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OCTOBER 2019 – SOUTH AFRICA
EMPLOYMENT EQUITY AMENDMENT BILL 2018 UPDATE

It is important that employers note the following:

Employment Equity Amendment Bill 2018 expected to be tabled soon

Currency reforms

In a statement delivered by the Commission for Employment Equity (CEE) on Wednesday, 9 October, the CEE said that the bill is expected to be tabled in parliament before the end of October 2019 to further establish and increase transformation in the workplace.

The Employment Equity Amendment Bill, 2018 and the Draft Employment Equity Regulations, 2018 were published for public comment for 60 days from 21 September 2018 to 20 November 2018.

The amended Employment Equity Bill would empower the Labour Minister to regulate sector-specific employment equity targets and promulgate Section 53 of the Act to enable the issuing of Employment Equity compliance certificate as a prerequisite for accessing state contracts.

A summary of the proposed changes include:

The definition of a “designated employer” changes by removing paragraph (b) of the definition: “(b) a person who employs fewer than 50 employees but has a total turnover that is equal to or above the applicable annual turnover of a small business in terms of Schedule 4 of this Act”.

In short, this means that all employers with less than 50 employees will be excluded from Chapter 3 of the Employment Equity Act, No. 55 Of 1998 (Affirmative Action) and will no longer have to submit an annual Equity plan.

The following definition is inserted after the definition of “Minister”: National Minimum Wage Commission means the Commission established in terms of the National Minimum Wage Act, 2017 (Act No of 2017)

The following definition is inserted after the definition of “Republic”: sector means an industry or service or part of any industry or service

The following definition is inserted after the definition of “suitably qualified person”: “the state means-

  • A national or provincial department as defined in the Public Finance Management Act, 1999 (Act 1 of 1999);
  • A municipality or municipal entity as defined in the Local Government Municipal Systems Act of 2000 (Act 32 of 2000);
  • A constitutional institution as defined in the Public Finance Management 1999 (Act, 1999 (Act 1 of 1999);
  • Parliament;
  • A provincial legislature;
  • Any entity listed in Schedule 2 and 3 of the Public Finance Management Act of 1999 (Act 1 of 1999).”

Section 14 of the principal Act (Voluntary Compliance) is deleted. This means that in terms of section 53 (State Contracts), employers with less than 50 employees will no longer be able to participate in a government tender, however, small employers can still be issued with a Certificate of Compliance to enable them to do business with Government, provided they comply with Chapter 2 of the EE Act (Unfair Discrimination) and the National Minimum Wage Act.

A new subsection, section 15A has been added to Chapter 3, Section 15 (Affirmative action measures) of the Act. Section 15A (Establishment of sectoral targets) has been added to specify numerical targets for any sector or part of a sector. This means:

  • The Minister may publish a notice in the Gazette identifying national economic sectors for the purposes of the EE Act, having regard to any relevant code contained in the Standard Industrial Classification of all Economic Activities published by Statistics South Africa.
  • The Minister may, by notice in the Gazette, set numerical targets for any sector or part of a sector identified. The notice issued may set different numerical targets for different occupational levels or regions within a sector or on the basis of any other relevant factor.

The Minister may also issue regulations prescribing the criteria to be considered in determining a numerical target.

Section 53 (State Contracts) of the EE Act is amended by the insertion of a new subsection (6) which states:

  • “The Minister may only issue a certificate in terms of subsection (2) if the Minister is satisfied that the employer:-
    (a) has met any sectoral targets in terms of section 15A that applies to it or has provided reasonable grounds, as contemplated by section 42(4), justifying its failure to comply;
    (b) has submitted a report in terms of section 21;
    (c) has not been found by the CCMA or a court within the previous twelve months to have:-
    (i) breached the prohibition on unfair discrimination in Chapter 2; or
    (ii) failed to pay the national minimum wage in terms of the National Minimum Wage Act, 2017 (Act of 2017).”

To view the Employment Equity Amendment Bill 2018, follow the link 

 

Contact our legislation team at info@crs.co.za if you require any additional information.
© 2019 C
RS Technologies (Pty)Ltd. All Rights Reserved.

