These are the new transformation goals businesses will have to achieve

The Department of Employment and Labour (DEL) has set the transformation objectives that companies must achieve over the next five years.

The sector-specific targets outlined the demographic composition that companies must achieve at skilled entry and management levels.

The department listed 18 affected sectors, with failure to comply, or failure to prove that compliance was not possible, subject to a hefty fine.

Skilled entry targets above 90%

The sector targets stipulate that designated employers must have a certain percentage of designated groups in their four employee brackets — top management, senior management, professionally qualified and skilled technical.

A designated employer is defined in the Employment Equity Act as a business that employs 50 or more people or meets a pre-determined turnover threshold.

It also includes municipalities, state entities and employers bound by collective agreements related to the Labour Relations Act.

The term designated groups refer to black South Africans, women, and people with disabilities.

Across the skilled technical brackets of all sectors, the regulations stipulate a designated group composition of over 90% in 15 of the 18 sectors.

Of the 18 sectors, 11 have a designated group target of over 95% for the skilled technical bracket, while the targets taper off considerably with each rung of the employment ladder.  

Select numerical sector targets set by the Department of Employment and Labour. Picture: DEL

Five-year plan to start 1 September

Employment equity law specialist and Counsel at Cliffe Dekker Hofmeyr, JJ van der Walt explained the regulations gazetted on 15 April repealed those from 2014 and replaced them with “significantly more robust compliance obligations”.

Companies will now be forced to compile a five-year plan employment equity plan that will stretch from 1 September 2025 to 31 August 2030.

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This plan must be submitted to the DEL and designated employers could be subject to fines capped at 10% of their turnover for repeat offenders.

“The Labour Court can impose a fine in the amount equal to the greater of R1.5 million or 2% of a designated employer’s turnover if it is the first occasion for non-compliance,” Van der Walt told The Citizen.

Van Der Walt urged employers to be aware of the introduction of the employment equity compliance certificate issued by the DEL for those who have met the commitments stated in their five-year plan.

“Absent such a certificate, designated employers would be unable to meaningfully participate in rendering service to and providing products in the public sector,” he stated.

Select numerical sector targets set by the Department of Employment and Labour. Picture: DEL

Possible exemptions for employers

Designated employers can only miss these targets if they can prove that circumstances beyond their control prevent them from reaching them.

Van der Walt says these factors include insufficient recruitment and promotion opportunities, the impact of economic conditions on the business, and mergers or acquisitions.

“[Additionally]; insufficient target individuals from designated groups with relevant formal qualifications, prior learning, relevant experience or capacity to acquire, within a reasonable time, the ability to do the job,” Van der Walt clarified.

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All sectors will have gender-based targets, but despite submissions from multiple sectors, natural inclinations to pursue certain careers will not be grounds for compliance exemption.

“Those [are] sectors that human experience taught us are dominated by a specific sex due to the nature of the work that ultimately creates a systemic pattern over time,” said Van Der Walt.

“For further details, mining companies have indicated that they receive far more applicants from men than women, which is equally the case in respect of transportation and security. The converse is also true in respect of healthcare, cleaning, and catering,” he explained.

Through consultations with designated employers, Cliffe Dekker Hofmeyr found that the primary compliance considerations for business owners were economic factors, availability of suitable candidates and adjusting their company structures to meet regulations.

Select numerical sector targets set by the Department of Employment and Labour. Picture: DEL

Sector-specific targets

Below is a list of each sector’s target for designated group inclusion, starting from skilled technical, moving to middle management, senior management and top management:

• Accommodation and Food Service Activities: 95.9%, 84.7%, 78.3%, 56.7%
• Administrative and Support Activities: 95.9%, 95.3%, 85.8%, 68.9%
• Agriculture, Forestry & Fishing: 93.8%, 76.4%, 52.6%. 34%
• Arts, Entertainment and Recreation: 95.9%, 95.9%, 84.1%, 68.6%
• Construction: 95.9%, 81.1%, 68.1%, 54.8%
• Education: 95.9%, 89.1%, 76.6%, 73.7%
• Electricity, Gas, Steam and Air Conditioning Supply: 95.9%, 95.9%, 82.2%, 59.6%
• Financial and Insurance Activities: 95.6%, 86.8%, 77%, 63.1%
• Human Health and Social Work Activities: 95.9%, 95.9%, 85.9%, 71.3%
• Information and Communication: 91.7%, 76.8%, 68.6%, 56.6%
• Manufacturing: 89.4%, 78.1%, 66%, 49.1%
• Mining and Quarrying: 86.7%, 77.6%, 64.5%, 57.5%
• Professional, Scientific and Technical Activities: 95.9%, 82.0%, 76%, 62.5%
• Public Administration and Defence; Compulsory Social Security: 95.9%, 95.9%, 95.9%, 91.7%
• Real Estate Activities: 84.4%, 78.5%, 69%, 49.2%
• Transportation and Storage: 91.2%, 87%, 78%, 62.2%
• Water Supply, Sewerage, Waste Management and Remediation Activities: 95.9%, 95.9%, 90.8%, 85.7%
• Wholesale and Retail Trade; Repair of Motor Vehicles and Motorcycles: 94.2%, 88.3%, 73.6%, 51.7%

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