• Uniting the South African Construction Industry

Letter to Ntsoaki Mamashela Director: Employment Equity

CASA SUBMISSION ON THE EMPLOYMENT EQUITY SECTORAL TARGETS

Construction Alliance South Africa (CASA) is an initiative which has united the construction industry under one umbrella body made up of some 36 professional, contractor, supplier, manufacturer and other allied industry bodies – essentially the construction value chain. CASA seeks to address the need for broad-based ongoing collaboration, consultation and engagement involving relevant industry stakeholders and is characterised by professionalism, integrity, relevance, fairness and transparency.

During the engagement sessions with the Department of Employment and Labour (DEL) on the setting of sectoral employment equity targets, we have raised some clarity-seeking questions and concerns around the proposed Employment Equity Bill itself and it’s impact on the construction industry. Unfortunately, many of these issues remain unclarified to date and there has been no demonstration that any of the issues raised by CASA have been taken into consideration as part of the meaningful consultation process. To this end we propose a further discussion on these outstanding issues.

The construction industry is very diverse and is made up of contractors, built environment professionals, suppliers, manufacturers and allied industry bodies. This makes it particularly challenging for CASA to agree targets and we require clarity in terms of how the targets should be submitted in these circumstances. It must be accepted that any target setting for the Construction sector cannot be the same for all subsectors within construction.

The DEL point of departure has been to utilise the 2017 Construction Sector BBBEE Code targets which in effect was as a multi-dimensional target setting process for the Construction Sector BBBEE Codes unlike the EE Amendment Bill which looks at only a single element of the BBEEE Sector Codes. This also unfortunately does not take into account the economic factors since 2017 coupled with the trajectory of the sector even before that and the unprecedented events arising from the COVID-19 pandemic, all of which have further decimated the industry and the economy, making the ability to commit to meeting such targets even less possible and somewhat disingenuous on our part if we were to simplistically do so, notwithstanding our commitment to transformation in the Sector.

Furthermore, we have noted that whilst the existing Employment Equity legislation already contains punitive measures for non-compliance for all companies in respect of that legislation, the Amendments seek to add the further issue of a compliance certificate which is linked to the eligibility of companies in the sector to qualify for consideration for procurement opportunities within the public sector. The application of this amendment arguably exempts companies depending on business opportunities from the private sector from this consequence of non-compliance rendering the legislation patently unfair and inconsistent. It is respectfully submitted that the introduction of a compliance certificate conflicts with other legislative provisions and in addition, procurement legislation does take into account BBBEE scorecards for the awarding of tenders. It is important that the various pieces of legislation are assessed collectively. It is highly recommended that a regulatory impact assessment be commissioned in this situation to avoid unintended consequences such as infrastructure backlog, company closures, etc, particularly if construction is pivotal in the economic recovery plan of the country.

We have recently been advised by the DEL that the Employment Equity Regulations published on 21 September 2018 reflect the justifiable reasons under paragraph 16(4)(a) for not complying with the EE sector targets and we seek to confirm this understanding as the present wording allows for subjective decision making as opposed to clear definitive reasons.

It is our considered view that if the DEL continues with the setting of sectoral targets, consideration must be given to an extended time period of a minimum of 5 years for companies in the sector to meet these targets due to the factors set out herein.

CASA would like to propose that DEL and the Commission of Employment Equity (CEE) partner with Industry and other relevant role players to explore and collaborate on interventions that could assist in overcoming the challenges that have necessitated the consideration for target setting at sector level.

CASA has consistently made the point that further research was necessary to put measures in place that would ensure that the sector is capacitated to reach the targets, and remains of the view that there is inadequate research in place to inform the target setting. It is further submitted that meaningful and informed target setting could take place when the following information is obtained by the DEL and the Council of Employment Equity (CEE) for the Construction Sector:

  1. Economic projections based on present data and post

 

  1. Statistics of the attrition rate in the Construction Sector must be considered, together with the recent decimation of the

 

  1. Professional bodies like ECSA, SACPCMP, ASCQSP, CETA and SACAP must be required to submit statistics of registered professionals as well as candidates, broken down into race and gender for accurate knowledge of the candidate pool available at each Occupational Level and whether these professionals are in construction companies or consulting

 

  1. Tertiary institutions should be required to make submissions to the CEE regarding their enrolment and graduation statistics in terms of qualifications, race, gender and nationality. This will form the basis of future modelling for all economic

 

  1. Similarly, the Department of Basic Education should be required to make submissions to the DEL regarding their enrolment, throughput rate and Grade 12 pass rate in terms of race, gender, nationality and subjects that enable registration for tertiary education programmes in the built

 

  1. For construction, an analysis of the current CIDB Company registrations per Grade can be used to model the future industry requirements in terms of engineers and related professions upon which realistic targets can be

 

  1. Local vs National demographic targets must be taken into consideration. The sectoral targets are national targets and differ from the current EAP approach. There must be clear direction on how the national targets will be implemented at a regional level as this is identified as an area of conflict in terms of the application of

 

CASA considers itself as partners in rebuilding our country and believe that it is imperative that we jointly pursue the economic and employment growth needed for the future of our Country. Whilst CASA fully understands the spirit and intention of the amendments, we regret to advise that at this stage and for the factors outlined above and in all our prior submissions and engagements, CASA is unable to submit a consensus position from its 36 diverse membership base.

We trust that DEL will take due cognisance of this representation and be more amenable to a collaboration between government and industry, such that we may together achieve the objectives of transformation, economic growth, employment growth and subsequent poverty alleviation to the benefit of all our citizens. To this end, we continue to make ourselves available to further engagements on the issues set out herein on the setting of sectoral employment equity targets with the DEL.

 

Yours Sincerely

John Matthews Chairperson

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