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Discuss the impact of the Employment Equity Act (EEA), 1998 (Act 55 of 1998) on businesses.

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Impact of the EEA on businesses


  • Promotes equal opportunity and fair treatment in employment.
  • Prevents unfair discrimination/discriminatory appointments as it ensures that the workforce represents the demographics of the country/promotes diversity in the workplace.
  • Motivates employees because everyone has the same employment opportunities.
  • Appointment process is clearly defined, so all parties are well informed.
  • Promotes the implementation of affirmative action measures to redress the imbalance in employment.
  • Encourages consultation between employer and employees.
  • Businesses are in a better position to negotiate contracts with the government.
  • Impacts positively on BEE ratings for businesses.


  • Increased administration burden, as businesses must compile/submit employ-ment equity reports every two years.
  • Expensive to train/employ someone who knows little about the Act.
  • Other groups may not respect the knowledge/skills/experience of an EE appoint-ment which may lead to conflict.
  • Fines/Penalties for non-compliant businesses may be expensive for the business.
  • Employers have to appoint one or more senior managers to ensure the imple-mentation of the plan, which increases salary expenditure.
  • Skilled people from designated groups may demand higher salaries which increase salary expenses
  • Job hopping of skilled/trained EE appointees may increase staff turnover.
  • Businesses must submit a compliance certificate before they can conduct business with the government.
  • Diversity in the workplace may lead to conflict/unhappiness.
  • Businesses are sometimes pressurized to appoint an unsuitable EE candidate just to meet EE requirements.
  • Often positions go unfilled because there are no suitable EE candidates.
answered by Master (629k points)