A staggering 70% of companies did not submit their employment equity (EE) reports by the October 1 deadline despite assurances from the South African Chamber of Business (Sacob) that all companies would comply.
The Department of Labour is leaving it up to unions to ensure that companies comply with equity legislation, according to Snuki Zikalala, spokesperson for Minister of Labour Membathisi Mdladlana.
However, the Congress of South African Trade Unions (Cosatu) believes that, although it fully supports the EE Act, enforcement is the government’s problem.
This week Zikalala warned that the government would be getting tough. ”Those who failed to submit are those who think that the government won’t do anything. We are going to act now.”
According to the Act, companies with more than 150 employees must submit reports yearly to indicate how many previously disadvantaged people are being hired, and the company’s future plans to rectify imbalances.
Zikalala said that letters had gone out to 10 000 companies that the South African Revenue Service identified as having more than 150 employees. The department had received 3 000 reports by Tuesday this week.
”We can’t strictly enforce the Act,” says Patrick Craven, acting spokesperson for Cosatu, ”but we can highlight cases where there is a problem. We will monitor the situation and encourage action where we think the Act has not been complied with.” He added that it is ”ultimately the government and courts that enforce regulations”.
Zikalala stressed the weight of unions in the matter. ”They must make sure that employers submit reports, it is up to the unions to fight to have disadvantaged people in companies and to ensure that the EE plan is in place.” He emphasised that the department is ”very serious about the question of penalties”.
Companies that did not comply might not receive government business. ”We may decide not to give tenders to them. Government policy is very clear in terms of procurement.”
Failure to submit a report in time would carry a fine of R500 000 said Zikalala. Additional fines of R500 000 would also be imposed if employers had not consulted workers with regard to their EE policies; if they did not have policies in place or failed to set out time frames to carry out EE plans. ”The fines can reach up to R3-million.”
Unions are expected to act as a catalyst to get to issues, says John Botha, MD of Global Business Solutions. ”The Department of Labour is not well capacitated to enforce penalties. The department can only make examples of a few companies.”
Botha says that one of the most ”common reasons companies fail to submit is, for example, new companies and companies that have run out of time with the consultation process”. A lack of proper planning is also to blame. ”Maybe they’re just useless.”
The slow return of reports has been attributed to companies not understanding who is required to submit, says Carol O’Brien, Sacob’s labour policy executive. ”I’m quite shocked, that’s disappointing.”
O’Brien says the Act seems to indicate that in certain instances companies with a certain turnover would also be classified as designated employers, and this caused confusion. ”We picked up difficulties regarding who are designated employers.”
On Thursday last week Sapa quoted O’Brien as saying, ”I think everybody will have submitted their reports because it was well advertised.”