South Africa lacks ethical leaders to drive employment equity, says Commission chair

29 Jun 2018

“Twenty years on and we are still nowhere near celebrating effective implementation of transformation legislation. We cannot even begin to contemplate the implementation of a “Sunset” clause on the employment equity legislation.”

By: Tabea Kabinde‚ chairperson of the Commission for Employment Equity

It has been 20 years since the promulgation of the Employment Equity Act and one is naturally inclined to want to investigate the degree of transformation in the country as a result of the Employment Equity Act. A reflection of the first Commission for Employment Equity (CEE) Annual report, compared to the current status, is significant.

The first Annual CEE report was launched in 2001. A total of 12 980 employers submitted their EE reports to the EE Registry for the first year of the EE reporting cycle. Of these reports, 8 250 complied with the requirements in accordance with the Act, whilst 4 730 were excluded from the analysis for various reasons. During the 2017 employment equity reporting cycle, 27 163 employment equity reports were submitted by designated employers, representing 7 299 428 employees. This represents at least three times the number of reports submitted since the first reporting cycle. This improvement in reporting is to be applauded.

I purposely focused on the total number of reports in the initial 2001 reporting cycle, including the non-compliant reports, based on the premise that the excluded reports indicated the willingness to report despite the errors in those submissions. It is accepted that designated employers might still have been familiarising themselves with reporting requirements and that these errors were made “in good faith”. However, as in the first reporting cycle, the CEE was still faced with challenges in 2017 with a number of reports from designated employers being excluded because they did not report correctly.

Some errors are negligent and inexcusable, which should not be used as an excuse for submitting inaccurate reports. In 2017, 30 employers reported that their total staff compliment were Persons with Disabilities. Although the possibility existed for an employer to have a full staff compliment of persons with disabilities, the CEE was suspicious that this was highly improbable. Upon further investigation, the CEE found that these employers simply repeated the same number of employees in the Table on Workforce Profile for all employees and in the Table on Workforce Profile for Persons with Disabilities only, most probably as a “copy and Paste”. Negligent errors typically reflect on some employers who report “just for the sake of compliance” in an effort to simply” tick the boxes” at the end of the reporting cycle.

Although it could be argued that the country has made progress in reporting compliance, it is clear from these inaccuracies that there are still pockets of designated employers who appear not to be committed to the spirit of the law at all.
When analysing progress in terms of the objectives of the Act, the number of persons from designated groups, in Table 1 on the following page, reflects the shift. The table cannot be considered to be an absolute comparison, as the number of reports received varied and a number of other variables might have impacted on the nature of the reports. The information however, still presents a measurement of progress.

Data on the trends of the number of Foreign Nationals employed across various economic sectors commenced in 2009 when the EE reporting instruments were amended. As a result of the late start of reporting on Foreign Nationals, we are unable to do a direct comparison with the 2001 figures at the top four occupational levels reported by designated employers.

In 2001, designated employers reported that 1% of their total employees were Persons with Disabilities across all occupational levels of their organisations compared to the 1. 3%, in 2017, which is an insignificant increase.
In terms of race, the biggest shift from the White population to the Black population, in particular the Indian Population has been at the Top and Senior management levels. The White Population at Top Management level decreased by 20% whilst at Senior Management level a 24,9% decrease is noted. This represents around a 1% increase of the Black Population year on year and is considered be a very slow rate of transformation. Again, it should be remembered that the table cannot be considered to be an absolute comparison, as the number of reports received varied and a number of other variables might have impacted on the quality of the reports.

At Professionally Qualified level, there has been a decrease of the White Population of 13.8% and at the Skilled Technical Level their representation increased by 1.6%.
The picture in terms of gender remains particularly discouraging. The highest increase in representation of women, is noted at Senior Management level, which is 18.8% increase. This bleak picture is after 20 years and is far from desirable.

In the first CEE Report, the Commission indicated that: “The EEA (Employment Equity Act) and the SDA (Skills Development Act) also provide the basis for addressing other indicators of inequality in the labour market. These two Acts must complement each other in addressing inequalities and unfair discrimination in human capital development and thus helping this country to harness fully the potential of its diverse human capital.”

Twenty years later, the 4th Commission of Employment Equity can clearly report that the impact of the Skills Development Act to redress the inequality in the workplace appears to have been minimal. Employers still complain of a lack of a skilled labour pool from which to draw from to increase the percentage of employees from designated groups at the top four occupational levels of organisations. This is particularly concerning when the Training and Development activities reported by designated employers seem to favour the White Population group.

Year-on-year, the statistics indicate that the White Population Group remains favoured for training and development, while males remain favoured in terms of gender. Thus the two pieces of legislation that are supposed to be supporting each other in driving transformation are not achieving the desired outcome.

What could be the problem, one might ask? The CEE embarked on Sectoral Engagements during 2016, which provided great insights on the perceptions of employers and the reasons for the slow pace of transformation. One of the key reasons offered was the lack of commitment from the Top Management of Designated Employers.
There is simply no real “political will and commitment” to transform. If the implementation of the SDA was supposed to have bared fruits in creating a pool of suitably qualified candidates from the designated groups for promotion to the top four occupational levels of organisations, why is it that these results are not evident, while training and development is taking place at these levels? The statistics indicate that the intended beneficiaries of the Act are overlooked in training and promotions. This is totally counterproductive to the very objectives of the Act.

Cynthia Rose of Ethics Monitor suggests that Leaders with low ethics focus on compliance, as opposed to commitment in response to legislation. The Low Ethics Leader often focuses on the quality and consistency of enforcement, as opposed to embracing shared values and sustainability of outcomes in making a decision on how to respond to legislation. This paradigm is totally devastating to transformation, which results in Policy Makers and Enforcers doing a lot of things, but achieving very little in transformation.
South Africa is in dire need of ethical leaders. It is common knowledge that we get what we reward. The country therefore needs to be preoccupied with answering the questions: “How do we create ethical leadership and how do we reward ethical leadership?”

Twenty years on and we are still nowhere near celebrating effective implementation of transformation legislation. We cannot even begin to contemplate the implementation of a “Sunset” clause on this legislation.
The Commission is now preoccupied with advising the Minister on exploring other effective implementation and compliance mechanisms for this Legislation and also creating an environment where the focus goes just beyond compliance, but commitment from ethical leaders in the South African labour market.

In conclusion, I thank Minister Mildred Oliphant for entrusting us with this vital responsibility as Commissioners to advise on matters related to Employment Equity. We remain committed to provide sound and well thought through advice to her. I would like to also thank my fellow Commissioners for their commitment to fulfilling the CEE’s mandate. I appreciate each one of you Commissioners, and the value you add.

I also thank the Director-General, Mr Thobile Lamati, for supporting the work of the CEE by ensuring that the Directorate of Employment Equity has the necessary resources to provide both the technical and logistical Secretariat services required for the work we do. For this, I am very grateful.
Finally, I would like to thank our strategic partners. Together we can make a difference to the lives of South Africans who need to experience transformation, and feel included in their workplaces.

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