HEAD FOR SUCCESS
Business Studies Grade 12
TERM 1
Topic 1: Impact of recent legislation on business – response to demands for
redress and equity.
EMPLOYMENT EQUITY ACT
(Nr. 55 of 1998)
EMPLOYMENT EQUITY ACT
(Nr. 55 of 1998)
(no unfair discrimination against an employee)
NATURE of the EEA:
 This Act was introduced to rectify the inequalities before 1994.
 The law promotes equality in employment and provide for affirmative
action to reflect the demographics of the community in the workplace.
 Provision for equal opportunities for all job seekers and fair treatment in the
workplace.
 Preventing discrimination applicable to all employers. No job seeker /
employee shall be discriminated against in respect of race, pregnancy,
sex, marital status, ethnic or social origin, colour, language, sexual
orientation, disability, HIV status, culture, etc.
EMPLOYMENT EQUITY ACT
(Nr. 55 of 1998)
NATURE of the EEA:
 No unfair discrimination may be allowed e.g. sexual-harassment,
compulsory medical tests, etc.
 Measures for affirmative action by designated employers. (This is employers
who have 50 or more workers employed).
 Measures for affirmative action to designated groups that includes blacks,
Coloureds, Indians, women of all races and disabled persons.
EMPLOYMENT EQUITY ACT
(Nr. 55 of 1998)
NATURE of the EEA:
 Companies should have an equality employment plan that forms part of
the code of good business practice. This plan shall contain the following:
 Reasonable progress with employment equity of the firm’s workforce.
 The goals / targets to be achieved for each year of the plan.
 Affirmative action measures that must be implemented.
 If the current representation of designated groups is lower than it should be, the
number and the time frame in which the correction will be made, must be
indicated.
 The time frame for each year of the plan must be indicated.
 The duration of the plan with a minimum of one year to a maximum of five years.
 Procedures to monitor and evaluate the implementation of the plan, etc.
EMPLOYMENT EQUITY ACT
(Nr. 55 of 1998)
PURPOSE of the EEA:
 The purpose of this Act is to achieve equity in the workplace by:
 Promoting equal opportunities and fair treatment of all employees, e.g. by
inviting all employees to apply for a managerial position.
 Eliminating unfair discrimination e.g. by giving preference to disabled persons.
 Ensuring equal representation of all population groups in all occupational
categories and levels in the workforce e.g. by appointing candidates of all
races.
 Redressing disadvantages in employment experienced by designated groups,
e.g. by implementing Affirmative Action measures.
 Implementing Affirmative Action (AA) measures to redress the disadvantages in
employment experienced by designated groups, e.g. by giving preference to
previously disadvantaged individuals when appointing new candidates.
EMPLOYMENT EQUITY ACT
(Nr. 55 of 1998)
PURPOSE of the EEA:
 Employers are encouraged to formulate plans to promote employment
equity. These plans must be submitted to the Department of Labour for
approval.
 Affirmative Action measures for designated groups of employees are
specified in this Act as well as the application of affirmative action to
ensure equal representation in the workplace.
 Employees are protected against victimisation in the workplace.
 Inspectors from the Department of Labour may visit businesses to check if
their employment equity plan is implemented and non-compliance can be
ended in Labour Court.
 To prevent unfair employment because of past discrimination in terms of
race, gender and disablility.
EMPLOYMENT EQUITY ACT
(Nr. 55 of 1998)
PURPOSE of the EEA:
 To promote equal opportunities for all employees and to regulate
affirmative action.
 Implementation of the Government’s transformation program.
 Strive for diversity / equal representation in the workplace.
EMPLOYMENT EQUITY ACT
(Nr. 55 of 1998)
ADVANTAGES
DISADVANTAGES
Brings redress to people who have
experienced suffering and inequality
in the past.
The Act remedies one form of
discrimination with another form of
discrimination.
Promotes equal opportunities for all
people in the workplace.
The purpose of the Employment Equity
Act may clash with the purpose of the
Skills Development Act.
Provides all candidates with an equal
opportunity to be selected.
The Act often benefits people who
have not personally experienced the
discrimination of the past.
Provides all candidates with an equal
opportunity to be considered for
promotion .
