Settlement agreement on Employment Equity

On 28 June 2023, the South African government and the Solidarity Trade Union signed a settlement agreement on employment equity. Employment and Labour Minister, Mr T.W. Nxesi, referred to the agreement as a “ground-breaking” settlement agreement amid all the negative publicity. They added that the agreement is critical to discrediting the negative perceptions created maliciously in the media regarding the current EE amendments and sector EE targets.

Minister Nxesi emphasised that the EEA and other labour laws do not require employers to dismiss or terminate the employment of any employees to make space for the implementation of EE Amendments or sector EE targets.

He encouraged more thoughtful EE planning and implementation to ensure optimal participation of all population groups in the country’s economy. He urged employers to commit to ensuring that all people in the country have access to equal opportunities and are treated fairly without any form of unfair discrimination in the workplace.

2 Major points were agreed upon in the settlement:

1. No employee’s employment may be terminated in any way because of the companies’ racial programs and

2. Race may not be used as the sole criterion for employment & promotions. The following criteria need to be considered when applying for EE:

3. The inherent requirements of the job

4. The pool of suitably qualified persons

5. The quality, skills and experience required for the job

6. The rate of turnover and natural attrition in the workplace

7. Recruitment and promotional trends in the workplace

   
   

The EE Amendments make provisions for employers that fail to achieve their annual EE targets and permit employers to raise a justifiable ground/reason for non-compliance. The settlement agreement provides a list of reasons that may be considered acceptable in instances where employers were unable to achieve the EE targets:

1. Insufficient recruitment opportunities

2. Insufficient promotion opportunities

3. Insufficient target individuals from designated groups with the relevant skills, qualifications, and experience

4. CCMA awards or court orders

5. Transfer of business

6. Mergers and Acquisitions

7. Impact of business economic circumstances

The Trader Union and Solidarity welcomed the conclusion of the agreement and commented that the agreement should end the use of race as the sole criterion for employment and promotion.