Employment Equity

Employment equityThe 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

R6 Million Agriculture
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.