with the targets the minister sets for their specific industry.

Penalties

The new Bill proposes that a labour inspector will assess employers to check that their employment equity plans comply with the sectoral targets for designated groups.

"Compliance orders" will be issued to those who do not comply.

Under current legislation, companies can be fined by between R1.5 million and 2% of turnover, to R2.7 million and 10% of turnover for contravening employment equity laws.

In addition, the new amendment act proposes that a company could face a fine if it fails to set an employment equity plan without numerical goals.

But whether these numerical goals can be enforced is still questionable, as these amendments do not seem to propose any consequences for an employer which sets out targets, but fails to achieve them for justifiable reasons, says Workman-Davies.  

“For example, if the employer were to set compliant numerical targets over the five-year period of its plan, but could demonstrate at the end of that period that suitably qualified persons could not be hired into service, it would still be compliant.”

However, if your company wants to do business with government, it will have to produce a certificate from the minister which confirms compliance with affirmative action targets.

“The minister will not be able to issue such a certificate unless the designated employer can demonstrate that it has met the numerical target set for its sector or has a reasonable ground to justify such failure,” says Workman-Davies.

Your company also won’t be able to do business with government if it has had an adverse finding against it for unfair discrimination in the last three years, or if it failed to comply with the National Minimum Wage Act over the previous three years.

But the new draft law could make things easier for companies with fewer than 50 workers. While in the past they had to comply with the employment equity requirements if their turnover was above a certain level, this will now fall away.

It is still not clear when the new law will be adopted, and whether it could still change.

“The Portfolio Committee on Employment and Labour has yet to schedule further meetings or to invite comment on the Bill. As such, designated employers should keep an eye out for development in the process without yet seeking to put in place preliminary steps to comply, especially as the sectors and sectoral targets which may be introduced by the EEA Bill are as yet unknown,” says Workman-Davies.

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