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On 17 May 2022 Parliament finally passed the EEA Amendment Bill (“EEAB”), which has been in the pipeline since mid-2020, leaving just the President to sign the proposed amendments into law. The proposed amendments, which have been topics of various debates throughout the industry for some time, brings about a few key changes to the Employment Equity Act (“EEA”).

Firstly, the definition of “designated employer” excludes employer who employs less than fifty, regardless of annual turnover. Small businesses are excluded from the application of the affirmative action provisions of the EEA. Following from this is a repealing of the “voluntary compliance provision”, as contained in Section 14 of the EEA, which currently allows for non-designated employers to ‘voluntarily notify’ the relevant Director General of its intention to comply with the affirmative action provisions of the EEA, as if it were a designated employer.

The next major amendment contained in the EEAB is the proposed insertion of “Section 15A” – the “determination of sectoral numerical targets”.  Section 15A should be read hand in hand with the proposed amendment of Section 20, in terms of which the new Section 20(2A) proposes that any employment equity plan, prepared in terms of Section 20(2) of the EEA, must comply with the “sectoral numerical targets” as set in the new Section 15A. In turn, this means that the Minister of Employment and Labour, after identifying a “national economic sector” may set numerical targets for “the purpose of ensuring the equitable representation of suitably qualified people from designated groups at all occupational levels in the workforce”, and employers must comply with these targets as set. In effect, the proposed amendments of Section 15A, read with Section 20(2A) will allow for the more stringent regulation of any “national economic sector” as identified by the Minister.

The EEAB further sets out other proposed amendments which will further regulate the employment equity environment, affording the Department of Employment and Labour more stringent powers in the sector. The proposed amendment of Section 36 will allow for a labour inspector to obtain a written undertaking that a designated employer will prepare an employment equity plan in circumstances where the inspector believes, on reasonable grounds, that the designated employer has failed to do so. This undertaking may be made an order of court, which could have further consequences on the designated employer.

Whilst the EEAB will now exclude certain employers from complying with the provisions of the EEA, the proposed amendments bring more stringent employment equity targets to large businesses in sectors as identified by the Minister.

Significantly, the Preferential Procurement Bill, which is under negotiation, stipulates that a procuring institution may only award a bid to a bidder who complies with various conditions, including the EEA.

Should you require any more information, please contact Bryan White at bryan@bv-inc.co.za or Melanie Hart at melanie@bv-inc.co.za .