I KNOW YOU HATE EE LEGISLATION… BUT COMPLIANCE IS NOW IMPERATIVE!

By Maryke Swanepoel

17 September 2019

What exactly is EE for Logistics & Supply Chain?

One of the most significant challenges faced by the Logistics & Supply Chain sector involves compliance with the Employment Equity (EE) Act within an operational environment which is just not conducive to fully achieving the EE Process benchmarks.At a core level EE is about creating a forum or platform for staff to address unfair discrimination. This industry, by its very nature, has an enormous reliance on a staff complement where the largest portion consists of truck drivers, who for the most part are out on the road. This makes is near impossible to fully commit to and meet the process requirements since truck drivers simply cannot always be involved in the process. In more general terms, this process entails opening up a discussion forum with representation from each department within the organisation so that company internal policies and procedures can be scrutinized to identify potential weaknesses which may be discriminatory. 

The aim is to continually make improvements internally for the overall benefit of the organisation and its staff. The tendency then is for staff to use this process as a grievance channel and this could potentially be counter-productive as it is not up to staff to approve policy changes; that is the responsibility of management. This further leads to conflict because staff grievances cannot always be met across the board when a number of policies come into play and these are sometimes at odds based on various departmental requirements. This means that potential solutions are not always what staff want and that organisations find themselves stuck between a rock and a hard place in attempting to comply and meet staff needs. 

It could be argued that the EE Act and what is trying to achieve is in a contradictory way creating conflict within the workplace where staff are unhappy with resolutions not made and companies are left with their hands being tied by policies.What requires further consideration is what is reasonably practicable within the Act. How does your organisation comply when you have a low staff turnover rate and yet you are required to take measures to ensure equitable representation in all occupational categories and levels of your workforce?Are you required to fire a number of people in order to meet quotas?When it comes to senior management positions within the Logistics and Supply Chain environment a range of skills and qualifications come into play including understanding risk; distribution; procurement; forecasting; production; planning, amongst others. The Act asks organisations to put people into senior management positions that are capable of fulfilling these roles.

There are discussions at present around the Department of Labour instituting a disability quota target of 3%. What this means is that 3% of your workforce must be disabled. How do you accommodate this within the Logistics environment where there may be long hours, physically labour-intensive work and potentially long travel?

The EE Act aims to achieve race and gender equality. The Logistics and Supply Chain sector, however, is by its very nature male-dominated due to potentially dangerous environments; the need for sheer physical strength and agility; coupled with the job not necessarily being female friendly. How then does one achieve gender equality through female appointment in this male-dominated environment?

There is further talk (although unconfirmed) about the Department of Labour insisting on a 50% female representation in the top, senior and middle management levels of organisations. When considering succession and upskilling planning, this becomes unachievable due to the majority workforce within this sector being male.

Let’s Talk About the Legislation…

It is imperative for companies to comply with the Employment Equity Act as it is metes out the severest consequences in the form of a turnover-based penalty of around 10% of revenue.

With a 15th January 2020 deadline fast approaching your organization requires knowledge; access to information; should be able to interpret the impact of existing compliance requirements; and be aware of what is still in the pipeline around emerging requirements.

Employment Equity in the workplace is legislated by the Employment Equity Act, 55 of 1998, issued in terms of Section 25(1). Employment Equity so legislated aims to achieve fairness in the workplace by promoting equal opportunity and fair treatment in employment through the elimination of unfair discrimination. It further aims to implement affirmative action measures to redress the disadvantages in employment experienced by designated groups, in order to ensure equitable representation in all occupational categories and levels in the workforce.

The act applies to all employees and employers, except to the South African National Defence Force, National Intelligence Agency, and South African Secret Services. A designated employer is an employer who employs 50 or more employees, or has a total annual turnover as reflected in Schedule 4 of the Act, municipalities and organs of state. A designated group means African men and women, Indian men and women, Coloured men and women, white women, and people with disabilities.

This law states no person may unfairly discriminate, directly or indirectly, against an employee in any employment policy or practice, on one or more grounds including race, gender, pregnancy, marital status, family responsibility, ethnic or social origin, colour, sexual orientation, age, disability, religion, HIV status, conscience, belief, political opinion, culture, language, and birth.

According to the legislation, it isn’t unfair discrimination to promote affirmative action consistent with the Act or to prefer or exclude any person on the basis of an inherent job requirement. The act also protects employees from unfair medical testing and evaluation.

As an employer, you are required to implement affirmative action measures for designated groups to achieve employment equity by:

• consulting with employees;
• conducting an analysis;
• preparing an employment equity plan; and.
• reporting to the Director-General on progress made on the implementation of the plan.

Affirmative action measures are intended to ensure that suitably qualified employees from designated groups have equal employment opportunity and are equitably represented in all occupational categories and levels of the workforce.

