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The importance of Employment Equity and its implementation in the workplace

Why is Employment Equity important for my business? An overview of the 17th Annual Commission for Employment Equity report.

Employment Equity Transformation
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The aim of the Employment Equity Act, 1998 (Act No. 55 of 1998) (EEA) is to facilitate transformation within the workplace. The Commission for Employment Equity (CEE) is a statutory body established in terms of Section 28 of the EEA tasked with advising the Minister of Labour on any matters concerning the EEA. This may include policy recommendations and implementation thereof aimed at achieving the objectives of the EEA. In order to monitor and evaluate any progress made towards achieving the objectives of the EEA, the CEE is required to submit an annual report in terms of Section 33. The report is a breakdown of the data and information obtained from employment equity (EE) reports annually submitted by employers in terms of Section 21 of the EEA. 

The 17th annual CEE report was released on 9 May 2017. Areas of concern are as follow: 

  • Slow pace of employment equity transformation

One of the main concerns highlighted in the CEE report is the slow pace at which employment equity transformation has been taking place. On release of the report, the Minister said more than 50% of companies referred for prosecution due to non-compliance with EE legislation were JSE-listed companies.

The slow pace can be ascribed to various factors, which include implementation challenges, employment equity not yet being recognised as a business imperative, the absence of prescribed EE targets/benchmarks, and inadequate monitoring of compliance by employees and trade unions.

As a result of the slow transformation, stakeholders that participated in the CEE Sectoral Engagements called for, amongst other things, the promulgation of Section 53 of the EEA to prompt financial consequences for non-compliance. The CEE accordingly deemed it urgent to promulgate Section 53 of the EEA which will deal with expediting transformation when dealing with state contracts. The section is also aimed at increasing compliance levels and triggering financial consequences for non-compliance with the EEA. It will also deal with the issuing of compliance certificates to employers who intend to do or are doing business with government.

Section 53 of the EEA states that:

  • Every employer that makes an offer to conclude an agreement with any organ of state for the furnishing of supplies or services to that organ of state or for the hiring or letting of anything.

must-

(i) If it is a designated employer, comply with Chapter II and III of this Act, or

(ii) If it is not a designated employer, comply with Chapter II of this Act; and

attach to that offer either-

(i) a certificate in terms of subsection (2) which is conclusive evidence that the employer complies with the relevant Chapters of this Act; or

(ii) a declaration by the employer that it complies with the relevant Chapters of this Act, which when verified by the Director-General, is conclusive evidence of compliance.

  • An employer referred to in subsection (1) may request a certificate from the Minister confirming its compliance with Chapter II, or Chapters II and III, as the case may be.
  • A certificate issued in terms of subsection (2) is valid for 12 months from the date of issue or until the next date on which the employer is obliged to submit a report in terms of section 21, whichever period is longer.
  • A failure to comply with the relevant provisions of this Act is sufficient ground for rejection of any offer to conclude an agreement referred to in subsection (1) or for cancellation of the agreement.
  • The Minister may in the code of good practice set out factors that must be taken into account by any person assessing whether an employer complies with Chapter II or Chapters II and III.

Source: information as provided in the 17th Annual CEE report. 

SERR Synergy assist businesses with the development and implementation of Employment Equity Plans and submission of the required reports. We guide businesses through the process to ensure that equity in your organisation meets the requirements of the Employment Equity Act as well as supports the growth and success of your business. 

About our author: Audrey Cloete obtained her LLB degree from the North-West University Potchefstroom in 2003. She completed her articles with the main focus on Criminal Law and is also an admitted Conveyancer. Audrey joined SERR Synergy in 2015 where she currently works as a Legal Compliance Advisor. 

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