ArticlesGovernment signs major BEE settlement – this is what it says
The Department of Employment and Labour and Trade Union Solidarity have signed a major “settlement agreement” over the country’s employment equity laws that will provide some boundaries and certainty for anxious businesses in South Africa.
The agreement stems from a mediation process that started after Solidarity had filed a complaint with the International Labour Organisation (ILO) against the government for the rigid application of affirmative action in South Africa.
Solidarity has been critical of the government’s moves around employment equity and has challenged the department and national government several times in court over the laws, particularly the ever-narrowing conditions under which businesses must operate.
The latest changes to the Employment Equity Act (EEA) were signed into law by President Cyril Ramaphosa in April, which empowered the employment minister to set specific racial targets for 18 sectors in the country across four different skill levels – including top management.
Under the new laws, designated employers – all businesses that employ more than 50 people – have five years to ensure their workforces represent racial and gender demographics on a provincial or national level.
Solidarity referred a dispute to the International Labour Organisation (ILO) regarding the Act, and the ILO recommended that the Commission for Conciliation, Mediation and Arbitration (CCMA) should facilitate the dispute.
Through arbitration and dialogue, the two parties reached and signed an agreement on the laws.
The agreement
According to Solidarity, the agreement solidifies and underlines two major points in relation to employment equity:
- No one’s employment may be terminated in any way as a result of companies’ racial programmes; and
- Race may not be used as the sole criterion for employment and promotions.
“This agreement means the end of using race as the sole criterion for employment and promotion. It also removes the sword of retrenchment that has been hanging over the head of minorities, and it means that companies would no longer be forced to make appointments that do not meet their specific skills needs.
“The agreement will now be gazetted as part of the 2023 Employment Equity regulations, and the parties have agreed that it may be made a court order. Companies will therefore be obliged to implement it,” Solidarity said.
According to the labour department, the agreement is in line with the Constitution and the new Employment Equity Amendment Act and standing BEE laws.
This, it said, should go toward “demystify(ing) and discredit(ing) the negative perceptions” around the laws – including the sector EE target regulations published for public comment.
In addition to the broad points outlined by Solidarity, the agreement also lists the specific conditions that employers can use as reasons for not complying with the laws.
The criteria that must be taken into account when applying employment equity include:
- Inherent requirements of the job
- The pool of suitably qualified persons
- The qualifications, skills, experience and the capacity to acquire, within a reasonable timeframe, the ability to do the job
- The rate of turnover and natural attrition in the workplace
- Recruitment and promotional trends within a workplace
Justifiable and reasonable grounds for not complying with the targets include:
- Insufficient recruitment opportunities
- Insufficient promotion opportunities
- Insufficient target individuals from designated groups with the relevant skills, qualifications and experience
- CCMA awards or court orders
- Transfer of business
- Mergers / Acquisitions
- Impact on business economic circumstances
The settlement also affirms a guarantee from the government that no penalties will be applied to employers and businesses that have a valid reason not to comply – while also stating clearly that no business will be forced in any way to dismiss workers based on race in trying to achieve the targets.
“The EEA and other labour laws do not require employers to dismiss or terminate employment of any employees irrespective of their race, to make space for the implementation of EE Amendments and sector EE targets, including Affirmative Action in their workplace,” the department said.
“What matters most is that it (the EEA) should lead to real change; more responsible behaviour from companies; and more thoughtful EE planning and implementation. EE and Affirmative Action seeks to ensure the maximum participation of every citizen in the economy of the country, which is inclusive of the African, Coloured, Indian and White population groups.”