THE EMPLOYMENT EQUITY

AMENDMENT BILL

A MIXED BAG

Frik Boonzaaier is a Human Capital

Specialist at the BEE Chamber.

During his career, he has worked

with many national and multinational

market leaders. His expertise in the

field equips him to chart a course of

transformation for organisations by identifying

relevant stakeholders whose decisions impact their ability

to transform. Frik’s aptitude for formulating sustainable

strategies aligns his clients' KPIs, training and policies

with their transformation goals. However, the area

he finds most rewarding is implementation, whereby

tracking mechanisms yield tangible results that filter

positive change throughout an

organisation.

The Employment Equity Amendment Bill (the Bill) was published

as Gazette #43535 of 2020. Parliament approved it on 17th May

2022. It is currently in the final stage of promulgation and is on the

President’s desk for sign-off. The Bill's initial gazette was on

21st September 2018 as Gazette #41922 of 2018. It was in

response to the slow pace of transformation in the workplace

1

.

At the time of going to print, the last update from the Department

of Employment and Labour (DoEL) was a press release on

31st August 2022. It stated that the DoEL were preparing for the

implementation and enforcement of the Bill from September 2023.

Therefore, unless the President has any last-minute concerns about

the constitutionality of the amendments contained in the Bill, the

passage of the Bill and the amendments to the Employment Equity

Act (EEA) will go ahead.

What are the significant amendments to the Bill?

The Bill presents three significant amendments, namely: 1 Employers with less than 50 employees, irrespective of

turnover, will no longer fall within the ambit of a ‘designated

employer’. As a result, some current designated employers

will become non-designated employers and thus will not

have to comply with the duties assigned to a designated

employer.

2 Promulgating section 53 of the Act provides for issuing

certificates confirming a designated employer's compliance

with the Act. The compliance certificate will be a

prerequisite for any State procurement.

3 The Minister of Labour will be empowered to determine

sectoral numerical targets to ensure progress towards an

equitable representation of people from designated groups

at all occupational levels in the workforce.

The focus of this article is to unpack the third point mentioned

above, namely the sectoral targets.

Firstly, we need to determine whether the contention that there

has been a ‘slow pace of transformation’ is, in fact, true. Analysis

of the average demographic statistics of employers reporting into

the DoEL annually, contained in the Commission for Employment

Equity Reports (CEE Reports) between 2009 and 2022, attests

that the contention does hold water, especially when compared

to the National Economically Active Population (EAP).

The DoEL has identified the under-representation of African and Coloured men at the

top, senior and middle management, women, as well as persons with disabilities at all

occupational levels as the core areas of concern, as illustrated in the tables that follow:

