The Department of Employment and Labour on the 20th of July 2020 issued out an Employment Equity Amendment Bill gazette for parliamentary comment. The bill was set in response to the slow pace of transformation in the workplace and measures to enforce transformation will be implemented in full force.
The Employment Equity bill proposes the following amendments to the Employment Equity Act:
1) Designated Employer
The bill will repeal a clause that classifies employers with less than 50 employees as designated employers upon meeting turnover threshold stated on schedule 4 of the act. Meaning the definition of a designated employer will be an employer with 50 or more employees only if the bill is passed into law. Small non-designated employers will no longer comply voluntarily. This is intended to reduce regulatory burden on small employers in implementing Chapter 3 of the act because all employers will obtain a certificate of compliance without submitting employment equity report.
2) People with Disability
Code of Good Practice on Key Aspects of Disability in the Workplace defines people with disabilities as ‘people who have a long term or recurring physical or mental impairment that substantially limits their prospects of entry into or advancement in employment’. The Employment Equity Act prohibits unfair discrimination against people with disabilities. In the bill persons with disability definition will be extended to include intellectual or sensory impairment.
3) Psychological testing and other similar assessments
The bill is proposing that Section 8 of the EE act of 1998 which states that psychological testing and other assessments of employees must be certified by the Health Professionals Council of South Africa be repealed. The council does not have the capacity or procedures to undertake this certification. In the event of a dispute, the validity of these tests will continue subject to evaluation by the Labour Court.
4) Sectoral targets
Sectoral targets will be set for the purpose of ensuring fair representation of suitably qualified people at all occupational levels in the workforce. Sectoral targets set may differentiate between occupational levels, subsectors, regions, or other relevant factors. Employers will then be required to set up numerical goals in line with the sector targets. The Minister is required to consult with the Employment Equity Commission on the proposed sectoral targets and publish.
There will be engagement with the DTI so that the proposed sectoral Employment Equity targets ARE ALLIGNED with B-BBEE i.e. the various B-B BEE Sector codes.
5) Consultation
Section 16 of the EE Act will be amended to clarify parties the designated employer is required to consult. The proposed amendment states that where there is a representative trade union, the designated employer must only consult with the trade union.
6) Income differentials
Section 27 of the EE act which deals with Income Differentials will be amended to transfer duties of the Employment Conditions Commission to the National Minimum wage Commission in respect of reporting and monitoring of disproportionate income differentials. The Definition of the National Minimum wage commission will be introduced to align with the National Minimum Wage Act of 2018.
7) Employment Equity reporting
Currently the act states that a designated employer must submit a report to the Director-General on the first working day of October .On the proposed bill the clause will be removed and replaced by the clause ‘a designated employer must submit a report to the Director-General once every year on such date and in such manner as maybe prescribed.’
If a designated employer is not able to submit EE reports he must notify the Director -General before the last working day of August in the same year in the bill this will be replaced by ‘ an employer that is not able to submit a report to the director-general within the period prescribed must notify the director-general in the prescribed manner and period giving reasons for its inability to do so.’
As presented above there will no longer be timelines to work-on if the bill passes. Currently some employers are failing to meet deadlines, the question will be what is going to happen if timelines are removed?
8) Compliance Enforcement
Section 36 of the EE Act to be amended to allow a labour inspector to issue a written undertaking to comply on the preparation of an employment equity plan.
Section 37 of the EE Act to be amended to allow the Minister to regulate the way compliance orders are served to employers.
Section 42 of the EE Act which deals with compliance assessment will be amended to add compliance with sectorial numerical targets. Currently compliance is measured against demographic profile of either national or regional economically active population.
From the above this means there will be more enforcement of the act as never before if the bill passes.
9) Promulgation of section 53 of the employment equity act (state contracts)
Section 53 of the Employment Equity Act states that every employer who wants to conduct business with the state must have an Employment Equity compliance certificates. This section has never been promulgated since the inception of the EE Act. State contracts may only be issued to employers that have been certified as being compliant with Employment Equity Act. This is a carrot and stick approach to enforce compliance to companies that want to do business with the state.
Some measures in the bill may not be favourable to employers considering that we are amid a pandemic but at the same time equity must be enforced at the workplace. In conclusion we await feedback on the proposed bill and will keep you informed.
Article by:
Rumbi Vashoma – SDF & EE Consultant