New Employment Equity Regulations: Major Changes And What They Mean For South African Employers (Part Two)

On 1 February 2024, the Department of Employment and Labour (DEL) released the Draft Employment Equity (EE) Regulations, introducing significant changes to the employment equity landscape in South Africa. These regulations set revised Sector Targets as part of the Employment Equity Amendment Act No 4 of 2022, specifically Section 15A, which aims to accelerate transformation in the workplace by requiring designated employers to comply with these new targets. 

Key Changes in the Draft EE Regulations 

1. Shift from ‘Black’ to ‘Designated Groups’: The new regulations have shifted the focus from ‘Black’ targets to ‘Designated Groups’ targets, categorizing them into ‘Designated Groups Male’, ‘Designated Groups Female’, and ‘Designated Groups Total’. This change eliminates specific targets for African, Coloured, or Indian males and females, instead requiring employers to consider the Economically Active Population (EAP) when setting annual EE targets. 
2. Sectoral Numerical Targets: The draft regulations emphasize the importance of setting 5-year sectoral numerical targets. Employers must consider several factors, including their workforce profile, the relevant sectoral targets, and the applicable EAP. Importantly, employers should not set higher targets for groups whose representation already exceeds their EAP at a particular occupational level.  
3. Employment Equity Plans and Implementation: The regulations provide detailed criteria for preparing and implementing employment equity plans. These include assessing the pool of suitably qualified persons, turnover and natural attrition rates, and recruitment and promotion trends within the workplace. Employers must also consider the inherent requirements of the job and the qualifications, skills, and experience needed.  
4. Use of EAP for National Employers: Designated employers operating nationally are required to use the National EAP when setting EE goals. However, they may opt to use the EAP of the province with the most employees, but cannot mix multiple EAPs. This provision aims to standardize the approach for employers with a national footprint. 
5. Justifiable Grounds for Non-Compliance: The regulations acknowledge that certain circumstances may justify an employer’s inability to meet EE targets. These include insufficient recruitment or promotion opportunities, a lack of qualified individuals from designated groups, and external factors like CCMA awards, court orders, business transfers, mergers, and acquisitions, or adverse economic conditions. 
6. Prohibition on Certain Consequences: The regulations prohibit any absolute barriers to employment practices or terminations as a consequence of affirmative action measures. This ensures that the implementation of sector targets does not result in unfair discrimination or unjust termination of employees.  

Implications and Future Considerations 

While the DEL has maintained most sector targets despite feedback from employer organizations, the introduction of specific criteria for setting and implementing EE goals may offer a more pragmatic approach. This could potentially ease the path towards achieving sector targets by allowing for more realistic and achievable EE goals. 

The changes, particularly the shift to ‘Designated Groups’, represent a significant shift in the employment equity framework. This new approach may prompt further discussions and adjustments to ensure it effectively promotes workplace transformation while addressing employer concerns. 

In subsequent articles, we will delve deeper into specific aspects of these regulations, including the rationale behind the shift to ‘Designated Groups’, the impact of the Solidarity-DEL agreement on sector target setting, and the legal implications of using national or provincial EAPs.