op

Management

CEE Report National

EAP

Variance between

2009 2022 CEE Report

2009 & 2022

2022 &

National EAP

Men

African 8,70% 10,70% 43,60% 2,00% 32,90%

Coloured 3,40% 3,50% 5,00% 0,10% 1,50%

Indian 4,60% 7,40% 1,80% 2,80% -5,60%

White 59,90% 50,20% 4,90% -9,70% -45,30%

Women

African 3,80% 6,40% 25,80% 2,60% 19,40%

Coloured 1,50% 2,40% 4,10% 0,90% 1,70%

Indian 1,30% 3,50% 0,90% 2,20% -2,60%

White 13,80% 13,00% 3,90% -0,80% -9,10%

Senior

Management

CEE Report National

EAP

Variance between

2009 2022 CEE Report

2009 & 2022

2022 &

National EAP

Men

African 9,80% 15,50% 43,60% 5,70% 28,10%

Coloured 4,20% 4,70% 5,00% 0,50% 0,30%

Indian 5,20% 7,50% 1,80% 2,30% -5,70%

White 45,60% 33,60% 4,90% -12,00% -28,70%

Women

African 5,20% 10,10% 35,80% 4,90% 25,70%

Coloured 2,60% 3,30% 4,10% 0,70% 0,80%

Indian 2,20% 4,50% 0,90% 2,30% -3,60%

White 22,30% 17,70% 3,90% -4,60% -13,80%

Middle

Management

CEE Report National

EAP

Variance between

2009 2022 CEE Report

2009 & 2022

2022 &

National EAP

Men

African 13,40% 22,80% 43,60% 9,40% 20,80%

Coloured 5,30% 5,00% 5,00% -0,30% 0,00%

Indian 6,20% 4,90% 1,80% -1,30% -3,10%

White 38,30% 17,80% 4,90% -20,50% -12,90%

Women

African 7,60% 24,20% 35,80% 16,60% 11,60%

Coloured 3,70% 4,80% 4,10% 1,10% -0,70%

Indian 3,40% 4,40% 0,90% 1,00% -3,50%

White 20,00% 13,60% 3,90% -6,40% -9,70%

“The amendments to the Employment

Equity Act will have far-reaching

consequences for designated employers.

Now is the time to review your

organisation's transformation strategy.”

A crude calculation of the ‘pace of transformation’ from the

findings of the CEE Report between 2009 and 2022 generally

indicates growth towards EAP alignment. However, comparing

the 2022 CEE Report to the National EAP targets makes the

reality of the ‘slow pace of transformation’ apparent. For example,

take the variance between the overall actual statistics in the CEE

Reports per race and gender group over the 13 years - 2009 to

2022 - is it possible to estimate the 'pace of transformation' per

year? Comparing this 'pace of transformation' to the National EAP

targets, is it further possible to estimate how long it will take until

the demographic representation in the national workforce reflects

that of the National EAP targets? The table below illustrates how

long it would take for top and senior management to achieve the

national EAP targets

African Coloured African Coloured

Top

Management

214 years 156 years 208 years 29 years

Senior

Management

64 years 5 years 77 years 15 year

n context, a generation is pitched to be between 20 and 30

years. So, using 20 years as the timeframe for a generation, it

would take African men more than ten generations and African

women more than seven generations to meet National EAP

targets at Top Management. As a collective, women would

only realise their National EAP targets at Senior Management

by 2053.

What is the status of persons with disabilities?

Since the 17th CEE Report, the representation of persons with

disabilities has been featured separately per occupational

level. The target applicable for persons with disabilities for both

employment equity and B-BBEE purposes is 2% of the

total workforce

Persons with

disabilities

2017 2022 CEE

Report

2017 vs

2022

Against

2%

target

Top Management 1.20% 1.60% 0.40% -0.40%

Senior Management 1.10% 1.30% 0.20% -0.70%

Middle

Management

0.90% 1.20% 0.30% -0.80%

Junior Management 0.90% 1.20% 0.30% -0.80%

Semi-skilled 0.80% 1.30% 0.50% -0.70%

Unskilled 0.80% 1.40% 0.60% -0.60%

Although the representation of persons with disabilities improved at

all occupational levels between 2017 and 2022, employers have,

on average, not met the 2% target at any occupational level. At the

current ‘pace of transformation’, for persons with disabilities at top

management and the semi-skilled level, it would take five to eight

years to meet the targets.

Therefore, considering the findings of the CEE Reports against the

National EAP and disability targets, it is safe to say that the DoEL’s

contention of a ‘slow pace of transformation’ is correct, at least in

terms of EAP and disability percentages. Hence the DoEL’s decision

to institute sectoral targets.

What is the status of the sectoral targets?

The DoEL has confirmed that engagements on setting sectoral

numerical targets began in June 2019. At the time of going to print,

there was no confirmation, however, of whether these engagements

were concluded. The next step is to publish the draft sectoral targets

for 30-day public comment. Gazetting of the final sectoral targets will

only happen once the President has given his assent to the gazetting

of the EE Act Amendments. The amendments mean that designated

employers must match or exceed the targets which the DoEL will set

for five-year cycles

at a time.

Which sectors will the DoEL institute

sectoral targets for?

