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Employment Equity Act amendments may
impact your state contract

October 2018

“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 Labour
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.

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