A significant amendment brought about by the Employment Equity Amendment Act, 2022, is the coming into operation of section 53 of the Employment Equity Act, 1998 (as amended) (EEA). In terms of this section, every employer who makes an offer to conclude an agreement with any organ of state for the furnishing of supplies or services or for the letting or hiring of anything, must comply with the relevant provisions of the EEA and attach to that offer either a certificate, or a declaration, of compliance.
This applies to both designated and non-designated employers. Accordingly, every employer that makes an offer to do business with an organ of state must, if it is a designated employer, comply with Chapters II and III of the EEA; and if it not a designated employer, comply with Chapter II of the EEA. A failure to comply with the relevant provisions of the EEA is sufficient ground for rejection of any offer to conclude an agreement with the State, or for the cancellation of the agreement.
Options to prove compliance
The legislation contemplates two options for an employer: either it can request a compliance certificate from the Minister of Employment and Labour and attach that certificate to its offer; or it can attach a declaration that it complies with the relevant chapters of the EEA. A certificate is conclusive evidence of an employer’s compliance. A declaration, on the other hand, is only conclusive evidence of compliance once verified by the Director-General.
Whilst section 53(1) provides for these two options, the newly enacted Employment Equity Regulations, 2025 (General Administrative EE Regulations) only deal with the first: the certificate of compliance. It does not provide any details on the verification process. If an employer chooses to attach a declaration of compliance, it is unclear at this stage how verification would be sought, and by whom.
Accordingly, while attaching a declaration of compliance is an option for proving compliance, whether organs of state will accept such declarations remains to be seen. Arguably, a decision by an organ of state to reject an offer by an employer to do business solely on the basis that the employer has attached a declaration as opposed to a certificate, may be open to legal challenge. However, in the circumstances and for the sake of certainty, it is likely that employers will opt to provide certificates.
Talita Laubscher, Melissa Cogger, and Chloë Loubser 19 May 2025
Applying for a compliance certificate
According to the General Administrative EE Regulations, an employer may request a certificate online by means of the Department of Employment and Labour's (DoEL) website, using the EEA15 form.
In terms of section 53(6) of the EEA, the Minister may only issue a certificate to a non-designated employer if the Minister is satisfied that
- there has been no finding by the Commission for Conciliation, Mediation and Arbitration (CCMA) or a court within the previous 12 months that the employer breached the prohibition on unfair discrimination; and
- the CCMA has not issued an award against the employer in the previous 12 months for failing to pay the minimum wage in terms of the National Minimum Wage Act, 2018 (NMWA).
(It is not clear why these additional requirements apply, especially compliance with the NMWA, given the clear wording of section 53(1) which only requires compliance with Chapters II and III.)
A designated employer will only be issued with a certificate if the above requirements are satisfied and if, in addition,
- it has submitted its most recent section 21 report; and
- it has complied with a sectoral numerical target applicable to the employer, unless it has raised a reasonable ground to justify its failure to meet a target.
Accordingly, a designated employer will only be able to request a certificate once it has submitted a compliant section 21 annual report for the relevant year. Practically, we understand that an employer will be able to request a certificate immediately after it has submitted its report on the DoEL’s online system (in the period between 1 September and 15 January of the following year).
Hugo Pienaar, Asma Cachalia, and Alex van Greuning 5 May 2025
Employers requesting certificates will be required to indicate their compliance with the relevant requirements on the EEA15 form by means of a tick-box exercise. We understand from engagements with the DoEL that the system will then automatically generate the compliance certificate, provided that the appropriate boxes have been ticked.
Court judgments
When it comes to any adverse findings by the CCMA or Labour Court in respect of failure to pay the national minimum wage, or unfair discrimination in the workplace, the EEA15 form permits an employer who has reported the existence of such adverse finding to indicate whether such award or judgment is currently the subject of an appeal or review. If so, and ‘yes’ is selected in response to this question, we understand that the compliance certificate will be issued.
As regards non-compliance with any applicable sector target for the relevant reporting period, a designated employer will be able to select one of the justifiable grounds for non-compliance, as specified in regulation 16(5) of the General Administrative EE Regulations and as set out in EEA15. These justifiable reasons appear on the form as a closed list. Provided that one of these grounds is selected, and the other compliance requirements are met, we understand that a designated employer would then be issued with a certificate.
A certificate is valid for 12 months from the date of issue or until the next date on which the employer is required to submit its section 21 report (if applicable), whichever period is the longer.
Withdrawal of a compliance certificate
While a certificate of compliance will be issued based on the employer’s own declarations on the EEA15 form as regards its compliance, the General Administrative EE Regulations do make provision for the withdrawal of the certificate.
In particular, the certificate may be withdrawn if it is found to have been issued as a result of any misrepresentation or the provision of any fraudulent or inaccurate information; or if a condition necessary for issuing the certificate no longer exists. It can be withdrawn by the Minister, a labour inspector or an official of the DoEL who has been delegated or assigned this function in terms of section 56 of the EEA.
The template EE compliance certificate in EEA16A and EEA16B records that providing false information to obtain a certificate of compliance or altering a certificate is a criminal offence which will render a person liable for prosecution at the instance of the DoEL.
Prior to the certificate being withdrawn, the employer must be given 14 days to make representations upon being served with an EEA16C notice and those representations must be considered by the relevant decision-maker.
