The Future of Employment Equity

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The Employment Equity Amendments, previously known as the “Proposed Employment Equity Amendments” are now a reality. As Designated Employers have come to find out, the bill for the amendments to the Act has been passed into law on the 17th of May 2022 and is awaiting signature from the President, with an effective implementation date of 1 of September 2023.

The Employment Equity Act amendments bring about change to the classification of a “Designated Employer” and the need for an Employment Equity Compliance Certificate being introduced. However, the big shift in focus comes in the form of the Minister, through consultation with the Commission for Employment Equity (CEE) having overriding power on the setting and regulation of sectoral targets. Upon closer inspection of these amendments, one could see similarities to another Act within South Africa, the B-BBEE Act, through having predetermined targets to achieve across the various elements on the scorecard, specifically the Management Control element, in which Employment Equity forms part of and the need for a certificate to prove compliance. The Employment Equity Act however has a far greater affect, as it is enforceable by law.

Before we jump into the future of Employment Equity and your business, we need to understand the Department of Employment and Labour’s (DoEL) view on transformation within South Africa and why these changes have come about: The Employment Equity Act has been in existence since 1998. The main purpose of Employment Equity has been to provide equal opportunity and fair working environments for all races and genders, considering past discriminatory laws and the impact they’ve had on people from designated groups. Where there are policies, practices or procedures that adversely affect people from designated groups, affirmative action measures should be implemented to remove any unfair discrimination within the work environment. For just over 22 years employers have had direct control over transformation within their business, with the amendments around the corner, that will change.

A clear indication of the DoEL’s objectives can be found in the 22nd Employment Equity Annual report which covers the period from 1 April 2021 to 31 March 2022. In this publication by the CEE, it contains the key highlights for the above period under review and reflects on the strategic objectives covering a 5-year period for both Government and the DoEL, this gives us an indication on the challenges faced with employers having sole discretion in the speed and way transformation occurs within South Africa considering the date of the initial implementation of the Act and the current situation.

The key objectives of the CEE stated in the report in addition to promoting the government’s efforts in speeding up economic growth and transforming the economy to provide decent work opportunities, reflect below:

  • To provide sound and well researched advice to the Minister on the EEA and its policy tools.

  • To mobilise stakeholders to enable employment equity compliance.

  • To facilitate the empowerment of workers to enforce their rights as espoused in the EEA.

  • To empower employers to drive the transformative journey.

  • To monitor, evaluate and report on employment equity.

In the DoEL and CEE’s extensive analysis conducted of the country’s Employment Equity reports from 2019 to 2021, we can identify recurring themes in which further promote the DoEL’s motives for implementing such changes to the current EE Act. The findings across all occupational levels except Unskilled/Defined Decision identified a gross overrepresentation compared to their EAP of the White and Indian populations especially from Top Management through to Professionally Qualified/Middle Management, the same occupational levels depict the African population as being grossly underrepresented in both male and female representation compared to their EAP statistics. Another interesting find on these more senior occupational levels is the high representation of Foreign National employees which has remained consistent throughout the measured period. The more Junior occupational levels and entry level positions have a low representation of White and Indian populations, whereas there is a high African population present in these more junior and entry level occupations. A common and concerning theme throughout all occupational levels would be the representation of permanent disabled employees, or a lack there of. A concerning statistic when taking into consideration the amount of training providers and learners enrolled for disabled learnerships throughout South Africa and in which employers are benefiting from for B-B-BBEE purposes.

Over and above the workforce component of Employment Equity and the movement thereof, the DoEL states their concerns regarding the extent of employers still reporting barrier’s indicating that unfair discrimination across policies, procedures and practices still exist. It is the view of the CEE that these statistics are a “true reflection” of why transformation in South Africa is slow. The report indicates that there are far too many organizations that indicate barriers that are still not resolved which adversely affect people from designated groups or based on the data where barriers are identified affirmative action measures are not indicated showing a lack of proper analysis and implementation of corrective measures within the organisation. As stated in the report “If employers are not identifying barriers as having impact to employment of designated groups, then they cannot commit to any corrective measures”. Having reviewed a few of the major indicators that represent a slow progress to transformation within South Africa, the birth of new amendments comes into effect for the Employment Equity Act, based on those key barriers which depict unfair discrimination which affects the principle of equal work for equal value one could understand the proposal to have the remuneration section for income differentials being reviewed by not only the DoEL but also the National Minimum Wage Commission when reporting due to the large wage gap reported on in 2021.

Having taken into consideration the DoEL and CEE’s view on why transformation has been a slow process within the private sector over the last 22 years of the Employment Equity Act’s existence, there are contributing factors from the other side to which implementing Employment Equity is impacted. Factors such as infrastructure supporting economic stability and growth resulting in job losses, education at a grass roots level and the accessibility to everyone, putting greater pressure on the private sector to develop suitably qualified individuals and the risk of competitors headhunting the employees with the relevant skills. One could argue that from either side we are pointing the finger and therefore no one is taking accountability in driving what we as South Africa stand for as a rainbow nation.

As employers and more so designated employers, the amendments to the Employment Equity Act can be daunting and rightly so, the focus and spotlight the amendments place on designated employers will be intensified as well as enforced more than ever before thus requiring a much more strategic approach to the implementation and monitoring of Employment Equity. No longer will only reporting to the DoEL suffice or be used as a measure to prove compliance with the Act, but rather the development of a strategy to achieve your sectoral targets over the 5-year duration in a measured approach in the form of a comprehensive Employment Equity Plan with much more scrutiny placed on the reasons as to why an organisation has not achieved their targets.

Designated employers with the challenge to find suitably qualified candidates to fill vacancies or without the opportunity for job creation, which as we established from the CEE’s publication is a large portion of South Africa, will need to place larger emphasis on their current workforce, ensuring their Employment Equity Plan is centred around the upskilling of their employees, making use of governments funding opportunities and dedicated training plans through their relevant SETA’s (Sectoral Education and Training Authorities) and SARS through occupationally directed qualifications and Learnerships where the employer can still enjoy the benefits for those not employed by them to create pools of suitably qualified people within their sector, ensuring that existing employees are retained and developed through succession planning, providing opportunities for promotions and replacing those employees at a level in which the organisation can again run through the cycle. Another focus area of succession planning will be that for the purposes of natural attrition, the importance thereof for upskilling existing employees remains imperative, with experience and skills that leave our businesses replacing will come at a higher cost, through recruitment and sourcing fees as well as the length of time it takes new employees to be onboarded, where existing employees understand the nature, culture, and values of your business.

As previously mentioned, the representation of disabled employees is a major concern to the DoEL and features among the changes included in the amendment bill for targets relating to the employment of people with disabilities. All employers are encouraged to revise their existing EEA1 document completion procedures and encourage employees, new and existing, to be honest and forthcoming regarding any of the disabilities, mental or physical. Where there are challenges regarding employees identifying their disability status, an employer should review their diversity and inclusivity programs and ensure there is awareness distributed regarding disabilities and the acceptance and inclusion for all within their workforce.

Through the insights the DoEL and CEE which has provided us with their view of transformation within South Africa, the monitoring and enforcement of the newly amended Employment Equity Act will be more stringent and the reasons for not achieving the objectives and targets of the relevant sector will not suffice as they have so easily in the past, all designated employers will need to shift their mindset in how they approach Employment Equity in the future, requiring a much more strategic and measured approach to their workforce and the elimination of unfair discrimination more so focused on the principle of equal pay for work of equal value.

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