Are you employment equity compliant?

Are you employment equity compliant?

As many of you find Ziyo News to be a helpful tool for monitoring your compliance, we felt it would be important to update you on the key amendments to the Employment Equity Act which were promulgated on 1 August 2014.

We are therefore very grateful to Desrae Connold who has provided us with the expertise necessary to prepare this edition of Ziyo News. If you need further advice in relation to employment equity or other employment legislation, Desrae can be contacted at Connold & Associates CC

In considering the Employment Equity Act (“the Act”), it is important to note that:

Chapter 2 of the Act deals with discrimination and is applicable to all employers, no matter what the size of the organisation is (it even applies to domestic employers)

Amendments to Chapter 2 of the Act, which applies to all employers and deals with discrimination:

  • The grounds for discrimination are no longer limited to those listed in section 6 of the Act (race, gender, sex, pregnancy, etc.), but also include discrimination “on any other arbitrary ground”. This means that an employee (or applicant for employment) may sue an employer for discrimination as long as they can prove that the discrimination was not rational,amounts to discrimination and is unfair.
  • Psychological tests can only be used (on [prospective] employees) if they can be applied fairly to all employees and are not biased against any employee or group; now there is the additional requirement to use only psychometric tests that have been certified by the Health Professions Council of South Africa, or another body which is authorised to certify such tests.
  • Previously the adjudication of all unfair discrimination claims fell within the exclusive jurisdiction of the Labour Court. Now an employee can refer a dispute to the CCMA for arbitration if:
    – the employee complains about sexual harassment (as a form of discrimination); or
    – the affected party is a lower-paid employee (ie. earning less than the earnings threshold prescribed under section 6(3) of the BCEA which is currently R205,433.30 per annum). In discrimination claims by higher earning employees, the parties may consent to the referral of a discrimination dispute to the CCMA for arbitration.
  • Where an employee alleges one of the listed discriminatory grounds (race, gender, sex,pregnancy, etc.), the onus is on the employer to prove that discrimination did not take place as alleged, or is rational and not unfair, or is otherwise justifiable. In the case of an allegation of unfair discrimination “based on any other arbitrary ground”, the onus is entirely on the employee.
  • A newly introduced section deals explicitly with unfair discrimination by an employer in respect of wages (and other terms and conditions of employment) of employees doing “the same or similar work or work of equal value”. The employer will need to show that differences in wages or other conditions of employment are in fact based on fair criteria, such as experience, skill, responsibility, etc. The Minister of Labour has published regulations outlining the methodologies for assessing work of equal value and outlining conditions under which an employee may fairly pay one employee differently to another.

Chapter 3 considers affirmative action and is applicable to designated employers.  It is important to note that designated employers which are all organisations:
– with more than 50 employees;
– whose turnover is above the designated amount (which for NPO’s and community, social and personal services is R15 million per annum)

This Chapter has been amended significantly:

  • The definition of “designated groups” has been brought in line with the regulations published in 2009. It confirms that designated groups are black people, women or people with disabilities who

– were citizens of South Africa before the 27th April 1994; or
– would have been entitled to citizenship but for the policies of apartheid.

As a result of this change, persons who are foreign nationals, or who have become citizens after April 1994, cannot be taken into account for the purposes of affirmative action targets.

  • The total annual turnover thresholds set for employers in various industries (in order to be classified as a “designated employers” for the purposes of the affirmative action provisionsof the Act) have been increased threefold. Employers that employ 50 or more employees will still be regarded as “designated employers” irrespective of their turnover.
  • All designated employers, including those with 150 and less employees, now have to submit their employment equity reports annually.
  • Enforcement procedures have been made more effective and efficient (eg. a labour inspector can issue a compliance order without first having to obtain a written undertaking from an employer). The opportunity to object to a compliance order has been removed, but a decision may still be challenged at an appropriate juncture.
  • The factors that may be taken into account in determining whether an employer is implementing employment equity in compliance with the Act have been revised. The Minister has been empowered to make regulations dealing with the assessment of compliance, including specifying the circumstances under which an employer’s compliance should be assessed by reference to the demographic profile of either the national or regional economically active population. An employer may raise any reasonable ground to justify failure to comply with what has been specified in terms of the Act or Regulations.
  • The maximum fines that may be imposed for contraventions of the Act have been increased threefold. This means that an employer who fails to consult with their employees with regard to employment equity could be fined from R1.5 million to a maximum of R2.7 million. In addition, an employer’s turnover could be taken into account in determining the maximum fine that may be imposed for substantive failures to comply with the affirmative action provisions of the Act. The maximum fine could be higher for organisations that fail to report annually, do not have an employment equity plan and cannot prove that they have consecutive employment equity plans. In such cases, the fine is R1.5 million or 2% of turnover to a maximum of R2.7 million or 10% of turnover, whichever is the greater

It is important that all designated employees must:

– have an Employment Equity Plan in the new format required by the Department of Labour; and

– submit reports (EEA2 and EEA4), in the revised formats*,  to the Department of Labour by 1 October 2014 (if submitting manual reports) and by 15 January 2015 for on-line submissions. These documents must be prepared with the assistance of a consultative committee.

* Regulations were gazetted on 1 August 2014 which alter the reporting formats for the EEA2 and EEA4 forms and which also give a required format for the Employment Equity Plans.

We do hope that these points will help you to navigate safely through the provisions of the Act that are now in force.

This newsletter was written in conjunction with:
Desrae Connold
Human Resource Practitioner
Connold & Associates CC