Organisational Structure and Effective Employment Equity Implementation in Multi-Divisional South African Organisations
When implementing Employment Equity in South Africa, large organisations often face the challenge of operating with multiple divisions spanning different provinces. These holding companies typically report centrally on Employment Equity; however, they must also meet the requirements of sections 16, 17, 19, and 20 of the Employment Equity Act when constructing Employment Equity plans.
In some situations, central committees are established without fulfilling Employment Equity consultation requirements. For example, a holding company with 10 divisions may report centrally but fail to establish Employment Equity committees within individual divisions or, conversely, fail to consolidate divisional reporting with a central transformation committee.
Employment Equity consultation must follow organisational structure. Too often, employers discover, during Department of Labour Director-General (DG) reviews, that their central Employment Equity committee is not representative of all divisions. The consequence is a finding that the employer is not fully compliant with section 16 read with section 17 of the Employment Equity Act, 1998, as amended. This typically leads to the entire Employment Equity plan being deemed non-compliant.
To avoid such findings in DG reviews, ensure your organisation's Employment Equity structure is fit for purpose and aligned with the Employment Equity Act. With the added challenge of sector targets, this becomes even more crucial as organisations that report centrally must align divisional goals with the holding company. Failing to do so reduces central reporting to a mere administrative exercise.
South African employers should consider:
a) Ensuring the holding company’s Employment Equity committee includes representatives from all divisions.
b) Building strong Employment Equity committees in each division, that align with the consultation requirements of Section 16(1)(2).
c) Ensuring goals and targets cascade up from divisions to the holding company.
d) Recognising that transformation occurs primarily in divisions.
e) Creating clear accountability structures for transformation.
The Employment Equity Act sets out specific requirements for employers in sections 16 and 17, establishing consultation processes so affected groups can meaningfully contribute to the transformation process. Audit your Employment Equity structure to ensure it is fit for purpose and that it creates accountability within corporate structures. To avoid future adverse findings in DG reviews, meaningfully incorporate the planned implementation of sector targets across all divisions.
Subjects like Employment Equity will be on the agenda at our must-attend Annual Employment Conference (#AEC25) on the 19th of March 2025. Join John Botha, Johnny Goldberg, Craig Kirchmann, Dr. Mark Bussin, and many more speakers at the conference, as well as 250 registered delegates. Set your organisation up for success in 2025 and register today! (Register here: https://globalretailoutlet.co.za/showevent/73)
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