It’s all systems go since the publishing of the notice pertaining to new regulations and the setting of EE targets by Employment and Labour Minister Thulas Nxesi. The Employment Equity (EE) Act was recently signed into law by President Cyril Ramaphosa and empowers the Minister of Employment and Labour to set Employment Equity targets for employers with more than 50 employees.
Changes to the Act include freeing designated companies from their Employment Equity compliance commitments if they have fewer than 50 employees. Previously, Designated employers (those who are required to comply with the Act, included companies of fewer than 50 employees but with an Annual Turnover listed in the Schedule 4 document which set the figures of turnover limits, by industry). Companies with fewer than 50 employees are now exempt from the EE Act and should proceed to de-register themselves on the EE portal.
As for the rest, targets have been prescribed for implementation yet while these targets are receiving great criticism after little consultation with other players, such as those in collective bargaining structures, the nett result remains the same. Designated Employers, more specifically those who wish to tender, will have to meet the goals and targets as set by the Minister.
While the game of compliance just levelled up, the game itself remains the same. In other words, Employers will need to ensure that they have well-documented processes around recruitment, promotions, training and development in order to avoid hefty fines. The threat of imposition of fines has been in play since the inception of the Employment Equity Act, so nothing has changed there. Employers should hire people who are able to perform the inherent function of a position (or someone who can be upskilled within a reasonable time-frame to meet those requirements) to reach the requirements of their Employment Equity plans (all of which will now need to be scrapped and replaced with a 5 year plan which aligns to the goals and targets set in the amended Act).
Successful employers will need to focus more intently on training and development of staff with the potential to meet the companies needs. This will come at a price when compared to the potential fines yet it is perhaps the less expensive road to take. Employers will bear the cost of training and they will bear the cost of non-compliance. Despite the continued economic downward trajectory, the world economic crisis, high unemployment rates and a barrage of political obstacles, this approach remains the clearest path to success.
So the answer to the question of how to deal with Employment Equity now that the targets have been set is to double-down on your documentation, follow the requirements of the law and when the outcome does not quite reach the target, ensure that, as before you have a sufficient paper trail to back up any Employment Equity decisions made within the company.
