Employment Equity Reaffirmed

Employment Equity Reaffirmed - NOVA Blog

In a drive to push the Employment Equity (EE) mandate aimed at increasing transformation in local business, the Department of Labour has increased their efforts relating to labour audits and the relevant compliance regulations. Employment Equity is aimed at promoting fairness in the labour market and, as such, labour inspectors have been tasked with evaluating EE plans to assess whether the plan complies with legislation and drives transformation.

Department of Labour; Chief Director, Statutory & Advocacy Services, Advocate Fikiswa Mncanca said: “We have been talking about transformation and nothing seems to be happening. Transformation should not just end in the paper. Also, the transformation should not happen just because the Department of Labour is conducting national Director-General Reviews”.

According to Mncanca “The department ‘has arrived’ to enforce compliance with EE legislation”.

The impact on your business

Failure to adhere to Employment Equity could land you in hot water. With a massive shift in focus and resources, you can expect to face significant fines and time in court as the Department of Labour pushes its transformation agenda.

Companies, as first-time offenders, may be subject to a fine of R1 500 000 or 2% of the employer’s annual turnover. If the employer is a second-time offender, then the fine may be the greater one of R1 800 000 or 4% of the employer’s annual turnover. Repeat offenders will face even harsher penalties.

The Department of Labour’s Inspection and Enforcement Services (IES) branch has announced it is taking six companies to court for various offences, including their failure to prepare employment equity plans as per the provisions of Section 20 (1) of the Employment Equity Act; and reporting to the Director-General on plans that do not exist which amounts to misrepresentation.

The six companies referred for prosecution are Gooderson; Clientele Legal; Clientele Life; Mazor Aluminium; Mazor Steel; and Spanjaard Limited. The companies are to be referred for breach of Section 20 of EE legislation.

Who should report on Employment Equity?

Not all companies in South Africa are bound to the Employment Equity Act. Rather, EE is aimed at all employers deemed as designated by the Department of Labour who must report their EE status and are required to comply according to legislation.

As per the Department of Labour’s standards, a designated employer is an employer with 50 or more employees or one which has a total annual turnover per the following industry sectors:[/vc_column_text]

DescriptionColumn Data
AgricultureR 6.00m
Mining and QuarryingR 22.50m
ManufacturingR 30.00m
Electricity, gas and waterR 30.00m
ConstructionR 15.00m
Retail and motor trade and repair servicesR 45.00m
Wholesale trade, commercial agents and allied servicesR 75.00m
Catering, accommodation and other tradeR 15.00m
Transport, storage and communicationsR 30.00m
Finance and Business servicesR 30.00m
Community, special and personal servicesR 15.00m
In cases where previously designated employers do not meet the requirements for EE, they will have to de-register from the Employment Equity Public Register portal using an EEA14 document as provided by the Department of Labour.

When should a designated employer report?

Designated employers are required to report to the Department of Labour based on certain criteria:

What does the reporting process entail?

The process requires that designated employers report on the following criteria:

This information is then used to establish the company’s equity targets and goals each year, as well as to compile the employment equity plan which the employer is required to submit to the Director-General. The reporting process will also require an employer to display evidence of equal pay for work of equal value.

What you will need to be able to submit a report

In order to submit a sufficiently detailed report, employers will need to include the following information:

This will allow the Department of Labour to set realistic Employment Equity goals for each company and help drive transformation and equality in South Africa.

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