Employment Equity regulations unexpected

Employment Equity Act surprises on race issues….

The reality of the Employment Equity Amendment Bill passed in Parliament last October is now beginning to kick in with the enforcement of the Bill by the regulatory process.   The Bill has now become an Act but the regulations are not what were expected on the race issue insofar as equity returns are concerned.

Oddly enough there were few objections or queries on the Bill when the draft Bill was presented for public comment by the department of labour (DoL) over eighteen months ago.  The legislation looked destined for an easy passage through Parliament but opposition party DA members appeared to be divided on a number of issues.

In an unusual turn of events, the Bill, when introduced into Parliament, allowed for foreigners whose applications for citizenship were turned down before 1994 on the basis of their skin colour and such persons can be included in employment equity (EE) returns in future.    This occupied much of the discussion in Parliament and MPs appeared to be relaxed that employment in terms of BEE would be regulated by DoL according to the demographics in the related areas.

Fines based on turnover

Fines were proposed in relation to turnover of the entity in question which could fall into eleven categories varying from agriculture to manufacturing, quarrying and mining to catering and transport and from wholesale, trade and commercial agencies to finance and business services.   Electricity, gas and water entities were mentioned, as were construction and community and personal services – all with total annual turnover thresholds given.

Most public comment in the parliamentary public hearings warned of criminalising business and strong objections were voiced on this issue.

Furthermore, the provisions of the Bill allowed for all white, Indian and coloured women who had been gender disadvantaged in terms of statutory law at any stage will also qualify for inclusion in terms of equity reporting.     The Employment Equity Bill was the third in a raft of four new labour bills presented to Parliament last year.

Business lagging in action

In its briefing to Parliament before the parliamentary public hearings, DoL suggested to parliamentarians that “business and industry has been riding roughshod over the law which had been unrevised for nearly 15 years and it was time now that provision was made in their budgets for considerably more than the negligible fines of the past.”

At the time of the Bill, it was assumed by most in the public hearings that the reference to “equity in terms of national or regional demographics” would mean that employers could set equity targets or make plans as called for in what could be interpreted as reasonable and according to the geographic area each company or entity was located.

The Bill said that “guidance would be given” on this provision by the DoL. The Bill was passed and became an Act with, as always happens, the regulations awaited – a matter then purely between DoL and the employer.

Race proportional representation

It appears from press reports that the regulations “giving guidance” on the issue of race demographics are a far more contentious item than the issue of the fines objected in the public hearings in Parliament.

The employment equity plan that each company must draw up, it is reported, now call in terms of the regulations issued for the targets to represent national demographics, not regional demographics as was expected, but still wherever the entity is of 150 employees or more wherever that entity is located.

It is unlikely that this matter will be debated in Parliament again unless a legal challenge results over the particular portion of the regulations concerned or the whole Bill is overturned constitutionally, which seems unlikely. Pressure on government to relax in general terms the consequences of new labour laws is coming from a number of directions.

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