Less control for Designated Employers will affect compliance

Date: 22 Jul 2019

Imminent Employment Equity amendments will affect your business

With just over 4 months to the start of Employment Equity reporting season, now is the time for designated employers to focus on their  energies on the progress of Employment Equity within their companies. Amendments were published in the form of Bill 41922 in October 2018, which the Employment Equity Commission’s Mr Sunil Sewpersad, Senior Labour Inspector (Department of Labour), has confirmed will come into effect “any minute now”. While some of the amendments are small and will not carry too much impact for your business, others are quite significant and may have a far-reaching impact on your business and the status of your B-BBEE scorecard. These include: The Department of Labour setting your company’s goals and targets, based on Sector, the level of consultation which your Employment Equity Forum has, pertaining to the analysis and reporting processes, reducing disproportionate income differentials, as well as changing the way in which the compliance to Employment Equity will be verified.

Lack of commitment to Transformation

Former Minister of Labour, Mildred Oliphant, announced in September of 2019, that the pace of transformation in the workplace over the last 20+ years since its inception has been minimal and as such the Department would be responding by introducing a “Carrot and stick” approach. By this they mean that the Dept will be taking control of how Employment Equity is implemented in business, limiting the influence of Employers over their own Employment Equity Plans and providing consequences for lack of compliance.

Diversity promotes innovation 

Procedural compliance to the Employment Equity Act is easy to achieve. However, substantively, Employers are failing dismally. Transformation in the workplace replies on employers recognising that by embracing diversity and valuing the varied and rich backgrounds of each employee and what they can contribute within the company, they are promoting a working environment where innovation can thrive. Everyone knows that with Industry 4.0 this kind of approach can propel companies to keep up with the fast-paced and changing world of business and innovation. Diversity has a direct impact on the success of companies and drives change.

Summary of amendments

The following amendments are listed:

  1. Changes to some definitions
  2. Amendment to Section 8 affecting Psychological testing and other similar assessments
  3. Deletion of Section 14
  4. Insertion of Section 15A – Establishment of sectoral targets
  5. Amendment of Section 20 regarding numerical goals
  6. Amendment of Section 21 regarding manner of submission
  7. Substitution to Section 27 regarding compliance with National Minimum Wage, Sectoral Determinations, Collective Bargaining and Skills Development legislation, aimed at decreasing income differentials
  8. Substitution in Section 36 relating to circumstances for which the Department may issue a written undertaking, including failure to comply to sections 16, 19 and 20
  9. Substitution in section 37
  10. Substitution in subsection (1) of Section 42 regarding assessment of compliance
  11. Amendment to, and insertion within Section 53 regarding verification of compliance, reasonable grounds for non-compliance and provisions under-which compliance may / may not be granted.
  12. Repeal of Section 64A
  13. Repeal of Schedule 4
  14. Deletion of footnotes

For assistance with analysis of your current Employment Equity Plan and implementation of Employment Equity processes and procedures, contact KZNEIA for a consultation. Or attend the KZNEIA Impact Session, which will be held on August 7th 2019 to understand more.