SEPTEMBER 2019 – SOUTH AFRICA EMPLOYMENT EQUITY EEA4 FORM

It is important that employers note the following:

Changes to the Employment Equity EEA4 Form

In August 2019 the Department of Employment and Labour repealed the old EEA4 form, as published in the Employment Equity Regulations of 1 August 2014, and replaced it with a new version. The new form became effective on 8 August 2019.

The EEA4 form generally contains the format for reporting income differentials to the Employment Conditions Commission.

The Department of Labour stated that the old form is ineffective. The main purpose of the new form is to enable companies to analyse salary information pertaining to employment equity more diligently and provide reasons for income differentials to reduce the remuneration gap between the highest and lowest paid employees.

Two new sections, section D and E, have been added to the EEA4 form. Section D requires the remuneration of the employee with the highest total remuneration, i.e. fixed/guaranteed and variable remuneration, in terms of race group and gender for all the occupational levels, except the lowest occupational level in a company. Section E requires the average/median remuneration and the remuneration gap.

The new format specifically focuses on the following:

  • Reporting on fixed/guaranteed annualised salaries per occupational level, race and gender.
  • Reporting on variable annualised salaries per occupational level, race and gender.
  • Reporting on average annual pay for the top 10% of an organisation’s workforce.
  • Reporting on average annual pay for the bottom 10% of an organisation’s workforce.
  • Reporting on average annual pay for the middle earners of an organisation’s workforce.
  • Reporting on whether an organisation has a policy in place which addresses and closes the vertical gap between the highest and lowest paid employees.
  • Reporting on whether the remuneration gap between the highest and lowest paid employees in an organisation is aligned with remuneration policy.
  • Indicating whether affirmative action measures to address remuneration gaps are included in the organisation’s Employment Equity Plan.

Employers are required to complete the EEA4 form and submit it with the EEA2 form when they complete their employment equity reports.

The report can be submitted between 1 September 2019 and 15 January 2020.

To view the Government Gazette containing the new form, follow the link, selecting 42627 8-8 Labour under Separate Gazettes.

Contact our legislation team at info@crs.co.za if you require any additional information.
© 2019 C
RS Technologies (Pty)Ltd. All Rights Reserved.

CRS Technologies stresses that legislation offers a guide, but can only solve some of the challenges businesses face in effectively dealing with employee incapacity. 

Employees can be incapacitated due to ill-health/injury or poor work performance, and South Africa has developed legislation that guide business owners – but knowing the law is only part of managing this process effectively warns leading HR and HCM solutions provider CRS Technologies.

Nicol Myburgh, Head of HR business unit at CRS Technologies, says three sets of legislation must be considered when it comes to this issue, including the Labour Relations Act (LRA), the Occupational Health and Safety Act, and the Employment Equity Act (EEA).

“Each of these Acts contributes to- or covers the issue of employee incapacity in one way or another. While it is essential to know exactly how, this is only part of the management’s responsibility,” says Myburgh.

To illustrate, CRS Technologies explains that Schedule 8 of the LRA explains the procedure for incapacity. If an employee is temporarily unable to work the employer should consider the extent of the incapacity and consider alternatives to dismissal.

If the incapacity is more permanent in nature, the employer should ascertain the possibility of securing alternative employment or adapting the duties or work circumstances of the employee to accommodate the employee’s disability.

“Particular consideration should be given to employees who are injured at work or who are incapacitated by work-related illness. The courts have indicated that the duty on the employer to accommodate the incapacity of the employee is more onerous in these circumstances.

In these cases the employer should seriously consider actions other than dismissal, for instance light duty or adapting the employee’s job to accommodate him/her,” Myburgh adds.

Disability is included as one of the listed grounds for discrimination and the EEA states: ““No person may unfairly discriminate, directly or indirectly, against an employee, in any employment policy or practice, on one or more grounds, including race, gender, sex, pregnancy, marital status, family responsibility, ethnic or social origin, colour, sexual orientation, age, disability, religion, HIV status, conscience, belief, political opinion, culture, language, birth or on any other arbitrary ground.”