Below are the sectors where the DoEL will prescribe targets

Administrative and Support Activities Accommodation and Food Service Activities Agriculture, Forestry & Fishing Arts, Entertainment and Recreation Construction Electricity, Gas, Steam and Air Conditioning Supply Education Financial and Insurance Activities Human Health and Social Work Activities Information and Communication Manufacturing Mining and Quarrying Public Administrative

and Support

Activities

Accommodation

and Food Service

Activities

Agriculture,

Forestry & Fishing

Arts,

Entertainment

and Recreation

Construction Electricity, Gas,

Steam and Air

Conditioning

Supply

Education Financial and

Insurance

Activities

Human Health

and Social Work

Activities

Information and

Communication

Manufacturing Mining and

Quarrying

Public

Administration

and Defence;

Compulsory

Social Security

Professional,

Scientific and

Technical

Activities

Real Estate

Activities

Repair of Motor

Vehicles and

Motorcycles

Transportation

and Storage

Water Supply,

Sewerage, Waste

Management

and Remediation

Activities

Wholesale and

Retail Trades

What course of action should employers take

until the gazetting of the Bill?

Until the President assents to the gazetting of the amendments,

the 2013 EE Act stands. Although, upon the gazetting of

the Bill, smaller companies will become non-designated

employers, all current designated employers, large and small

alike, must continue to implement the duties outlined in the Act

as it currently stands. In line with the current requirements, a

designated employer must have an EE Consultative Committee,

develop an EE Plan and report progress annually to the DoEL,

among others. These are the duties of a designated employer,

which a DoEL inspector will review.

Will current EE Plans become redundant

upon the publishing of the gazette?

The timeframe communicated on 31st August 2022 implies that

all current EE Plans will become redundant at the end of August

2023. Therefore, new EE Plans, which must include sectoral

targets, must be ready for implementation from September

2023 onwards. One of the areas which may be confusing is

the assumption that the sectoral targets will trump the EAP

targets and that employers, therefore, will no longer need to

align with the National EAP targets. On the contrary, designated

employers must view sectoral targets as interim targets, which

the DoEL will set to accelerate the pace of transformation, so

that employers move more quickly towards the National EAP

targets. Section 42(1)(a) remains intact and states:

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 … 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 an employer's workforce according to the

demographic profile of the National and Regional

Economically Active Population.

(b) “Whether or not the employer has complied with any

sectoral target …” will simply be an addition to the

amendment and not a replacement. Pursuing the

National EAP targets will put a designated employer

in good stead to meet the sectoral targets. Therefore,

designated employers with EE plans set to expire

before the gazetting of the sectoral targets must base

their new EE Plan on the National EAP targets, which

a designated employer can then amend upon the

gazetting of the sectoral targets.

“At the current 'pace of transformation',

it will take more than 200 years for

South Africa to meet all National EAP targets

at all occupational levels.”

What happens if a designated employer

cannot meet the sectoral targets?

According to section 16 of the 2018 Draft Regulations issued

as Gazette #41923 of 2018, a designated employer will have to

justify any misalignment based on one or more of the following:

> Insufficient recruitment opportunities;

> Insufficient promotion opportunities;

> Insufficient target individuals from the designated groups

with the relevant qualification, skills and experience;

> Court order;

> Transfer of business;

> Mergers or acquisitions; and

> Impact on business from economic circumstances.

Although the regulations remain in the draft, designated

employers can use the draft regulations as a guideline of what

will most likely be applicable in future.

To conclude, the long-awaited EE Act Amendments present

a mixed bag and will significantly impact how businesses

implement transformation going forward. As the

amendments necessitate designated employers to

present a certificate of compliance to win State

tenders, the cost of non-compliance could be grave.

Consequently, designated employers must thoroughly consider all

aspects of the amendments when plotting their new EE course of

action.

Until the amendments become effective, it is business as usual.

Therefore, all current designated employers must ensure that the

implementation of their EE Plans is in line with, and can withstand

the scrutiny of, an Employment Equity Director-General review as

per the 2013 Amendments.

Any updates on the Bill's finalisation, or additional updates that

will contradict the information provided in this article, will feature

in the TFM Magazine/BEE Chamber’s weekly newsletter. Contact

stella@bee.co.za to secure weekly electronic delivery of the

newsletter.