The Department of Employment and Labour’s Draft Regulations for the Employment Equity Amendment Act are open for public comment, and employers must understand the changes.

In April 2023, President Cyril Ramaphosa signed the Employment Equity Amendment Act into law. Although the Bill was introduced a year ago, the commencement date is yet to be promulgated.

To address the sectoral numerical targets provided in the Amendment Act, new draft regulations were introduced on 1 February 2024.

Wright-Rose Innes said that a significant amendment introduced is the insertion of Section 15A by the Amendment Act, which allows Minister of Labour Thulas Nxesi to set numerical targets for designated employers (over 50 employees) for economic sectors to speed up the pace of transformation.

The Amendment Act proposes 5-year numerical targets that designated employers must aim for.

After the widespread initial criticism, the Draft Regulations start off with a detailed explanation of how the proposed sector numeral targets were arrived at.

The Draft Regulations also guide designated employers in how they should develop their Employment Equity Plans (EE Plans):

  • Designated employers must take account of their current workforce profile and compare that to the relevant sector numerical target as well as the applicable Economically Active Population (EAP) data for each occupational level.
  • This should then be used to set annual numerical targets by the employer for their workforce for each year of their 5-year plan.
  • Designated employers should first strive to meet the sector numerical targets applicable to them, or where these have already been achieved, then aim to achieve the applicable EAP.
  • Designated employers are warned not to set targets for groups whose representation already meets or exceeds the applicable EAP in a particular occupational level. However, employers may also not regress if they have met the set numerical target of a particular group at an occupational level.
  • Designated employers are required to set annual numerical targets for the upper occupational levels for which sector numerical targets have been provided. These levels include Top Management, Senior Management, Professionally Qualified & Middle Management, and Skilled Technical.
  • Designated employers are cautioned to continue to also set annual numerical goals for the lower occupational levels of Semi-Skilled and Unskilled employees, despite no sector numerical targets having been set for these levels.

In addition, uncertainty regarding which EAP – national or provincial – designated employers must use has also been clarified.

The National EAP will apply to designated employers that conduct their business or operations nationally, while the Provincial EAP shall apply where the business or operations are conducted in a particular province.

“A designated employer cannot, however, use the National or Provincial EAP at the same time, i.e. pick which EAP they wish to apply, but must choose only one demographic to apply and must use that demographic for the entire duration of their EE Plan,” said Wright-Rose Innes.

“Where a designated employer operates in more than one Province, the employer may choose the EAP of the Province with the majority of employees.”

Moreover, the Draft Regulations now state if a designated employer works in more than one sector, the employer should choose the sector with the majority of employees.

Another key change is the consolidation of the respective racial designations of African, Coloured and Indian into a single reference to a “designated group”, further differentiated by male and female.

The sector numerical targets for the top four occupational levels are then established for the designated groups, with targets for both male- and female-designated groups.

“Employers are, however, cautioned that despite the numerical targets using the consolidated designated groups for target settings, designated employers must still differentiate in their annual targets between the various racial groups and take the EAP into account when doing so,” said Wright-Rose Innes.

However, the EAP is only one of many factors that need to be assessed when considering an employer’s compliance.

“It also clearly stated that no absolute barrier may be placed on any employment practices affecting any person from any racial group.”

“Guidance is also given as to how employer compliance will be assessed, what could constitute justifiable grounds for not complying with set workplace targets, and that an employer will not suffer any penalty or other form of disadvantage should there be justifiable/reasonable grounds for non-compliance.”

“That said, an unjustifiable failure to comply may result in penalties as well as failure to obtain an Employment Equity Compliance Certificate necessary to do business with the State.”

The draft regulations on the proposed sectoral numerical targets are up for public comment until Thursday, May 2, 2024.

Source: www.businesstech.co.za

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