South Africa’s big employment equity shake-up is coming

South African businesses need to prepare for the planned amendments to the Employment Equity Act (EEA) which promise a number of significant changes to the country’s employment equity laws.

Announced by Labour minister Thulas Nxesi in July 2019, the amendment bill will regulate the setting of sector-specific employment targets to address the gross under-representation of blacks, women and persons with disabilities.

It will also ensure that an employment equity certificate of compliance becomes a precondition for access to state contracts.

John Botha, chief operating officer of Global Business Solutions, said that individual businesses need to be aware of how their specific sectors will be impacted.

“For example, the proposed construction Industry sectoral targets will have to be achieved by 2025 by organisations in this sector,” he said.

“This means that they will have to review their employment policies and procedures, conduct better workforce planning based on anticipated workforce movement and capacitate their employment equity committees and line managers to ensure adherence to re-aligned employment equity plans.

“In addition to these sectoral targets, the Employment Equity Plans also have to address the analysis, interpretation and remediation of income differentials across occupational levels and in terms of the vertical inequality or Gini Index of an organisation,” he said.

Botha said that these amendments – which should be implemented by the end Q2 of 2020 at the latest – are a response to slow levels of transformation evidenced in the statistics gathered from more than 27,000 reporting employers.

A draft version of the bill published at the end of 2018 indicated that the changes being were made to speed up transformation.

The bill states that while the public sector has seen significant changes, the private sector continues to lag behind.

“It has been 20 years since the inception of the Employment Equity Act, however the pace of transformation has been slow,” the bill states.

“Relative to the demographics of the Economically Active Population (EAP) as released by StatsSA, marginal progress in relation to the equitable representation of the designated groups, in particular Africans, coloureds and persons with disabilities have been made in the middle-to-upper occupational levels, which is repeatedly visible in the statistics contained in all the Commission for Employment Equity (CEE) annual reports.”

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