In response to stiff opposition, the Department of Labour earlier this week withdrew a portion of the proposed amendments to the Employment Equity Regulations.
These amendments would have required employers who employ 150 or more people to use the national demographics for the upper three levels of the workforce and employers who employ less than 150 to use the national demographics for the upper two levels of the workforce.
The controversy surrounding these proposals centred mainly around the Coloured and Indian population groups who respectively represent 10.6% and 3.1% of the national economically active population (EAP).
In contrast, the regional EAP for the Coloured population for the Western Cape last year was 52.4% whereas the regional EAP for the Indian population in KwaZulu Natal was 10.6%.
By removing these conditions, the Act simply stipulates that employers should consider the national and regional EAP demographics when drafting their Equity Plans.
The remainder of the regulations were agreed to by the NEDLAC partners and their deliberations on the Act and Regulations are now complete. The amendments to the Employment Equity Act were gazetted in January this year with only an announcement of an effective date pending.
This new legislation places substantial emphasis on the prohibition and elimination of unfair discrimination by including the new section of equal pay for equal value. According to this new section, if an employee believes that he/she is directly or indirectly unfairly discriminated against on the basis of pay in comparison to employees who perform work of same or similar nature and value, the burden of proof shifts to the employer to justify the difference in pay and that it is not based on prohibited grounds such race or gender etc.
If there is no systematic benchmark or justification based on performance, years of service, qualification or job grading system, employers will soon be paying fines for unfair discrimination.
The employers may be obliged to consult with representatives or the representative trade union to disclose information in order to eliminate unfair discrimination. However, the consultation section 16 of the LRA will still apply if there is a dispute of disclosure of information. This means that more and more employers need to be able to justify a difference in pay by having a job grading system in place that will assist in ensuring fairness in remuneration.
Furthermore, amendments and draft regulations suggest that businesses need to have means to monitor and evaluate affirmative action measures that they have put in place in order to avoid fines of up to 10% of turnover. Self-regulating and internal audits will assist employers in ensuring that they avoid unnecessary fines.
Failure to adhere to these amendments may see the Director-General of Labour dragging offenders straight to the Labour Court.
We recommend that employers ensure that they have aligned their activities accordingly. Ensure that you have an Equity Plan in place that incorporates the new amendments and ensure that it is known to all staff, including those who are responsible for recruitment. Where appointments are not aligned to the Plan, records of the reasons for the deviation should be kept because you can be sure that the labour inspectorates will be asking for them. Otherwise, be prepared to be fined!