You could soon be headed for Labour Court if you are a designated employer and if you have not complied with the Employment Equity Act (EEA). That is, if you have 50 or more employees or your annual business turnover exceeds the prescribed turnover threshold the requirements of the EEA apply to you. This threshold ranges from R2 million to R25 million depending on the industry you are in. For example, the thresholds for the sectors of agriculture, construction, business services and wholesale trade are R2 million, R 5 million, R 10  million and R 25 million respectively. Your industry’s threshold will fall somewhere within this range. These thresholds will be changing soon.

Thus, even if you have fewer than 50 employees, you could soon be liable for prosecution in the Labour Court if you have not complied with the affirmative action requirements of the EEA.

To make things worse for employers, the employment equity laws will soon be tightened very considerably so as:

• to place a much higher responsibility on employers to achieve acceptable affirmative action targets; and
• to  enable the Department of Labour to take very strong action and much swifter action against defaulters.

Employers that do not comply, even those that have not yet been visited by the Department of Labour, face the prospect of prosecution in the Labour Court. Defaulters could be forced to pay millions of rands in fines and could lose their qualifications for being granted government contracts. This could bankrupt some companies and there are moves afoot to give the courts the power to jail those managers responsible for defaulting.

It appears that Mildred Olifant, the Minister of Labour has run out of patience and intends to use the full might of the law to crack down on contraventions of the EEA. According to the EEA all designated employers are breaking the law if they fail to:

• Do a detailed employment equity (EE) Analysis
• Prepare and submit regular EE Reports
• Prepare and implement a detailed EE Plan. This is a comprehensive strategy for recruiting, ‘accommodating’ and developing members of designated groups. That is, employers must devise an action plan aimed at ensuring that it has the right proportion of black, coloured, Indian, female and disabled people working in all departments and at all levels of the organisation including the very top. For example, if you have fifty members on your board of directors then you must aim to have approximately 35 black, 5 coloured, 4 Indian and 5 white directors. Of these, 25 should be female and 2 should be disabled.
• Set and meet regular EE targets for achieving the required number of members of designated groups at all levels of the workplace.
• Consult with a full cross-section of their workforce and representative trade union on the devising and implementation of the above mentioned analysis, report, plan and target.
• Make available to employees all the documents referred to above.
• Make special arrangements to ensure that black, coloured, Indian, female and disabled employees are able to remain with the organisation, cope with their duties and work environment, fit into the organisation and to advance in the organisation.
• Eliminate barriers to employment of members of designated groups.

While none of these requirements are impossible they will be very much more difficult to achieve with the DOL inspectors breaking down your door. It is important to bear in mind that, once you have set up your EE system based on your own level of resources and circumstances, the task of EE compliance becomes very much easier.

The dearth of jobs available in South Africa coupled with the slow progress of skills development makes it difficult for you to increase your numbers of employees from designated groups even if you want to. However, the impending new legislation puts the onus on you to resolve these problems instead of using them as an excuse for low AA representation.

You therefore have everything to gain and nothing to lose by using the help of a labour law expert to devise your EE analysis, report, plan, target and consultation system. Otherwise, at Labour Court, you will not only be forced to implement EE and to pay crippling fines; you may also be faced with having to meet imposed EE targets.

Thus, if you fall under the definition of “designated employer” then, whether your company/organisation is big or small, private or public, profit-making or non-profit you urgently need to set up your EE systems and begin complying with the legal requirements.

To buy our e-Book, WALKING THE NEW LABOUR LAW TIGHTROPE please go to www.labourlawadvice.co.za

Written by Ivan Israelstam, Chief Executive of Labour Law Management Consulting.
He may be contacted on (011) 888-7944 or 0828522973 or on e-mail address: ivan@labourlawadvice.co.za. Go to: www.labourlawadvice.co.za.
This article first appeared in The Star.