Job seekers are employed in positions
for which they lack the necessary
qualifications or experience, just to
meet the requirements for equity.
EMPLOYMENT EQUITY ACT
(Nr. 55 of 1998)
ADVANTAGES
DISADVANTAGES
Promote equal opportunities and fair
treatment in employment.
Workers being retrenched because of
affirmative action must receive a
financial compensation package
which increase expenses.
Promote the implementation of
affirmative action measures to rectify
the imbalances in employment of the
past.
Untrained employees appointed to
meet the requirements of equality,
should be trained which also has
additional financial implications.
Prevent unfair discrimination against
employees on the basis of race
religion, etc.
Businesses are forced to employ
someone which in the first place
would not have been appointed.
Provide a framework for acceptable
employment practices.
Unfair promotion f employees to meet
the demands of equity at
management level.
EMPLOYMENT EQUITY ACT
(Nr. 55 of 1998)
ADVANTAGES
DISADVANTAGES
Promote diversity in the workplace.
It takes time to introduce and
implement an employment equity
plan.
Promote consultation between
employers and employees.
The law is seen by some businesses as
a liability in relation to productivity
that can hamper economic growth.
Certain groups of people are
excluded when appointments are
considered, as a result of affirmative
action.
Affirmative action should be
prioritised, so that disadvantaged
people are given opportunities,
especially to fill management
positions, which can lead to the loss of
qualified employees.
EMPLOYMENT EQUITY ACT
(Nr. 55 of 1998)
ADVANTAGES
DISADVANTAGES
Can lead to conflict in the workplace.
Staff turnover can be high, which
means that new employees are to be
trained which has cost implications.
Trained, experienced and skilled
workers are retrenched through
affirmative action.
People who are qualified to do the
job, are excluded, to make place for
non-skilled people of the appropriate
gender, race, etc.
EMPLOYMENT EQUITY ACT
(Nr. 55 of 1998)
ADVANTAGES
DISADVANTAGES
Experienced workers leave the
country because they have better
work opportunities abroad.
The uncertainty of people that had to
start their careers in different
professions, reduce the targeted
economic growth, because foreign
opportunities and salaries are more
attractive.
Experienced and knowledgeable
workers had to make way for unskilled
workers when new appointments
were made as a result of the
provisions of the Act.
EMPLOYMENT EQUITY ACT
(Nr. 55 of 1998)
RIGHTS / IMPLICATIONS FOR THE BUSINESS:
 All employers must take the necessary action with regard to employment.
 Take affirmative action to ensure that suitably qualified people from
designated groups have equal employment opportunities.
 Ensure that designated groups have equal representation at all levels in the
business.
 Provision of relevant information pertaining equality to representative
parties.
 No unacceptable practices may be applied e.g. reverse discrimination
may not be used by appointing people from previously disadvantaged
groups, without investigating the merit of all applicants.
EMPLOYMENT EQUITY ACT
(Nr. 55 of 1998)
RIGHTS / IMPLICATIONS FOR THE BUSINESS:
 Applicants from designated groups should be considered when
appointments for vacant posts are made.
 Businesses with over 50 employees and small businesses with an annual
turnover equal to or higher than the prescribed annual amount must
compile an equity plan. This plan should be submitted to the Department
of Labour, along with an annual report on the progress of implementing the
plan.
 Businesses that do not meet the above requirements, do not need to meet
the affirmative action requirements set in the EEA. They may voluntarily
agree to apply it.
EMPLOYMENT EQUITY ACT
(Nr. 55 of 1998)
RIGHTS FOR EMPLOYEES:
 Equal opportunities in the workplace.
 Elimination of unfair discrimination when applying for vacancies.
 Equal representation in the workplace, according to the demographics of
the country.
 Provide input into the company’s employment equity plan.
EMPLOYMENT EQUITY ACT
(Nr. 55 of 1998)
IMPLICATIONS FOR SMALL AND LARGE BUSINESSES:
Implications for small businesses:
Implications for large businesses:
Business enterprises with more than
50 employees are obliged to
comply with the principles of
Affirmative Action.
Businesses’ employment policies
must prohibit unfair discrimination.
Businesses have a smaller pool of
candidates to choose employees
from.
