In the last 2 years we have seen a significant increase in the Department of Labour’s Employment Equity compliance audits taking place. We have been in a fortunate position to assist a number of clients in navigating through this process, which clearly anyone would view as stressful.
In some of the recent audits, it was once again emphasized that there are a number of more important aspects to focus on and get in place to avoid any penalties. We only want to highlight 7 of them.
A (1) current (2) Employment Equity Plan
In two recent audits, the inspectors shared with us that failure to have a current Employment Equity Plan (EE Plan) in place, will result in immediate referral to the Labour Court for enforcement due to non-compliance with the Employment Equity Act (EEA) section(s) 20 and 23 respectively.
What is vital to highlight is that your EE Plan must indicate the strategies the organisation will adopt in aiming to achieve a more equitably represented workforce in terms of the Economically Active Population’ statistics. Applying the SMART principle in setting your numerical goals and targets, as well as in terms of identifying and eliminating barriers are a must! This can only be done by doing a (3) section 19 Analysis to identify the current status of the company and what we should project for and aim to achieve.
(4) Annual Reporting
Equally so, failure to submit an Annual Employment Equity Report (EE Report), will have the same dire consequences, being non-compliant with section 21 of the EEA. Every year a designated employer must (based on meaningful consultation and implementation of the EE Plan), report on their progress made in terms of the objectives set.
During a DoL audit, your organisation’s “performance” will be scrutinised over the past 3 years. In other words, what progress have you made year on year?
Non-compliance in terms of section 20, 21 or 23 (with no previous contraventions); could result in a fine equal to the greater of R1 500 000 or 2% of the employer’s turnover.
(5) Meaningful Consultation
Consider the fact, that even though you might have an EE Plan in place and even though you might be submitting an Annual EE Report; has there been meaningful consultation regarding the plan, it’s implementation and monitoring of progress made? The dire consequences of not engaging your committee in meaningful consultation regarding your plan is obvious. Failure/refusal to comply with section 17 could result in a fine of R1 500 000 (with no previous contraventions).
Meaningful consultation with an (6) equitably represented forum (compliance with section 16), regarding the company’s EE Plan (including strategic objectives in order to achieve numerical goals and targets, etc.) is NON-NEGIOTIABLE.
After all how valid is an Employment Equity Plan, if there was no consultation? A designated employer must be able to prove that it has engaged in meaningful consultation. Equally of importance, a designated employer must be able to provide proof of regular consultative meetings, as well as proof of the measures taken to identify and eliminate any possible barriers for advancement of designated groups.
(7) Appointing a senior responsible manager
As a designated employer, it is critical to take Employment Equity serious. Not just because of the risk of being fined, but also more importantly to be able to show progress in creating change and advancing previously disadvantaged groups. It is therefore another compliance requirement (section 24) that the company must appoint one or more senior managers to take responsibility for monitoring and implementing the EE Plan.
Quarterly Labour Force Survey (1st Quarter 2019)
According to the latest Quarterly Labour Force Survey (QLFS) released by Statistics SA, the number of employed persons decreased by 237 000 to 16.3 million, while the number of unemployed persons increased by 62 000 to 6.2 million.
- Unemployment in the first quarter of 2019 increased by 0.5 of a percentage point, bringing the rate to 27.6%.
- The burden of unemployment is concentrated amongst the youth (aged 15–34 years) as they account for 63.4% of the total number of unemployed persons.
- Almost 4 in every 10 young people in the labour force did not have a job, with the unemployment rate within this group at 40.7% in the 1stquarter of 2019.
- The historical data shows that compared to the 4thquarter of every year, unemployment among youth increases in the 1st quarter of every year. This is mainly due to new entrants into the labour market.
- The majority (85,7%) of the young unemployed graduates aged 15–24 years were new entrants into the labour market in the 1stquarter of 2019, while the rest have either lost their previous jobs, left their previous jobs or were re-entrants into the labour market.
The latest survey once again highlights to employers that we must explore and invest in opportunities to employ the youth. With the added benefits through the YES program, there is no reason not to consider this.
In order for Transformation to work, one of the first steps is to invest in training your EE/Training Committee. Your committee must be informed and have the necessary understanding in order to engage in meaningful consultation. They must understand their role and responsibilities.
Another aspect to consider is that failing to take Employment Equity seriously, will have a direct impact on your company’s B-BBEE score, as Employment Equity and Skills Development work hand-in-hand. B-BBEE is of course a topic for another day.
We invite you to engage with us to assist you in terms of the requirements of the EE Act and Skills Development.
The Employment Equity Reporting period opens in September 2019.
Written by: Hannetjie Hock – EE/SD Consultant
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