Business, labour welcome signing of amended employment equity law
Business and labour welcomed President Cyril Ramaphosa’s signing into law the Employment Equity Amendment Act on Wednesday.
The new law will allow employment & labour minister Thulas Nxesi to set workplace transformation targets.
The legislation is aimed at accelerating transformation in the workplace by putting clear targets in place, and empowers Nxesi, in consultation with sector stakeholders, to introduce sector-specific employment equity targets.
The government previously had no real targets as the Employment Equity Act required only “reasonable progress” in terms of workplace transformation.
According to data from the latest Labour Market Dynamics, compiled by Stats SA, black African men and women had the highest unemployment rate compared with those of other groups, while the white population group had the lowest unemployment rate in 2016 and 2021. The study found that men are more likely to be employed regardless of race.
Business Unity SA (Busa) CEO Cas Coovadia said the amendment act ends a “long period of uncertainty on the proposed changes and impact of our transformation laws”.
He said Busa was pleased the minister would set targets for sectors “only after consultation with the relevant business and employer bodies.
“In our view, meaningful consultation on sector targets affirms social dialogue and will ensure the relevance of the set targets,” Coovadia said.
“Busa is, however, aware that some aspects of the law remain problematic, as the organisation had raised in parliament during the public hearings process in 2021 and 2022. For example, measuring compliance and issuing compliance certificates as a licence to do business with the state will depend on whether a company has met its targets and does not have a case of unfair discrimination raised against it at the CCMA [Commission for Conciliation, Mediation and Arbitration] or labour court in the previous 12 months.”
Coovadia said Busa was concerned about “treating targets as quotas, which would be against the spirit and letter of the law anyway.
“Companies should not be subjected to double punishment by the CCMA or labour court and the department of employment and labour for the same issue, which could lead to unnecessary litigation and derail our objective of transformed workplaces,” he said.
Cosatu parliamentary coordinator Matthew Parks said the labour federation, an important ally of the ANC, welcomed the signing of the act into law.
He said the law provides “badly needed interventions to strengthen government’s ability to hold employers accountable for their role and failures to adhere to the Employment Equity Act.
“Cosatu urges the department of employment and labour to move with speed to ensure the promulgation and implementation of these long overdue provisions,” Parks said.
“Organised business must do its bit to ensure employers are aware of these new requirements. Cosatu will be working with its affiliates, endeavouring to empower shop stewards and workers on this progressive amendment act.”
Meanwhile, Solidarity said it would challenge the “unconstitutional” law which granted “draconian” racial powers to Nxesi. Solidarity’s legal team will serve court papers soon.
The presidency says the law is intended to advance transformation of the country’s workforce by setting employment equity targets for economic sectors and geographical regions, and requires enterprises to develop transformation plans.
Employers with more than 50 staff must submit employment equity plans, specifying how they will achieve the targets. Employers must also submit annual reports to the department.
Solidarity said it informed Ramaphosa of its views on August 23, obtained legal opinion confirming its stance and had made submissions to parliament.
“The president is ... aware that Solidarity would go to court should he sign this act into law. This is precisely what he has now done. We are now preparing for court,” said Solidarity CEO Dirk Hermann.
The union said the amended act empowered the minister to undertake centralised racial planning at his or her discretion.
“This would be the most drastic race-manipulating legislation in the world.” Solidarity expects the private sector will have to follow the state’s example. “Private enterprises will become state-run racial enterprises,” Hermann said.
The law would also have dire consequences for the economy, he said. “New definitions of ‘designated employers’ will force small businesses to remain small and will cost thousands of jobs. “Any promotion opportunities for those fortunate enough to keep their jobs will be stopped. This will mean the skills exodus will merely be accelerated”.