1. The Employment Equity Act No.47 of 2013 (“EEA amendment“) comes into operation today, 1 August 2014.

2. The purpose of the EEA amendment is to amend the Employment Equity Act No. 55 of 1998 (“EEA“) by, inter alia,

2.1  amending the definition of “designated groups” as follows -

“black people, women and people with disabilities who -

(a) are citizens of the Republic of South Africa by birth or descent;

(b) became citizens of the Republic of South Africa by naturalisation -

(i) before 27 April 1994; or

(ii) 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”;

2.2  introducing the following additional criteria which would give rise to unfair discrimination -

“a difference in terms and conditions of employment between employees performing the same or substantially the same work or work of equal value that is directly or indirectly based on one or more of the grounds already contemplated in the EEA”;

2.3  providing that -

2.3.1  all disputes regarding unfair discrimination and prohibited medical or psychological testing will be dealt with by the CCMA, unless the employee earns in excess of the earnings threshold promulgated by the Minister of Labour, in which case all such disputes must be referred to the Labour Court;

2.3.2  sexual harassment cases are to be dealt with by the CCMA; and

2.3.3  certain arbitration awards handed down by the CCMA in respect of EEA disputes can be appealed to the Labour  Court;

2.4  providing that -

2.4.1  if discrimination is alleged on the grounds of 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, the employer will bear the onus to prove that the discrimination did not take place, or is rational, not unfair and justifiable;

2.4.2  if discrimination is alleged on arbitrary grounds the complainant must prove that the conduct was not rational, amounts to discrimination and that the discrimination is unfair;

2.5  further regulating the preparation and implementation of employment equity plans and the submission of reports by designated employers to the Director General of Labour by removing the distinction between designated employers employing 50 or less employees and those employing 150 or more employees, and furthermore providing that all designated employers must –

2.5.1  submit annual reports to the Director General within twelve months after becoming a designed employer;

2.5.2  thereafter submit reports once every year by the first day of October of each year or other date as may be prescribed;

2.6   simplifying the compliance procedures set out in the EEA by –

2.6.1  eliminating the need for the Department of Labour to issue compliance orders if a designated employer fails to prepare or implement employment equity plans and/or submit employment equity reports;

2.6.2  removing the designated employer’s right to appeal against or object to compliance orders issued by the Department of Labour; and

2.6.3 allowing the Director General to approach the Labour Court for further action to be taken against employers failing to comply with compliance orders;

2.7  significantly increasing the fines and penalties provided for in the EEA (which previously ranged from R500 000 to R900 000). Fines in respect of non‑compliance with the consultation, analysis, appointing of managers, displaying information, retention of records requirements of the EEA now range from a maximum of R1 500 000 to a maximum of R2 700 000. Fines in respect of non‑compliance with the employment equity plan and employment equity report obligations of the EEA now range from the greater of R1 500 000 or 2% of turnover to the greater of R2 700 000 or 10% of turnover;

2.8  amending the annual turnover thresholds for determining whether an employer (which employs less than 50 employees) will be deemed to be a designated employer. Examples of the new turnover thresholds are -

2.8.1  mining and quarrying – R22.5 million (previously R7.5 million);

2.8.2  construction – R15 million (previously R5 million);

2.8.3  manufacturing – R30 million (previously R10 million);

2.8.4  transport and communications – R30 million (previously R10 million).

3.  The EEA amendment clearly highlights the importance of the EEA in South Africa and that employers who disregard their obligations in terms of the EEA will be dealt with more swiftly and more severally.

Written by Anastasia Vatalidis, director, Werksmans Attorneys