Commission for Employment Equity Annual Report 2016 - 2017

The aim of the Employment Equity Act, No 55, 1998 (as amended) is to facilitate workplace transformation. It incorporates two elements: a) the elimination of unfair discrimination and b) the implementation of affirmative action and measures to enable equitable representation of employees from different race, gender and disability groups in the workplace.

The Commission for Employment Equity (CEE) is a statutory body established in terms of Section 28 of the Employment Equity Act, No 55 of 1998 (EEA). The role of the CEE is to advise the Minister of Labour on any matters concerning the Act, including policy recommendations and matters pertaining to the implementation towards achieving the objectives of the EEA. The CEE is required to submit an annual report to the Minister of Labour in terms of Section 33 of the EEA to monitor and evaluate progress towards achieving the objectives of the EEA. This is the 17th annual report submitted to the Minister by the CEE since its first report in 2000.

This report is an analysis of data and information from EE Reports submitted by employers (both designated and those reporting voluntarily) through their annual employment equity reports as required by Section 21 of the Employment Equity Act. These reports were submitted by employers manually and electronically from 1 September 2016 to 15 January 2017 when the EE system officially closes for reporting for a particular year.

The CEE embarked on a number of key initiatives to understand and enhance the pace of transformation in the country. These initiatives are reflected in this 17th Annual Report. The 2016 initiatives by the CEE includes: engagements with stakeholders both strategic partners and representatives from key sectors of the economy; review of the Code of Good Practice on the Employment of Persons with Disabilities and the review of the Code of Good Practice on the Preparation, Implementation and Monitoring of Employment Equity Plans. Included in this report is the latest Economically Active Population (EAP) as published by Statistics South Africa during the third quarter of 2016. The EAP is provided by population group and gender for the national and provincial populations and is used as a benchmark for the setting of numerical goals and targets.

An analysis of the workforce profile for the reporting organisations is presented for all the occupational levels, viz. Top Management, Senior Management, Professionally Qualified, Skilled Technical, Semi-skilled and Unskilled levels. This is in response to an outcry from users to reflect on all the occupational levels and not only concentrate on the top levels. The analysis is according to race, gender and disability status as well as by province, sectors and business type.

The report also provides a workforce profile trend analysis from 2014 to 2016 by race, gender and disability. Also, included in this edition of the CEE Annual Report is the analysis of workforce profile, movements and skills development at universities and universities of technology. This is in response to a request from the higher education sector during the CEE sectoral engagements and in line with the Government’s plan on transformation in the higher education sector.

The activities of the CEE are guided by the key strategic objectives set out by the fourth CEE at the beginning of its term in December 2015. Key activities highlighted for this reporting period include the following:

2.1    REVIEW OF THE TECHNICAL ASSISTANCE GUIDELINES ON THE EMPLOYMENT  OF PERSONS WITH DISABILITIES  (DISABILITY  TAG)

The Technical Assistance Guidelines on the employment of People with Disabilities, which unpacks the Disability Code, was first published in 2003. Following the adoption of the United Nations Convention on the Rights of Persons with Disabilities and the revision of the Code of Good Practice on the Employment of Persons with Disabilities (Disability Code) in 2015, the Disability TAG was aligned accordingly. The Disability TAG unpacks the Disability Code and serves both as a management and a technical tool to guide employers in dealing with disability in the workplace when commencing employment, during employment and when terminating employment.

2.2.   REVIEW OF THE CODE OF GOOD PRACTICE ON THE PREPARATION,  IMPLEMENTATION AND MONITORING  OF THE EMPLOYMENT  EQUITY PLAN

With the commencement of the Employment Equity Amendment Act No. 47 of 2013 in August 2014, it became necessary to review all provisions affected by the amendment. One such instrument is the Code of Good Practice on the Preparation, Implementation and Monitoring of the Employment Equity Plan. The draft amended Code was published in the Government Gazette on 30 September 2016 for public comments. The amended Code will be published in the Government Gazette after incorporating the inputs sourced from public comments.

2.3. CEE STAKEHOLDER ENGAGEMENTS

The fourth CEE had planned among its strategic priorities, to engage with stakeholders in order to promote effective implementation of the objectives of the EEA. In discharging this task, the CEE differentiated between strategic and sectoral stakeholders. The mandate of the strategic partners has a bearing on the work that the CEE does. The sectoral stakeholders are those stakeholders responsible for the implementation of the EEA.

2.3.1   CONSULTATION  WITH STRATEGIC PARTNERS

The engagement with this category of stakeholders was in order to form strategic partnerships on issues of common interest in realising the aims of the EEA. Among the partners that the CEE met, was the Broad-Based Black Economic (B-BBEE) Commission, the Black Management Forum (BMF), the Commission for Gender Equality (CGE) and the South African Human Rights Commission (SAHRC). The CEE entered into an agreement and signed a memorandum of understanding with the CGE regarding matters of mutual interests.

2.3.2  SECTORAL STAKEHOLDER ENGAGEMENTS

The Commission for Employment Equity embarked on consultative meetings with business leaders from various sectors of the South African economy. The CEE Annual Report constantly pointed to the under-representation of designated groups at the senior and Top Management levels of the workforce, despite them possessing skills to operate in the industry evidenced by the concentration at the Skilled Technical and professionally qualified occupational levels of the workplace.

