Critical for organisations are the amendments that were tabled and approved by Cabinet in February 2020 concerning the Employment Equity Act. In July 2020, the Minister of Employment and Labour published that the Bill would go to the National Assembly to start the Parliamentary process.

The Parliamentary Monitoring Group published that the Employment Equity Amendment Bill was now available for public commentary until 19 February 2021. The amendments are fast reaching the point of promulgation and will require an extraordinary employer effort to ensure compliance with some of the amended regulations.

What Do The Employment Equity Amendment Bill Propose?

The most significant amendment to the proposed Employment Equity Act is section 15A which empowers the Minister of Employment and Labour to prescribe numerical targets for sectors at all occupational levels to ensure the equitable representation of suitably qualified people from designated groups.

This is followed by section 42, which deals with the assessment of organisational compliance. Specifically, section 42 provides that meeting the Ministerial Targets is a pre-requisite to compliance and the ultimate issuing of a compliance certificate.

Finally, section 53(6) is a list of five criteria that an employer must meet to obtain a compliance certificate. Key to this is section 53, which has always been in the Employment Equity Act but has not been operational. It will be put into effect by these amendments. This will mean that State contracts may only be issued to employers who have been certified as being compliant with the obligations under the Employment Equity Act. One of these is the requirement to achieve the above numeral sector targets prescribed by the Minister.

What Does Not Attaining A Compliance Certificate Mean?

Not attaining a compliance certificate would mean that these businesses would not be able to do business with the State. Currently, BBB-EE status is measured in terms of the Preferential Procurement Framework Act in relation to a 10% and 20% evaluation of the total score. This is dependent on the monetary amount of the tender. Should this amendment go through it will have far-reaching implications for those sectors that have not achieved these targets and are not getting a certificate.

What is critical is that section 42 is not definitive enough and does not contain a clause that would recognise reasonable steps towards the employer achieving the applicable targets.

In terms of section 64, the draft regulations make provision for a designated employer who applies for a certificate of compliance – (to be but has not achieved the applicable targets – to record justifiable reasons for not doing so. However, it is not good enough to have this in the regulations as it needs to be in the Act.

In addition, it actively empowers the Minister to delegate his authority of compliance to inspectors. This could lead to far-reaching powers for inspectors. .

The Five Compliance Criteria In Section 53

Interestingly if one looks at section 53 of the Employment Equity Amendment Bill, there are five criteria of compliance for a certificate of compliance:

  1. The employer has complied with a numerical target set in section 15A that applies to that employer.
  2. If an employer has not complied with any target set, the employer has raised a reasonable ground, to justify its failure to comply as contemplated by section 42(4).
  3. The employer has submitted a report in terms of section 21.
  4. There has been no finding by the CCMA or a court within the previous three years that the employer breached the prohibition on unfair discrimination in chapter 2; and
  5. The CCMA has not issued an award against the employer in the previous three years for failing to pay the National Minimum Wage.

These amendments will have far-reaching consequences if they are passed into law and potentially some significant unintended consequences. Join us for the Employment Equity Amendments – Interpreting, Planning & Implementing as we unpack these amendments and what they mean for your business.

Follow this link to book.