CRS Technologies affirms that management must not only be aware of legal stipulations (and these are substantial), they have to also ensure compliance and that they instil an environment conducive to open, frank and honest discussion and consultation between the employer and employee.

Despite the extent to which labour law covers incapacity of employees and forces a company to be proactive, Myburgh believes that for the most part, businesses are not adhering to the law.

“Not because they don’t want to or refuse to adhere to it, they are just not aware that they are non-compliant, there are so many requirements with regards to incapacity and the process can get extremely complex, non-compliance is not due to anything untoward just ignorance. Unfortunately Employers usually find out too late that a mistake was made, they only realise this upon receiving an 7.11 CCMA application to appear for arbitration,” he adds.

For now, businesses will need to keep focused on legal developments and compliance, but especially how to handle what CRS Technologies describes as their toughest challenge: how to differentiate between incapacity and discrimination and what reasonable accommodation is in practice.

 

South Africa’s business landscape is highly competitive and is governed by legislation designed to enforce compliance. It is important for employers to know under what circumstances a critical resource such as the CCMA (Commission for Conciliation, Mediation and Arbitration) will get involved.

Nicol Myburgh heads up the HR Business Unit at CRS Technologies, a leader in HR and HCM solutions market. Myburgh explains that the CCMA can get involved in several matters including dismissal, wages and working conditions, workplace changes, or discrimination.

“It is important to note that an employee may ask the CCMA to conciliate or even arbitrate your dispute. A union or employer’s organisation may also initiate this action. Either party does not need the other party’s consent before taking the matter to the CCMA,” he says.

In the following instances the CCMA does not hear disputes where:

• an independent contractor is involved,
• the case does not deal with an issue in the Labour Relations Act (LRA), Employment Equity Act (EEA) or Basic Conditions of Employment Act (BCEA),
• a bargaining council or statutory council exists for that sector,
• a private agreement exists for resolving disputes (for example: private arbitration).

CRS Technology says the body has three major functions: conciliation, arbitration, and con-arb.

Employees may refer disputes about unfair labour practices and unfair dismissals on an LRA 7.11 application form to the CCMA or, where applicable, a bargaining council for conciliation. If the dispute remains unresolved, it can be referred to arbitration. The dispute can also be con-arb if there is no objection.

The company adds that conciliation is a process where a commissioner meets with the parties in dispute, and explores ways to settle the dispute by agreement.

At conciliation a party may appear in person or be represented by a director or employee of that party or any member, office bearer or official of that party’s registered trade union or registered employer’s organisation.

The meeting is conducted in an informal way.

“The commissioner may begin by meeting jointly with the parties and asking them to share information about the dispute. Separate meetings between the commissioner and each party may also be held. Parties are encouraged to share information and to come forward with ideas on how their differences can be settled. The commissioner may also put forward suggestions,” Myburgh continues.

When conciliation fails, a party may request the CCMA to resolve the dispute by arbitration.

At an arbitration hearing, a commissioner gives both parties an opportunity to fully state their cases. The commissioner then makes a decision on the issue in dispute. The decision, called the arbitration award, is legally binding on both parties. Attempts must generally be made to resolve the dispute through conciliation. If it cannot be resolved by conciliation, the parties can go to arbitration or the Labour Court, the Act specifies which dispute goes to which process.

This process may not be used for dismissals relating to unprotected strikes. These disputes must be referred to the Labour Court after conciliation has failed at the CCMA.

During the Conciliation and the Con-Arb process the Commissioner has the power to award the employee a maximum amount not exceeding twenty-four months remuneration in cases of automatically unfair dismissal or a maximum amount not exceeding not exceeding twelve months remuneration in cases of unfair dismissal.

CRS Technologies advises the market to always evaluate the precise nature and circumstances of each case against the criteria as laid out by the CCMA, prior to immediate engagement.

“This will eliminate a great deal of frustration on all sides and help to streamline what are often complex, tough and drawn-out processes,” Myburgh comments.