It is that time of year when employment equity compliance should be particularly front-of-mind for employers as the filing season came to an end on 15 January 2021.
In this ENSight, we discuss the possible changes that the Employment Equity Amendment Bill, 2020 may bring about, and which should focus employers' minds in approaching their employment equity goals and targets.
The Bill was first published in the Government Gazette of 20 July 2020. On 19 January 2021, the Portfolio Committee on Employment and Labour invited comments on the Bill. The Bill is open for comment until 19 February 2021.
The Bill seeks to amend a number of clauses in the Employment Equity Act, 1998 ("EEA"). The proposed amendments, include, among others, the following changes:
Definition: designated employers
If the Bill is enacted, employers who employ fewer than 50 employees (regardless of their turnover) will no longer fall within the definition of "designated employer" and will not be required to comply with Chapter III of the Act relating to affirmative action.
Definition: people with disabilities
The definition of "people with disabilities" will also be amended in line with the definition in the UN Convention on the Rights of Persons with Disabilities, 2007 which reads, "includes people who have a long-term or recurring physical, mental, intellectual or sensory impairment which, in the interaction with various barriers, may substantially limit their prospects of entry into, or advancement in, employment and 'persons with disabilities' has a corresponding meaning".
Psychological testing: HPCSA Certification
The Bill removes the requirement that physiological testing and similar assessments of employees be certified by the Health Professions Council of South Africa.
As it stands, designated employers, when determining numerical goals, have regard to the demographic profile of the economically active population. The Bill introduces a provision that empowers the Minister of Employment and Labour to determine sectoral numerical targets. The minister may identify national economic sectors and, after consulting the National Minimum Wage Commission for the purposes of ensuring the equitable representation of suitably qualified people from the designated groups at all occupational levels, set numerical targets for any national economic sector. These targets may differ across occupational levels, sub-sectors, regions or based on other relevant factors. The amendment if effected will require that an employer, in setting its numerical goals, comply with any sector target. Employers' employment equity plans must also address the numerical targets referred to above.
Trade union consultation
Where a representative trade union is present, a "designated employer" must consult only with such union and not its employees or their nominated representatives, in relation to the preparation and implementation of its employment equity report (on matters requiring consultation in terms of section 17 of the EEA).
Compliance certification: state contracts
The Bill requires a certificate to be issued to employers, confirming their compliance with the provisions of the EEA, as a prerequisite for contracting with an organ of state. The minister may only issue such certificate once satisfied that the employer has complied with any numerical targets applicable to the employer, or if it has failed to do so, the employer has a reasonable ground to justify such non-compliance; and within the previous three years there has been no finding by the Commission for Conciliation, Mediation and Arbitration or a court that the employer breached the prohibition on unfair discrimination in terms of the Act or failed to pay the minimum wage
Powers of inspectors or any person acting on behalf of a labour inspector
The scope of a labour inspector's power has been extended to request and obtain a written undertaking from a designated employer requiring it to prepare an employment equity plan.
The main thrust of the amendments is to increase substantive compliance with the objects and provisions of Chapter II of the EEA which deal with affirmative action measures. Transformation, since the inception of the affirmative action provisions in the EEA, has been slow according to the Commission for Employment Equity. The introduction of these amendments, if unaltered by public comment, could see a move away from the historically "tick-box" approach to employment equity compliance towards an increased pace of transformation.
The Department of Employment and Labour's compliance audits, which will now be underway for the reporting season which ended on 15 January 2021, could be the last of their kind. Should the amendments in the Bill be enacted unchanged, we envisage closer scrutiny into the substance of the employment equity plan and report and a harsher approach to the sufficiency of designated employers' efforts to transform their workforce.
With this in mind, designated employers are encouraged to take a critical look at their transformation efforts and ready themselves for the proposed amendments.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.