VII. AFFIRMATIVE ACTION (AA)/ EMPLOYMENT EQUITY (EE) POLICIES AND PROGRAMS IN THE UNITED STATES, CANADA, SOUTH AFRICA, THE EUROPEAN UNION COUNTRIES AND NETHERLANDS

The Challenge of Equality in Employment in South Africa

HARISH C. JAIN
McMaster University

Abstract

      South Africa has successfully gone through a peaceful transition through its 1994 national election and enacted a constitutional democracy that augurs well for equal protection and equal opportunity for all its citizens regardless of race, color, gender, religion, political opinion, and so on. In the 1990s, the country also passed some of the most progressive legislative measures including the Labour Relations Act, Employment Equity Act and the Promotion of Equality Act, among others.¹

      This paper discusses the demographics of the labor market in South Africa, the legislative framework for employment equity, the state of compliance, and some of the positive and negative aspects of the move to legislate employment equity.

Employment Equity (EE) in South Africa

      According to the Census, 76 percent Africans, 9 percent Coloreds, 3 percent Indians and 12 percent Whites were economically active in 1996. There were 52 percent women in the population, and 45 percent were economically active in 1996, as per SA Census. According to the World Bank, in 1999, 17 million people were in the labor force, while 34 percent of the economically active population were found to be unemployed (World Bank 2001:50).

      The Employment Equity Act (EEA) was enacted by the Parliament in 1998. It aims to redress the ghettoization of the blacks--including coloreds and Indians--women and persons with disabilities (called the designated groups) in the workplace. The objective of the EEA is to achieve equality in the workplaces by elimination of unfair discrimination and promotion of equal opportunity, through the implementation of positive and proactive measures (termed as affirmative action measures) to advance the designated groups. The EEA requires employers with either 50 or more employees or certain specified turnover (in monetary terms) to undertake affirmative action measures with a view to ensure that the designated groups have equitable representation in all occupational categories and levels in an employer’s workforce consistent with their availability in the external labor market.²

Rationale for Employment Equity Legislation

      Historically, the labor market was a distorted one, with inequality in access to education, skills, managerial and professional work, based on race and ethnicity (Bowmaker-Falconer et al. 1998, 1997). Racial discrimination was created in labor legislation--for example, in job reservation clauses that restricted access to skilled jobs, preserving them for white employees--in the Mines and Works Act (1904) and Industrial Conciliation Act (1956). These provisions have been abolished since 1980, and significant labor law reforms have occurred in the last 5 years. However, the apartheid labor market has left most employees inadequately trained and economically disempowered.

      The legacy of workplace discrimination against blacks, the majority population, is systematically being eroded, albeit slowly. In 1998, the percentages of blacks, coloreds and Indians were 6, 4 and 4, respectively, with 86 percent white managers, and 84 percent male and 16 percent female, (BWM 2000). However, in the year 2000, a survey of 161 large firms in South Africa (employing 560,000 workers) revealed that (Breakwater Monitor, BWM 2000) 10 percent of managers were black, 5 percent each were colored and Indian; thus, 80 percent of all managers were white. Of these managers, 79 percent were male and 21 percent female. There is therefore some incremental progress.

      According to the Commission on Gender Equality (CGE 1999), women constituted the major segment of the SA population but accounted for only a third of the labor force. They were mainly concentrated in service, retail and manufacturing sectors.³ Across all sectors, women were mainly to be found occupying jobs associated with stereotyped domestic roles. Thus gender equality,⁴ within the workplace, according to the CGE, was underpinned by job segregation and perceived roles associated with gender group (CGE 1999).

      The Department of Labour (1999) found that whites had 104 percent wage premium over Africans; men earned approximately 43 percent higher wages than similarly qualified women in the similar industrial sectors and occupations (cited in Thomas, in press).

