The Employment Equity Amendment Act has come under fire from black business organisations after President Cyril Ramaphosa signed it into law last month.
The Presidency said the act sought to advance the transformation of South Africa’s workforce by setting equity targets for economic sectors and geographical regions and requiring
enterprises to develop transformation plans.
The new law amended to the Employment Equity Act of 1998 has new measures to promote diversity and equality in the workplace, the Presidency added. The Presidency published the Employment Equity Amendment Act in the Government Gazette on April 14.
However, the Black Management Forum (BMF) and the Association of Black Securities and Investment Professionals (Absip) opposed the act.
BMF acting managing director Xolile Kunene wrote in a statement that the act purported to advance the transformation of South Africa’s workforce by setting equity targets for economic sectors and geographical regions. It requires enterprises to develop transformation plans.
The act empowers the employment and labour minister to regulate compliance criteria to issue compliance certificates as per section 53 of the Employment Equity Act.
“Even though it all appears as a progressive move, the tail has a sting. What is unpleasing is the omission by the employment and labour department on the turnover threshold for employers who employ less than 50 employees. This exclusion creates a back door escape mechanism for companies who do not want to employ black professionals,” Kunene added.
She said the BMF rejected aspects of section 53 of the act.
“In terms of this new dispensation, a company turning over R100-billion, as an example, is deemed a small company, and therefore undesignated on the basis that it employs less than 50 people and thus exempted from the compliance expected from designated employers who employ more than 50 employees.
‘This further creates a loophole for companies not supporting transformation to unbundle into subsidiaries that employ less than 50 people. The BMF rejects the exclusion of the turnover threshold in defining small employers, as it reverses the transformation gains achieved thus far.
“We call on the department of labour to tighten all loopholes that can be used to derail this important agenda of transforming workplaces. Lessons learned thus far indicate that those against this agenda will use any hole to hide. The amendments to the act must strive to close these as far as possible,” Kunene said.
Absip is concerned that the Employment Equity Amendment Act may undermine the financial sector’s progress on transformation and hinder efforts to achieve diversity, inclusivity and equity.
“We believe that the new rules exempting companies with less than 50 employees from BBBEE compliance regardless of their annual turnover will harm the representation of black professionals in the workplace. This will not only delay our progress towards diversity and inclusivity but may also reverse the gains we have made to transform the face of SA Inc,” Absip added in a note posted on its website.
“We need your collective input to draft a comprehensive submission regarding this development. Your comments and inputs are essential to our ability to influence the legislative process,” Absip wrote.
The department of labour and employment conducted public hearings in October 2018 after publishing the amendment bill for public comment.
Black Business Council chief executive Kganki Matabane did not respond to an email from Sunday World seeking comment about the Employment Equity Amendment Act.