Amendments to the Employment Equity Act

The long awaited amendments to the Employment Equity Act have finally been passed and were signed by the President on 14^th April 2023. 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.

However, the Act has not yet been promulgated, which is to say that while the Amendments have been passed, they are not yet law.  We understand that the Department expects the amendments to be promulgated in September 2023.  However, the Democratic Alliance, Solidarity and Sakeliga have indicated that they will be challenging the constitutionality of the amendments in court, which may delay the implementation.

What had Changed

The amendments sought to:

1. Simplify compliance for small business 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 in court.  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 may (when published) 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 (HPCSA).

The Way Forward

Until the sectoral targets are gazetted, and the act is promulgated, we need to comply with the current legislation and the current reporting processes.  Will the act be promulgated before the next reporting period?  It depends on the court processes and the publishing of regulations with regard to sectoral targets.