Are targets being introduced for Employment Equity?
LEXOLOGY / 19 AUGUST 2020 - 15.44 / FASKEN - LUDWIG FRAHM-ARP AND VENOLAN NAIDOO AND SINOVUYO MAKALIMA
On 20 July 2020, the Department of Employment and Labour published the Employment Equity Amendment Bill in the Government Gazette. The Bill is not law and must be formally adopted by Parliament before it becomes law. Until then, it is still possible for the Bill to be amended. However, given the importance of the Bill, we consider it appropriate to address it in a bulletin at this stage and not to wait until it becomes law.
The Bill has proposed a number of substantial changes to the Employment Equity Act.
We highlight the Bill’s most notable proposed changes in this bulletin:
Numerical targets to be set for different sectors, sub-sectors, or regions within a sector
The Bill permits the Minister of Labour to -
• identify national economic sectors, sub-sectors or regions;
• prescribe criteria that must be taken into account when identifying economic sectors and sub-sectors; and
• set numerical targets for any economic sector, sub-sector or region identified (different numerical targets for different occupational levels, sub-sectors, or regions within a sector may be set).
The Minister must allow interested parties at least 30 days to comment on any intended notice to be published identifying any economic sector or setting any numerical targets before publishing such a notice.
Non-compliance with the numerical targets will result in the ineligibility to enter into contracts with the State
The Bill amends section 53 to provide that the Minister may issue a certificate of compliance if the Minister is satisfied that:
• the employer has complied with the sectoral numerical targets;
• if the employer has not complied with the numerical targets, it has raised a reasonable ground to justify its failure to comply;
• the employer has submitted its report in terms of section 21; and
• the employer has not been found to have breached the prohibition on unfair discrimination in the past three years by the CCMA or a court and the CCMA has not issued an award against the employer in the past three years for failing to pay the minimum wage in terms of the National Minimum Wage Act.
A certificate of compliance is a prerequisite for any entity to enter into contracts with the State. Providing that only employers who have complied with their numerical targets (where such targets have been set) may be issued with a certificate of compliance will result in entities becoming ineligible to be awarded State contracts if they have not complied with the numerical targets set. This is anticipated to be a significant incentive for employers to meet their numerical targets.
Employers with less 50 employees regardless of turnover are not a ‘Designated Employer’
Employers who employ 50 employees or less will no longer be a ‘Designated Employer’ regardless of their annual turnover. Thus, only employers with 50 employees and more will be designated employers and be required to report on their employment equity targets. This amendment is intended to reduce the regulatory burden on employers with smaller workforces from the regulatory provisions dealing with the implementation Chapter III (Affirmative Action) of the EEA.
Extended definition to ‘Persons with Disabilities’
‘Persons with Disabilities’ will be extended to include persons with long-term or recurring, or, mental, intellectual or sensory impairment which, in interaction with various barriers, may substantially limit their prospect of entry into, or advancement in, employment.
These amendments, if they become law in their current form, will have a significant impact on all employers, and particularly those who contract with the State. It will be most interesting to see what sectors the Minister will identify and what targets will be set.
This bulletin was prepared by partner Ludwig Frahm-Arp, senior associate Venolan Naidoo and candidate attorney Sinovuyo Makalima.
Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER