How will the soon-to-be-implemented Employment Equity Amendment Bill affect your business?
Bill now before Parliament; includes requirements for employee training and compliance certificates for government tenders
JOHANNESBURG – March 04, 2020 – South Africa is facing a double dilemma right now in terms of unemployment and skills. Firstly, we have one of the highest unemployment rates in the world, but secondly, we also rank poorly in terms of skills. The net effect is that despite this high unemployment level, companies still battle to find skilled workers.
In mid-February, Cabinet gave the Employment Equity Amendment Bill of 2020 the green light for submission to Parliament. This is a crucial bill that seeks to strengthen the Employment Equity Act 55 of 1998 (the Act) and support efforts to eradicate the legacies of apartheid discrimination, as well as inequality in the workplace. When it becomes law, most likely in mid-2020, it will bring far-reaching consequences to employers in terms of rights and obligations.
From the perspective of inequality in the workplace, the Employment Equity Amendment Bill will bring in mandatory training of employees, meaning that companies will have to focus on their training and development. Additionally, the Amendment Bill also makes specific reference to the issuing of an Employment Equity Compliance certificate.
In short, the bill places an obligation on companies to train their own employees, and in addition, restricts organisations that do not meet the requirements of the Employment Equity Compliance certificate regulations from bidding for state tenders.
Did someone say Pivotal training?
In light of the difficulties that companies face in finding – and sometimes retaining – skilled workers, it is therefore vital for business to take skills development and training seriously, especially where pivotal training is concerned. ‘Pivotal training’ refers to learnership programmes that are professional, technical as well as academic, and which will result in occupational qualifications or part qualifications within the National Qualifications Framework (NQF).Pivotal training will allow for the following:
- It helps contribute to employee wellness;
- It enables employees to grow within your organisation; and
- It offers staff equal employment opportunities.
The implementation of pivotal training will also allow for increased B-BBEE points, in that the points available under skills development and bursary expenditure allow for 10 points (up from eight), while the combined target remains at six percent.
Why turn your company into a place of learning?
The latest World Economic Forum (WEF) Global Competitiveness Report ranked the skills of the South African workforce at 101 out of 141 countries; in other words, within the bottom third of economies assessed. The ease of finding skilled employees also ranked poorly at 98th. And so the answer to the question, ‘Why turn your company into a place of learning?’ is therefore clear on many fronts, including moral responsibility and a duty to the country.
Organisations can achieve this by implementing or introducing the following: skills development, bursaries, learnerships or internships, or of course a combination of these.
Other areas affected by the revisions to the Employment Equity Act of 1998 include learnership allowances and mandatory grants. The revised learnership allowances are set out in the table below:
On mandatory grants, some confusion currently reigns with regards to percentages of mandatory grants and a Labour Appeal Court judgment of 16 October 2019. Our best practice advice here is to urge companies to engage with their relevant SETA, in order to properly advise the Employment Equity Committees on which the business will serve, prior to the submission of Annexure 2 Reports in April 2020.
Turning to the issue of the requisite compliance certificates, and as per Government Gazette No. 41922 of 21 September 2018, a certificate of compliance to the Employment Equity Act will be issued to employers only if:
- The applicable sectorial targets have been achieved or the company has raised a reasonable ground for non-compliance;
- The employer has submitted its most recent employment equity report; or
- The employer has not been found within the previous twelve months to have breached the prohibition on unfair discrimination or to have paid wages below the level of the national minimum wage.
As the new decade slowly but steadily unfolds, it is clear that the country remains under the yoke of an ongoing economic crisis. Remedial steps and solutions are multi-layered and will take time. Nonetheless, we believe steadfastly in the power of education and training to uplift and empower individuals, which in turn translates, like ripples in the proverbial pond, into positive effects for the wider organisation in which the individual operates, and in turn the wider region and state.