Labour Minister Mildred Oliphant on Tuesday slammed calls for the scrapping of employment equity (EE) and affirmative action policies, stating that the objectives of the policies have not yet been achieved and a harsher approach to noncompliance is on the cards.

Highlighting the dismal outcomes of the seventeenth Commission for Employment Equity (CEE) report, which show the “painfully slow” pace of transformation in the South African labour market, Oliphant said it was time to “up the ante”, with the Department of Labour having no option but to consider drafting in harsher consequences for noncompliance.

“This includes promulgating the stick sections of the EE Act, because, quite frankly, the carrot sections have not delivered the desired results,” she said upon the release of the Annual Employment Equity Report, in Pretoria, on Tuesday.

The department is now considering approaching President Jacob Zuma to, on recommendation of the CEE, enact the more punitive sections and chapters of the EE Act that were initially excluded from the earlier promulgation and, thereby, eliminating ineffective self-regulation.

The EE Act “ticked all the right boxes”, with the Minister noting that the challenge was not one of the construct or design of the Act, but rather low levels of compliance with it, something the promulgation of Section 53 was expected to reverse.

“This will give the EE Act real teeth and will bite where it hurts the most – designated employers’ revenue,” Oliphant assured, noting that discussions with the National Treasury and the South African Revenue Services have started to link EE compliance certificates with access to procurement opportunities.

The amendment and insertion of Section 53 is expected to be submitted to Parliament for consideration by August.

In compiling the report, CEE chairperson Tabea Kabinde said the commission had sought to identify specific sectoral barriers and to inform the relevant policy interventions required to accelerate transformation as “not much has changed” 18 years after the enactment of the EE Act.

“We as a commission will, therefore, pursue the promulgation and implementation of Section 53, which deals with State contracts to incentivise compliance, in earnest, to ensure that there is radical economic transformation in the workplace,” she explained, highlighting a lack of commitment to transformation by boards and executive leadership, with EE not part of all companies’ business strategies and plans.

Section 53 of the EE Act states that “every employer that makes an offer to conclude an agreement with any organ of State for the furnishing of supplies or services to that organ of State or for the hiring or letting of anything must comply with Chapter II and III of the Act, (in the case of designated employers) or comply with Chapter II of the Act (nondesignated).”

A director-general-verified certificate, valid for one year, proving that the employer complies with the relevant chapters will be required.

Further, in line with the request made at the sectoral engagements, the commission aims to set sectoral targets for the various sectors to assist in furthering compliance, as self-regulation is not producing results, and these will be used as a basis for the issuing of compliance certificates for those employers who want to do business with government.

The promulgation of the section will ensure that employers, both designated and nondesignated, that are noncompliant are not awarded with government contracts.

Further findings following reviews with stakeholders that participated in the CEE’s engagements, which were held between June and September 2016, included the practice of gate-keeping in companies that maintains the status quo; persistent racism and sexism; a lack of contribution by business towards education despite complaints of skills shortages; the preference of employing foreign nationals; and disparities in income for equal work.

Some key contributors to the slow pace of change included resistance to transform various workplaces, EE not being recognised as a business imperative and not yet integrated into business strategies and plans to promote equity, and the absence of prescribed EE targets or EE benchmarks, as well as inadequate monitoring of compliance by employees and trade unions.

Other solutions proposed by the commission, in addition to removing State contract access for noncompliant businesses, included research into the impact of migrant labour on the implementation of the EE Act, the promotion of equal pay for equal work and encouraging workplace transformation activism to challenge unfair discrimination practices.

“The EE Act and affirmative action remain the only instruments to redress fundamental labour market inequities; however, the latest report demonstrates in no uncertain terms that what the Act seeks to achieve is disappointingly still far from being accomplished,” Oliphant said, noting that black people, women and persons with disabilities remain severely underrepresented.

Business Unity South Africa (Busa) commended the progress made in EE; but agreed that the “current trajectory and pace of change” was insufficient to make the shifts needed to transform the South African workforce at more senior levels.

“Unless we take meaningful steps so that our workforce reflects the broad demographics of our society at every level, we will miss the opportunity to leverage the full human resource potential that South Africa has to offer,” Busa CEO Tanya Cohen said in a response statement on Tuesday.

“The time has come to move beyond administrative compliance into substantial action.”

THE REPORT FINDINGS
The report shows that at top management levels, 68.5% of the positions are occupied by Whites, while Africans, Indians and Coloureds held 14.4%, 8.9% and 4.9% respectively. Foreign nationals held 3.4% of the top management positions.

Further, 78% of the positions are held by males and 22% by females.

Some 58.1% and 22.1% respectively of the positions in senior management are occupied by Whites and Africans, while 10.6% comprised Indians and 7.7% Coloureds.

Males occupy 66.7% and females 33.3% in senior management.

Meanwhile, of those at the professionally qualified level, 41.5% of the positions are held by Africans, 37.5% by Whites, 9.7% Coloureds, 8.5% Indians and 2.8% by foreign nationals.

At the skilled technical level, 60.2% of the positions are occupied by Africans and 20.8% by Whites, while Coloureds hold 11.5% and Indians 5.8%.

Meanwhile, 76.1% and 83.2% of the positions at the semiskilled level and unskilled level, respectively, are occupied by Africans. Whites accounted for 6.2% and 1.2% respectively, while Coloureds accounted for 12.3% of semiskilled and 11.4% of unskilled positions respectively.