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Stricter enforcement of the EEA under the amendments

Aadil Patel and Kirsten Caddy

The Employment Equity Act, No 55 of 1998 (EEA), 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 under the amended EEA.

The Employment Equity Act, No 55 of 1998 (EEA), 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 under the amended EEA.

Enforcement of employer compliance with affirmative action measures will be faster

There will be significantly increased penalties for non-complying, designated employers. The following failures will no longer be accepted and will be subject to a process of seeking compliance orders:

  • Preparing and/or implementing employment equity plans, and
  • Filing annual reports.

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 and 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 (e.g. 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 does need not be followed as if a written undertaking is not complied with, the Labour Court could be brought in. Compliance orders will only be used if no written undertaking was asked for, or provided, and in respect of:

  • Sections 16 and 17 (consultation),
  • Section 19 (conducting an analysis),
  • Section 22 (informing employees of the provisions of the EEA, the most recent report submitted and so on), and
  • Section 26 (keeping records).

Employers will no longer be able to delay enforcing a compliance order

Previously, employers could delay enforcing a compliance order by objecting to, 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. If the employer does not comply, a fine will be imposed. Such application must be brought if an employer gives the director-general written notice 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.

Employers must take cognisance of the equal-work-for-equal-pay provision

Section 6 of the EEA contains a general prohibition of unfair discrimination, which is applicable to all employers. Discrimination on any of the grounds listed in the EEA 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 performing the same or similar work - or work of equal value - if the differentiation is directly or indirectly based on one of the grounds prohibited in the EEA. 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, e.g., experience, skill and responsibility.

The employee claiming equal pay discrimination will first have to establish a factual basis for the claim:

  • If a causal link is established between the discrimination and the difference in pay, 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

This enforcement 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,
  • Conduct complained of amounts to discrimination, and
  • 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 EEA clearly seeks to ensure that employers apply affirmative action more strenuously and that they take active steps to eliminate discrimination within the workplace.

Aadil Patel is the director and national practice head: Employment at Cliffe Dekker Hofmeyr.
Kirsten Caddy is an associate in the employment practice at Cliffe Dekker Hofmeyr. She studied at the University of Pretoria and graduated cum laude for both her BCom (Law) and LLB degrees. Kirsten also obtained a post-graduate diploma in labour law from the University of South Africa.