The Employment Equity Act amendment was assented to on the 16th January 2014 and is a major amendment to the original act, hugely increasing the fines applicable to Companies who do not comply with the legislation. The amendment does the following:
- It further regulates the prohibition of unfair discrimination against employees by adding the clause “or any other arbitrary discrimination” to the list of possible discriminations.
- Provides that certain disputes can be referred for arbitration instead of Labour Court (e.g. sexual harassment cases).
- Provides that the fines payable are paid into the National Revenue Fund.
- Establishes revised annual turnover thresholds applicable to designated employers.
In order to be considered a designated employer (one who is required to report on affirmative action measures); the employer must employ more than 50 employees or have a turnover in excess of
|R15 Million||Construction, Catering, Accommodation and other Trade, Community, Social and Personal Services|
|R30 Million||Manufacturing, Electricity, Gas and Water, Transport, Storage and Communications, Finance and Business Services|
|R45 Million||Retail and Motor Trade and Repair Services|
|R75 Million||Wholesale Trade, Commercial Agents and Allied Services|
Designated employers who do not comply with the legislation face fines as outlined below:
|Previous Contravention||Contravention of 16, (read with 17) 19, 22, 24, 25, 26 and 43(2)||Contravention of section 20, 21, 23 and 44(b)|
|No previous Contravention||R1 500 000||The greater of R1 500 000 or 2% of turnover|
|A previous Contraventions||R1 800 000||The greater of R1 800 000 or 4% of turnover|
|Two previous contraventions||R2 100 000||The greater of R2 100 000 or 6% of turnover|
|Three previous contraventions||R2 400 000||The greater of R2 400 000 or 8% of turnover|
|Four previous contraventions||R2 700 000||The greater of R2 700 000 or 10% of turnover|
It is important to understand what these fines are for. The first category of fine is failure to comply with:
- Clause 16: Consultation with employees, i.e. the Employment Equity Committee
- Clause 17: Matters for Consultation, i.e. conduct of the analysis, preparation of employment equity reports and plans
- Clause 19: Analysis, i.e. the conduct of a qualitative analysis
- Clause 22: Publication of report (applicable to public companies)
- Clause 24: Designated employer must assign a manager – to monitor and implement affirmative action, i.e. the Employment Equity Manager
- Clause 25: Duty to inform i.e. to display a summary of the act in the workplace
- Clause 26: Duty to keep records, i.e. an employment equity file of documentation relating to the Committees activities
- Clause 43(2): Review by Director-General
Failure to comply with the following clauses will attract a larger fine. These clauses are:
- Clause 20: having an Employment Equity Plan
- Clause 21: submitting a Report i.e. EEA2 and EEA4
- Clause 23: having successive Employment Equity Plans
- Clause 44(b): failing to or refusing to implement the recommendations given by the Director-General after a review
IF YOU ARE NOT SURE WHETHER YOU SHOULD BE COMPLYING PLEASE CONTACT TESSA AT OUR OFFICES. REMEMBER, Employment Equity is an Act belonging to the Department of Labour, Broad-Based Black Economic Empowerment is another Act belonging to the Department of Trade and Industry. They are not the same thing.