Employment Equity Updates – Amendment EEA Bill of 2020

Author: Kusile Consulting Services

On 20 July 2020, amendments to the bill have been made with the intention to propose to National Parliament.

The Employment Equity Amendment bill proposes a number of substantial amendments to the Employment Equity Act, however, the main purposes are to allow the Minister of Labour to establish enforceable sectoral numerical targets to improve equitable representation on all levels of business, and to enhance the administration of the act with the proposed promulgation of section 53.

The following chapters are chapter with amendments:

Chapter 1  Definitions

In Section 1 of the act, the definition of a designated Employer (a company that, by law, has to comply with the EE Act) has been amended by deleting paragraph (b,) which classifies employers with less than 50 employees as being designated based on their annual turnover. This would suggest that the only factor on which we can determine designation is based on the number of employees (being 50 or more).

The Definition of the National Minimum wage commission is introduced suggesting that the duties of the Employment Conditions commission have been absorbed by the National Minimum wage commission.

A definition of the sector is included as an industry or service or part of any industry or service.

The Definition of “serve or submit” has been deleted. This definition refers to methods of communication, currently including sending communication in writing, delivering it by hand, delivering it by registered post, transmitting it by use of any electronic mechanism which allows for printing. This would allow the Minister to prescribe by regulation, the methods of communication, submission and service.

The definition of persons with disabilities now includes “intellectual and/ or sensory impairment” components which, in interaction with various barriers, can further be affected as a barrier to employment.

A definition of ‘the state’ is included as a national or provincial department as defined in the Public Finance Management Act. This is to ensure clarity with the application of section 53 which deals with state contracts.

Chapter 2  Prohibition of Unfair discrimination

Section 8 of the Act deals with Psychological testing and other assessments, this section is amended by excluding the requirement that psychological tests need to be certified by the HPCSA. This suggests that it is believed that the HPCSA does not have the capacity to certify these assessments/tests and any disputes of such assessments will be evaluated by the Labour Court.

Chapter 3  Affirmative Action

Section 14 of the act, which dealt with Voluntary Compliance to the EE Act, has been repealed. This suggests that an Employer who is currently deemed as “Non-Designated” cannot notify the Director-General that they will be complying with the act out of their own free will for any reason (such as for tender-related purposes). Chapter 3 will thus only be applicable to Employers with more than 50 employers under the amended definition.

Section 15 of the act, which deals with affirmative action measures, has been amended with the proposed inclusion of section 15A subsection 1 – 5.

The inclusion of 15A Subsection 1 will allow the Minister to identify and group national economic sectors for the purpose of administration of Employment Equity. Subsection 2 will allow the Minister to establish numerical targets (a headcount target) for Employers in these sectors to ensure equitable representation of suitably qualified people from designated groups. This suggests that Employers will no longer be setting their own targets in line with the Economically Active Population as it is believed that Employers are using self-imposed targets as a “shield” to evade the law by setting low targets and achieving same within a reasonable timeframe.

It is proposed in 15A subsection 3 that the Minister may issue a notice in terms of subsection 2 (above) which may set different numerical targets for the 6 occupational levels, or to set specific targets in regions within an economic sector, or, to set targets on the basis of any other relevant factor. Subsection 4 states that a draft of any notice needs to be gazetted and parties must be allowed at least 30 days to comment on the draft notice. This effectively allows the public 30 days per notice to voice their concerns with the proposed notices and/ or legislative changes. Subsection 5 will allow the minister to issue regulations prescribing criteria to be considered when determining a numerical target in terms of subsection 2 above. The minister of labour thus sets the bar for how stringent or radically transformative these targets are, and dispenses judgement on whether they were achieved or not.

The inclusion of section 15A is, in our opinion, the most aggressive amendment and seemingly included due to a perceived lack of commitment to transformation.

Section 16 has been amended in order to clarify who a designated employer is required to consult with. The proposed amendment is that where there is a representative trade union, the designated employer must only consult with the trade union.

