Compliance Order
A compliance order by the Department of Labour Inspector was issued to Wincool after an inspection. The Court found that Wincool contravened the Employment Equity Act 55 of 1998 (“the EEA”). After being issued a compliance order, the Wincool continued with their non-compliance.
An application was made by the Director-General of the Department of Labour to have a compliance order in terms of section 37 of the EEA made an order of the court and to have a fine of R5,000,000 imposed on the respondent.”
The court decided that the first respondent had succeeded in proving the respondent’s non-compliance with sections 16, 19, 20 and 21 of the EEA.
Section 16 – Consultation with employees.
The designated employer must take reasonable steps to consult and reach consensus with employees, their nominated representatives and the trade union representing the organisation’s employees, informing them of the contents of the analysis, employment equity plan, affirmative action measures, and numeric goals and targets.
Section 19 – Analysis
Designated Employer must analyse its workforce profile and environment to identify the existing barriers and develop measures to address those barriers. The outcomes of such an analysis must be used to inform the plan’s content.
Section 20 – Obligations of the designated employer.
Designated Employer must develop and implement an EE Plan in section 20 of the Employment Equity Act, and the plan’s duration may not be shorter than one a year or longer than five years. It must have a specific start and end date.
Section 21 – Reporting.
The designated employer must submit the EEA2 and EEA4 reports on or before the 15th of January annually. EEA2 and EEA4 reports must contain all the information required and must be signed by the organisation’s chief executive officer.
Compliance Order: R5,000,000 Fine
One of the questions for determination by the court was the nature of the penalty imposed by the Act. It found that the purpose of the fine was deterrence and prevention of contraventions, and the penalty was not intended to be criminal in nature. The court assessed the amount that the respondent should be ordered to pay as a penalty and issued an order to that effect.
In conclusion, Compliance Order
Ignoring a compliance order will not only cost the organisation a lot of money but will also tarnish the organisation’s reputation. The fine may only be a small portion of the eventual cost of lost revenue.
Director-General, Department of Labour v Win-Cool Industrial Enterprise (Pty) Ltd [2007] JOL 19784, Page 1 of [2007] JOL 19784 (LC).
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By Stephan du Toit
Senior Advisor Employment Equity.
Website: employmentequity.co.za
eMail: info@employmentequity.co.za
WhatsApp: +27825613022
Landline: +27212505007
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