      As of December 1997, 87 percent of management in the Public Service (Director and above) were men, and only 13 percent were women. Over half the men who were public sector managers were white (Booysen 1997:39). Women comprised only 1.3 percent (49) of the 3773 directors of the 657 companies listed on the Johannesburg Stock Exchange. Only 14 women were listed as executive directors, chairwomen or managing directors, and less than 1 percent board members were women⁵ (Naidoo 1997 in Booysen 1997).

Employer Obligations Under the EEA

      The EEA requires employers in consultation with unions and employees to:

1. Conduct a review of employment policies and practices to identify the specific job barriers faced by the designated group members and attempt to remove them;

2. Conduct a workforce survey and analysis to identify the under-representation of members of the designated groups relative to their availability in the external workforce;

3. Develop an employment equity plan with numerical goals and timetables, monitoring and evaluation procedures; report on remuneration and benefits in each occupational category and level.⁶

4. Develop measures an employer will undertake to progressively reduce any disproportional differentials as well as an employment equity plan.

5. The EEA requires that employers give due consideration to a “suitably qualified person” in their recruitment of designated groups. Such a person may have either formal qualifications, prior learning, relevant experience or capacity to acquire--within a reasonable time--the ability to do the job.

      Capacity to acquire the ability to do the job will require training and support. Currently, few black men and women are qualified to fill semi-skilled, skilled and professional jobs, due to apartheid practiced by the previous white regime. The EEA along with the Skills Development Act (1998) requires employers to provide training to designated groups.

      The EEA encourages employers to provide improved internal grievance procedures against discriminatory behavior and harassment. Labor inspectors have the enforcement powers. Those disputes that cannot be resolved through internal procedures will be referred to the Commission for Conciliation, Meditation and Arbitration (CCMA) and ultimately the Labour court (Hepple 1997).

State of Compliance With the EEA By Employers

      The Commission for Employment Equity (CEE) recently released its first annual report covering the period 1999–2001 (CEE Report 2001). The Commission’s report for 2001 is based on 8,250 employers with 3,336,784 employees and shows mixed results.

      On the plus side, it indicates that employers, in general, are taking their responsibility seriously for eroding the effects of apartheid labor market, which had left most black workers inadequately trained and disempowered. For instance, the EEC report indicates that black (African, coloreds, and Indians) workers improved their labor market position from a 1998 baseline survey (conducted by Jain and Bowmaker-Falconer in 1998 for the SA Department of Labour) to 2001 as Professionals, Technicians and Associate Professionals from 25 percent and 38 percent in 1998 to 55 percent and 48 percent in 2001, respectively (see Table 1). The professionals’ position also compares favorably to Statistics South Africa’s Household Survey data for 1999. Blacks lost ground from 1998 as legislators, senior officials and managers when their representation in these occupational categories was 28 to 26 percent in 2001; this is even more pronounced compared to their representation of 45 percent in the Household Survey of 1999. They are still concentrated in elementary occupations (98 percent in 2001), plant and machine operators (94 percent in 2001), skilled agricultural and fishery workers (86 percent in 2001) and service and sales workers (72 percent in 2001; Commission for EE Report 2001:30; see Table 2).

      Table 2 indicates that women (both white and black) currently hold only 13 percent of all top management and 21 percent of all senior management positions in SA; however, African women hold only 1.2 percent of all top management positions (CEC 2001:19). Women represent 38 percent of total TABLE 2 employment and are clearly under-represented in all management occupational levels (Commission for EE Report 2001:19, 24).

      Black employees consisted of almost 31 percent of all levels of management; therefore, an overwhelming majority of managers across all levels of management were white. Employees with disabilities represented only 1 percent of all management levels.

      Women (black and white) hold a minority of positions, that is 22 percent, as legislators, senior officials and managers; of the 22 percent, white women hold 15 percent, Indian females 1 percent, African females 3 percent, and colored females 2 percent in this category (CEC Report 2001:30).

Pros of Employers Equity

      Employers Equity is helping employers to focus not only on African blacks but also on coloreds, Indians and other designated groups such as women and persons with disabilities (Jain 1993).

