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The Commission for Employment Equity (CEE) has proposed changes to the way racial and gender employment targets are set, and has suggested the introduction of new compliance certificates for any employer seeking to do business with the state.
Section 53 is a dormant part of the Employment Equity Act that the CEE has advised Labour Minister Mildred Oliphant to now promulgate.
The section creates a new penalty – obliging companies to apply for a compliance certificate to do business with the state.
However, the important part is how “compliance” will be measured for the purposes of getting this certificate.
The CEE specifically proposed that new prescribed sectoral targets were formulated to “assist in determining compliance”.
This would be a sharp departure from the employer-driven target-setting which, up until now, followed a generic set of nationwide rules.
Introducing a system of compliance certificates could also result in new kinds of obligations.
The overwhelming emphasis of employment equity enforcement has been on “administrative” compliance.
Mostly, this means having an employment equity plan and filing the company’s annual reports to the department.
Section 53 could, however, expand the scope of what employers need to demonstrate compliance with.
The Employment Equity Act has two chapters establishing what employers are supposed to do – and not do – in the pursuit of workplace equality.
Chapter three is the one governing what currently constitutes compliance: the drafting of employment equity plans and the filing of reports to the department.
All the prosecutions currently taking place relate to failures around this reporting obligation.
Chapter two of the act refers to nondiscrimination, which is a set of prohibitions instead of an easily regulated obligation to submit documents.
Bradley Davies, a director at law firm Werksmans, said: “With chapter three, it is easy to measure: Did you report or not? Do you have a compliant plan or not?
“With chapter two, the only real consequence is if employees take you to the Commission for Conciliation, Mediation and Arbitration or the Labour Court. In the past, the state did not get involved, but now it will.”
Without additional criteria from the department of labour, it is, however, hard to imagine how compliance with chapter two could be certified in a proactive way.
Oliphant will need to publish a new set of codes of good practice that set out how nondiscrimination is to be assessed. The road for section 53 was paved in the amendments to the act in 2014.
Among other things, a clause has been added to the section saying the minister “may in the code of good practice set out factors that must be taken into account by any person assessing whether an employer complies with chapter two or chapter three”.
A new code will most likely be drafted by the department this year.
ENFORCEMENT
There has been a surge in enforcement of the act recently, using the existing power to fine noncompliance with chapter three.
The department of labour’s inspector-general, Aggie Moiloa, said there were 192 prosecutions in the 2016/17 financial year for fines totalling R255 million.
All of these prosecutions were administrative and related to nonsubmission of plans or reports, Moiloa told City Press.
Only 21 fines have actually been paid, and half of these were paid by JSE-listed companies, according to Oliphant.
This is still a remarkable escalation from the situation a few years ago, when the department could point to only two penalties – both against small textile factories.
WHAT THE NUMBERS SAY
CEE chair Tabea Kabinde this week told journalists at the release of the report that she would not bore them with the numbers too much because “the picture is the same” as in previous years.
“I think we should acknowledge that there has been movement, but it has been slow,” said Kabinde.
“If there was no Employment Equity Act, the legacy of apartheid would have accelerated because like always appoints like,” she said.
“Self-regulation is not working,” she added.
The CEE report covers the workplaces of almost 7.1 million employees, while the formal sector employs about 9.7 million.
The annual report has become far more representative of the formal economy as compliance with reporting obligations has increased over the years.
Since 2014, the report has consistently covered roughly the same proportion of the workforce, which starts making it possible to reliably analyse the trend.
The report, however, gives less information than previous versions on the hiring and retirement dynamics underpinning the racial composition of different occupational levels.
Giving only percentages and not the actual numbers, it observes that white men still receive the largest proportion of appointments into top and senior management, but are leaving at a higher rate.
This natural attrition is what leads to the slowly declining role of white men at the top.
If the past two years’ trends are crudely extrapolated, white representation in top management will only fall below 50% in 2048.
This tier consists of less than 60 000 people, and the pace at which its racial composition changes is heavily influenced by overall growth.
If the growth in the number of top managers was 3% instead of the 1.5% average since 2014, whites will represent less than 50% a decade earlier.
In senior management, a category covering 143 000 people, the past two years’ trend sees whites represent less than 50% in 2024.
