How to set your business’ EE targets in line with the Envisaged Amendments to the Employment Equity Act


by John Botha: COO of Global Business Solutions

It is envisaged that the amendments to the Employment Equity Act (EEA) will be promulgated in early 2020. These amendments are currently being debated by the National Economic Development and Labour Council (NEDLAC). The EEA draft amendments give the Minister the right to implement these targets and to preclude designated employers who are unable to achieve these from accessing public sector tenders.

The proposed Section 53 of the Amendment Act – which was interestingly part of the original 1998 Act but was left out because it was felt that employers would automatically adhere to the spirit and purport of the Act, without this necessity having to be spelt out – states that:

“Every employer that makes an offer to conclude an agreement with any organ of state for the furnishing of supplies or services to that organ of state or for the hiring or letting of anything.
a) must-
(i) If it is a designated employer, comply with Chapter Il and Ill of this Act, or
(ii) If it is not a designated employer, comply with Chapter Il of this Act; and attach to that offer either-
a certificate in terms of subsection (2) which is conclusive evidence that the employer complies with the relevant Chapters of this Act; or
a declaration by the employer that it complies with the relevant Chapters of this Act, which when verified by the Director-General, is conclusive evidence of compliance.”

The challenge is that companies are not being provided with clarity as yet about HOW they should set their targets going forward relative to their sectoral targets so that they are compliant with the revised legislation.

Disrupting Employment Equity pending Sectoral Targets

In business, a ‘disruptive innovation’ is described as one that creates a new market and value proposition. When disruption hits, many businesses are unable to adapt (for various reasons). This has disastrous consequences.
We are only in the early stages of an ever-accelerating disruptive environment. The fundamental question is: has human resources been left behind?

The impact of economic, legislative, social, political and technological disruption on businesses, jobs and the occupants of jobs is significant. However, the truth be told, a review of current human resources practices does not hold much hope that it will catch up any time soon in most businesses.

Human resources strategies, values, structures, systems, skills, staff and leadership/management style fall short of the human capital 2.0 standard. Organisations have to integrate the provisions of the EEA into this reality.

This Act dictates that designated employers need to ensure that there are no barriers to achieving the objectives that are legally set and by the employer concerned. Given the poor progress in achieving the equitable representation of black individuals, women and persons with disabilities relative to the Economically Active Population (EAP), the Employment Equity Commission is currently engaging with industries with a view to setting sector targets. It is likely that the sector end-state EE targets that will be adopted, will be in line with those contained in the BBBEE Codes/ Sector Codes under management control.

In order to avoid challenges in setting and complying with targets in moving towards these sector targets over the next five years, companies need to be calculated in analysing what is possible and realistic and that they are sure of the HR strategies they can implement in support of this. This means that your company’s next Employment Equity Report must have the proper targets in place to avoid unnecessary challenges being posed to your company.

Global Business Solutions – a leading Labour Law, Human Resources and Industrial Relations consultancy – is running workshops nationally on the amendments to the Employment Equity Act and how to approach the sectoral target setting process given that targets that are set as early as the end of this year may be binding in 2020 and beyond. To find out more about these workshops, please visit our website on www.globalbusiness.co.za or contact Carly de Lange on carly@globalbusiness.co.za.

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