What is employment equity in South Africa?

The Department of Labour (DoL) is getting stricter on the enforcement of Employment Equity, and in our experience companies tend to take a reactive approach when it comes to Employment Equity implementation in that they only start the process when they receive an intention to audit from the DoL. The DoL has picked up on this approach from companies, hence the stricter enforcement from the DoL and the Labour court.
The necessity for Employment Equity can be seen if read with Section 9(1) and Section 9(2) of the Constitution. S9(1) states that no one may be discriminated against on the basis of race, but S9(2) states that to promote equality, measures or legislation must be developed to protect and promote previously disadvantaged persons, hence the Employment Equity and BEE Acts were developed.

The Employment Equity Act

According to the Employment Equity (EE) Act, it is a Designated Employer’s duty to promote equality in the work place and as well advance those previously disadvantaged by past discriminatory laws. The need for Employment Equity can be seen when one only looks at the current socio-economic composition of South Africa, especially when it comes to the youth unemployment rate. A big misinterpretation of the EE act is that a lot of employers understand it as an advancement of certain races only, but this is certainly not the case. In order to understand the true intention of Employment Equity, one needs to understand who was discriminated against in the past. Traditionally people weren’t only discriminated against based on race, but also based on gender and disability. So in essence, white females and all disabled people should be considered when one considers Employment Equity. One should always ask the question: Was this person discriminated against due to past policies and social norms?

How to start the Employment Equity process and taking a proactive approach

The biggest issue that we have found with the implementation of Employment Equity in South African businesses is that there are no clear guidelines and the information regarding Employment Equity is very limited and does not always address challenges directly. The feeling that one gets is one of “comply, or else…”.
To enable business owners to understand where to start with EE and how to track progress this article will outline the process below and discuss the importance of each step.

Consultation

First, employees need to be consulted on the process and the need for EE participation. This can be done through toolbox talks, information pamphlets, or a training session by an independent and neutral consultant. This will also promote buy-in from employees and eliminate unreasonable expectations from employees. It is of utmost importance that the company also communicates the importance of Top and Senior Management’s participation and understanding of the process to be followed. Employment Equity can only be achieved if the entire company participates, and understands, the necessity for transformation.

Responsibility

Second, the Employer must assign responsibility to a Senior Manager, who must take responsibility for the entire process in the form of an Employment Equity Manager. The EE Manager must be formally appointed with an appointment letter in which the duties and responsibilities of the EE Manager are outlined and should form part of the KPIs of such the Senior Manager. The EE Manager must be directly appointed by the CEO and held accountable for the progress of Employment Equity implementation. The EE Manager must:

• be a Senior Manager that reports directly to the CEO;
• have the authority and mandate to assign recourses; and
• must be a South African citizen.

The appointment of an EE Manager does not shift the responsibility from the CEO, and ultimately the CEO will be held responsible by the DoL should the company be found contravening the Employment Equity Act by the Labour court. A CEO can therefore not take the decision of appointing an EE Manager lightly.

Representativeness

Third, the employer needs to establish the over- and under representations of gender and race within the 6 occupational level categories. This needs to be done through a consultative body: the Employment Equity Committee. This committee:

• needs to be elected in a democratic manner;
• must be representative of the entire company; and
• should have a minimum of four members that represent the Employer and Employees.

This committee should also reflect the race and gender breakdown within your company. Should the Employer have a formal agreement with a registered trade union, the elected shop stewards will automatically form part of this committee and will not have to be re-elected as the election of these representatives has already have been done in a democratic manner by the trade union.

The EE Committee needs to analyse the composition of the company’s employee profile and compare it to the latest Economically Active Population (EAP) statistics as released by StatsSA. After establishing the over- and under representations within the company, the EE Committee needs to:

• identify the reasons for the over- and under representations within the company;
• assign corrective measure/s for each reason (barrier) identified;
• assign timelines to each corrective measure; and
• identify the responsible people that need to be engaged to assist in overcoming these barriers.

In order to assist the EE Committee in identifying these barriers, the committee needs to analyse all company policies, procedures and practices and establish whether any of these are in any way discriminative and what measures should be put in place in order to achieve equality.

Goals and Targets

Once the barriers and measures have been identified, the committee needs to establish goals and targets in order to overcome the over- and under representations. The employee profile needs to be aligned as close as possible to the Economically Active Population (EAP) statistics. In our experience, companies tend to focus mostly on the top 4 tiers of the occupational levels and leave out the semi-skilled employees, unskilled employees, and disabled employees in their corrective measures. To overcome the oversight of these employees, we have found that training in the form of Learnerships, bursaries and apprenticeships is effective in including these employees in the process. Not only will this include these employees in the process, but there are also benefits for the employer in the form of Discretionary Grant funding, Tax Incentives and ETIs.

The work isn’t done here – it only starts

The above 4 steps are only the starting point in implementing Employment Equity and too often employers believe that as soon as these steps has been implemented, the process has been completed. This is, however, only the beginning of the implementation process and Employment Equity must be seen as a continuous process of analysing, identifying issues and corrective measures, and tracking the progress of goals and targets.

EE Committee meetings
There are no clear guidelines as to how often the EE Committee should meet. This will all depend on the progress of your implementation, goals and targets as well as the identified corrective measures. The DoL usually asks for 4 sets of meeting minutes during an audit. It is advisable that companies that have a high staff turnover or that have regular shifts in their employee profile should meet at least once a month in order to analyse and track the appointments and dismissals. Companies that don’t have monthly staff movements can meet quarterly (four times a year). The committee must be provided with an accurate staff movement report every time they meet. The EE Committee also needs to have access to all company policies in order to review and align them with the Employment Equity Act.

The benefits to a positive, proactive approach to EE

In order to implement Employment Equity beneficially for the employer and employees, one needs to take a positive proactive approach and not a political one. Below are some of the benefits of implementing Employment Equity as set out above:

1. In our experience, most issues between employers and employees can be resolved through a proper communication channel. The EE Committee enables employees to communicate the issues they face without fear of prejudice or discrimination.
2. By upskilling and promoting employees internally, before appointing outside the company, employees will have a positive attitude and will also be more loyal towards your company.
3. Semi-skilled and Unskilled employees will overcome the feeling of being in a dead-end job if the company rewards those that put in the effort and show potential with Skills Development initiatives and promotions.
4. Supervisors and Line Managers that have come through the ranks will have a better understanding of problem-solving and issues employees under them face as they have been in similar circumstances.
5. Supervisors and Line Managers will have a better understanding of the processes and procedures regarding certain lower ranking job titles.
6. Problem-solving and production for lower occupational level employees will increase, as a result of training focused on upskilling and promoting these employees.

The Employment Equity process should not be seen as a burden, but rather a powerful management tool for Top Management, if implemented with the right attitude. The benefits above are only a few of many rewards that not only employees, but also the employer will reap.

The financial implications of not complying with the EE Act are far greater than most employers realise – when found guilty of a contravention, one cannot simply pay the fine and make the problem go away. The Labour Court will keep on issuing fines until the company eventually complies or cannot afford the fines anymore and have to shut their doors. The CEO of a non-compliant company will also be held liable for any false reporting or an attempt to mislead the DoL, and this could lead to a criminal record for the responsible CEO.

The Purpose of Employment Equity is not to retrench or get rid of over-represented groups, but to align your employee profile with Economically Active Population statistics over time and as vacancies open up. The purpose is to have a clear guiding light of what races or gender should be prioritised when a vacancy or promotion is available, provided that such an identified person is suitably qualified.