Excited work employees in an office

Complying with employment equity makes business sense

Employment Equity is a legal and business imperative.

What is Employment Equity?

  • Its purpose is to promote equal opportunity and fair treatment in the workplace by elimination of  unfair discrimination
  • To redress the disadvantages of the past experienced by designated groups by implementing affirmative action measures to ensure equitable representation in all occupational levels in the workplace.

There are benefits with compliance with the Employment Equity Act

South Africa is a diverse country that why it’s called “Rainbow nation”, and it’s logical that companies must appoint a diverse workforce. Products that are developed and services provided by companies will therefore be diverse.

Having a diverse workforce will ensure productivity and different ways of creativity. This can bring a lot of different ideas and understanding of the diverse nature of our market.

Complying with the Employment Equity Act will also highlight the company’s reputation to potential employees, clients/customers, and investors. The diverse workforce will attract potential employees especially designated groups (Black, women and persons with disabilities), looking for a company that creates a positive work environment.

The diverse workforce will also attract potential clients/ customers as their needs will be met through language, culture, tradition, etc. Workforce profiles of companies need to mirror their clients/customer base.

A diverse workforce will create or promote communication with clients or customers, enabling the company to promote its brand, products, or services to the needs of the diverse community/market. This will, in turn, create growth for companies and good standing within the community.

Compliance with Employment Equity, if done correctly, will impact the scorecard of BBBEE as its one of the five pillars. BBBEE ranking is vital for parastatals, government tenders, and maintaining supplier status.

What is compliance with the Employment Equity Act?

The act has two chapters that employers must comply with:

  • Chapter II-Prohibition of unfair discrimination
  • Every employer must take steps to promote equal opportunities in the workplace by eliminating unfair discrimination in any employment policy or procedure.
  • Unfair discrimination is prohibited whether directly or indirectly against any employee in any employment policy or procedure on one or more of the listed or unlisted grounds, including race, gender, sex, pregnancy, marital status, family responsibility, ethnic or social origin, sexual orientation, age, disability, religion, HIV status, conscience, belief, political opinion, culture, language, and birth or on any arbitrary ground.
  • Discrimination on any arbitrary ground affecting human dignity constitutes unfair discrimination 
  • The following is not unfair discrimination:
  • To take affirmative action measures consistent with the Employment Equity Act; orDistinguish, exclude, or prefer any person based on the inherent requirement of the job
  • Harassment of an employee is a form of unfair discrimination and is prohibited
  • The Employment Equity Act also prohibits medical and psychometric testing unless the test(s) are scientifically valid (in the case of psychometric testing), inherent to the requirements of the job functions and are applied fairly to all employees
  • Dispute concerning this chapter must be referred to the CCMA within a period of six months
  • Burden of proof
  • In the case of listed and unlisted grounds burden of proof lies with the employer to prove fairness
  • In the case of arbitrary grounds, the complainant must define the ground and must have the burden of proof.
  • Chapter III-Affirmative Action
  • This chapter applies to designated employers only (employers who employ 50 or more employees)
  • The following are the duties that a designated employer must comply with:
    • Consult with the employees-section 16
    • Conduct an analysis-section 19
    • Prepare an Employment Equity plan-section 20
    • Report yearly to Department of Employment and Labour on the progress made on the EE plan-section 21
  • Matters for consultation-section 17
    • Conducting of the analysis on the workforce, policies, procedures and work environment – chapter 19
    • Preparing and implementing Employment Equity Plan based on the analysis conducted – section 20
    • Reporting on the implementation of the Employment Equity Plan -section 21
    •  
  • The employer must disclose information relevant to matters for consultation-section 18
  • The EE Report must be published in the annual financial statement-section 22
  • The employer must keep records relevant to the compliance of the Act-section 23
  • The designated employer must appoint or assign a Senior EE Manager who reports directly to the CEO-Section 24

Essential aspects to consider in achieving Affirmative Action Measures per Employment Equity Act

  • Complying with the Employment Equity Act is not only a numbers game but also to eliminate or address barriers or challenges with Affirmative Action measures in your policies, procedures, and work environment.
  • Suitably qualified designated groups must be appointed. Suitably qualified means any one of, or any combination of a person’s
    • Formal qualification
    • Prior learning
    • Relevant experience
    • The capacity to acquire within a reasonable time, the ability to do the job
  • Designated groups are Africans, Coloureds, Indians, Women and Persons with disabilities who are citizens of the Republic of South Africa by birth or descent, or they must have become citizens of the Republic of South Africa through naturalisation before 27 April 1994.
  • Designated groups exclude Foreign nationals in the implementation of the Employment Equity Plan. The hiring of foreign nationals will also negatively impact the employer’s numerical goals and targets in their employment equity plans and the BBBEE scorecard. Foreign nationals should only be employed where there are no South African citizens available who can perform the role, and proof thereof must be available.
  • Persons with disabilities are also part of the designated groups and must form part of the numerical goals and targets. Persons with disabilities are defined in the Employment Equity Act as
  • Persons who have a long-term or recurring physical or mental impairment which substantially limits their prospects of entry into, or advancement in, employment.’

Non-compliance of Employment Equity Act

The Director-General of Employment and Labour may refer a company that is non-compliant to the Labour Court to impose a fine/penalty.

These fines/penalties can be anywhere between R1.5 million and up to 10% of an employer’s annual turnover, depending on the nature and frequency of the non-compliance”.

  • Sections that the Director-General may apply directly to the Labour Court are:
  • Section 20- Failure to prepare or implement the Employment Equity plan.
    • Section 21- If an employer:
      • Fails to submit a report
      • Fails to notify and give reasons to the Director-General for not being able to report
      • Has notified the Director-General for not being able to report, but the reasons given were false and invalid.

Contact us today if you are concerned about the state of your EE plan. We can help you.

Article By: Pertunia Sele, EE Specialist

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