Amendments To The Employment Equity Act

The long awaited amendments to the Employment Equity Act which were passed and signed by the President on 14^th April 2023 have finally been promulgated. The effective date will be the 1^st January 2025.  These amendments were first published for public comment on the 21^st September 2018 so they have been through an exhaustive process prior to being gazetted.

Please note that this does not affect the submissions, which need to be completed and submitted before the 15^th January 2025.

This amendment was challenged by Solidarity, who reached an agreement with the Department of Employment and Labour that any Sectoral Targets set must not pose an absolute barrier to any employment. 

What Has Changed

The amendments sought to:

1. Simplify compliance for small businesses by deleting any reference to turnover.  Once the Act has been passed into law, any company with less than 50 employees will not be required to comply with Chapter 3 of the Act.
2. Going forward, the National Minimum Wages Commission will be responsible for monitoring Wage Equity.  Any Income Differential Reporting will need to be reported to this body.
3. The amendment empowers the Minister to gazette Sector Targets which designated employers (those with more than 50 employees) will need to reach.
4. The amendment promulgates section 53 of the Act (not previously promulgated), which required that any designated company who wants to tender for state contracts must obtain a Certificate of Compliance from the Minister of Employment and Labour and that this may only be issued if the Minister has satisfied himself that:
   • the employer has complied with a numerical target set in terms of section 15A that applies to the employer
   • in respect of any target with which the employer has not complied, the employer has raised a reasonable ground to justify its failure to comply, as contemplated by section 42(4)
   • the employer has submitted a report in terms of section 21
   • there has been no finding by the CCMA or a court within the previous 12 months that the employer breached the prohibition on unfair discrimination in Chapter 2, and
   • the CCMA has not issued an award against the employer in the previous 12 months for failing to pay the minimum wage in terms of the National Minimum Wage Act, 2018 (Act No. 9 of 2018).

It is this amendment that will be challenged.  The fear is that the setting of Sectoral Targets will give the Minister wide-ranging powers to exclude certain races and that it is unconstitutional.  To this point, clause 15 (3) of the Act has not been deleted.  It states:

15 (3)     The measures referred to in subsection (2)(d) include preferential treatment and numerical goals but exclude quotas.

However, the Sectoral Targets have not yet been finalised but could be seen as quotas in contravention of this clause.  It would also provide a mechanism to exclude companies (who may have complied with BBBEE) regulations, to be excluded from state contracts.

Another concern is the CCMA record in terms of discrimination.  If the CCMA or Labour Court has found against an employer, they would already have faced a penalty.  This would seem like a double penalty.  Also, Labour Court Appeal proceedings take years. Does this mean that a company would not be awarded a certificate until the Courts have overturned a CCMA decision?

Another minor change to the Act is that it is no longer required that Psychological and other Assessments be registered with the Health Professional’s Council.

The Way Forward

Regulations need to be developed to support the new legislation.  We need an easy mechanism to deregister companies who no longer need to report, and to decide what happens to existing Employment Equity Committees.

We are expecting new templates for Employment Equity Reporting that will support the sector targets and regulations in this regard to be published.

Employers who no longer have to report on Employment Equity will still need to comply with BBBEE Codes.  Those that do have to comply may find that their sector target is not the same as the BBBEE requirements. 

We will advise all our clients of developments.  For ease of reference, we have a link to a copy of the Employment Equity Act where the amendments are inserted in purple text.  

Employment Equity Act Amendment