PUBLISHED BY ANAMARIE WESSELS
Employment Equity and Contracting
with the State
Date: 01 May 2023
Section 53 of the Employment Equity Act, 1998 places an obligation on all employers who wish to contract with an organ of state to comply with the Act.
The purpose of the Act is to promote the constitutional right of equality; eliminate unfair discrimination in employment; ensure the implementation of employment equity to redress the effects of discrimination; achieve a diverse workforce; promote economic development and efficiency in the workforce; and to give effect to the obligations of the Republic as a member of the International Labour Organisation.
As part of tenders to organs of state for the provision of goods and services, or the leasing or hiring of anything, compliance with the relevant Chapters of the Act has to be proved by way of a Compliance Certificate.
Two classes of employers are identified, designated and non-designated employers – and different obligations for compliance are set out for them.
According to the Employment Equity Amendment Act, 2022, ‘designated employers’ are employers with more than 50 employees in their charge (and organs of state.)
Designated employers must comply with Chapters 2 and 3 of the Act – which are the ‘prohibition on unfair discrimination’ and the ‘affirmative action’ clauses. The required Certificate of Compliance for contracting with the state, will be issued by the Minister of Employment and Labour.
The Minister may only issue a Certificate of Compliance if the Minister is satisfied that the employer has complied with a numerical target for the sector/ sub-sector/region/occupational level; the employer has raised a reasonable ground to justify its failure to comply; the employer has submitted an Employment Equity Report; there has been no finding by the CCMA or a court within the previous 12 months that the employer breached the prohibition on unfair discrimination; and the CCMA has not issued an award against the employer in the previous 12 months for failing to pay the minimum wage in terms of the National Minimum Wage Act, 2018.
Employers with fewer than 50 employees must comply with Chapter 2, the ‘prohibition on unfair discrimination’ clause. To prove compliance as part of the tender process, the employer must file a declaration – which when verified by the director- general is conclusive evidence of compliance. This class of employers may also request a Certificate of Compliance from the Minister of Employment and Labour.
A Certificate of Compliance is valid for at least 12 months from the date of issue.
For the purpose of contracting with the state – non-compliance could lead to the rejection of offers or to the cancellation of agreements already in place.
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