Section 20 refers to the Employment Equity plan and has been amended with the proposed inclusion after subsection 2, (2A) “The numerical goals set by an employer in terms of subsection (2) must comply with any sectoral target in terms of section 15A that applies to the employer “. This will ensure that the goals and targets to be set in the Employment Equity plan, are in line with the “set” targets proposed in section 15A.

In Section 21, Reports, subsection (1) referring to the October deadline, has been replaced with a very vague section stating that a designated employer must submit a report once a year on such date and in such manner as may be prescribed. This doesn’t leave much room for planning as the deadline is not made clear in the amendment bill. In addition to this subsection 3 and 4 have been deleted and subsection 4A, failure to submit, has been amended to exclude the October deadline.

Section 27, Income Differentials, has been amended to propose a transfer of duties from the Employment Conditions Commission to the National Minimum wage Commission.

Chapter 5  Monitoring, Enforcement and Legal Proceedings

Section 36, which deals with an Undertaking to Comply has a proposed amendment to include the preparation of an employment equity plan as a criteria for issuing of a written undertaking to comply, should the designated employer fail to do so.

Section 37, which deals with Compliance Orders, has been amended to propose that the duties of a labour inspector may also be fulfilled by a person acting on behalf of a labour inspector, thus, permitting the Minister to prescribe the manner in which compliance orders are served. This could lead to an influx of new – labour inspectors.

Section 42, Assessment of Compliance, has been amended to clarify that an Employer’s implementation of affirmative action may be measured against the demographic profile of either the national or the regional economically active population (EAP), and to measure whether the employer has achieved any sectoral target set by the Minister in terms of the proposed section 15A. This indicates that if these Sectoral Targets are not met, the employer may be deemed Non-compliant with the act, and face the corresponding consequences.

Chapter 6  General Provisions

Section 53, State Contracts, is proposed to be promulgated as this section was not promulgated before. Section 53 is proposing that state contracts will only be awarded to Employers who have been certified as being compliant with the Employment Equity Act, an employer will be required to attach a certificate of compliance and/or a declaration by the employer that it complies with the relevant chapters of the act when applying for a contract with the state. A brand-new subsection (6) has been included in section 53 which regulates when the Minister may issue a certificate of compliance with the Employment Equity Act. As per the proposed subsection 6, the below criteria need to be met:

• The Employer met the applicable sectoral targets in terms of section 15A or has provided reasonable and acceptable grounds for non-compliance
• The Employer has submitted its most recent report (section 21)
• The Employer has not been found (within the previous 36 months) to have breached the prohibition on unfair discrimination or failed to pay the national minimum wage in (National Minimum Wage Act, 2017)

Section 64, which allowed for the annual turnover thresholds in Schedule 4 to define employers with less than 50 employees as designated, has been repealed.

Schedule 4 – Turnover thresholds to determine if an employer is designated, has been repealed.

Conclusion:

The proposed bill has been, by far, the most radical and aggressively transformative move by the Department of Employment and Labour to force employers to change their respective employment profiles. The entire introduction of the document is laden with undertones of frustration and implies that employers have found methods of subverting the point of economic transformation, and goes so far as to mention the “Carrot and Stick approach” – signifying an intention to force transformation of junior management/ skilled technical and higher occupational levels in a drastic fashion.

• Inspections will be more frequent due to the ability of inspectors to allow others to act on their behalf when determining compliance
• Employers who are designated by virtue of turnover, with a staff complement numbering less than 50, who operate exclusively in the private sector, will no longer be required to comply with Chapter 3, however, the de-registration process will still apply
• Employers will be forced to employ either a set number or set percentage of staff per level based on targets set by external forces or suffer the effects of being non-compliant
• All Employers that deal with State-Owned Enterprises will require the equivalent of a letter of good standing for Employment Equity, which will entail that they get audited or verified

Draft Code of Good Practice on the Prevention and Elimination of Violence and Harassment in the World of Work
2020/08/26

Labour minister Thembelani Nxesi has published a draft code of good practice on the prevention and elimination of violence and harassment in the workplace in South Africa.

