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Karl Gernetzky - 13 April 2023

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President Cyril Ramaphosa on Wednesday signed the Employment Equity Amendment Bill of 2020 into law, which will, among other things, empower the Department of Labour to set new transformation targets for industries, including regional ones, while also sparing many smaller businesses from the need to report annually.

The bill amends the Employment Equity Act of 1998, which was implemented with an aim of preventing discrimination in the workplace and to address SA's history of structural exclusion on the basis of race.

The new measures will promote diversity and equality in the workplace and require enterprises to develop transformation plans, while compelling labour inspectors to inspect workplaces and to issue employers with compliance orders, the Presidency said in a statement.

Trade union Solidarity said on Thursday it was gearing up for a "huge legal battle" over the bill, which it said was unconstitutional, will keep businesses small, and cost thousands of jobs.

"If there is no intervention, this government will carry on with its policy of ineffective centralisation and it will even go so far as to take over the human resources function in organisations," Solidarity CEO Dirk Hermann said in a statement.

The DA said on Thursday it would join Solidarity's legal action, maintaining that the act wouldn't bring about transformation, but would rather enrich a number of politically connected individuals, while it would also reinforce the racial categorisation of the past.

Business Unity SA (BUSA), meanwhile, welcomed the step, given that it ended a period of uncertainty but also formed part of the transformation agenda, and would help affirm social dialogue through meaningful dialogue on sector targets.

BUSA, however, said it would continue to engage with the Department of Labour, given that some areas of the bill are still "problematic".

This includes "concerns around the fragmentation of policy objectives and enforcement mechanisms within government, with some companies, because of their sectors, expected to comply with different transformation targets administered by different government departments or entities".

The amended act allows the minister of employment and labour to set regional targets given that racial diversity in SA often has regional differences, the Presidency said. The law also requires employers with more than 50 employees to submit employment equity plans for their companies, spelling out how they will achieve these targets. Employers are then required to submit annual reports to the Department of Employment and Labour.

According to law firm Cliffe Dekker Hofmeyr, the amendment significantly relieves the administrative burden on these smaller employers, which can still seek compliance certificates if they are looking to do business with the state.

The firm said the new changes in terms of allowing for setting numerical targets was, importantly, a discretionary power which requires consultation with the relevant sectors and advice of the Employment Equity Commission.

"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," it said.

‘Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER’.


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