SOUTH AFRICA: CONTROVERSIAL CHANGES TO THE EMPLOYMENT EQUITY ACT SIGNED INTO LAW
President Cyril Ramaphosa has signed the Employment Equity Amendment Bill of 2020 into law. It amends the Employment Equity Act 55 of 1998 (Act). The effective date is still to be proclaimed in the Government Gazette.
One of the controversial amendments to the Act is the Minister’s power to determine sectoral numerical targets for designated employers. Currently, a designated employer’s employment equity plan must include numerical goals to achieve equitable representation of suitably qualified people from designated groups.
The numerical goals are a designated employer’s projection of what it will achieve in relation to its entire workforce at the end of its current employment equity plan. ‘Goals’ and ‘targets’ rather than ‘quotas’ are applicable when a designated employer is considering the implementation of its employment equity plan.
The amendments require that numerical goals set by a designated employer must comply with any sectoral specific numerical target that applies to that designated employer.
In addition, companies seeking to do business with the State will be required to submit a certificate from the Department of Employment and Labour confirming that they comply with the Act and its objectives. This necessarily entails compliance with the relevant sectoral targets unless there are reasonable grounds to justify a failure to meet the sectoral targets.
It is likely that the implementation of sectoral targets and the inability to meet them will end up in the courts.
Another significant amendment is the change to the definition of a designated employer. The consequence of this will be that employers who have less than 50 employees will not be considered designated employers, regardless of their turnover. The intention behind this is to reduce the regulatory burden on small employers in relation to implementing their affirmative action obligations in terms of Chapter 3 of the EEA.
Click here to see our previous newsflash on the Employment Equity Amendment Bill.