The draft policy, which falls under the Employment Equity Act, and is currently open for public comment, covers a number of areas including Sexual Harassment and Bullying.

The code aims to protect workers and other persons in the world of work, as well as other workers irrespective of their contractual status.

It applies to all sectors, whether private or public, both in the formal and informal economy, and whether in urban and rural areas.

The code also applies to the world of work occurring in the course of, linked with or arising out of work, including, but not limited to:

• In the workplace, including public and private spaces where they are a place of work;
• In places where the worker is paid, takes a rest break or a meal or uses sanitary, washing and changing facilities;
• During work-related trips, travel, training, events, or social activities;
• Through work-related communications, including those enabled by information and communication technologies;
• In employer-provided accommodation;
• When commuting to and from work.

Some of the key policies included in the draft code are outlined in more detail below.

Sexual violence and harassment

The policy defines ‘sexual violence and harassment’ as directly or indirectly engaging in conduct that the perpetrator knows or ought to know is not welcome, is offensive to the complainant and makes the complainant feel uncomfortable and interferes with work, causes harm or inspires the reasonable belief that harm may be caused to the complainant or a related person.

This includes:

Following, watching, pursuing, or accosting of the complainant or a related person, or loitering outside of or near the building or place where the complainant or a related person resides, works, carries on business, studies, or happens to be;

Any unwelcome sexual attention, advances or proposals from a person who knows or ought reasonably to know that such attention is unwelcome;

Unwelcome explicit or implicit behaviour, suggestions, messages, advances, attention, proposals or remarks of a sexual nature that have the effect of offending, intimidating or humiliating the complainant or a related person in circumstances which a reasonable person, having regard to all the circumstances, would have anticipated that the complainant or related person would be offended, humiliated or intimidated, (implied or expressed), the promise of reward for complying with a sexually-orientated request, proposal, advances or attention;

Implied or expressed threat of reprisal or actual reprisal for refusal to comply with a sexually-oriented request, advance, attention, or proposals.

In addition to providing a number of examples, the code sets out a test to be applied for sexual violence and harassment.

The test states that the subjective feelings of the complainant should be evaluated against the objective standard of a “reasonable person /complainant” test which involves how the reasonable person would have reacted in the circumstances.

It notes that sexual attention becomes sexual violence and harassment when:

The behaviour is persistent, although a single incident of harassment can constitute sexual harassment;

The recipient has made it clear that the behaviour is considered offensive;

The perpetrator knows or ought to have known that the behaviour is regarded as unacceptable.

Racial violence and harassment

Racial violence and harassment is defined as unwanted conduct which is persistent or a single incident which is serious demeans, humiliates or creates a hostile or intimidating environment or is calculated to induce submission by actual or threatened adverse consequences and which is related to a person’s membership or presumed membership of a group identified by one or more of the prohibited grounds or a characteristic associated with such group.

This includes direct or indirect behaviour which involves issues such as racist verbal and nonverbal conduct, remarks, abusive language, racist name calling, offensive behaviour gestures and racist cartoons, memes, or innuendos.

In applying a test, the code states that racial harassment has to be assessed objectively with reference to the reaction of the normal or reasonable person.

In addition, it has to be established on a balance of probabilities that the conduct of complaint was:

• Was unwanted conduct, which
• Was persistent or serious;
• Demeaned, impaired dignity, humiliated, or created a hostile or intimidating environment or;
• Was calculated to induce submission by actual or threatened adverse consequences and;
• Was related to race, ethnic origin, or a characteristic with such group;

Whether a perpetrator would have spoken the words or behaved in the manner complained of towards the complainant but for the complainant’s race or ethnic origin;

How the alleged perpetrator treats other persons not of the complainant’s racial group or ethnic origin, even if the conduct complained of is race-neutral and whether language or other conduct is considered violence and harassment might depend on the circumstances; and the motives of the perpetrator;

The impact of the violence and harassment;

Whether the language or conduct is violence and harassment might depend on the circumstances of the particular circumstances and whether the language and conduct are directed at a particular person(s) and is insulting, abusive and /or derogatory.

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