Thulas Nxesi. Picture: TREVOR SAMSON
Thulas Nxesi. Picture: TREVOR SAMSON

Frustrated by the slow pace of transformation in the workplace, the government says it will invoke a section in labour legislation that will make it compulsory for companies to have a compliance certificate to do business with it.

The legislation, section 53 of the Employment Equity Act, has, to date, remained dormant while government waited to see whether employers would comply voluntarily with employment equity objectives. But this has happened at a very slow pace and employment and labour minister Thulas Nxesi said on Tuesday that the government will adopt a tougher approach to companies that continue to stall on employment-equity targets.

“Section 53 will give us the force we need,” Nxesi said at a media briefing, adding that he hoped to see its promulgation by the end of 2019 or early in 2020.

Another measure contemplated to quicken the equity transformation in the workplace is to set employment equity targets for each economic sector, with the risk of prosecution for the failure to meet the targets for no justifiable reason. These targets will replace the system of self-regulation Nxesi says has not worked. He said there is a need to increase the risk of non-compliance so companies are aware there would be consequences.

Nxesi was reacting to the just-released Commission for Employment Equity report for 2018, which showed that the pace of transformation in the workplace is very slow. The construction and financial sectors were found by the commission to be the worst performers in terms of employment equity.

Chair Tabea Kabinde said the commission will engage with the different sectors to set targets for the next five years. These will  be based on reasonable expectations of what can be achieved and aligned with expectations set under the Broad-Based BEE Act.

Nxesi said on the handover of the employment equity report that there had been little transformation in the workplace — especially in the middle and upper ranks — since the adoption of the Employment Equity Act about 20 years ago. African and Coloured employees continued to be under-represented at these levels. “This cannot continue,” the minister stressed, noting that the slow pace of transformation raised questions of whether liberation has, in fact, been achieved. “We are now going to start to be very hard. Those who do not comply must face the music.”

Labour department chief director Thembinkosi Mkalipi said that when there are no consequences for non-performance, compliance will  be low, and that companies have not been committed to transformation.

The breakdown

The commission’s findings on employment equity were compared with the figures of the economically active population for each racial group — 78.8% for Africans, 9.6% for Coloureds, 2.7% for Indians, and 9% for Whites.

Kabinde said that the most transformation had happened at the level of skilled workers. There was “excellent” representation — indeed, over-representation — of white females and Indians in the upper four occupational levels.

The commission draws its information from reports from companies, which numbers have risen from 27,163 in 2017 to 27,485 in 2018.

At top management, 65.5% of the positions in both government and the private sector were held by whites; 15.1% by Africans; 9.7% by Indians; 5.3% by Coloureds; and 3.4% by foreign nationals. Males occupied 76.5% of the positions and females 23.5%.

At senior management level 54.4% were white; 23.2% were African; 11.1% Indian; 8% Coloured; and 3.3% foreign nationals.

Among the semi-skilled 75.5% were African; 12% Coloured; 5.5%  white; 2.8% Indian; and 2.3% foreign nationals. At the unskilled level, 83.7% were Africans; 11.1% Whites; 11% Coloured; 3.5% foreign nationals; and 0.8% Indians.

Among the professionally qualified, Africans were at 40.2%; Whites 37.4%; Indians 9.4%; Coloureds 10%; and foreign nationals 3%.

Africans fared better in government, where they made up 71% of top management while Whites occupied 69.6% in the private sector and 71% of senior management; Whites occupied 60% of the positions in the private sector.

ensorl@businesslive.co.za