The Employment Equity Act is a cornerstone of workplace fairness and transformation in the contemporary South African business milieu. This Act, pivotal in its purpose, mandates equitable employment practices across diverse sectors. Central to its premise is the concept of a ‘Designated Employer’, a term that necessitates careful elucidation.
What are Designated Employers?
In the Employment Equity Act, a designated employer is not merely a title but a responsibility laden with legal and ethical implications. This status applies to various entities, including employers with a workforce exceeding fifty individuals and those with an annual turnover surpassing the threshold set for small businesses. Furthermore, this designation extends to municipalities, certain organs of state, and employers who are parties to specific collective agreements.
For entities employing more than fifty individuals, the responsibility as a designated employer is unequivocal. The Act mandates these organisations to implement rigorous employment equity policies, ensuring a diverse and inclusive workforce. This is not a mere compliance exercise but a strategic imperative that aligns with broader societal goals of equality and representation.
In the case of employers with fewer than fifty employees, the annual turnover becomes a determinant of their designated status. This criterion, aligned with the financial thresholds of Schedule 4, ensures that financially substantial businesses, regardless of their size, contribute to the national objective of employment equity.
Municipalities, as delineated in Chapter 7 of the Constitution, along with certain organs of state, are also encompassed under the ambit of designated employers. This inclusion underlines the government’s commitment to leading by example in promoting equitable employment practices.
Interestingly, the Act also recognises the power of collective agreements in determining designated employer status. Employers bound by agreements under sections 23 or 31 of the Labour Relations Act are classified as designated employers, underscoring the collaborative nature of employment equity in South Africa.
The implications are profound for businesses meeting these criteria. Compliance is not optional; it is a legal obligation. It involves the development and execution of comprehensive employment equity plans, regular reporting, and a commitment to rectify any disparities in the workplace. Non-compliance carries significant legal ramifications, including penalties and reputational damage.
HR’s Role
Moreover, the human resources function within these organisations is critical in ensuring adherence to the Act. This involves formulating policies and their effective implementation, monitoring, and continuous improvement.
Examining real-world scenarios, it becomes apparent that the designation of an employer carries tangible business implications. Compliance recommendations from the Director General reveal a spectrum of outcomes, from general administrative compliance to non-compliance and compliance orders. These examples offer invaluable insights into the practical aspects of implementing employment equity, highlighting both challenges and best practices.
As we conclude, it is imperative to reflect on the broader societal impact of the Employment Equity Act. Designating employers is more than a compliance exercise; it is a step towards rectifying historical imbalances and fostering a more inclusive, equitable society. The Act’s requirements, though challenging, offer a roadmap for businesses to contribute meaningfully to this national endeavour.
In sum, an employer’s designation under the Employment Equity Act is a significant responsibility with far-reaching implications. It demands a conscientious approach to workforce management, a commitment to fairness, and an unwavering dedication to the principles of equality and diversity. As South Africa continues to evolve, the role of designated employers in shaping a just and equitable workplace remains paramount.
Find more information on implementing employment equity in my other articles or visit our website to enrol for the next employment equity training course.
Are you having difficulty with employment equity?
Please don’t hesitate to contact me.
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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All rights reserved. No part of this articlemay be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording or any information storage or retrieval system without permission from the copyright holder. The Author has made every effort to trace and acknowledge sources/resources/individuals. In the event that any images/information have been incorrectly attributed or credited, the Author will be pleased to rectify these omissions at the earliest opportunity. For further information please contact the author at stephan@employmentequity.co.za
Reference:
“designated employer” means-
(a) an employer who employs 50 or more employees;
(b) an employer who employs fewer that 50 employees, but has a total annual turnover that is
equal to or above the applicable annual turnover of a small business in terms of Schedule 4 to
this Act;
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Prepared by: In partnership with:
(c) a municipality, as referred to in Chapter 7 of the Constitution;
(d) an organ of state as defined in section 239 of the Constitution, but excluding the National
Defence Force, the National Intelligence Agency and the South African Secret Service; and
(Paragraph (d) of the definition of “designated employer” substituted by section 1(a) of Act 47 of 2013)
(e) an employer bound by a collective agreement in terms of section 23 or 31 of the Labour
Relations Act, which appoints it as a designated employer in terms of this Act, to the extent
provided for in the agreement;
