Hospitality sector proposes new and realistic Sector Targets to advance transformation

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. The alternative sector codes FEDHASA proposes 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 to speed up the pace of transformation within the private sector. However, FEDHASA fears the
complexities surrounding the new Bill area likely to hamper instead of advance transformation.
“The Hospitality Sector is completely behind transforming the sector and is in alignment in this regard
with the Deparment of Employment &Labour (DoE&L)”, says 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.”

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 9 specified percentage Targets in the various occupational levels
within the company.

Anderson explains there are a number of flaws in the proposed new sector Targets. 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,” says 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 5 employees in these Levels.”
What happens if a business employs 10 employees in the Professionally Qualified level, for which the
proposed % 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 is not possible.

When sector codes are ‘unrealistic’, the risk is great that employers will 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.

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 % of Blacks, African and Females 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 % Blacks to be appointed vs anticipated Opportunities and
the % Black Goal when setting EE Goals, employers are required to multiply their % Black goals by the
applicable Economically Active Population percentages of the different race and gender groups (and
can select an appropriate % 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 % appointment
Targets which will need to be agreed upon between the Sector and DoE&L are then the Sector Targets
for the Sector,” says Munnik.’

According to Munnik, this will result in achievable EE Goals being set for all members irrespective of the % 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,’ says Munnik.
The % 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
EAP percentages.

The % Female Targets proposed are higher than what 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 DoEL proposed Sector Targets and pave
the way for the willing participation of Sector Members in the acceleration of Transformation in the
Sector” Adv Munnik concluded.

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