The Department of Labour's online reporting system for electronic submission of employment equity reports has now closed. What happens if you missed it though?

The electronic submission deadline is the later of the deadlines for submission with the manual submission deadline being in the preceding October. This means that there is no further opportunity for designated employers to submit their employment equity reports for the 2017 reporting year.

The failure to submit a company's employment equity report may result in the imposition of a statutory fine of up to 10 % of the company's annual turnover, depending on the frequency of such a failure. The ancillary, and potentially more damaging, ramifications however are that the company, if it does not file its employment equity report, may be downgraded in terms of its Broad-Based Black Economic Empowerment (BBBEE) rating. Proof of a filed employment equity report (and income differentials statement) is used as evidence of compliance with the affirmative action measures contained in the Employment Equity Act, 1998 (EEA) and is used as the basis on which BBEEE points are awarded for employment equity under the Management Control pillar.

A reduction in BBBEE rating may have dire consequences for businesses who rely heavily on public sector work where preference is generally given to service providers with a higher BBBEE rating.

There may be any one of a number of reasons why a designated employer did not submit its report in time, but is there anything they can do about it? The most likely answer to that question is "No".

However, if the lack of submission was as a result of the online system hanging or crashing (which could be attributable to an influx of submissions), there may be a chance that a sympathetic court will come to the company’s assistance. In this regard, a designated employer may approach the court for clarity on whether their report was in fact 'submitted' when considering the definition of 'submit' in the EEA. In essence, if the Department of Labour is capable of viewing the final report and printing it on the online system, then there is a chance that the report would be considered to have been filed in accordance with the EEA.

If the designated employer's failure to submit the report is not as a result of the system crashing at the 11th hour, there is little that an employer can do other than ready themselves for a potential inspection from the Department of Labour.

Written By Lauren Salt, Senior Associate, Employment & Compensation Practice, Baker McKenzie Johannesburg