Amendments to the Employment Equity Act 2012

The Employment Equity Amendments Bill published on 19 October 2012 (‘the Bill’) signifies the first amendments to the Employment Equity Act (‘the EEA’) since it came into operation in 1998. The Bill seeks to rectify anomalies and clarify uncertainties that have arisen out from the interpretation of the EEA in the past decade. We will also see the expansion of the powers of the Labour Inspectorate and the jurisdiction of the CCMA.

The following amendments proposed by the Bill are worth taking note of:

Discriminatory grounds expanded: The grounds for discrimination will no longer be limited to those listed in section 6 of the EEA (race, gender, sex, pregnancy, etc), but will also include discrimination “on any other arbitrary ground”. This change would create consistency with the terminology used in section 187(1)(f) of the Labour Relations Act, 1995 (Act No. 66 of 1995), that prohibits discriminatory dismissals.

Psychometric tests: Currently psychological tests may be used on employees (including prospective employees) if they have been shown to be scientifically valid and reliable, can be applied fairly to all employees and is not biased against any employee or group. The Bill introduces an additional requirement that only psychometric tests that have been certified by the Health Professions Council of South Africa, or another body which is authorised to certify such tests, may be used.

CCMA to have jurisdiction: At present, all unfair discrimination claims fall within the exclusive jurisdiction of the Labour Court. According to the Bill an employee would also be able to refer the dispute to the CCMA for arbitration if the employee complains about sexual harassment (as a form of discrimination). Any other discrimination claims may be referred to the CCMA for arbitration by lower-paid employees (those earning less than the earnings threshold prescribed under section 6(3) of the BCEA, which is currently at R183008 per year). In the case discrimination claims by higher earning employees, the parties may consent to the referral of a discrimination dispute to the CCMA for arbitration. However, the maximum award that the CCMA can make in respect of damages will be an amount equal to the earnings threshold referred to above. A person affected by an arbitrator’s award in a discrimination case will be entitled to appeal to the Labour Court.

Burden of proof: There will be some changes relating to the onus of proof in discrimination claims. In the case where an employee alleges one of the listed discriminatory grounds (race, gender, sex, pregnancy, etc), the onus will be on the employer to prove that discrimination did not take place as alleged, or is rational and not unfair, or is otherwise justifiable. In the case of an allegation of unfair discrimination “based on any other arbitrary ground” the onus will be entirely on the employee.

Work of equal value: A new section is introduced in order to deal explicitly with unfair discrimination by an employer in respect of wages and other terms and conditions of employment of employees doing the same or similar work or work of equal value. A differentiation based on a ground envisaged by the EEA will amount to unfair discrimination unless the employer can show that differences in wages or other conditions of employment are in fact based on fair criteria such as experience, skill, responsibility, etc. The Minister of Labour will be empowered to publish a code of good practice dealing with criteria and methodologies for assessing work of equal value.

Only apartheid victims to benefit: The definition of ‘designated groups’ is amended to ensure that beneficiaries of affirmative action are limited to persons who were citizens of South Africa before the democratic era, or would have been entitled to citizenship, but for the policies of apartheid, and their descendants. As a result the employment of persons who are foreign nationals or who have become citizens after April 1994, will not assist employers to meet their affirmative action targets.

Occupational categories excluded: In order to avoid confusion and simplify the procedures relating to affirmative action, reference will only be made to ‘occupational levels’ in the workforce. Reference to ‘occupational categories’ will be removed.

Threshold for ‘designated employers’: The total annual turnover thresholds set for employers in various industries (in order to be classified as a ‘designated employers’ for the purposes of the affirmative action provisions of the EEA), will be increased to three times the current amount. This means that some employers that were obliged to comply by virtue of their turnover will no longer have to do so. Employers that employ 50 or more employees will still be regarded as ‘designated employers’ irrespective of their turnover.

Annual reports: All designated employers, including those with 150 and less employees, will have to submit their EE reports annually.

Enforcement procedures: Enforcement procedures will be truncated to promote more effective and efficient enforcement. For example, a labour inspector would be able to issue a compliance order without first having to obtain a written undertaking from an employer. The opportunity to object to a compliance order has been removed, but a decision may still be challenged at an appropriate juncture.

Assessment of compliance: The factors that may be taken into account in determining whether an employer is implementing employment equity in compliance with the EEA have been revised. The Minister will be empowered to make regulations dealing with the assessment of compliance, including specifying the circumstances under which an employer’s compliance should be assessed by reference to the demographic profile of either the national or regional economically active population. An employer may raise any reasonable ground to justify failure to comply with the implementation of employment equity.

Labour brokers: Employees who are placed with a client by a temporary employment service (labour broker) for longer than six months will be deemed to be employees of the client for the purposes of affirmative action.

Increased fines: The maximum fines that may be imposed for contraventions of the EEA will be increased threefold (in order to reflect the change in the value of money since 1998). In addition, an employer’s turnover could be taken into account in determining the maximum fine that may be imposed for substantive failures to comply with the EEA.

This Bill follows extensive consultation between the Department of Labour, organised business and organised labour. It is therefore unlikely that we will see any significant changes before it becomes law.

Jan Truter of www.labourwise.co.za