You are required to conduct an analysis of employment policies, practices, procedures, and your working environment so as to identify employment barriers that adversely affect members of designated groups. The analysis must also include the development of a workforce profile to determine to what extent designated groups are under-represented in the workplace.Your employment equity plan must outline objectives for each year; include affirmative action measures; have numerical goals for achieving equitable representation; provide a yearly timetable; implement internal monitoring and evaluation procedures, including internal dispute resolution mechanisms; and identify persons, including senior managers, to monitor and implement the plan.

If you are a designated employer, you must submit every year. You are required to assign one or more senior managers to ensure implementation and monitoring of the employment equity plan and must make available necessary resources for this purpose.Managing Supply Chain compliance is a company-wide responsibility and collaboration is vital to ensuring minimal operational disruption.

The EE-inspector is coming (are you ready)?

An EE-inspector is a representative of the Department of Labour who visits your company to assess your compliance with the Employment Equity Act.

So, what are your rights as an employer, and what is the inspector entitled to in terms of access to information?
The inspector will have a signed certificate providing identity and designation information; it will state which legislation he is authorised to monitor and enforce, and will outline the functions he can perform. You are thus perfectly within your rights to ask for the certificate, and deny access if one cannot be provided.

The inspector may enter your workplace at any reasonable time to investigate and enforce compliance through a consultative process, you will, however, receive written notification under normal circumstances.

• Advising you and your employees on rights and obligations as they relate to the EE Act
• Investigating complaints with regards to employers who are considered non-compliant
• Conducting workplace inspections
• Ensuring employer compliance in the workplace

In the event that you do not comply, the inspector will issue a compliance order.

The EE-inspector’s rights include:

• The right to information relating to the EE Act
• The right to copy documents
• The right to inspect and question you

The inspector may remove and return any items from your workplace within a reasonable time by providing an acknowledgement receipt.

Are you ready?

Regardless of the nature of the EE-inspector’s visit, you will be required to provide a set of documents in compliance with the guidelines as set-out in the EE Act. 
Document requirements are formally requested against a checklist. 

A good EE consulting partner will assist you in making sure that you have met all requirements by:

• Conducting a workplace analysis
• Coordinating the process of completing EEA1 forms for all employees
• Assisting with the establishment of an EE Forum
• Providing EE Manager and Forum Committee member appointment letters
• Assisting with employing an EE Manager
• Training on the requirements of the EE Act and committee member roles
• Developing an EE Plan
• Developing numerical goals and recommendations in line with legislative requirements
• Aligning of remuneration in accordance with the National Minimum Wage Act of 2017
• Developing an Employment Equity Report (EEA2) and Income Differentials (EEA4)
• Completing online submissions to the Department of Labour

Skills Development / Workplace Skills Planning

A key aspect of this process is around Skills Development which is intricately connected with EE. Employers are required to develop a Workplace Skills Plan and Pivotal Plan, and report on what has been set out and achieved in accordance with this to the relevant SETA. 

Skills programmes are prescribed by the SETA and are credit bearing so that you can receive Mandatory and Discretionary Grant Disbursements.

You are also required to set-up Employment Equity and Skills Development Committees to draft an Annual Training Report against an approved Skills Plan. 

This is to be monitored in terms of quality benchmarks prescribed by the SETA.

Your Workplace Skills Plan should outline the skills needs within your organisation and describes a range of skills development interventions that you will implement to address these needs. 

This Plan also provides the SETA with valuable sector information around employee profiles, skills needs and skills development interventions. 

This information then informs the development of the SETAs sector skills plan.

How is the Act going to change?

The main purpose here is the upskilling and training of your staff in line with what they want/need, as well as to assist with Succession Planning. The benefits are that your people become better at what they do; you will have a happier workforce; and your people are more highly skilled.

Currently there is much debate around how the EE Act is going to change as this is relatively uncertain at present. Amendments to the Act were released by the Department of Labour in November 2018, these have, however, not yet been written into law.

The Employment Equity Amendment Bill 2018 aims to more aggressively target transformation in the workplace. Section 53 concludes that state contracts may only be provided to employers who are compliant and have been certified as compliant with their obligations under the EE Act. This empowers the Labour Minister to set appropriate numerical targets for transformation for particular sectors in consultation with those sectors. Also, 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 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.

It is also worth noting that this legislation changes often and that this is a major consideration for industry in working toward compliance. What is painfully clear is that remaining compliant requires current understanding of Business and HR Law, EE and how this fits into BEE legislation – no mean feat.

SOURCES | NEWS 24: ACT FOR EMPLOYMENT EQUITY CHANGED – 2018-11-21

Maryke Swanepoel, Business Consultant at KVRQhubeka, heads up KVR Training where she provides organisational clients with strategic advice on Skills Development and Employment Equity (EE). Having obtained her Skills Development Facilitation qualification in 2010, she has over the past 9 years gained an intimate understanding of what organisations go through in meeting compliance regulations. In driving strategy on EE, Skills Development, Industrial Relations, and Generalist HR, Maryke has gained specialist knowledge at an operational level, and developed training proficiency which led to her appointment as Chairperson of The Association of Skills Development SA for the Gauteng Region. Maryke now works closely with business owners, EE and HR managers as part of the KVR team to assist with achieving EE Process benchmarks.