In July this year, 72 JSE-listed companies were identified as the\u00a0subject of employment equity reviews\u00a0by the department of labour’s Inspection and Enforcement Services (IES).<\/p>\n
As a result of this process, the IES found that 50 JSE-listed companies, including the JSE itself, have been found to be non-compliant with the Employment Equity Act (EEA) – 41 employers were given 60 days to comply with their recommendations and the IES said that nine would be prosecuted for failing to prepare employment equity plans.<\/p>\n
The IES noted that areas of non-compliance with the EEA included a lack of properly constituted consultative forums; EE plans that were not properly audited and analysed; assigned senior EE managers who did not have the necessary authority or resources to execute their mandate; and\u00a0prepared employment equity plans that did not comply with legislation.<\/p>\n
According to\u00a0Lauren Salt, senior associate at Baker McKenzie in Johannesburg, there is now little wriggle-room for these companies that are being prosecuted for their non-compliance, as this will relate to past non-compliance which cannot be retrospectively rectified.<\/p>\n
Where this is the case, there is a high likelihood that a fine will be issued, she said.<\/p>\n
“These fines can be up to 10% of the companies\u2019 annual turnover<\/strong> depending on the nature and frequency of the contravention,” said Salt.<\/p>\n \u201cTo date, there have\u00a0not been any\u00a0hefty fines issued for non-compliance with employment equity\u00a0obligations\u00a0and so businesses have been fairly lackadaisical in their approach to compliance with the EEA.”<\/p>\n This is because putting in place proper employment equity structures and plans is also no simple task and takes time, she said.<\/p>\n However, this is likely to change quickly, as the department of labour has a clear point to prove when it comes to compliance.<\/p>\n \u201cClearly, the department of labour is seriously clamping down on enforcement and I think in the near future, will see a number of fines imposed on \u2018big ticket\u2019 JSE listed companies to ensure compliance going forward,\u201d she said.<\/p>\n
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