The Employment Equity Amendment Bill shall prescribe amended sectoral targets
The Employment Equity Amendment Bill shall prescribe amended sectoral targets. The Bill (“Bill”) is in its final stage of promulgation as it has been sent to the President for signing. The Bill will amend the Employment Equity Act 55 of 1998 (Act).
Department of Employment and Labour (DEL) labour policy and industrial relations acting deputy director-general (DDG) Thembinkosi Mkalipi says the signing of the Bill by President Cyril Ramaphosa is imminent, with this expected to happen between now and the beginning of 2023.
According to the Director of Employment Equity, all current employment equity plans will fall away and will be replaced with new employment equity plans in terms of the Bill.
The EE Amendment Bill 2020 was passed by Parliament (National Assembly and National Council of Provinces) on May 27, but must still be assented to and signed into law by the President.
According to Cliffe Dekker Hofmeyer attorneys, several additional sections have been amended for alignment with section 15A and in this regard, section 20 has been amended by the insertion of section 20(2A). This amendment requires that the numerical targets that are set out in a designated employer’s Employment Equity Plan, must align with the applicable sectoral targets as set by the Minister of Employment and Labour (“the Minister”). The National Council of Provinces passed the Employment Equity Amendment Bill on Tuesday, 17 May 2022.
The major changes brought about by the Bill are as follows:
- The definition of a “designated employer” has been amended. According to the current Employment Equity Act, an employer that employs less than 50 employees ( which is deemed as a small businesses), but has a total annual turnover that is equal to or above the applicable annual turnover contained in Schedule 4 of the Act, is deemed to be a “designated employer”.
Designated employers must comply with Chapter 3 of the Act (which deals with affirmative action measures) and the exclusion of employers that employ less than 50 employees means that these employers will not be required to have an employment equity plan, submit reports, etc.
In this regard it is noteworthy that section 14 of the Act, which permits for voluntary compliance with Chapter 3, has been repealed, says attorneys Cliffe Dekker Hofmeyer.
- Section 15A is an additional section to the Act which gives the Minister the power to:
- Identify national economic sectors, which in terms of the Bill are defined as “an industry or service or part of any industry”.
- Set numerical targets for specific economic sectors to ensure equitable representation of suitably qualified people from designated groups at all occupational levels in the workplace
- Section 42 of the EE Act, which refers to the assessment of compliance with the Act, has been amended by the insertion of section 42(1)(aA). This amendment essentially has the effect of adding the requirement of alignment with the Minister’s sectoral targets in so far as compliance with the Act is concerned.
- The amended section 53 requires a designated employer to set its numerical targets in accordance with the applicable sectoral targets determined by the Minister as a prerequisite for a compliance certificate to permit contracting with the state. This means that organisations that do businesswith the State will have to be in good standing when it comes to compliance with EE.
Mkalipi cautions that even those businesses that do not necessarily do business directly with the State will have to comply with the law.
Engagements on the setting of sector-specific EE targets started from June 2019 and will be completed by the end of September.
Mkalipi says the DEL will, in due course, publish the list of sector targets for public comment and “the implication for employers is that if you have an EE plan in place it will be affected by the setting of targets and you will have to revisit your targets.”
According to Mkalipi a new EE online assessment system that will allow employers to report on their planned targets will be created to monitor the implementation of sector targets, with the assessment to be done yearly. He notes that if employers are not meeting their set target, they will need to have justifiable reasons for this.The DEL will continue to visit workplaces to verify if information submitted is correct and warns warns that if what has been submitted is not genuine, a Certificate of Compliance will be withdrawn and penalties will be imposed
