How government will ‘punish’ businesses to enforce transformation in South Africa

Minister of Employment and Labour, Thulas Nxesi, says that his department plans to introduce harsh measures against employers who do not meet employment equity targets.

In August, Nxesi expressed concern at the slow pace of workplace transformation and promised that government will now introduce new legislation to remedy these issues.

Answering in a recent parliamentary Q&A session, Nxesi said that the incoming Employment Equity Amendment Bill will expedite the pace of transformation and address non-compliance with the requirements of the Employment Equity Act (EEA).

He added that this new bill will likely be tabled in parliament for deliberation before the end of this year.

Nxesi said that these changes will serve as punishments to non-compliant businesses in two main ways:

  • All organisations that are deemed non-compliant will no longer be able to reap the financial benefits of doing business with the state;
  • Even non-compliant organisations that do not necessarily depend on state contracts for their business will still have to face consequences by being referred to the Labour Court for a penalty to be levied against them.

“The amendments will empower myself as the minister of Employment and Labour to regulate sector-specific numerical EE targets, which must be complied with in order to accelerate transformation in various economic sectors because the current self-regulated EE targets did not yield positive results over the 21 years of the EEA,” he said.

“They will also enable the promulgation of Section 53 of the EEA that deals with the issuing of an EE Certificate of Compliance as a prerequisite for accessing state contracts and to do business with the state.”

Read: The South African businesses hit hard by retrenchments

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How government will ‘punish’ businesses to enforce transformation in South Africa