In response to challenges presented by government-imposed Employment Equity (EE) Sector Targets for the hospitality industry, FEDHASA has consulted an EE specialist to create alternative and more achievable targets.
FEDHASA believes the alternative sector codes it is proposing are not only “transformative”, but are also more practical, simpler and easier to implement.
The 2020 EE Act Amendment Bill is currently being introduced by the Department of Employment and Labour (DoE&L) to speed up the pace of transformation within the private sector. However, FEDHASA fears the complexities surrounding the new Bill are likely to hamper, instead of advance, transformation.
The Bill stipulates that any employer with more than 50 employees who wants to do business with the State will need a Certificate of Compliance. To obtain a Certificate of Compliance, employers in the hospitality sector will need to reach nine specified percentage targets in the various occupational levels within the company.
“The hospitality sector is completely behind transforming the sector and is in alignment in this regard with the Department of Employment and Labour,” said Rosemary Anderson, Chairperson of FEDHASA.
“However, the proposed targets have fatal flaws when it comes to the practical implementation – both with the setting of EE goals and the achievement thereof. As honourable as the department’s objectives are, its proposed targets are not practically or legally implementable and are simply not achievable for the vast majority of our members.”
According to her, the first flaw is that the targets do not take into account that the exact target percentages required are not aligned with a business’s number of employees in a level.
“One can’t break up a person into a fraction, which is what is required to comply with the targets (quotas) proposed,” explained Anderson. “As a result, it will not be possible for employers to set numerical goals that comply with the proposed exact African, Coloured and Indian percentage sector targets in the top 3 levels, as, on average, Sector members have between 0.2 and five employees in these levels.”
What happens if a business employs 10 employees in the Professionally Qualified level, for which the proposed percentage of African, Coloured and Indian male and female targets are 32.0%, 3.9% and 1.1% respectively, and the Black target is 75%? The company would need to have 3.2 African employees, 0.4 coloured employees and 0.1 Indian male and female employees, as well as 7.5 black employees. This was not possible, noted Anderson.
She cautioned that when sector codes were ‘unrealistic’, the risk was great that employers would look for ‘reasonable’ grounds to justify non-compliance as opposed to focusing on accelerating the appointment of Africans or Blacks in relation to opportunities that arise.
Alternative option
In response to the 2020 EE Act Amendment Bill, FEDHASA has asked Advocate Jan Munnik, an experienced EE Consultant, to conduct a thorough analysis and to propose an alternative option for the sector, which will compel employers to focus on the achievement of their EE goals.
His proposal has been accepted by sector members and proposed to the DoE&L.
Munnik’s proposal stipulates that sector targets be expressed and measured, with reference to an agreed upon percentage of Black, African and Female appointments vs opportunities (as a result of growth/shrinkage, attrition, retirements and promotions) anticipated to arise during the EE Plan period, and which do in fact arise during an EE reporting period, respectively.
“As there is a direct correlation between the percentage of Blacks to be appointed vs anticipated opportunities and the percentage Black goal when setting EE goals, employers are required to multiply their percentage of Black goals by the applicable Economically Active Population percentages of the different race and gender groups (and can select an appropriate percentage female goal) when setting their EE numerical goals in any level. Such sector targets can readily be complied with when numerical goals are set. These percentage appointment targets that will need to be agreed upon between the sector and DoE&L are then the sector targets for the sector,” highlighted Munnik.
According to Munnik, this will result in achievable EE goals being set for all members, irrespective of the percentage of Blacks, Africans, and females in their Top 4 levels at the commencement of sector targets.
“As their resultant EE goals will be achievable (albeit stretched), present resistance to the DoE&L proposed sector targets is very likely to dissipate, and they will be left with no choice but to focus on the achievement of their resultant EE goals.”
The introduction of the systems and processes necessary to achieve their EE goals will follow, paving the way for the achievement of the DoE&L’s objective in introducing sector targets, said Munnik.
The percentage targets proposed for Blacks for the different levels, for example, are:
· Top Management: 70%
· Senior Management: 73%
· Professionally Qualified: 80%
· Skilled Technical: 90%
The African targets are proposed to be determined with reference to its applicable male and female Employee Assistance Programme (EAP) percentages.
The percentage female targets proposed are higher than the DoE&L is proposing, as there are more female than male employees in the industry.
With small proposed adjustments thereto, the EEA2 can be used as primary instrument to determine compliance, and, insofar as it can be determined with reference to the data submitted in an EEA2 report, whether the reasons advanced for non-compliance (such as lack of opportunity) are factually based.
It has lastly been proposed by the sector that members be entitled to apply to the DoE&L for the issuing of a compliance certificate where a certificate has not been issued (pursuant to the EEA2 submission process), and that questionnaires be used by the DoE&L to establish whether defined justifiable grounds advanced for non-compliance exists.
“The above proposals will address all the above flaws in the DoE&L proposed sector targets and pave the way for the willing participation of sector members in the acceleration of transformation in the sector,” Munnik concluded.
