The Department of Employment and Labour has gazetted the Employment Equity Amendment Bill on 20 July 2020. The bill aims to amend some provisions of the Employment Equity Act. This was first announced by the Minister of Labour Thulas Nxesi in July 2019.
The most significant change is that the Minister will now be empowered to determine numerical targets, which has in the past been determined by employers themselves when employment equity plans were drawn up and concluded. These new sector-specific employment targets will be subject to a consultative process with the National Wage Commission. The aim is to remedy the “gross under-representation” of black South Africans, women and persons with disabilities and ensure equitable representation of these designated groups in all occupational levels in the workplace.
The view that sector targets will harm economic growth has been rejected by the government. It has been indicated that target setting is not a new concept, and that the only exception will be that, in future, the government will set these targets and not employers themselves.
An earlier draft version of the bill published in 2018 indicated that the changes were made to speed up transformation in the country. It further states that while the public sector is on par with these targets, the private sector continues to fall short. It has been 20 years since the inception of the Employment Equity Act, and politicians are of the view that the pace of transformation has been too slow.
Concept of Designated Employers to change
One of the other important changes is that employers who employ less than 50 employees will no longer be considered designated employers for the purposes of the act – irrespective of their turnover. This means that these employers will now be exempted from the obligations imposed by the act. This will alleviate a significant administrative burden on many small enterprises.
Employers who wish to submit their tender for state contracts will only qualify in public bids where the Minister has issued a certificate of compliance. This document may only be issued if an employer has complied with the requirements set by the act, and where the failure to do so is justified on reasonable grounds, where the employer has submitted a section 21 report, and where no finding has been made by the CCMA or court within the previous three years that the employer has breached the prohibition of unfair discrimination act or failed to pay employees in accordance with the Minimum Wage Act.
There has been a change in the way statistics had to be submitted from last year. The EEA4 Income differential statement had for the first time requested the following information from employers:
- Reporting on Fixed/Guaranteed annualised salaries per occupational level, race and gender.
- Reporting on variable annualised salaries per occupational level, race and gender.
- Reporting on average annual pay for the top 10% of an organisations workforce.
- Reporting on average annual pay for the bottom 10% of an organisations workforce.
- Reporting on average annual pay for the middle earners of an organisations workforce.
Relative to the demographics of the Economically Active Population (EAP), as defined by the act, Statistics SA has released data indicating the marginal progress in relation to the equitable representation of the designated groups. These deductions have been made from the statistics compiled annually by the Employment Equity Commission (CEE) annual reports, which are based on employment equity reporting done by employers nationally on a periodical basis.
It is too soon to tell whether these amendments will bring about the desired transformational changes as envisaged by the government.
Click here to view the full Employment Equity Amendment Bill.