President Ramaphosa has proclaimed the effective date of the amendments to the Employment Equity Act (“EEA”) as 1 January 2025.
The Employment Equity Amendment Act, 2022, seeks to introduce changes to the Employment Equity Act which will have a significant impact on the way employers are required to implement employment equity in the workplace.
The amendments specifically introduce various amendments to the affirmative action provisions of the EEA which aim to achieve faster transformation in the workplaces of designated employers.
With effect from 1 January 2025, designated employers will be those employers who employ 50 or more employees. It is only these employers who will be required to comply with chapter 3 of the EEA, which deals with affirmative action and sets out the duties of designated employers. Employers who employ fewer than 50 employees, irrespective of their turnover, will no longer fall within the definition of a “designated employer” and will therefore no longer be required to comply with chapter 3 of the EEA.
The most significant of the amendments relate to the Minister of Employment and Labour’s power to set sector-specific employment equity targets against which designated employers will be held to account.
On 12 May 2023 and 1 February 2024 respectively, the Department of Employment and Labour published draft regulations identifying sectors and proposing sector-specific employment equity targets for each sector for public comment. You can read our article on these draft regulations here - https://www.fasken.com/en/knowledge/2024/02/revised-employment-equity-sectorial-numerical-targets-published-for-public-comment
Given that these draft regulations were published prior to the provision empowering the Minister of Employment and Labour to publish them becoming effective, the Minister of the Employment and Labour will have to publish a fresh set of regulations setting out the sector-specific employment equity targets. It is unclear whether the Minister will publish a final version of the regulations or publish a new version for public comment.
Once the sector-specific employment equity targets are published, and are effective, designated employers will have to review their employment equity plans to ensure that their numerical targets and goals align with the sector-specific employment equity targets, and where they do not, whether there is reasonable justification for such.
The second significant amendment introduced by the Employment Equity Amendment Act, 2022 is the requirement to obtain certificates of compliance. In order to “incentivise” employers to meet targets, certificates of compliance will now be issued by the Minister if:
- the employer has complied with any applicable sectoral targets or has raised a reasonable ground for non-compliance;
- the employer has submitted its most recent employment equity report; and
- within the previous 12 months, the employer has not been found to have breached the prohibition on unfair discrimination, or paid wages below the level of the minimum wage.
Entities that contract with the State may only do so if they have been certified as being compliant with their obligations under the Act. A failure to comply with these requirements is a sufficient ground for the cancellation of any state contract (should no reasonable ground exist to justify such non-compliance).
Other notable amendments are as follows:
- The definition of “people with disabilities” has been amended to include people who have a long-term or recurring intellectual or sensory impairment which, in interaction with various barriers, may substantially limit their prospects of entry into, or advancement in employment.
- Voluntary compliance with the designated employer’s obligations has been removed.
- A designated employer will only be required to consult with a trade union in discharging its consultation obligation for the preparation of its employment equity plan and reporting, if there is a representative trade union in the workplace.
- The specific date for annual submissions of employment equity reports has been removed. The Minister will prescribe the date on which the annual submissions must be made.
- Compliance with the sector-specific employment equity targets will be considered as one of the factors that the Director General will take into account when determining whether a designated employer has implemented employment equity in compliance with the EEA.
Until the sector-specific employment equity targets have been finalised and published by the Minister, designated employers should take note of the amendments listed above. Action will only be required from designated employers once the sector-specific employment equity targets have been published as they will be required to consult with their employees (or representative trade unions), conduct an analysis of the workforce and prepare either a new or amended employment equity plan in line with the sector-specific employment equity targets.