The aim of the sectoral engagements was to understand and appreciate the issues affecting the implementation of the Employment Equity Act in organisations. The engagements produced vigorous debates from participants and pointed to various factors explaining the continued under-representation of designated groups in decision-making positions in the workplace. Among those mentioned is resistance to change from management in most sectors of the economy, which is characterised by the fixation on the legal compliance on employment equity and a failure to move beyond what is required by law. Businesses were mostly focussed on B-BBEE, which is seen to yield economic benefits, while ignoring the employment equity component of the balanced scorecard. This was because employment equity is not integrated into the overall business strategy, but relegated to human resources, (HR). Sectoral targets were proposed as a solution to this problem.

There were claims of the existence of networks, which dictate who is recruited and promoted in organisations which was also a major challenge. This meant designated groups, especially Black (African) people were not being exposed to such opportunities ensuring their readiness for operating at higher levels despite having the necessary qualifications. Income disparities on employees in the same positions also came up during the engagements despite the promulgation of the Equal Pay for Work of Equal Value provisions in the Employment Equity Amendment Act in 2014, which perpetuate income inequality.

2.4. PROMULGATION OF SECTION 53  OF THE EMPLOYMENT   EQUITY ACT (STATE CONTRACTS)

The consolidation of 23 years of democracy and 21 years of the Constitution of the Republic of South Africa entrenched the need to eradicate social and economic inequalities, particularly those that stem from our history of Colonialism, Apartheid and Patriarchy, which brought inequality to the great majority of our people, in particular Black people, Women and Persons with Disabilities.

It is well known that Colonialism, Apartheid and Patriarchy, have left behind a legacy of inequalities in both the labour market and society as a whole. In the labour market, the disparity in the distribution of jobs, occupations and incomes, reveals the effects of discrimination against Black people, Women and Persons with Disabilities.

It is therefore submitted that prohibition of unfair discrimination and the commitment to the implementation of affirmative action measures are mutually reinforcing processes required to achieve “substantive equality” in order to give effect to the right to equality as enshrined in Section 9 of the Constitution of the Republic of South Africa (Constitution).

Section 9(2) of the Constitution, the equality clause reads as follows:

‘Equality includes the full and equal enjoyment of all rights and freedoms. To promote the achievement of equality, legislative and other measures designed to protect or advance persons or categories of persons, disadvantaged by unfair discrimination may be taken.’

It is against this backdrop that the Employment Equity Act (EEA), 1998 was enacted followed by other pieces of transformation legislation such as the Skills Development Act and the Broad Based Black Economic Empowerment Act to give effect to section 9(2) of the Constitution.

However, it is known that despite the comprehensive legal framework in place and the consolidation of 19 years of the EEA, the pace of transformation has been slow. Some key contributors to this slow pace, include implementation challenges such as resistance by a number of employers to embrace employment equity to transform their various workplaces; employment equity not yet being recognised by a number of employers as a business imperative and not yet integrated into business strategies and  plans to promote equity; absence of prescribed EE targets/ EE benchmarks to be met by various employers in various sectors to ensure that there is equity in their various workplaces; and inadequate monitoring of compliance by employees and trade unions in relation to the implementation of the agreed EE targets set by employers in the EE plans.

Notably, stakeholders that participated in the Commission for Employment Equity Sectoral Engagements held between June and September 2016, called or requested the setting of Sectoral EE targets as benchmarks and the promulgation of Section 53 of the EEA to trigger financial consequences for non-compliance and as a result, expedite transformation and compliance with the EEA.

In light of the slow pace of transformation; implementation challenges of the EEA and absence of financial consequences for non-compliance, the Commission for Employment Equity deemed it urgent to promulgate Section 53 dealing with State Contracts to expedite transformation, increase compliance levels and at the same time trigger financial consequences for non-compliance with the EEA.

53.  (1)  Every employer that makes an offer to conclude an agreement with any organ of state for the furnishing of supplies or services to that organ of state or for the hiring or letting of anything.

(a) must-

(i)  If it is a designated employer, comply with Chapter II and III of this Act, or

(ii) If it is not a designated employer, comply with Chapter II of this Act; and

(b) attach to that offer either-

(i)  a certificate in terms of subsection (2) which is conclusive evidence that the employer complies with the relevant Chapters of this Act; or

(ii) a declaration by the employer that it complies with the relevant Chapters of this Act, which when verified by the Director-General, is conclusive evidence of compliance.

(2)  An employer referred to in subsection (1) may request a certificate from the Minister confirming it compliance with Chapter II, or Chapters II and III, as the case may be.

(3)  A certificate issued in terms of subsection (2) is valid for 12 months from the date of issue or until the next date on which the employer is obliged to submit a report in terms of section 21, whichever period is longer.

(4)  A failure to comply with the relevant provisions of this Act is sufficient ground for rejection of any offer to conclude an agreement referred to in subsection (1) or for cancellation of the agreement.

(5)  The Minister may in the code of good practice set out factors that must be taken into account by any person assessing whether an employer complies with Chapter II or Chapters II and III.

It is noteworthy to highlight that the linking of EE compliance certificates with access to procurement opportunities available within the State is in-line with the international trends that are currently emerging and shared by a number of countries at the United Nations Commission on Status of Women (CSW61) held in March 2017. The linking of Certificates of Compliance for access to State Contracts is seen as a key Government policy intervention to accelerate gender equality and economic empowerment for women to achieve the Sustainable Development Goals, which are central to the United Nations 2030 Agenda.

Section 53 of the EEA deals with issuing of compliance certificates to employers who intend or do business with government. This section has never been promulgated since the inception of the Act. In line with the request made at the sectoral engagements conducted by the CEE, the Commission is looking at setting sectoral targets for the various sectors. These will assist in determining compliance, which will then be used as a basis for the issuing of compliance certificates for those employers who want to do business with Government.