Employment Equity Act amendments may impact your state contract

09 November 2018 468
“I’ve recently heard about proposed amendments to the Employment Equity Act which I understand will make it more difficult to tender for Government work. Is this true?”

The Department of Labour has recently published the Employment Equity Amendment Bill 2018 with the aim of more aggressively targeting transformation in the workplace. Some of the significant amendments to look out for are contained in amendments to sections 53 and section 42 of the Employment Equity Act.

Section 53, provides that state contracts may only be provided to employers who are compliant and have been certified as being compliant with their obligations under the Employment Equity Act. This will require employers to attach a certificate of compliance when concluding a contract with the state as evidence that is complies with the provisions of the Employment Equity Act. 

It is important to note that the abovementioned certificate may only be issued if the employer has achieved applicable sectoral targets or has provided reasonable grounds for non-compliance. The Bill also empowers the Minister of Labour to set appropriate numerical targets for transformation for particular sectors in consultation with those sectors.

A further condition for obtaining such a certificate of compliance is that the employer must have submitted its Employment Equity Report to the Department of Labour. In addition to that, the employer may not be in breach of any provision of the Act within the last 12 months or have been found guilty of unfair discrimination or of paying employees below the national minimum wage.

Section 42 amendments also propose to clarify that a designated employer’s compliance with its obligations to implement affirmative action may be measured against the demographic profile of either the national or regional economically active population, unless the Minister has set specific sectoral targets.

How the compliance certificate process will work, still needs to be clarified, but what is clear, is that Government is considering a further layer of compliance for businesses that wish to work for Government, using this as an incentive to fast-track transformation within the workplace.
Related Expertise: Labour and Employment