More onerous and less onerous: Employment Equity Amendment Bill

The National Council of Provinces passed the Employment Equity Amendment Bill (Bill) on Tuesday, 17 May 2022. The Bill is in its final stage of promulgation as it has been sent to the President for signing. The Bill will amend the Employment Equity Act 55 of 1998 (Act).

23 May 2022 3 min read Employment Law Alert Article

At a glance

  • The Employment Equity Amendment Bill has been passed by the National Council of Provinces and sent to the President for signing, marking the final stage of promulgation.
  • The Bill narrows the definition of "designated employer," excluding small businesses from the scope of Chapter 3 of the Employment Equity Act, which deals with affirmative action measures.
  • The Minister of Employment and Labour is empowered to determine sectoral numerical targets to ensure equitable representation of designated groups in the workplace, and compliance with these targets becomes a requirement for designated employers.

Two of the major changes brought about by the Bill are that; the definition of “designated employer” has been narrowed, and the Minister of Employment and Labour (Minister) has been empowered to determine sectoral numerical targets.

In the current Act, an employer that employs fewer than 50 employees (small businesses), but has a total annual turnover that is equal to or above the applicable annual turnover contained in Schedule 4 of the Act, is deemed to be a designated employer and falls within the scope of application of Chapter 3 of the Act (which deals with affirmative action measures).

The aforementioned inclusion of small businesses has been removed in the Bill, having the effect that Chapter 3 of the Act will no longer apply to small business regardless of their turnover. Accordingly, these employers will not be required to have an employment equity plan, submit reports, and the like. In this regard it is noteworthy that section 14 of the Act, which permits for voluntary compliance with Chapter 3, has been repealed.

The second major amendment, for the purposes of this article, is that of the newly created section 15A, with the pertinent aspects being:

  • The Minister may identify national economic sectors, which in terms of the Bill are defined as “an industry or service or part of any industry”.
  • For any economic sector that has been identified, the Minster may set numerical targets to ensure equitable representation of suitably qualified people from designated groups at all occupational levels in the workplace.

The sectoral targets shall be published in the Government Gazette, allowing interested parties at least 30 days to comment on them. There is a likelihood that substantial litigation will flow from the setting of such targets. 

It is envisaged by the Director of Employment Equity that all current employment equity plans will fall away and be replaced with new employment equity plans in terms of the Bill.

Several additional sections have been amended for alignment with section 15A. In this regard, section 20 has been amended by the insertion of section 20(2A). This amendment requires that a designated employer, in its employment equity plan, align numerical targets with the applicable sectoral targets as set by the Minister.

Section 42, which pertains to assessment of compliance with the Act, has been amended by the insertion of section 42(1)(aA). This amendment essentially has the effect of adding the requirement of alignment with the Minister’s sectoral targets in so far as compliance with the Act is concerned. Further, the amended section 53 requires a designated employer to set its numerical targets in accordance with the applicable sectoral targets determined by the Minister as a prerequisite for a compliance certificate to permit contracting with the state.

The essence of these amendments would result in less onerous compliance for small businesses and more onerous provisions for larger businesses.

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