EE laws also affect small businesses now

All employers, including small business owners, are affected by the Employment Equity Amendment Act changes that came into effect on 1 August.

Following the introduction of the Employment Equity Amendment Act on 1 August, the Department of Labour is likely to be very active in assessing employers’ compliance in the coming months.

The act, which is aimed at expediting transformation in the labour market so as to address inequality, was signed by President Jacob Zuma in January this year.

However, not only large employers are affected – the provisions of the act that do not deal specifically with affirmative action apply to all employers, irrespective of their size.

The following are some of the key amendments:

Discriminatory grounds expended

The grounds for discrimination are no longer limited to those listed in section 6 of the act (race, gender, sex, pregnancy, etc), but also include discrimination “on any other arbitrary ground”.

This change is consistent with the terminology used in section 187(1)(f) of the Labour Relations Act, 1995 (Act No. 66 of 1995), that prohibits discriminatory dismissals.

Psychometric tests

Previously, psychological tests could be used on employees (including prospective employees) if they had been shown to be scientifically valid and reliable, could be applied fairly to all employees and were not biased against any employee or group.

Now, there is the additional requirement that only psychometric tests that have been certified by the Health Professions Council of South Africa, or another body which is authorised to certify such tests, may be used.


Previously, the adjudication of all unfair discrimination claims fell within the exclusive jurisdiction of the Labour Court. Now, an employee would also be able to refer the dispute to the CCMA for arbitration if the employee complains about sexual harassment (as a form of discrimination). Any other discrimination claims by lower-paid employees (those earning less than the earnings threshold prescribed under section 6(3) of the Basic Conditions of Employment Act, which is currently at R205 433 per year) may now be referred to the CCMA for arbitration. In the case discrimination claims by higher earning employees, the parties may consent to the referral of a discrimination dispute to the CCMA for arbitration.

However, the maximum award that the CCMA can make in respect of damages will be an amount equal to the earnings threshold referred to above.

A party affected by an arbitrator’s award in a discrimination case will be entitled to appeal to the Labour Court.

Burden of proof 

There are some changes relating to the onus of proof in discrimination claims.

Where an employee alleges one of the listed discriminatory grounds (race, gender, sex, etc), the onus is on the employer to prove that discrimination did not take place as alleged, or is rational and not unfair, or is otherwise justifiable. In the case of an allegation of unfair discrimination “based on any other arbitrary ground” the onus is on the employee.

Work of equal value

A newly introduced section deals explicitly with unfair discrimination by an employer in respect of wages and other terms and conditions of employment of employees doing “the same or similar work or work of equal value”. A differentiation based on a ground envisaged by the act will amount to unfair discrimination unless the employer can show that differences in wages or other conditions of employment are in fact based on fair criteria such as experience, skill, responsibility, etc.

The Minister of Labour is empowered to publish a code of good practice dealing with criteria and methodologies for assessing work of equal value.

Apartheid victims only

The definition of “designated groups” has been amended to ensure that beneficiaries of affirmative action are limited to persons who were citizens of South Africa before the democratic era, or would have been entitled to citizenship but for the policies of apartheid, and their descendants.

As a result, persons who are foreign nationals or who have become citizens after April 1994 may not be taken into account for the purposes of affirmative action targets.


In order to avoid confusion and simplify the procedures relating to affirmative action, reference is only made to “occupational levels” in the workforce. Reference to “occupational categories”’ has been removed.


The total annual turnover thresholds set for employers in various industries (in order to be classified as a “designated employers” for the purposes of the affirmative action provisions of the act), has been increased to three times the current amount.

This means that several employers that were obliged to comply by virtue of their turnover will no longer have to do so.

Employers that employ 50 or more employees will still be regarded as “designated employers” irrespective of their turnover.

Annual reports

All designated employers, including those with 150 and less employees, now have to submit their EE reports annually.


Enforcement procedures have been truncated to promote more effective and efficient enforcement.

For example, a labour inspector would be able to issue a compliance order without first having to obtain a written undertaking from an employer.

The opportunity to object to a compliance order has been removed, but a decision may still be challenged at an appropriate juncture.


The factors that may be taken into account in determining whether an employer is implementing employment equity in compliance with the act have been revised.

The minister has been empowered to make regulations dealing with the assessment of compliance, including specifying the circumstances under which an employer’s compliance should be assessed by reference to the demographic profile of either the national or regional economically active population.

An employer may raise any reasonable ground to justify failure to comply with what has been specified in terms of the act or regulations.

Increased fines

The maximum fines that may be imposed for contraventions of the act have been increased threefold (in order to reflect the change in the value of money since 1998).

In addition, an employer’s turnover could be taken into account in determining the maximum fine that may be imposed for substantive failures to comply with the affirmative action provisions of the act.

Commission for Conciliation, Department of Labour, Health Professions Council of South Africa (HPCSA), Jan Truter, labour, Mediation and Arbitration (CCMA),

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