With the continuous ever-changing times with employment law in South Africa, staying up to date with the latest amendments is crucial for both employers and employees. One such recent amendment that holds significant importance is the revised Employment Equity Act.
President Cyril Ramaphosa has signed into law the Employment Equity Amendment Act 4 of 2022. The Act amends the Employment Equity Act of 1998 (Act 55 of 1998) with new measures to promote diversity and equality in the workplace.
Having now been gazetted, hence coming into effect on the 01st of September 2023 at the start of the reporting period, the amended Employment Equity Act introduces several noteworthy changes that demand attention, and that which will reshape employment practices in South Africa.
It has been designed to foster inclusivity and equality in the workplace, with aim to further address historic disparities and promote fair representation across various sectors.
The amendments restrict the application of certain sections of the Employment Equity Act to a reduced group of employers, relieving the administrative burden on smaller employers.
The amendments introduce sectoral numerical targets to ensure equitable representation of historically disadvantaged groups based on race, gender, and disability at all occupational levels in the workforce.
Let us explore these key aspects of the amended Employment Equity Act, so as to shed light on its implications and also provide valuable insights to employers.
Here's how the amendments will affect employers:
Designated Employer Status: The amendment to the EEA brings about a change to the definition of “designated employer” to restrict the application of these sections to a reduced group of employers and relieve some of the administrative burden on smaller employers. With the revised definition, employers will be considered designated employers for affirmative action purposes only if they employ 50 or more employees. This change means that smaller businesses with fewer than 50 employees will no longer have the same obligations and reporting requirements as larger organizations. However, it's important for employers of all sizes to review their current status and ensure compliance with the revised criteria.
Sector-Specific Targets: One of main objectives of the amendments introduced is to empower the Minister of Labour and Employment to, among other things, identify and set employment equity numerical targets for each national economic sector. This means that businesses operating in these sectors will be subject to specific equity goals and transformation objectives. Employers should stay updated on the targets relevant to their sector and take proactive steps to meet them. The purpose of the numerical targets is to ensure equitable representation of suitably qualified people from historically disadvantaged groups based on race, gender, and disability at all occupational levels in the workplace.
Employment Equity Plans: The regulations provide for the setting of proposed five-year sector targets (EE Plan) for the various economic sectors in terms of population groups and gender for the four upper-occupational levels. These are top management, senior management, professionally qualified and skilled levels and for employees with disabilities.
Certificate of Compliance: The introduction of the certificate of compliance requirement has significant implications for employers seeking agreements with the State. To enter into contracts with government entities, designated and non-designated employers must obtain a certificate of compliance issued by the Department of Employment and Labour. This certificate signifies adherence to employment equity obligations, including compliance with sectoral numerical targets, submission of annual employment equity reports. Employers must ensure they meet these criteria to access opportunities for state.
People with Disabilities: The definition of “people with disabilities” is substituted to align with the definition in the United Nations Convention on the Rights of Persons with Disabilities, 2007. The amended definition includes within the meaning of “people with disabilities”, “people who have a long-term or recurring physical, mental, intellectual or sensory impairment which, in interaction with various barriers, may substantially limit their prospects of entry into, or advancement in, employment”. This enhanced definition accords with a more expansive international understanding of what constitutes disabilities.
Trade Union Involvement: An amendment to section 16 of the EEA clarifies the consultation process between a designated employer and its employees. Where there is a representative trade union the designated employer must only consult with that trade union, and not with its employees. The consultations relate to the implementation of an employment equity plan, the analysis conducted by a designated employer to identify employment barriers which adversely affect people from the designated groups, and the content and submission of the employment equity report.
It is essential to understand that the amended Employment Equity Act carries significant implications for designated employers, particularly those with larger workforces, as well as employers seeking to engage in business with the State. These implications necessitate a thorough review of employment equity plans by designated employers to ensure alignment with any sectoral targets published by the Minister. Should there be a misalignment, it is advisable for designated employers to provide reasonable justification and corrective measures within their employment equity plans.
To monitor the implementation of sector targets, the Department of Employment and Labour (DoEL) will introduce a new online assessment system. This system will assess employers' progress towards meeting their targets and flag any shortcomings.
Non-compliance to the EE Act and Amendment can result in legal repercussions, fines and reputational damage.
We recognize the importance of keeping abreast of these amendments and their potential ramifications. We at DRG are therefore dedicated to helping businesses navigate the complexities of the new legislation.
To chat further, if you require more guidance on your submission, you can contact.
DRG - HR Specialist with expertise in Employment Equity Reporting
DRG – HR & Compliance Best-Practice Specialist