PODCAST | Future of race in recruitment, promotion and restructuring

In this edition of Business Law Focus, host Evan Pickworth interviews Lisa-Anne Schäfer-King, director: employment & labour, human resources at Fluxmans, on the future of “race” in recruitment, promotion and restructuring processes. A recent settlement agreement provided welcome clarity on the application of affirmative action where targets cannot be met on justifiable or reasonable grounds.

Listen to the conversation:

 The context

An important settlement agreement was signed on Wednesday 28 June 2023 between Solidarity and the government in the International Labour Organisation conciliation process, facilitated by the CCMA.

The parties have agreed that affirmative action shall be applied in a “nuanced way” and that economically active population statistics will be just one of the many factors taken into account in determining whether a business is compliant with Employment Equity legislation. 

While it will be interesting to see how labour, businesses and the courts will interpret “nuanced way”, the agreement is clear that no absolute barrier may be placed on any employment practices affecting any person, and no termination of employment may be affected as a consequence of compliance with affirmative action targets. 

In drafting and implementing employment equity plans and reporting thereon, businesses will be required to take the following criteria into account to ensure compliance with affirmative action measures in the workplace:

• inherent requirements of the job;
• the pool of suitably qualified persons;
• the qualifications, skills, experience and capacity to acquire, within a reasonable time frame, the ability to do the job;
• the rate of turnover and natural attrition within the workplace;
• recruitment and promotional trends within the workplace.

Insofar as businesses are unable to comply with affirmative action targets set in their employment equity plans or by any other party, they will need to justify such noncompliance on justifiable/reasonable grounds to avoid any penalties for noncompliance. According to the settlement agreement “justifiable/reasonable grounds” may include:

• insufficient recruitment opportunities;
• insufficient promotion opportunities;
• insufficient target individuals from the designated groups with the relevant qualifications, skills and experience;
• CCMA awards/court orders;
• transfer of businesses
• mergers & acquisitions; and
• impact on business economic circumstances.

Hopefully the signing of the settlement agreement will go a long way in assisting businesses in drafting and implementing employment equity plans now that the significant emphasis on “race” in recruitment, promotion and restructuring processes has been addressed.