South Africa’s new, controversial transformation legislation will have far-reaching effects on businesses and workers, and President Cyril Ramaphosa has just signed the Employment Equity Amendment Bill of 2020 into law.
The new legislation vest extensive authority in the minister of Jobs and labour to establish sector-specific employment equity targets. In addition to creating employment equity plans, reporting annually, and obtaining compliance certifications, businesses will need to demonstrate compliance with state legislation if they want to conduct business in the state.
Companies that are subject to the new regulations fall under the category of “designated employers,” a term that has been expanded under the new laws. Companies with more than 50 employees are now considered designated employers regardless of annual revenue. Even if a designated employer has no plans to conduct business within the state, they are nevertheless required to follow all applicable laws.
Fines and Other Penalties May Be Imposed for Lawbreaking
Companies are already expressing anxiety over the new legislation, and labour unions and other corporate interest groups are preparing legal challenges. The amendments have been passed into law but have not taken effect just yet.
Bowmans, a law company, has provided a summary of the new laws and their current status, including a discussion of some of the more important provisions. Some of the most frequently asked questions by employers have been addressed by Melissa Cogger and Talita Laubscher.
Have the Changes Been Implemented Yet?
On April 6, 2023, the President signed into law the Employment Equity Amendment Act, 2022. The changes have not yet taken effect. The President will announce the effective date in the Official Gazette. The Department of Employment and Labour had stated that the changes will go into effect on September 1, 2023, however, this has yet to be confirmed.
When Will We See the Sectoral Goals Released?
The Minister of Employment and Labour now has the authority, following consultation with the relevant sectors, to set and publish sectoral targets under the revised Employment Equity Act. The Minister has not yet made a final decision, had a consultation, or released sectoral targets.
Several sectors’ stakeholders were consulted in 2021 and 2022, and sector targets were discussed; however, the Amendment Act mandates a multi-step procedure before sectors are selected or sectoral targets are determined. Some examples are:
- Provision of at least 30 days for interested parties to comment on a draught notice outlining particular national economic sectors;
- The Minister must communicate with the affected industries and seek guidance from the National Minimum Wage Commission after the sectors have been published in the Government Gazette.
- After giving interested parties at least 30 days to weigh in on a proposed notice of numerical targets, the Minister will issue it in the Government Gazette.
- After receiving feedback, the Minister will announce the sectoral numerical targets in a notice published in the Government Gazette.
- Even if stakeholders have already been contacted, the Department must conduct new consultations and cannot apply the existing ones retroactively without risking a judicial challenge.
Are the Sectoral Goals Easy Enough for Businesses to Implement?
Instead, a designated company must consult with employee representatives during the planning and execution of its employment equity strategy and during its assessment of the extent to which members of designated groups are underrepresented at different occupational levels.
For this reason, it’s crucial to solicit feedback before deciding on specific numerical targets, timelines, or strategies for increasing the proportion of underrepresented groups in the workforce across all occupational levels. A designated employer’s numerical targets are a forecast of the workforce demographics it hopes to attain by the end of its current employment equity plan.
A designated employer’s numerical targets are the results it expects to see by the conclusion of the reporting period in question (often one year). The revised quantitative objectives must be in line with any applicable sectoral target for the designated employer. Thus, in the future, designated employers will align their quantitative aims and targets with the sectoral targets.
Timelines for each year of the plan’s duration should be included in an employment equity plan. The duration of the employment equity strategy must be at least one year but no more than five.
Throughout the plan’s implementation, the designated employer must have systems in place to track progress and assess success. A selected employer can be in the middle of implementing its present employment equality plan when the sector’s targets are released.
The revisions necessitate that designated employers update their plans to reflect the new requirements, such as giving due consideration to industry benchmarks when establishing quantitative objectives.
If the Company Doesn’t Reach Its Goals, What Happens?
According to the Employment Equity Act of 1998, before any penalties are levied, a designated employer will be given a chance to explain why they failed to meet numerical targets in front of the Director-General and the Labour Court.
Justifiable reasons for not meeting targets are outlined in the proposed regulations and include, among other things, a lack of qualified candidates from the designated groups, the inability to promote from within, mergers and acquisitions, transfers, and the effects on business economic activities.
About The Author:
Lebohang Mokoena is an award-winning journalist with over a decade of experience in business reporting. She specializes in innovation and technology in South Africa and beyond. Lebohang holds a Master’s degree in Journalism and has previously worked for top-tier publications before joining Africa Nova.
