Six years after the promulgation of the Employment Equity Act, it is time for a fundamental review of one of SA's most important pieces of legislation. (See table on Employment Equity.)
The review must give the act more teeth, bring it in line with new black economic empowerment (BEE) legislation and sector charters, and result in greater capacity to monitor implementation, say black human resources (HR) practitioners surveyed by Top Empowerment Companies.
After a decade of democracy, there has been little transformation of SA management structures. The 2001 Commission for Employment Equity (CEE) report said there were just 3 719 black African people in top and senior management in the private sector. It seems few companies are enthusiastic about implementing the act.
Only 22% of the companies surveyed for Top Empowerment Companies disclosed their employment equity status. HR experts said many companies regarded compliance as an administrative exercise involving putting a tick in a box. Few had moved towards substantial qualitative compliance, which requires fundamental transformation. The labour department had done nothing to monitor compliance, they said.
The black group HR manager of a large listed company, who declined to be named, says: "In 1998 my white colleagues said: Oh bingo! It is not that tough.' However, there was an initial rush to achieve procedural and administrative compliance. When they started trying to implement the act, they found it was full of holes. Now that they know there is no capacity in government to monitor compliance, they think it is a joke.
"Another factor that impedes implementation is that trade unions have not taken the issue of employment equity seriously. They do not regard it as a core issue or as important as traditional union concerns, such as wage levels and conditions of employment. If they had taken the issue on board, this would have increased the pressure on companies to comply," she says.
University of Cape Town academic Loyiso Mbabane, who helped draft the act, says there is nothing wrong with the law.
"The act has stringent enforcement mechanisms. The problem is at the labour department and the CEE, which are supposed to drive implementation. They have not been visible enough in emphasising the need for compliance.
"I am not aware of any company that has been given a fine. In the short term, the department should adopt the strategy of the Scorpions and the SA Revenue Service and target a few large employers and rogue industries. This would send a powerful message to employers that government is serious about implementing the act," Mbabane says.
Beyond practical concerns, some people question the fundamentals of the act.
The HR practitioner says: "The problem is that the philosophy that underpins the act is one of self-regulation and assessment of both the quantitative and qualitative aspects of employment equity. Companies set their own targets and then report on performance against those targets. There are no external benchmarks against which to measure progress."
The CEE has the powers to issue numerical benchmarks, but has yet to do so, says Mbabane. However, the proliferation of sector charters will create an external benchmark for some industries.
"One of the few positive things to say about charters is that they have raised the bar to some extent. They force companies to review their own targets," Mbabane says.
However, another solution that has been mooted by some analysts such as Mbabane is to have a standard charter that specifies targets for all sectors within the BEE Act. This would require further amendments to the Employment Equity Act to bring it in line with the BEE Act.
For example, the Employment Equity Act defines "designated groups" that will benefit from affirmative action as "black people, women and people living with disabilities". This definition includes white women, who some believe were the greatest beneficiaries of affirmative action during the first decade of democracy. The BEE Act refers to black people only. An amended Employment Equity Act should do the same.
The argument against a common benchmark is that targets must take into account sector-specific considerations.
The counterargument is that charter processes involve political bargaining. The targets eventually agreed to are dictated by balance-of-power dynamics and not by scientific supply and demand calculations about particular sets of skills.
In practice, targets are likely to be pulled downwards by the relatively low levels agreed to in the financial services charter.
