Progress towards employment equity is still too slow, according to government’s Commission for Employment Equity — but there are signs that the commission’s conclusion is based on faulty data.
Earlier this week, the commission released its report and publicly criticised six companies for lack of compliance. Commission chairperson Jimmy Manyi and Labour Minister Membathisi Mdladlana publicly named Comair, Kumba Resources, Verimark, Medi-Clinic, Prism Holdings and Omnia as the defaulters. Failure by these companies to comply with the commission’s recommendations would result in possible legal action through the Labour Court, said Manyi.
The report says the six companies did not comply with the Act’s full requirements, including conducting workplace analyses, preparing and implementing an employment equity plan, and submitting progress reports. ‘Based on the information received from employers it could clearly be deduced that these employers just focused on submitting reports to the department on an annual basis, which were not based on a plan,†it said.
In terms of the Employment Equity Act, all employers with 50 or more workers, or whose annual income is above a certain threshold, must submit employment equity reports to the labour department, listing progress towards employment equity goals. But a source close to the commission said there was a severe lack of capacity in government to check companies’ progress.
The source said the report’s data was misleading because ‘nobody checks the quality of inputs†and that job definitions changed from company to company. The labour department itself did not have the capacity to check the data submitted, leading to fluctuations in the findings from year to year.
Government should either vastly increase capacity, said the source, or take a strategic approach and thoroughly check only a few reports. Another problem was that while the BEE codes ‘had a lot more teethâ€, the Employment Equity Act was largely unenforced. The Act itself provides for employment equity progress to be linked to government procurement initiatives, but this has never been implemented.
Last year, Mdladlana’s ‘name and shame†campaign backfired when companies who he said had not submitted reports were able to prove that their reports had been received by government. It emerged then that the department had filed reports according to company name, rather than company registration numbers, although more than one name could be used by a company and its subsidiaries. This led to confusion about which companies had actually complied.
There are also signs that the skills shortage may have held up progress. Erik Venter, joint CEO of Comair, said that in the past five years the percentage of black employees at Comair has grown from 29% to 52%, despite difficulties in securing black pilots and technical staff. He said a labour department review had found that employment equity practices, initiatives and compliance at Comair were in place.
The department’s recommendations related mainly to obtaining additional written proof of Comair’s employment equity practices, he said. ‘Based on the review findings and the facilitative approach adopted by the department’s auditors, we were shocked to see that the minister of labour had once again chosen to highlight Comair as non-compliant.â€
Medi-Clinic said low management staff turnover and a lack of qualified and experienced applicants had held up progress on employment equity. ‘Moreover, applicants who do meet the criteria are reluctant to join the company at internally equitable remuneration rates,†it said.
The labour department’s final review report had highlighted areas where it was not meeting requirements, but the report had not found that Medi-Clinic had disobeyed the Employment Equity Act, the company said.
When contacted for comment, Prism Holdings said that it was now a subsidiary of US-based Net1 UEPS Technologies and no longer existed as a separate company.
Kumba Iron Ore spokesperson Anne Dunn said that Kumba Resources also no longer existed, as it had split into Exxaro and Kumba Iron Ore in November last year, and had been incorrectly listed by the department in the first place.
Trade union Solidarity also criticised the department’s approach, saying that the report’s scientific standing was dubious. ‘The problem lies in the fact that the companies that submit employment equity reports to the department of labour are different every year. This means that Mr Manyi and his commission use statistics that are based on data relating to different companies. We should much rather see data from the same group of companies being used from year to year,†said Dirk Hermann, the union’s deputy general secretary.
He added that the report was unrepresentative of the labour force. ‘If one takes into account that companies with fewer than 50 employees are exempt from the submission of employment equity reports, and that more than 70% of working South Africans are to be found in these companies, it is clear that more than 70% of the labour market is automatically excluded from the Employment Equity Report.â€
The state of employment equity
The Commission for Employment Equity’s report, released on Monday, found:
- Black representation at top management level (which is undefined) has increased by only 9,5 percentage points between 2000 and 2006, from 12,7% to 22,2%. The proportion of Africans has increased by 5,1 percentage points, while female representation has risen 9,2 percentage points. White women account for most of the increase, and now hold 14,7% of top management positions, with black women holding 9,6%.
- At senior management level (which is undefined), black representation increased by 8,4% from 18,5% in 2000 to 26,9% in 2006. Black women hold 8% of senior management positions and white women 19%.
- At the professionally qualified and middle management level, black representation fell by 7,6 percentage points between 2000 and 2006, from 44,1% to 36,5%, while white representation increased by 6,1% from 56,1% to 62,2%. Black female representation fell by 11,1 percentage points, from 24,9% to 13,8%, while white female representation increased by 3,8 percentage points, from 18,3% to 22,1%.
- The proportion of disabled people fell from 1% to 0,7% of the workforce.
- White women, who appear to be overrepresented, may lose their status as a designated group for affirmative action.
- The department received 6Â 876 reports last year, excluding 2Â 482 from its review. This is a 50% drop compared to 2000.