| Labour Legislation Overhaul |
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The EMPLOYMENT EQUITY ACT (NO 55 OF 1998) is set for a major overhaul this year that could have drastic implications for all employers.Enclosed are some of the proposed changes: Assessment of complianceThis is one of the major radical of all the proposed amendments. The Section 42 makes it very difficult for the Department of Labour to enforce the Employment Equity Act (EEA). It obliges the Director General or any person or body applying this Act to take all of the factors listed below into account when assessing compliance. As a result, the Act is almost impossible to enforce. The current section 42 is belowIn determining whether a designated employer is implementing employment equity in compliance with this Act, the Director General or any person or body applying this Act must, in addition to the factors stated in section 15, take into account all of the following:the extent to which suitably qualified people from and amongst the different designated groups are equitably represented within each occupational category and level in that employer’s workforce in relation to the – Demographic profile of the national and regional economically active population; Pool of suitably qualified people from designated groups from which the employer may reasonably be expected to promote or appoint employees; economic and financial factors relevant to the sector in which the employer operates; present and anticipated economic and financial circumstances of the employer; and the number of present and planned vacancies that exist in the various categories and levels, and the employer’s labour turnover; progress made in implementing employment equity by other designated employers operating under comparable circumstances and within the same sector; reasonable efforts made by a designated employer to implement its employment equity plan; the extent to which the designated employer has made progress in eliminating employment barriers that adversely affect people from designated groups; and any other prescribed factor The proposed new section 42 below:In determining whether a designated employer is implementing employment equity in compliance with this Act, the Director General or any person or body applying this Act may, in addition to the factors stated in section 15, take the following into account:the extent to which suitably qualified people from and amongst the different designated groups are equitably represented within each occupational category and level in that employer’s workforce in relation to the demographic profile of the economically active population; reasonable steps taken by an employer to develop a pool of suitably qualified people from the designated groups; reasonable steps taken by an employer to appoint and promote suitably qualified people from the designated groups; reasonable efforts made by a designated employer to implement its employment equity plan; and the extent to which the designated employer has made progress in eliminating employment barriers that adversely affect people from designated groups. You will notice the major change of the removal of must to may which make enforcement compliance a lot easier for the Department. You will also notice the removal of economic and financial factors out of the compliance sections. This is very dangerous and should be opposed. The implementation pace of an enterprise must be some way related to the economic conditions both in the sector and the enterprise. Maximum fines that may be imposed for contravening the ActSchedule 1 which deals with fines that may be imposed on an employer for non-compliance, has remained static since the promulgation of the Act (1999). The fines outlined in this current schedule do not appear to serve as a deterrent to employers. In addition, in its present form any changes to the fines outlined in this schedule will require the Act to be perpetually amended. The thinking is to go to what the competition commission does and that is based on a percentage of turnover.The recommendation is this Schedule be radically amended.
The first proposal in the new amendments was a range of fines up to a maximum of 10% of the preceding year’s turnover. Although we think the negotiations will end up at between 0.5% and 4% of turnover it is a huge increase that will have dramatic implications for enterprises. RemunerationThe ILO recommends the inclusion of ‘Equal Pay for Work of Equal Value’ to be included in the Employment Equity Act (EEA). .The proposed change is a clause regulating ‘Equal Pay for Work of Equal Value’ should be included in Chapter 2 of the Act as an attempt to eliminate unfair discrimination. The consequences of this is a huge increase in expectation of a number of employees who might be paid differently but for permissible reasons the performance, years of service and alike. Get your act together as an employer. This act will change and the fines will be a percentage of turnover. Contact us at 043 7211030 if you require additional information or help in terms of compliance. |
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