Fines for firms that ignore equity targets

JSE-listed companies will be slapped with a minimum penalty of R1.5m if found to not be compliant with employment equity targets, an official of the department of employment and labour has said.

Fikiswa Mncanca-Bede, the department’s chief director for statutory and advocacy services, told businesses and employment consultants on Friday that the department would revisit JSE-listed companies during the first quarter of the year to monitor compliance with the Employment Equity Act.

She said that in 2018 the department gave JSE-listed companies an opportunity to rectify their employment equity plans.

“We are checking if they have implemented those plans, we call it monitoring. So, we are going to monitor whether those employment equity plans are aligned to their goals. They will pay a minimum of R1.5m if they do not comply and that will double if they have not complied in the previous assessment,” she said.

Mncanca-Bede said the department was targeting JSE companies because of their size in terms of employees and profits.

“If such companies can make a difference and change we will see the difference on the ground because they are big companies with many employees. It does not mean we will not go to other companies, but for now the project will focus on JSE-listed companies.”

Mncanca-Bede said that in 2018 the department found that employment equity plans were not achieving the goals in line with the government’s transformation targets.

“You will find there is a plan, but that plan is not talking to transformation, it is just a plan, just for administrative compli

ance. We had to say they must amend those plans to address the affirmative action measures,” she said, adding that the representation of women was still below expectations.

“When you go to companies you still find men dominating top and senior management, and you find women in middle management — that is what we want to check. The main issue we want to check is whether they have transformed. It has been almost five years, so at least there must be a difference.”

However, she was sceptical that the companies would have improved their performance, as the 22nd Commission for Employment Equity (CEE) annual report, released last year, showed an increase of less than 1% in women’s representation in senior management. The report found that male representation continued to be dominant at that level, remaining above 63% from 2019 to 2021.

“If there is a 1% movement, what does that tell you? It tells you that we may still find the same issues we found in 2018.”

The CEE report found that the private sector was slow in embracing transformation of the workplace despite the introduction of the Employment Equity Act in 1998.

The report said Africans and coloured people, both men and women, were underrepresented at senior management level.

Speaking on the sidelines of the event on Friday, Aggy Moiloa, the department’s inspector-general, said it had conducted 860 employment equity inspections nationally and only 48 companies had complied in the past financial year.

Moiloa said the department tried to leave no stone unturned in terms of assessing whether companies had moved beyond ticking boxes.

“The tragedy is only 6% of companies that were inspected or subjected to a director-general review complied. It means a whopping 812 companies did not comply. There are three provinces that have zero compliance and need to hang their heads in shame.”

According to the department, none of the companies inspected in the Free State, Northern Cape and Mpumalanga complied with employment equity targets.

“We are all complicit in one way or another. The very low compliance levels are unacceptable. The appetite to pay penalties rather than complying is also unacceptable. Companies would literally rather budget than comply,” she said.

She added that the number of employment equity inspectors was pitiful.

“We have fewer than 60 employment equity inspectors for the whole country. Occupational health and safety has in excess of 600 inspectors, and basic conditions of employment has in excess of 1,200 inspectors. What does it say about us as a department we have our own homework to deal with. Are we dealing with it? Yes. We need to admit we are failing in the employment equity space.”