South Africa’s President, Cyril Ramaphosa assented to the Employment Equity Amendment Bill of 2020 on 12 April 2023, amending the Employment Equity Act of 1998. See link below.
Introduction:
The Employment Equity Act 55 of 1998 (“EEA”) came into operation four years into South Africa’s constitutional democracy. The primary objective of the EEA is to promote equity in the workplace, to ensure that all employees receive equal opportunities and affirmative action, and to ensure that employees are treated fairly by their employers.
There has, however, been growing impatience among the government’s social justice partners about a perceived lack of transformation within the employment landscape in South Africa. This frustration has given life to the Radical Economic Transformation faction in our society as a result. In an effort to hasten the transformation of SA workplaces, amendments are about to be made following the President’s signing of the Amendment Act into law.
Whether these amendments will go far enough in balancing the requirements of our economy with the desire for transformation is something that only time will tell.
On May 17, 2022, Parliament passed the Employment Equity Act Amendment Bill (“the Bill”), which brought about various amendments that are set to come into operation on September 1, 2023.
This article outlines the primary amendments to the EEA that have been introduced by the bill and the potential impact that it will have on the South African legal landscape.
A change in the definition of “designated employer”:
It is undisputed that smaller (but highly profitable) employers are said to be positively impacted by the bill as a result of a change to the definition of “designated employer” being introduced by the bill. The definition will be narrowed to exclude employers that employ fewer than 50 employees, irrespective of their annual turnover.
As a result of the change in the definition, the administrative burden on smaller employers will be significantly reduced. From September 1, 2023, smaller employers will not be required to comply with certain obligations of a designated employer. This includes the obligation of a designated employer relating to affirmative action measures, the development and implementation of employment equity plans, and the submission of annual employment equity reports to the Department of Employment and Labour.
Section 53 of the EEA will continue to provide for the voluntary registration of non-designated employers wishing to enter into a contract with the state or an organ of the state. The amendments will not change this. Only the Chapter 2 obligations (which deal with the prohibition against unfair discrimination) need to be complied with to obtain a certificate that will permit the state to enter into agreements with such registered non-designated employers.
The impact on persons with disabilities
The definition of “people with disabilities” will be amended in order to align with the United Nations Convention on the Rights of Persons with Disabilities, 2007 (“the Convention”) definition. The Convention includes a broad categorisation of disabled people. With this definition, people with different types of disabilities enjoy equal human rights and freedoms. The Convention also confirms that “disability is an evolving concept that results from the interaction between persons with impairments as well as any attitudinal and environmental barriers that hinder their full and active participation in society on an equal basis with others.
The new definition will include people who have long-term or recurring physical, mental, intellectual, or sensory impairments, which, in interaction with various barriers, may substantially limit their prospects of entry into advanced employment. Currently, under the EEA, a disability must be permanent, but with the newly proposed amendments, any recurring condition that limits a person’s movements, senses, or activities in executing their tasks will now also be considered.
Introduction of sectoral numerical targets:
The new section 15A will introduce sectoral numerical targets. This is a big shift, as the government has always been at pains to stress that there are no targets in this space. It will be more interesting to see which demographics will be used in setting these targets. What role will regional demographics versus national demographics play? This remains to be seen.
The objective of the targets is to ensure the equitable representation of people from designated groups (historically disadvantaged groups of people based on race, gender, and disability) at all occupational levels in the workforce. The amendment will empower the Minister of Employment and Labour (“the Minister”) to regulate, identify, and set sector-specific employment equity numerical targets for each national economic sector. The minister will also be able to regulate compliance criteria and issue a certificate of compliance.
In terms of the amendments, a certificate of compliance may only be issued if the Minister is satisfied that:
- The employer has complied with any sectoral numerical targets applicable to the employer; or
- has raised a reasonable ground for justifying its failure to comply;
- The employer has submitted its annual employment equity report.
- There have been no findings by the Commission for Conciliation, Mediation, and Arbitration (“CCMA”) or a court that the employer breached the unfair discrimination provisions of the EEA in the previous 12 months, and
- The CCMA has not issued an award against the employer in the previous 12 months for failing to pay the national minimum wage.
The sectoral numerical targets will have an impact on all designated employers’ employment equity plans in that an amendment to section 20 of the EEA (which deals with employment equity plans) will link the sectoral numerical targets to the numerical targets set by a designated employer in its employment equity plan. A designated employer will now be required to set numerical targets in line with the applicable sectoral targets determined by the minister. An amendment to section 42 (which deals with the assessment of compliance with employment equity obligations by a designated employer) will align the assessment of compliance with employment equity with the new requirements relating to sectoral numerical targets.
The sectoral numerical targets must be set to help achieve the purpose of ensuring the equitable representation of suitably qualified people from designated groups at all occupational levels in the workforce. The outcome of this exercise should ideally result in the Minister setting numerical targets based on the reality of the sector, the composition of the workforces within the sector, and the shifting needs for certain skills or proficiencies. This means that the target should neither be arbitrary nor rigid.
Conclusion:
The amendments will have a significant impact on larger, designated employers or non-designated employers who seek to do business with the state. The designated employers will need to review their employment equity plans to ensure that their numerical targets and goals align with any sectoral targets that may be published by the minister. Employers are consequently encouraged to familiarise themselves with the amendments and the effect that it may have on their businesses.
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