Employment Equity Report 2010/11: briefing by Commission on Employment Equity

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Employment and Labour

24 October 2011
Chairperson: Mr E Nyekemba (ANC)(Acting)
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Meeting Summary

The Commission on Employment Equity briefed the Committee on the Commission’s 11th annual report for 2010/11.  The Commission analysed the employment equity reports submitted annually by large designated employers (more than 150 employees) and every two years by small designated employers.  The data was compared to the statistics on the Economically Active Population derived from the Quarterly Labour Force Survey published by Statistics South Africa.  During 2010, 18,534 employment equity reports were received, of which 16,698 (90.1%) were analysed by the Commission.

The briefing focused on the four upper occupational levels of top management, senior management, professionally qualified and technically skilled.  The analysis included the distribution per race and gender for each of the four upper levels.  In addition, the analysis of the race and gender representation in the workforce profile, recruitment, promotion, termination and skills development of employees and the best and worst performing sectors were provided.

The analysis indicated that white males continued to benefit most at the top- and senior management levels.  Slight improvement was recorded at the professionally qualified level.  The most significant improvement was at the technically skilled level.  There was no change in the percentage of foreign nationals but the employment of persons with disabilities remained a challenge.  Females continued to be under-represented.

The Commission suggested a change to the employment strategy to increase the pace of change and amendments to the Employment Equity Act to introduce fines and to simplify enforcement.

Members asked questions about the reasons for the slow pace of change at the higher levels and the lack of performance in the employment of persons with disabilities.  Questions were asked about the under-representation of Whites and Indians at the lower levels and the strategies for involving retirees in mentorship programmes; the strategy to employ Black graduates; engagement with other government departments; the imposition of more stringent punitive measures and the provision of tax incentives and subsidies to facilitate the employment of disabled persons.

Meeting report

Briefing by the Commission on Employment Equity (CEE)
Ms Mpho Nkeli, Chairperson of the CEE presented the briefing to the Committee (see attached document).

The briefing covered the composition of the Commission, the mandate and the context of the annual report on employment equity.  The employment equity value chain was illustrated and the desired workforce distribution was explained.  A representative workforce profile was aligned to the Economically Active Population (EAP).  Data for the CEE report was provided by the Quarterly Labour Force Survey published by Statistics South Africa.

The current national and provincial distribution for Africans, Coloureds, Indians and Whites and the percentages of males and females in each race group were provided.  Small designated employers (fewer than 150 employees) reported every two years but large employers were required to submit reports on an annual basis.  An online reporting system was implemented, which improved the accuracy and quality of the reports received.  During 2010, 18,534 reports were received and 16,698 (90.1%) were analysed by the CEE.

The published report included the data and trends at all occupational levels.  The briefing to the Committee focused on the upper occupational levels, i.e. top management, senior management, professionally qualified and technically skilled levels as challenges remained at those levels in particular.  An analysis of the workforce distribution per race and gender for the upper levels was provided.  In addition, the data concerning workforce profile, recruitment, promotion, termination and skills development was analysed.  The best and worst performing sectors were listed.

The analysis indicated that white males continued to benefit the most at the top- and senior management levels.  More positive change was observed at the professionally qualified level.  The most significant positive change was at the skilled technical level, indicating a strong bias towards African employees.  The employment of foreign nationals showed no significant change but the employment of people with disabilities remained disappointing.

The briefing was concluded with a summary of the percentage increase of African employees at the top levels since 2006.  Challenges included the slow pace of achieving employment equity at the top- and senior management levels, the under-representation of women and the representation of people with disabilities.  The CEE suggested a change in the current strategy to facilitate an escalation in the pace of change and accompanying amendments to the Employment Equity Act (EEA) to impose fines for non-compliance and to simplify enforcement.

Mr D Kganare (COPE) observed that government entities appeared to perform better than the private sector and wondered what the picture would look like if the public sector as omitted.  He asked what problems were experienced by the private sector that prevented the achievement of employment equity targets.  He asked what the countries of origin of the foreign nationals employed in South Africa were.  He remarked that employees at the professionally qualified and technically skilled levels could be expected to progress to senior and top management positions in due course.

Mr I Ollis (DA) asked what percentage to the total workforce was at the top- and senior management level.  Employees at the upper levels were presumed to be highly skilled and have extensive experience.  He asked what the CEE suggested was causing the slow rate of change at the top management level.

Adv A Alberts (FF+) observed that the briefing was incomplete as the performance at the lower employment levels had been excluded.  He had asked the Minister a question in Parliament concerning the under-representation of Whites and Indians at the semi-skilled level and felt that government was not addressing the issue.  There was more opportunity to create jobs at the lower levels but the focus was only on the upper employment levels.

Mr A Williams (ANC) observed that top- and senior managers were encouraging transformation at the lower levels but not at their own level.  He asked if the CEE had engaged with the under-performing sectors to ascertain the reasons for the lack of performance.  He asked what action was taken to address the issue of the disabled community.

Ms Nkeli agreed that the public sector had performed better than the private sector in achieving employment equity targets.  The reasons given for the lack of progress included the limited availability of skilled and experienced Black persons.  However, the number of Black graduates had increased three-fold in recent years.  Companies perceived the employment of persons without experience as a risk but it was essential that recently-qualified graduates were given the opportunity to gain work experience.

