By Aadil Patel and Kirsten Caddy; Cliffe Dekker Hofmeyr
The Employment Equity Act, No 55 of 1998 (EEA or Act) has been extensively amended. The amended act came into force and effect on 1 August 2014. This article examines the more stringent enforcement mechanisms introduced by the amendment act.
Employment Equity disputes
Enforcement of employer compliance with affirmative action measures will in future be much faster, with significantly increased penalties for non-complying designated employers. Failures to prepare and/or implement employment equity plans, and failures to file annual reports, will no longer be subject to a process of seeking compliance orders. Instead, the Director-General may immediately apply to the Labour Court to impose a fine.
The fines that may be imposed for failures to prepare and/or implement employment equity plans have been radically increased by approximately 300%. The new fines start from R1.5 million or 2% of turnover (whichever is the greater) for a first offence, up to R2.7 million or 10% of turnover for a fourth offence.
Other failures by designated employers to comply with Chapter III of the EEA (eg failures to consult with employees or conduct an analysis) may still result in a labour inspector seeking a written undertaking from the employer to correct the position, however, this process need not be followed. If a written undertaking is not complied with, the undertaking may be made on order of the Labour Court. Compliance orders will only be used if no written undertaking was asked or provided, and in respect of s16 and 17 (consultation), 19 (conducting an analysis), 22 (informing employees of the provisions of the EEA, the most recent report submitted and so on) and 26 (keeping records).
Employers will no longer be able to delay enforcement of a compliance order by objecting to it or appealing against it.
The Director-General had the right to conduct a review of an employer’s compliance with the EEA, and to request a host of information to facilitate the review process. The outcome of such process may be either approval of the employment equity plan, or a recommendation of steps to be taken by the employer. This review process is the manner in which the Director-General may attempt to interfere in the targets for affirmative action set by an employer.
The process to enforce such requests and recommendations will no longer be a referral to the Labour Court, but will take the form of an application to the Labour Court for an order directing the employer to comply, failing which, a fine. Such application must be brought if an employer gives the Director-General notice in writing that it does not accept the request or recommendation. If the Department does not bring an application in the allocated time after an employer’s notice of disagreement, the recommendation will lapse.
Equal pay disputes
Section 6 of the EEA contains a general prohibition of unfair discrimination, applicable to all employers. Discrimination on any of the listed grounds remains prohibited. The ‘equal pay for equal work’ principle will amount to unfair discrimination if an employer differentiates between terms and conditions of employment of employees doing the same or similar work or work of equal value, if such differentiation is directly or indirectly based on one of the prohibited grounds. An employer will only be able to escape liability if it can prove that the differentiation is in fact based on fair criteria such as experience, skill, responsibility, and so on.
The employee claiming equal pay discrimination will first have to establish a prima facie factual basis for the claim.
If a causal link is established, the employer will have to justify the discrimination. The Minister of Labour has prescribed the criteria and methodology for assessing work of equal value, which are set out in the regulations.
Enforcement of equal pay disputes will not be limited to individual employee claims, but may also take the form of State intervention (presumably through the review and recommendation process). A statement must be provided to the Employment Conditions Commission (established in terms of the BCEA), on the remuneration and benefits received in each occupational level. Employers will have to take steps to ‘progressively reduce’ any disproportionate income differentials.
If it is alleged that the claimant was discriminated against on an arbitrary ground, the claimant will have the burden to prove, on a balance of probabilities, that:
- the conduct complained of is not rational;
- the conduct complained of amounts to discrimination; and
- the discrimination is unfair.
It is evident by the new powers provided to the Minister as well as the increase in intervention by the Department of Labour that the drafters of the amended EEA envisage a stricter enforcement of the provisions of the Act.
Furthermore, the Act clearly seeks to ensure that employers apply affirmative action more strenuously and that they take active steps to eliminate discrimination within the workplace.