The Employment Equity deadline is approaching and the Department of Labour is making a huge noise about the status of EE within some of the bigger companies. Headlines like "Mdladlana names ‘too-white’ firms - Business Day, 12 September, 06"; and "We have regularly submitted reports - Business Report , 12 September, 06" are making the front page of the business press. Then there are the new EE regulations and EE reports which are far more complicated than the last ones.
It seems as though the DoL is trying its best to generate some EE activity within the private sector. Both articles name some very large corporates who have “unacceptable levels of equity representation". The Business Day report states that the DoL may even consider revising the fines to move more inline with inflation. (Note the report mistakenly states that the maximum fine is ninety thousand rand; it is in fact NINE HUNDRED THOUSAND RAND Download schedule_1_of_the_employment_equity_act.pdf ).
The thing that I find most interesting about fining is what a company can be fined for. Sections 16,19, 20, 21, 22, 23 Download the_caird_group_punitive_sections_of_the_employment_equity_act.pdf appear to be procedural, in other words you can be fined if you don't follow the procedure. In other words you can never meet your stated EE targets and follow the procedure and you will be exempt from a fine. It was pointed out to me that section 20 contains the following wording:
(1) A designated employer must prepare and implement an employment equity plan which will achieve reasonable progress towards employment equity in that employer's workforce.
Do the words reasonable progress have any legal recourse; can a company be fined if they do not achieve reasonable progress? My legal background suggests not - but I'll be checking up on this in the next few days. Watch this space.
I come back to the question as to whether EE is failing. Is it possible that it is too difficult to legislate and change the way market forces work? We don't know yet, but the DoL is ramping up its EE effort dramatically and there must be a reason behind this.
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