10 July 2017

Employment Equity and Human Resources Development aspects of Mining Charter III

Submitted by: MyPressportal Team

By Johan Olivier, a Partner in the Employment and Employee Benefits Practice at Webber Wentzel

Mining Charter III imposes materially higher employment equity targets than in the Mining Charter II in seeking to "create a conducive environment to ensure diversity as well as participation of black people at all decision-making and core occupational categories in the Mining Industry." 

Every mining company is required to achieve the prescribed minimum levels of representation at the levels of executive/top management, senior management, middle management and junior management.  The targets at these levels progress from 50% for top management to 88% at junior management level.  The targets for female black persons at each of these levels also escalate from 25% of the minimum for top management to 44% of the minimum at junior management level. 

In addition, Mining Charter III also provides for the appointment of a minimum of 3% employees with disabilities as a percentage of all employees and reflective of the national and/or provincial demographics.

It also requires the mining company to ensure that a minimum of 60% black persons are represented in the core and critical skills and must be reflective of the national demographics.

The term "employee" is not defined in Mining Charter III and it appears that the intention is to use the definition provided in the Employment Equity Act, 1998, and the Regulations published thereunder (EEA).  This means that every mining right holder must directly employ the requisite number of persons to meet the prescribed thresholds and that the engagement of contractor personnel (defined as "employees" in the Mine Health and Safety Act) is not sufficient. 

The requirement of 3% employees with disabilities as a percentage of all employees, but that it must be reflective of national and/or provincial demographics, is vague and conflicts given that the targets for the other categories are required to be reflective of the national demographics.  The EEA defines "people with disabilities as people who have a long-term or recurring physical or mental impairment which substantially limits their prospects of entering into or advancement in employment".  This will require practical adjustment of various occupational health and safety considerations including a formal determination of the job categories that can safely be filled by employees with disabilities, incorporation of this consideration into the assessments by Occupational Medical Practitioners and revisions of applicable risk assessment and codes of practice. 

Similarly, when a mining right holder is required to identify and fast-track black persons to hold positions in respect of the company's "core and critical skills", an assessment of the minimum criteria for competency against such fast-tracking will need to be established.

The Companies Act does not require the appointment of executive directors to the Board of a Company.  However, the King IV Report requires listed companies to have consideration for the appointment to executive director roles such as the Chief Executive Officer, Financial Director as well as Company Secretary.  Mining Charter III now places an obligation on a mining rights holder to employ a minimum of 50% black persons at the executive director level of which 25% must be female black persons.  As such, should a mining right holder appoint a white person as a Chief Executive Officer at executive director level, then an additional executive director needs to be appointed who must be black and female.  Non-executive Board members are not employees of the company and do not fall within the scope of the EEA. 

In order to determine national and provincial demographics, the latest figures of the Economically Active Population (EAP) as published by Statistics South Africa during the third quarter of 2016 are set out below.  The EAP is provided by population, group and gender for the national and provincial population and is used as a benchmark for the setting of numerical goals and targets towards achieving an equitable and representative workforce in the Republic in terms of the provisions of the EEA:

Table 1: National EAP by population, group and gender

Population Group Male Female Total
African 42.8% 35.1% 78.0%
Coloured 5.3% 4.5% 9.8%
Indian 1.8% 1.0% 2.8%
White 5.3% 4.2% 9.5%
Total 55.2% 44.8% 100.0%

Table 2: Provincial EAP by population, group and gender

Provinces

Gender

Population Group

African

Coloured

Indian

White

Total

Eastern Cape

Male

43.2%

5.9%

0.1%

3.0%

52.3%

Female

39.8%

5.5%

0.1%

2.4%

47.7%

Total

83.0%

11.5%

0.2%

5.4%

100.0%

Free State

Male

49.6%

0.7%

0.4%

3.7%

54.3%

Female

41.5%

1.3%

0.1%

2.7%

45.7%

Total

91.1%

2.0%

0.5%

6.4%

100.0%

Gauteng

Male

44.8%

1.7%

1.8%

7.9%

56.1%

Female

35.2%

1.3%

1.1%

6.3%

43.9%

Total

80.0%

3.0%

2.9%

14.2%

100.0%

KwaZulu-Natal

Male

43.2%

0.6%

6.8%

2.3%

52.9%

Female

41.1%

0.4%

3.8%

1.8%

47.1%

Total

84.3%

1.1%

10.6%

4.0%

100.0%

Limpopo

Male

53.1%

0.2%

0.4%

2.1%

55.7%

Female

43.0%

0.1%

0.1%

1.0%

44.3%

Total

96.0%

0.3%

0.5%

3.1%

100.0%

Mpumalanga

Male

51.0%

0.2%

0.6%

3.5%

55.3%

Female

42.1%

0.1%

0.1%

2.5%

44.7%

Total

93.1%

0.3%

0.7%

6.0%

100.0%

North West

Male

56.4%

0.5%

0.1%

3.6%

60.6%

Female

35.9%

0.3%

0.2%

2.9%

39.4%

Total

  
Published in Business, Economy, Finances, Banking and Insurance

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