Transformation is given a rapid boost
Non-compliant businesses have little time to get their house in order
different from the 10.8% Coloured and 74.9% African national demographic.
As indicated above, the regulations were met with much criticism and were sent for a re-look. The redrafted regulations were published on August 1. There are strong indications that the revised regulations may revert to regional demographics (in line with recent case law).
In previous editions of this publication we highlighted the pertinent amendments to the four pieces of legislation — the Labour Relations, Basic Conditions, Employment Equity and Employment Services bills.
The Employment Equity Act has raised a number of areas of concern or disagreement and has led to its fair share of emotive debate in Parliament and other consultative forums.
Some of the pertinent issues raised by the act are: 1. The amendment of section 42 to allow a discretion for a labour inspector when assessing a company’s compliance with the act; 2. The lessening of enforcement requirements, which would ensure an easier and quicker path to the Labour Court; 3. The substantial increase of fines from R500,000 for first offences to R1,500,000, or 2% of turnover, depending on the nature of the breach. This amount escalates up to 10% of turnover at the fourth offence. The concern with this point is that linked to the discretion given to inspectors listed above, it may open the door to litigation and, unfortunately, the possibility of the spectre of corruption raising its head; 4. The relatively new concept of equal treatment is also included in this legislation and is further reflected in the proposed Labour Relations Amendment Bill. The concept of “equal treatment” means that unless you have justification for differential treatment (not only on “equal pay”) on the grounds listed, you will be in breach of the act; 5. The extension of grounds of discrimination to include “any other arbitrary ground”. In the past the grounds for discrimination were limited to issues such as age, race, gender, etc. While this was not an exhaustive list, the extension bars unfair discrimination on any arbitrary ground. Together with the extended definition, the burden of proof in such cases has also changed with the onus now shifting to employers to prove that discrimination did not take place and, if it did, that it was fair; and 6. Other changes that will be of interest, but are less controversial, are the fact that psychometric tests are to be certified by the Health Professions Council of SA or a similar body and the inevitable burden on small business having now also to report on an annual basis rather than biannually.
There is very little time for businesses to get their houses in order. Inspectors are certain to come down hard on non-compliance. The department has thrown down the gauntlet to business to ensure rapid compliance, failing which they will face sizeable fines and days in court.
Businesses should have been alive to the fact that transformation needs to be a clear strategic goal. Now is the time for non-compliant businesses to take the lead from those who are compliant and to align their transformation strategy to the overall business one and to take up this challenge as an opportunity to define their future, to address equality and ensure a bright, compliant future for their business and generations of South African businesses and society at large to come.
OFF TARGET FOR INVESTORS In SA, there is no distinction between domestic and international arbitration Foreign investors cannot independently refer a dispute to an international arbitration forum without the consent of the South African government