“Whilst we have made some progress, there is still a long way to go as there are many who are still holding on to outdated historic tendencies … ‘Apartheid hangover’, others call it.” These were the words of Minister of Labour, Nelisiwe Mildred Oliphant, when she launched the 17th Commission for Employment Equity Annual Report (2016-2017) (the CEE report) in May 2017.

The Employment Equity Act (EEA), Skills Development Act, and Broad-Based Black Economic Empowerment Act are the main transformative instruments to redress fundamental market inequities and to eliminate discrimination on the basis of demographic profile, race and gender, disability and HIV status. Yet, despite these measures, the CEE report demonstrates a regrettably slow pace of transformation in the workplace – black people, women, and persons with disabilities remain severely under-represented in all aspects of employment equity.

In consideration of the CEE Report, the Minister remarked that JSE-listed companies alone account for more than 50% of the companies that have been issued with fines for non-compliance. She also noted that the maximum fine for non-compliance (R2.7 million) is too small for some companies, particularly the bigger corporates, as they simply budget for it just in case they get caught.

The Minister announced that it is time to up the ante which may include promulgating the “stick” sections of the EEA as the “carrot” sections have not delivered the desired results.

One of these “stick” sections is section 53 which requires employers to furnish a certificate of compliance in order to procure state contracts. In blunt terms, non-compliant employers will be barred from doing business with the State.

The CEE has deemed it necessary and urgent to promulgate section 53 of the EEA. It believes that the imposition of this harsh punitive measure will expedite transformation, increase compliance levels and at the same time trigger financial consequences for non-compliance with the EEA.

Harsher penalties are clearly in the pipeline. Employers must ensure that they take steps to develop a workforce that is broadly representative of the population, as well as to economically develop and transform the workplace to improve the opportunities of black people, women, and persons with disabilities. These steps include:

  • Appointing an employment equity committee or consultative forum
  • Consulting employees on barriers to transformation, proposed affirmative action measures and the company’s employment equity plan
  • Prepare and implement an employment equity plan that is in line with the EEA
  • Report annually to the Director-General of Labour

This article was written by Priyanka Naidoo,  a Candidate Attorney at Norton Rose Fulbright South Africa