      It is encouraging more and more employers to devise new and innovative measures to proactively recruit, promote and train the designated groups. It goes beyond the poaching of African blacks by one employer from another to plan staffing in a systematic and planned manner. It is motivating employers to develop HR information systems (Jain 1993). It is sensitizing employers to labor market demographics of the designated groups while developing their EE plan (Jain 1993).

Cons of the EEA

      According to the CEE’s latest evaluation of the state of EE in SA (2000), as noted above, there is mixed progress. Similarly, the CGE survey of employers (1999) found that there were significant job barriers in the recruitment and promotion of women. It seems employers in SA have a long way to go. At the same time, one has to realize that the EEA has been in effect only 2 years and that the legacy of apartheid will take some time to overcome.

      The EEA treats women as a homogeneous category. White and black women currently have extremely different levels of education and training, job opportunities and wages. Even among black women, there are significant differences. Legislation at present does not require companies to disaggregate their information on race and disability by gender. This presents the possibility that targets for women will be met by advancing the already privileged, thereby denying black women access to training and traditionally male jobs (Samson 1999).

      Companies below the threshold limit of 50 employees are not covered by the EEA. Since the vast majority of African women work in the informal sector or as domestic workers, most of them will remain uncovered by EEA in their workplaces (Samson 1999).

      The fines for non-compliance may not be a sufficient deterrent. First time offenders could be fined up to R500,000, but they could also be charged much less.

      An evaluation of the compliance with the EEA must take into consideration: (1) the economic and financial factors relevant to the sector in which the employer operates, (2) present and anticipated economic and financial circumstances of the employer, (3) progress in implementing EE by other employers, and (4) reasonable efforts made by the employer to implement EE (Samson 1999). This will make EE planning flexible according to the needs of an employer rather than a fixed target in terms of numerical goals.

Conclusion

      Although progress has been made in enhancing racial and gender representation in the workplace, this is an incremental process that has to be supported by coherent human resource development priorities through the implementation of the skills development legislation and changes in the organizational culture. This is vital at both public policy and organizational levels. An increasing earnings gap has an adverse impact on mainly black people--this, in spite of the increasing diversity and multiracial character of a growing middle class. The biggest priority must be human resource development and education in skills and competencies needed in a society in transition.

      This reality has been recognized by the government and the Black Economic Empowerment Commission. The Commission has made important recommendations to the government to “kick-start” the economy and enhance economic growth through state-driven measures to ensure black participation in the mainstream economy. Proposed measures include a national integrated human resource development strategy, legislated deracialization of business ownership in the private sector, national targets--which include land distribution and ownership, equity participation in economic sectors. The Commission further recommends targets for senior and executive management in private sector firms of more then 50 employees to be black. The commission’s proposals, which have been accepted by the government in principle, are a significant policy basis for improving access to capital and skills and economic empowerment for the majority of South Africans. These overall measures, along with the progress in implementing employment equity, will greatly improve the chances of majority blacks to have their just share in the South African economy.

Endnotes

1. The legislative armory against unfair discrimination is now quite formidable. For example, chapter 2 of the new Employment Equity Act (1998) in SA prohibits unfair discrimination against designated employees. These include black people, women and employees with disabilities. Legislative prohibitions against unfair discrimination are also intrinsic to South Africa’s Constitution (1996). Chapter 2 (the Bill of Rights) contains an equality clause, and like the Employment Equity Act, specifies a number of grounds that constitute unfair discrimination. Additionally, Schedule 7 of the Labour Relations Act (1995) considers unfair discrimination either directly or indirectly as a residual unfair labor practice. Grounds include race, gender, ethnic origin, sexual orientation, religion, disability, conscience, belief, language and culture. Labor laws have been at the forefront of the post-apartheid government’s determination to remove unfair discrimination. A new act, The Promotion of Equality and Prevention of Unfair Discrimination Act (1999), seeks to prohibit discrimination in both civil society and in employment practices.