Ms Ntsoaki Mamasela Director: Employment Equity, Department of Labour (DOL) referred Members to the published report.  Appendix A to the report provided a breakdown of the statistics for government and the private sector.  The DOL had engaged with the Chief Executive Officers of private companies but perceived little commitment to achieving employment equity.  Few companies had proper employment equity plans and the issue was not taken seriously enough.  Progress was being made at the lower levels but the upper levels remained insular and averse to increasing the number of Black executives.  Employment equity plans lacked measurable targets.  Many reports were compiled by consultants and the data provided was not substantiated of based on the employment equity plan.  The DOL had visited companies in the mining, retail and banking sectors.  Audits were conducted and assistance to develop credible plans was provided.  The published report included data on all the employment levels.  The DOL had raised the concerns regarding the under-representation of Whites and Indians at certain levels during the engagements with employers.  The EEA strove for employment equity and no particular race group should be excluded.

Mr Niresh Singh, Department of Labour conceded that the disabled community continued to be adversely affected.  The DOL had engaged with the Department of Public Service and Administration (DPSA) on the issue.  Guidelines for the employment of disabled persons in the public sector had been developed.  The target of 2% had not been reached since 2005.  The matter was under consideration by NEDLAC.  The disabled sector needed to bring skills to the table as well.

Ms Nkeli said that unions had complained that White supervisors were appointed in preference to Black candidates.  There was a tendency for society to avoid persons with disabilities.  Severely disabled persons were often feared and companies found it was expensive to provide the necessary facilities and equipment for disabled persons.  There was less staff turnover at the higher employment levels and White candidates were being appointed to vacant posts.  The CEE was concerned over the feeding mechanisms for the upper levels.  A large percentage of senior and executive managers were nearing retirement age.  It was not true that there were no suitably qualified and experienced Black candidates in the country.  A willingness to change was necessary.

Mr Kganare asked how the Committee could assist with providing incentives to employ persons with disabilities.  He asked if measurable employment equity targets should be included in audit criteria.  The submission of employment equity reports with factually incorrect information constituted fraud and there should be severe consequences for the company concerned.

Mr Ollis felt that government should be encouraged to provide subsidies or tax breaks to facilitate the employment of persons with disabilities.  The point concerning the attitude of society towards disabled persons was taken but he felt that more should be done to change the attitude.

Ms Nkeli said that top management represented only 3% of the total workforce but was extremely powerful.  She suggested that the attitude towards the disabled community should be changed from the primary school level.

Mr Singh agreed that tax breaks and subsidies could help to sole the problem but employers should also be willing to provide employment opportunities to persons with disabilities as a civic duty.  The approach needed to be multi-faceted.

Ms Nomonde Mesatywa, Commissioner, CEE said that employment equity was not considered to be a strategic objective of companies.  The issue was regarded as a side-issue of the human resource function and should be given a higher profile.

Mr Nyekemba said that the major issue was the enforcement of the EEA.  Certain sectors of the economy did not respect the EEA and did not acknowledge the role played by the CEE.  He disagreed that companies should be rewarded for complying with the legislation.  Children with disabilities should not be isolated in special schools and should be integrated with other children in the school system.  Further engagement with the Departments of Trade and Industry and Higher Education was necessary.  The Minister of Higher Education had commented on the lack of training opportunities for Black employees.

Adv Alberts said that job creation and growing the economy were the post important issues for the country.  He disagreed that employment equity targets should be compulsory for small companies.  This would impose an additional burden on companies.  Entrepreneurs tended to be risk-averse.  He asked if there were any statistical data available on the number of qualified Black persons that was unemployed and if there was a strategy to place them in employment.  He asked if there was a strategy to identify where skills were needed, which could be filled by newly-qualified persons.  The lack of skills and capacity was a major problem in government entities.  Skilled white persons were forced out in the past and he wondered if any attempt was being made to make use of these persons in mentoring and up-skilling programmes.

Mr Williams was disappointed by the results and felt that tougher measures should be taken against employers who failed to achieve the employment equity targets.  There should be harsher penalties for non-compliance with the EEA and the Committee should consider amending the Act.

Mr Kganare remarked that there were no statistics on the number of Black persons who obtained qualifications prior to 1994.  Despite the increase in the percentage of Black graduates, the percentage of Blacks appointed in senior positions had not increased significantly.  Certain companies budgeted for the fines levied for non-compliance with the EEA.  The culprits should be identified.  The Committee had to conduct oversight and ensure that companies adhered to the national objectives.  The private sector was profit-oriented and it was necessary to be realistic about the additional costs associated with employing disabled persons.  There should be a balance between providing incentives and taking tough action against transgressions.

Ms Nomvula Hadi, Commissioner, CEE welcomed the assistance of the Committee to ensure that the EEA was adhered to.  The legislation had been criticised for frightening off investors.  Disabled employees should not be treated any differently than other employees but it was necessary to ensure that their working environment was suitable.

Ms Mesatywa suggested that the BBBEE scorecard was strengthened to increase the impact of larger companies.  Discussions were being held with the Department of Higher Education.  Other engagements concerned the utilisation of the Job Fund and mechanisms (such as procurement policies) that could be used to escalate the rate of change.

Ms Nkeli pointed out that South Africa had managed to develop the necessary skills to exploit the country’s mining resources.  South Africa had become an exporter of mining engineering skills.  She saw no reason why the country could not develop the skills it needed.

Mr Nyekemba thanked the CEE for the briefing.  He said that it was necessary for all the stakeholders to work together to achieve the country’s employment equity and transformation objectives.  The issue needed to remain high on the agendas of the Departments of Higher Education and Economic Development.  The Committee would continue to exercise its oversight responsibility and assist with addressing the challenges.  The failure to achieve employment equity targets was a failure in the workplace to deliver services and should be vigorously protested against.  Skills were developed in the workplace and an apprenticeship system should be in place.

The meeting was adjourned.


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