A guide to planning, preparing and monitoring employment equity in the workplace

At this time each year there appears to be a ‘season’ for Employment Equity. HR consultants and companies alike are bombarded with questions regarding employment equity. Why is there this seasonal approach to employment equity?
For those companies that embrace the true meaning and objectives of employment equity, it is not a once a year seasonal event but a 365 day commitment and process of achieving equity and transformation in the workplace.

The degree of success in achieving employment equity in the workplace is determined by employers firstly asking themselves, “WHY are they participating in the process?” The most common reasons quoted are: they are scared of the Department of Labour (DOL) fines associated with noncompliance, they need to submit employment equity reports in order to obtain a BBBEE certificate, or this is another government return that needs to be submitted on an annual basis. All of these reasons are not the motivating factors that employers should be using for compliance with the Employment Equity Act. The only valid reason is that a company wants to achieve true transformation within their organisation.

What is Employment Equity?

The Employment Equity Act was first gazetted in 1998 and was further amended in August 2013 effective 1st August 2014. The overall purpose of the Act is to achieve equity in the workplace by promoting equal opportunity and fair treatment in employment through elimination of unfair discrimination and implementing affirmative action measures to redress the disadvantages in employment experienced by designated groups.

There is a misconception that employment equity means treating people equally, which is not the intention of the act. Employment equity is around recognising people’s differences and accommodating those differences by implementing affirmative action measures to allow them to have fair opportunities.

Who has to comply with the requirements of the Employment Equity Act?

Any employer that is deemed to be a designated employer is required to comply with all aspects of the Act. A designated employer is any employer that employs more than 50 employees or who employs less than 50 people but has an annual turnover greater than their industry sector, which is as follows:
â- â- â€‚Agriculture (R 6 million)
â- â- â€‚Mining and Quarrying (R 22.5 million)
â- â- â€‚Manufacturing (R 30 million)
â- â- â€‚Electricity, Gas and Water (R 30 million)
â- â- â€‚Construction (R 15 million)
â- â- â€‚Retail and Motor Trade and Repair Services (R 45 million)
â- â- â€‚Wholesale Trade, Commercial Agents and Allied Services (R 75 million)
â- â- â€‚Catering, Accommodation and other Trade (R 15 million)
â- â- â€‚Transport, Storage and Communication (R 30 million)
â- â- â€‚Finance and Business Services (R 30 million)
â- â- â€‚Community, Special and Personal Services (R 15 million)

Who is a Designated Group?

The Act provides protection to designated groups. A designated group is Black people, women and people with disabilities whoâ€"
â- â- â€‚are citizens of the Republic of South Africa by birth or descent; or
â- â- â€‚became citizens of the Republic of South Africa by naturalisation before 27 April 1994;
â- â- â€‚after 26 April 1994 and who would have been entitled to acquire citizenship by naturalisation prior to that date but who were precluded by apartheid policies

How should Employers comply with the Act?

As with any implementation process employers should commence with a project plan for implementing employment equity. This should comprise of the following three phases:
â- â- â€‚Preparation
â- â- â€‚Implementation
â- â- â€‚Monitoring

PREPARATION PHASE

This is a critical phase in which all stakeholders should be involved, including commitment from top management. Employers should include the following steps:
1. Assign an employment equity manager â€" This should be a senior permanent employee within the organisation
2. Raise awareness of employment equity within the organisation
3. Ensure that each employee has the opportunity to complete the Department of Labour EEA1 form, which enables employees to confirm their race, gender and disability status
4. The employer should establish an employment equity committee via a nomination process, which is representative of all race, gender and disability groups at all organisational levels within the organisation
5. Train the employment equity committee in the legislation and their role within the process
6. In consultation with the employment equity committee conduct a qualitative analysis of employment policies, procedures and practices to ensure that they are not discriminative in any way. Where potential discriminatory areas are identified affirmative action measures should be put in place to eliminate the identified discrimination or potential discrimination.
7. Conduct a quantitative analysis, which involves creating a workforce profile and analysing the number of employees in each race, gender and disability group at each organisation level and comparing the workforce profile with the
Economic Active Population (EAP) figures.

What are EAP Figures and how should they be used?

The most recent EAP figures are released by Statistics South Africa and relate to the percentage of people from the ages of 15 to 64 who are either employed or
unemployed and who are seeking employment. The EAP figures are displayed by race and gender and employers can choose to use national figures or provincial figures depending on the footprint of their business. As part of the quantitative analysis it is critical that employers compare their workplace figures with the EAP figures as they will assist an organisation in determining the degree of under -representation of the designated groups. The information obtained from this analysis will then provide data on which to base the goals and targets for their equity plan. It is vital that the outcome of the analysis ‘talks’ to the content of an organisation’s equity plan.

IMPLEMENTATION PHASE

Once the above analysis is completed the organisation is ready to move onto the next phase. In consultation with the employment equity committee the organisation is required by the Act to develop an employment equity plan.

What is an Employment Equity Plan?

The employment equity plan should address the barriers to fair employment practices identified during consultation and the remedial measures to be implemented during the length of the plan to remove such barriers. The plan should include the following:
â- â- â€‚The duration of the plan (one â€" five years)
â- â- â€‚Objectives that the employer aims to achieve for each year of the plan
â- â- â€‚Details of the affirmative action measures to be implemented. Where the outcome of the analysis shows that the designated groups are underrepresented numerical targets for each year of the plan should be included as well as numerical goals for what the employer wishes to achieve at the end of the employment equity plan. Employers should note that these are not quotas but targets to be achieved after the implementation of affirmative action measures
â- â- â€‚A timetable and strategies to be implemented for each year of the plan
â- â- â€‚ Procedures that will be used to monitor and evaluate the implementation of the plan
â- â- â€‚A dispute procedure that will be applied if disputes arise around the EE plan
â- â- â€‚ Details of people who are responsible for implementing the plan

Completion of Employment Equity Reports

In consultation with the employment equity committee, the employer, after following the above process should have the required information to enable them to submit their employment equity reports to the DOL. All designated employers are required to submit an EEA2 and EEA4 form on an annual basis.
Employers are actively encouraged to submit these reports on line via the DOL website. The online system for 2016 reporting opened on the 1st September 2016 and will close on 15th January 2017.

MONITORING AND IMPLEMENTATION PHASE

This is a key area of the Act and one in which employers often fail to implement and is the reason why employment equity should not be viewed as a ‘seasonal’ event. After the submission of employment equity reports and the development
of the employment equity plan. Employers should keep records of the progress made in achieving their equity plans and continue to meet with their employment equity committees on a regular basis to provide feedback on the progress of the equity plan and to discuss any other employment equity related issues.

In assessing an employer’s compliance with the Act, one aspect that the DOL will review is the extent to which an employer has made progress in implementing their plan and that they have taken reasonable efforts towards its implementation.

What are the Fines and Penalties?

Since the amendments to the Employment Equity Act came into force in August 2014 the fines relating to non -compliance have increased by 200% and employers can be liable to fines of greater than R1, 500,000 or 2% of the employer’s annual turnover. Employers therefore need to be mindful that the consequences of non-compliance will be of considerable financial loss, which in some cases maybe crippling for an organisation.

The moral of this article is that the process of implementing true employment equity within the workplace should not be left to chance. Employers should embrace the Act in the true spirit in which it was intended to create transformation in the workplace that will benefit and contribute to creating a harmonious productive workplace in South Africa.

DRG Outsourcing (Pty) Ltd
Tel: +27 (0) 31 - 767 0625
Fax: +27 (0) 31 - 767 3280
david@drg.co.za
www.drg.co.za