South Africa’s major ‘transformation’ law takes a step forward

2 December 2020

Parliament’s Portfolio Committee on Employment and Labour has asked for public comment on the proposed Employment Equity Amendment Bill.

The bill will empower the minister to regulate the setting of sector-specific employment equity targets across most of South Africa’s major industries.

Under the legislation, the Employment and Labour minister will first publish a notice in the gazette identifying national economic sectors which will be impacted.

After consulting the individual sectors, and on the advice of the Commission for Employment Equity (CEE), the minister may set numerical employment equity targets for any sector or part of a sector by notice in a gazette.

The department said that the notice may set different numerical targets for different occupational levels, sub-sectors or regions.

The bill stipulates that a draft of any notice that the minister proposes must be published in the gazette and interested parties must be permitted at least 30 days to comment.

Some of the factors which the minister will consider when setting sector targets include:

  • The qualification, skills and experience required to be employed in a particular occupational level;
  • The rate of turn-over and natural attrition in a sector;
  • Recruitment and promotional trends within a sector.

Enforcement

Bradley Workman-Davies, director at law firm Werksmans Attorneys, said the bill provides for labour inspectors which will assess compliance with sectoral targets.

This inspector will also be able to issue a compliance order to a designated employer which has a non-compliant Employment Equity Plan, he said.

“In other words, if the Employment Equity Plan does not contain numerical goals set for the period of the plan, which can be for a period of not less than one and not more than five years), the labour inspector can issue the compliance order.”

Workman-Davies said that whether these goals can be enforced is still questionable, as these amendments do not seem to propose any consequences for an employer which sets out targets, but fail to achieve them for justifiable reasons.

“For example, if the employer were to set compliant numerical targets over the five year period of its plan, but could demonstrate at the end of that period that suitably qualified persons could not be hired into service, it would still be compliant.

This is however not the case of any employer which does, or wishes to do business with the state.

Why the bill is being introduced

In a February 2020 interview, the Department of Labour’s Thembinkosi Mkhaliphi said that there has been limited transformation since the Employment Equity Act was first introduced 21 years ago.

“The law then moved from the premise that there should be no involvement of government enforcing transformation in terms of target setting. It left it to companies themselves to set their own targets and goals,” he said.

Government’s role then was to monitor these targets.

“We realised that over the last 21 years, nothing has happened that should have happened and no real significant change has taken place. There has been very limited change and if we continue to go at the rate that we’re going, it will take another 100 years before we really transform,” he said.

Asked whether the sector targets could stifle business, Mkhaliphi said current legislation states that employers can set their own targets and that the introduction of government setting the targets is not new.

“Target setting is not new, except that now government comes into the picture in setting the target. The principle of setting targets is not new, therefore it can’t be said that this is a drastic change that will affect business.”

However, he noted that not everyone will be happy with the proposed changes.

The closing date for written submissions on the bill is 19 February 2021. You can find out more about the submission process here.

https://businesstech.co.za/news/wp-content/uploads/2020/12/EEA-Bill.pdf

Source: Businesstech at https://businesstech.co.za/news/business/453780/south-africas-major-transformation-law-takes-a-step-forward/