Only businesses that comply wit EE
requirements are allowed to do
business with the government – this
serves as motivation for small
businesses to be EE compliant (EE
compliance is not enforceable b
law for small business enterprises).
Skilled and experienced employees
are sometimes denied promotions
in order for a business to become
EE compliant.
EMPLOYMENT EQUITY ACT
(Nr. 55 of 1998)
IMPLICATIONS FOR SMALL AND LARGE BUSINESSES:
:
Implications
for small businesses:
Implications for large businesses:
Business enterprises with less than
50 employees are not obliged to
have an Employment Equity Plan.
Businesses must give preference to
people who were previously
disadvantaged.
Employers with less than 150
employees must submit EE reports
to the Director-General every two
years.
Businesses have a duty to inform
employees about the provisions of
the EE Act by displaying the Act at
the workplace.
Businesses have a duty to inform
employees about the provisions of
the EE Act by displaying the Act at
the worlplace.
Businesses have a duty to keep
record of its workforce and
Employment Equity Plan.
EMPLOYMENT EQUITY ACT
(Nr. 55 of 1998)
IMPLICATIONS FOR SMALL AND LARGE BUSINESSES:
:
Implications
for small businesses:
Implications for large businesses:
Designated employers (businesses
with 50 or more employees) are
required to have an Employment
Equity Plan.
Employers who employ more than
150 employees must submit an
annual EE report to the DirectorGeneral.
Designated employers must assign
a senior manager to be responsible
for the business’ EE Plan.
EMPLOYMENT EQUITY ACT
(Nr. 55 of 1998)
COMPLIANCE WITH THE PROVISIONS IN THE ACT AND PENALTIES IF THE BUSINESS
FAILS TO COMPLY:
 Labour inspectors have the power to issue compliance orders.
 If a compliance order is not followed, the Labour Court may be requested
to make the compliance order an order of the Labour Court.
 This means that the business that the business will be forced to comply.
 The Labour Court can impose fines on employers.
 The Labour Court can impose a minimum fine of R500 000 for first violators of
the law’s provisions, up to an amount of R900 000 after four offenses.
EMPLOYMENT EQUITY ACT
(Nr. 55 of 1998)
COMPLIANCE WITH THE PROVISIONS IN THE ACT AND PENALTIES IF THE BUSINESS
FAILS TO COMPLY:
 The employer cannot be penalised if the objectives set out in the
employment equity plan is not achieved, but the Labour Court can act
against the employer if no real attempt to reach the goals is made.
 The Employment Equity Commission may help to enforce the EEA.
 The provisions of Affirmative Action apply to:
 Employers with 50 or more employees and an annual income that exceeds the
amounts as prescribed by the EEA.
 Municipalities
 Organs of state
 Employers ordered to comply by a bargaining council agreement.
 Employers who choose to comply (voluntarily).
EMPLOYMENT EQUITY ACT
(Nr. 55 of 1998)
COMPLIANCE WITH THE PROVISIONS IN THE ACT AND PENALTIES IF THE BUSINESS
FAILS TO COMPLY:
 The EEA does not apply to:
 The National Defence Force
 The National Intelligence Agency
 The South African Secret Services
EMPLOYMENT EQUITY ACT
(Nr. 55 of 1998)
ACTIONS IN THE EEA SEEN AS DISCRIMINATORY:
 Discrimination on one or more grounds, including:
Race, gender, beliefs, pregnancy, marital status, family responsibility, ethnic or
social origin,
colour, age, disability, religion, HIV-status, political opinion, culture
 Medical testing:
Prohibited, unless:
 Legislation permits or requires the testing
 It is justifiable in the light of medical facts, employment conditions, social policy or the
inherent requirements of the job.
Testing to determine an employee’s HIV-status is prohibited
EMPLOYMENT EQUITY ACT
(Nr. 55 of 1998)
ACTIONS IN THE EEA SEEN AS DISCRIMINATORY:
 Psychometric testing:
Prohibited, unless:
 The test being used has scientifically shown to be valid and reliable.
 The test being used can be applied fairly to all employees.
 The test being used is not biased towards any employee or any group of
employees.
EMPLOYMENT EQUITY ACT
(Nr. 55 of 1998)
 Link na die wet as dit teen daardie tyd beskikbaar is ????