COSATU calls on govt to clamp down on companies not complying with Employment Equity Act

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The Congress of South African Trade Unions (COSATU) says it has noted the Employment and Labour Department’s lamentations about the lack of compliance with the Employment Equity Amendment (EE) Act by employers, especially in the banking and financial sector.

The Federation’s statement comes a day after Labour Minister Thulas Nxesi delivered the Department’s Budget vote in Parliament on Tuesday afternoon.

COSATU Parliamentary Co-ordinator Matthew Parks says it’s not enough for the department to continue criticising transgressors instead of acting against them.

“The Federation is calling on the government to move away from condemnations and be decisive to ensure employers comply with the letter and spirit of the Employment Equity Act. COSATU, as a progressive trade union movement, believes that the workplace should reflect the broad demographics of South Africa and we support the Employment Equity Act and its Amendment Act recently signed into law by President Cyril Ramaphosa”

The 1950s

The Federation wants the department to stop with lamentations, saying labour inspectors must act against non-compliance.

“The Act empowers the Department’s labour inspectors to issue compliance orders and to fine employers who routinely fail to show any progress in meeting their employment equity targets.  The Department needs to move from a place of lamentation to one of action and deploy its inspectors to workplaces to deal with recalcitrant employers who still believe this is the 1950s”, Parks emphasised.

He says, “The Amendment Act empowers the Minister for Employment and Labour to set specific targets for different economic sectors like banking, or specific categories, example, senior management, where employers show little interest in employment equity.  The Amendment Act provides the necessary nuance and pragmatism that a demographically and regionally diverse society like South Africa requires.”

“This provides recognition of the reality that the demographics of South Africa’s various regions differ widely and thus employment equity targets need to take that into account the demographics of Limpopo are different from the Western Cape.” he added.

Treasury’s role in compliance

According to Parks, National Treasury has a role to play to ensure that those who do business with the state should comply with the labour laws, including the employment equity legislation.

“The Amendment Act requires employers doing business with the state to follow the Employment Equity and National Minimum Wage Acts.  With public procurement set at an annual R1 trillion, this is a powerful incentive for businesses to comply with our labour laws. Treasury’s Chief Procurement Office and the Supply Chain Management Units across the various state institutions and State-Owned Enterprises need to move with speed to ensure they comply with this requirement.  The Department of Employment and Labour needs to ensure it can provide the required compliance certificates efficiently to companies”.

Black Business Council protest

Parks says it also notes the protestation from the Black Business Council (BBC) that the Amendment Act maintains the existing reporting exemptions for Small Medium and Micro Enterprises (SMMEs)

” Whilst there is some validity in their arguments, the long-term solution to ensuring employment equity at the workplace is to grow the economy and create jobs.  This requires reliable and affordable electricity, an efficient railway network and ports, functioning municipalities that provide basic services, SOEs that grow not suffocate the economy, the corruption that leads to the guilty being sentenced to prison and providing affordable capital for SMMEs.”

 Fronting, rural and township employment

Parks says COSATU want to see the council condemning fronting.

” It would help to hear the BBC speak with equal gusto against fronting where some businesspersons show little shame in standing in for white-owned companies and more importantly where many are little more than importers of cheap goods from overseas.”

“The PPE scandals of 2020 where persons who had never produced any product in their lives were overnight rewarded with multi-million rand contracts at inflated prices and then promptly imported shoddy goods from China.  We need to see the BBC actively championing local manufacturers who employ ordinary South Africans, especially in rural areas and townships,” Parks concluded.

President Ramaphosa signed Bill into law

President Cyril Ramaphosa  signed the Employment Equity Amendment Bill into law last month.

The Presidency said, “The Amendment Bill seeks to advance transformation of South Africa’s workforce by setting equity targets for economic sectors and geographical regions and requiring enterprises to develop transformation plans. The Bill amends the Employment Equity Act of 1998 (Act No 55 of 1998) with new measures to promote diversity and equality in the workplace.”

“Among its key provisions, the Amendment Bill empowers the Minister of Employment and Labour to set employment-equity targets for economic sectors, as well as regions where transformation is lagging. The amendment Bill also empowers the Minister of Employment and Labour to regulate compliance criteria to issue Compliance Certificates as per Section 53 of the Employment Equity Act”, Presidential Spokesperson Vincent Magwenya said in a statement on 12 April 2023.

“The amended Act allows the Minister of Employment and Labour to set regional targets given that racial diversity in South Africa often has regional differences. The law requires employers with more than 50 employees to submit employment equity plans for their companies, spelling out how they will achieve these targets.

Employers are then required to submit annual reports to the Department of Employment and Labour”, added the Presidency.

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