      The draft Constitution adopted by the Constitutional Assembly on May 8, 1996, was approved by the Constitutional Court in November 1996 (Corder 1996). Section 9(2) of the Bill of Rights in the Constitution states in part:

To promote the achievement of equality, legislative and other measures designed to protect or advance persons, or categories of persons, disadvantaged by unfair discrimination may be taken.

Similarly, section 2(2) of Schedule 7 of the Labour Relations Act of 1995 stipulates that

An employer is not prevented from adopting or implementing employment policies and practices that are designed to achieve the adequate protection and advancement of persons or groups or categories of persons disadvantaged by unfair discrimination, in order to enable their full and equal enjoyment of all rights and freedoms.

More explicitly, section of the EEA sets out the purpose of the Act to achieve equity in the workplace by

1. Promoting equal opportunity and fair treatment in employment through the elimination of unfair discrimination; and

2. Implementing affirmative action measures to redress the disadvantages in employment experienced by designated groups, in order to ensure their equitable representation in all occupational categories and levels of the workforce.

2. Occupational categories are based on the standard definitions provided by Statistics South Africa in the collection and analysis of Census data. Occupational levels are based on a semantic scale that can be related to any of the standard job evaluation systems and is based on Paterson Broadband Classification. Source: Department of Labour: Commission for Employment Equity Report 1999–2001, p. 17.

3. More than a quarter of African males and 60 percent of African females in the formal sector were in the elementary occupations such as cleaning, garbage collection and agricultural labor. Similarly 41 percent of colored women were in these elementary occupations, while 40 percent of Indian women were in clerical occupations. About 18 percent of African women and 19 percent of colored women were in managerial or professional jobs, while 11 percent of African men, 14 percent of colored men, and 37 percent of Indian men were in managerial professional jobs (Erasmus and Sadler 1999).

4. Sex vs. Gender: A person’s sex refers to the biological characteristics that make him or her male or female. Biological differences between men and women are: (1) Only women can get pregnant and (2) women menstruate and men do not. Gender refers to the characteristics that society expects a person to have, based on their sex. It refers to economic, social and cultural roles, behaviors, attributes and opportunities that are associated with being female or male, such as women are meant to do certain types of work, for example, and men, other types of work.

5. There is also a concentration of managerial control through a system of interlocking directorates where the same person(s) serve(s) on the boards of several corporations. This social closure has limited the upward mobility of black managers and women. However, SA’s reentry into the international business community has forced awareness about its relative competitiveness in the manufacturing and services sectors. Recently, statutory and governmental tender requirements have been towards employment equity and diversity at all levels. Several black directors have been appointed to boards of directors. Although less than 15 percent of SA’s company directors are black or women, this is likely to change significantly by the year 2005 (Erasmus and Sadler 1999).

6. The Employment Equity Act does not set quotas but rather enables individual employers to develop their own plans. Criteria regarding enhanced representation include national and regional demographic information and special skills supply/availability. Section '(1) of the Employment Equity Act requires designated employers to submit a statement of remuneration and benefits received in each occupational category and level to the Employment Conditions Commission established by section 59 of the Basic Conditions of Employment Act (1998). Section '(2) requires that, where disproportionate income differentials are reflected in the statement, a designated employer must take measures to progressively reduce such differentials. Section '(3) indicates that these measures may include: (1) collective bargaining; (2) compliance with sectoral pay determinations made by the Minister of Labour in terms of Section 51 of the Basic Conditions of Employment Act; (3) applying norms and benchmarks set by the Employment Conditions Commission; and (4) relevant measures in the Skills Development Act (1998). The Employment Conditions Commission is required to research and investigate norms and benchmarks for proportionate income differentials and advises the Minister on appropriate measures for reducing disproportional differentials. The Commission is not allowed to disclose information pertaining to individual employees or employers. There is likely to be considerable public and organizational policy debate around what constitutes an acceptable pay curve in respect of differentials within organizations, and indeed whether such pay structuring is possible in a market driven global economy.

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