New BEE and transformation targets for businesses in South Africa are ready

The Department of Employment and Labour says the new employment equity targets for businesses in South Africa are ready – but it is waiting for court challenges to the new laws to wrap up before it publishes them.

According to the department, the new EE targets have already been signed off by the minister. The targets were ready to be published but had to be held back after opponents to the new laws took the department to court.

Speaking at a stakeholder engagement session on Tuesday (9 May), Thembinkosi Mkalipi, the director for collective bargaining at the department, said that two pieces of legislation have recently been signed into law by President Cyril Ramaphosa, namely:

• The amended Employment Equity Act
• The Compensation for Occupational Injuries and Diseases (COID) Act

According to Mkalipi, the EE Act empowers the minister of labour to set employment equity targets for economic sectors and prescribe demographic targets for employers with more than 50 employees.

Failure to comply with the laws can result in penalties, such as fines.

Companies seeking to do business with the government will also need a Certificate of Compliance from the department.

Furthermore, the EE Act requires employers to submit employment equity plans and annual reports on their progress in meeting the targets.

The department said that the key objective of amendments was to reduce the burden of doing business for small businesses. However, this has created problems for other vested interests.

The new laws have been met with criticism and backlash from business interest groups and opposition parties, which have taken the matter to court.

“We have also been taken to the International Labour Organization (ILO), and we have responded to the ILO. We are eagerly waiting for a legal challenge. Legal challenges help clarify issues of doubt,” Mkalipi said.

“We are still on schedule to promulgate the EE Act by 1 September 2023, and then we will start with a new reporting period,” the department said.

Court action

One of the groups taking legal action against the new laws is labour union Solidarity.

The union has argued that the new transformation laws are draconian, unconstitutional and lean into racial discrimination by granting power to the minister of employment and labour to set targets based on race.

On April 14, Business Unity South Africa (BUSA), a civil society organisation representing business interests in South Africa, said that the employment equity changes remain problematic in certain aspects of law.

Cas Coovadia, the CEO of BUSA, said that a notable issue relates to measuring complaints and issuing compliance certificates as a licence to do business with the state.

According to Coovadia, this would depend solely on whether a company has met its targets and does not have a case of unfair discrimination raised against it at the CCMA or Labour Court in the past 12 months.

Coovadia expressed concern that treating targets as quotas would be contrary to the law’s intended purpose.

He further noted that companies should not be punished twice for the same issue by both the CCMA/Labour Court and the Department of Employment and Labour, as this could result in unnecessary litigation and hinder the goal of creating transformed workplaces.

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