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In the ever-evolving landscape of employment law in South Africa, staying up to date with the latest amendments is crucial for both employers and employees. One such amendment that holds significant importance is the revised Employment Equity Act. Designed to foster inclusivity and equality in the workplace, the amended act aims to address historic disparities and promote fair representation across various sectors.

At Van Deventer & Van Deventer Incorporated, we recognize the significance of these changes and are dedicated to helping businesses navigate the complexities of the new legislation. In this blog, we will explore the key aspects of the amended Employment Equity Act, shedding light on its implications and providing valuable insights for employers and employees alike.

Employment Equity Act 2023

The amended Employment Equity Act introduces several noteworthy changes that demand attention. These revisions, which come into effect on 1 September 2023, will reshape the landscape of employment practices in South Africa.

Here are the notable amendments introduced by the amended Employment Equity Act in South Africa:

• Revision of the definition of a 'designated employer': As of 1 September 2023, only employers with 50 or more employees will be considered designated employers for the purposes of affirmative action provisions. Total annual turnover will no longer be a consideration.
• Ministerial authority to set numerical targets: The Minister of Employment and Labour has been granted the power to identify national economic sectors and establish numerical targets for each sector. Sectors such as education, agriculture, finance, insurance, and more have already undergone consultations. Sectors yet to be consulted include mining and quarrying, public administration and defence, manufacturing, information and communication, construction, and real estate.

Criteria for issuing a certificate of compliance: Employers seeking to enter into agreements with the State will be required to obtain a certificate of compliance issued by the Department of Employment and Labour (DoEL). The certificate requirement, outlined in section 53 of the EEA, will become operational following the amendments. To obtain the certificate, designated and non-designated employers must meet specific criteria, including compliance with sectoral numerical targets, submission of annual employment equity reports, absence of findings of unfair discrimination in the previous 12 months, and no outstanding awards by the CCMA for non-payment of the national minimum wage.

How will These Amendments Affect Employers?

The amendments to the Employment Equity Act will have a notable impact on employers in South Africa. Understanding these effects is crucial for businesses to ensure compliance and effectively navigate the changing landscape of employment equity. Here's how the amendments will affect employers:

1. Designated Employer Status: With the revised definition, employers will be considered designated employers for affirmative action purposes only if they employ 50 or more employees. This change means that smaller businesses with fewer than 50 employees will no longer have the same obligations and reporting requirements as larger organizations. However, it's important for employers of all sizes to review their current status and ensure compliance with the revised criteria.
2. Sector-Specific Targets: The Minister of Employment and Labour now has the authority to set numerical targets for specific economic sectors. This development means that businesses operating in these sectors will be subject to specific equity goals and transformation objectives. Employers in sectors like education, agriculture, finance, insurance, and others have already undergone consultations, and additional sectors are yet to be addressed. Employers should stay updated on the targets relevant to their sector and take proactive steps to meet them.

Certificate of Compliance: The introduction of the certificate of compliance requirement has significant implications for employers seeking agreements with the State. To enter into contracts with government entities, designated and non-designated employers must obtain a certificate of compliance issued by the Department of Employment and Labour. This certificate signifies adherence to employment equity obligations, including compliance with sectoral numerical targets, submission of annual employment equity reports, absence of findings of unfair discrimination, and no outstanding CCMA awards for non-payment of the national minimum wage. Employers must ensure they meet these criteria to access opportunities for state contracts.It is crucial for employers to adapt their policies, procedures, and reporting mechanisms to align with these amendments. Non-compliance can result in legal repercussions and reputational damage.

How will These Amendments Affect Employees?

The amendments to the Employment Equity Act in South Africa will have a significant impact on employees, aiming to enhance their rights, promote equality, and create a more inclusive working environment. Here's how these amendments will affect employees:

1. Affirmative Action Opportunities: With the revised definition of a designated employer, businesses employing 50 or more employees will have a specific obligation to implement affirmative action measures. This change aims to create more opportunities for historically disadvantaged individuals, including marginalized racial and gender groups, by promoting their representation in the workplace. As a result, employees from these groups may have increased access to employment and career advancement opportunities.

2. Sector-Specific Transformation: The Minister's authority to set numerical targets for different economic sectors means that transformation objectives will be tailored to each industry. This targeted approach seeks to address specific challenges and historical imbalances within each sector. As a result, employees working in sectors such as education, agriculture, finance, insurance, and others will likely witness increased efforts by employers to foster diversity and inclusion, providing them with a fairer and more equitable working environment.
3. Enforcement of Employment Equity: The introduction of the certificate of compliance requirement signifies a strengthened commitment to enforcing employment equity. Employers must obtain this certificate to enter into agreements with the State, demonstrating their compliance with equity obligations. This measure helps ensure that employers uphold fair practices, including the absence of unfair discrimination, adherence to sectoral numerical targets, and submission of annual employment equity reports. Consequently, employees can expect increased accountability from their employers, fostering a more equitable workplace and minimizing discrimination.

Overall, these amendments aim to provide employees with a working environment that values diversity, promotes equal opportunities, and safeguards against unfair discrimination. By striving for compliance with the amended Employment Equity Act, employers can create inclusive workplaces where employees can thrive, contribute meaningfully, and benefit from a fair and equitable employment experience.

It is essential to understand that the amended Employment Equity Act carries significant implications for designated employers, particularly those with larger workforces, as well as employers seeking to engage in business with the State. These implications necessitate a thorough review of employment equity plans by designated employers to ensure alignment with any sectoral targets published by the Minister. Should there be a misalignment, it is advisable for designated employers to provide reasonable justification within their employment equity plans.

To monitor the implementation of sector targets, the Department of Employment and Labour (DoEL) will introduce a new online assessment system. This system will assess employers' progress towards meeting their targets and flag any shortcomings.

The introduction of sector-specific targets has generated contentious debate, with trade union Solidarity reportedly raising concerns about the constitutionality of the amendments. Solidarity has addressed a letter to the President, urging him not to sign the Bill into law and to refer it back to Parliament for review. In the event that the President signs the Bill into law, Solidarity has expressed its intention to seek legal recourse through the courts. Despite these concerns, the DoEL's statement suggests that the President is inclined to proceed with signing the Bill into law. Consequently, it is crucial for employers to familiarize themselves with the amendments and understand how they may impact their respective businesses.

Van Deventer & Van Deventer Incorporated - Labour Law Attorneys in Cape Town and Johannesburg

At Van Deventer & Van Deventer Incorporated, we recognize the importance of keeping abreast of these amendments and their potential ramifications. Our team of legal experts can provide comprehensive guidance to employers, ensuring compliance with the amended Employment Equity Act and helping them navigate any legal challenges that may arise.