On Friday, 12 May 2023, the Minister of Employment and Labour (the Minister) published the long-promised sectoral targets. The draft sectoral targets can be viewed here.
The draft sectoral targets follow on the President signing the Employment Equity Amendment Act, 2022 (the Amendment Act) into law on 14 April 2023.
The Amendment Act introduces a number of amendments to the Employment Equity Act, 1998 (EEA). The most talked about and important amendments for employers to take note of include:
- The definition of “designated employer” will change to remove employers who employ less than 50 employees and whose annual turnover exceeds the threshold published by the Minister from time to time. It will no longer be necessary for these smaller employers to implement affirmative action measures in terms of Chapter III of the EEA. This will relieve the administrative burden which the EEA currently places on smaller employers;
- The definition of “people with disabilities” will change to include “people who have a long-term or recurring physical, mental, intellectual or sensor impairment which, in interaction with various barriers, may substantially limit their prospects of entry into, or advancement in, employment”. The definition will align with the definition used in the United National Convention on the Rights of Persons with Disabilities, 2007;
- The new section 15A allows the Minister to identify sectors within the national economy and to set numerical targets for employment equity in each of these sectors;
- The amended section 20, dealing with employment equity plans (EE Plans) will require designated employers to include numerical targets in their EE Plans which must align with the sectoral targets in the particular industry;
- Designated employers’ compliance will now also be assessed having regard to whether they have complied with the sectoral targets; and
- The EEA currently contains a section listing the requirements that must be met if an employer wants to conclude an agreement with any organ of State. Section 53 is not currently in operation but once operational, will require a designated employer to comply with Chapters II and III of the EEA (non‑designated employers only have to comply with Chapter II) and to obtain a certificate from the Minister confirming compliance. As an alternative to a certificate, employers can complete a declaration of compliance which, when verified by the Director General of the Department of Labour, will be conclusive evidence of compliance. In terms of the amendments to section 53, the Minister may only issue a certificate of compliance if an employer has complied with the sectoral targets for the relevant sector or where there is non‑compliance with the sectoral targets, if the employer has demonstrated reasonable grounds for its non-compliance.
Employers and interested parties have until 12 June 2023 to comment on the draft sectoral targets. In deciding whether to comment or not, employers should bear the following in mind:
- The draft sectoral targets that employers will have to comply with only relate to the top four occupational levels as described in the EEA9 form attached to the EEA. These levels are for top management, senior management, professionally qualified (mid-management) employees and skilled technical/academically qualified employees (junior management, supervisors, foreman and superintendents);
- The sectoral targets are five year targets. In its EE Plans, employers will have to work towards achieving these targets in the top four occupational levels;
- For the bottom two occupational levels (semi-skilled and unskilled employees) employers will have to continue working towards achieving the economically active population (EAP) demographics published from time to time;
- Whilst designated employers were previously allowed to compare their own workforce profile to both the national and provincial EAP demographics, employers must now select whether to use the national or provincial targets. Designated employers with a national footprint (more than one province) will have to apply the national sectoral targets for the top four occupational levels and the national EAP demographics for the bottom two levels.
Employers are urged to make use of the opportunity to comment on the draft targets should they wish to do so since there has not been any indication that the time period for commenting will be extended. Whilst there are a number of interest groups who have indicated an intention to challenge the implementation of sectoral targets in the workplace (with the trade union, Solidarity, having filed its papers in the Labour Court already), employers should not take a “wait and see” approach. Furthermore, all employers – but especially those relying on State contracts – have to give themselves sufficient time to properly crunch the numbers, to conduct its workplace analysis and to prepare for the next EE Plan.