Department of Labour 22nd Employment Equity Report

The Department of Labour recently released their annual report covering progress in their strategic objectives and providing highlights from the previous twelve months.  It also details the workforce demographic distribution of the Economically Active Population (EAP) across the provinces, a key document for the B-BBEE industry that breaks some of its Management Control and Skills Development targets down demographically using this report as the basis.

This year there will be an increasing focus on employment equity and the demographic makeup of the workplace as the Employment Equity Bill is in its final stage of promulgation. It will amend the Employment Equity Act 55 of 1998 with the objective of speeding up transformation in specific business sectors. Major changes brought about by this Bill include:

  1. The definition of “designated employer” is narrowed to organisations of more than 50 people regardless of the level of turnover. Business has generally welcomed this change as it takes smaller businesses out of burdensome employment equity compliance and reporting.
  2. The Minister of Employment and Labour being empowered to determine sectoral 3-5 year targets and to levy heavy fines for organisations that fail to comply with the numerical demographic targets. The setting of targets with business representatives will be on a sector-for-sector basis.
  3. The introduction of a compliance certificate which will be “systems /auto-generated” by the Department of Employment and Labour if an organisation’s annual report demonstrates compliance with the sectoral targets. This ‘compliance certificate’ may become a factor in B-BBEE verification of Management control if required, with the EEA2, EEA4 and acknowledgement letter,  as mandatory evidence of compliance for the Management control element. It is thought that the Department of Employment and Labour will engage the DTIC for cooperation so that future amendments to the Codes enable this. Furthermore, certain adverse findings in respect of a CCMA Labour court cases may affect compliance (e.g. cases on unfair discrimination in the workplace);  it is envisaged that a planned Department of Employment and Labour – CCMA interface will enable an auto-check that could result in the non-issuance of a compliance certificate.
  4. It is anticipated that the State will introduce the EE compliance certificate as part of the State procurement/tender criteria.

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