Is amendment bill a new form of pencil test?

THE new Employment Equity Amendment Bill, which President Cyril Ramaphosa signed into law last month, is meant to promote diversity and equality in the workplace.

Instead, it is only stirring up political tensions and economic anxiety, and is set to lead to a legal battle over its constitutionality.

The amendment bill seeks to transform South Africa’s workforce by setting equity targets for 18 economic sectors and the nine provinces.

The bill only applies to employers with more than 50 employees, who have to submit employment equity plans with provision for race, gender and disability, among others.

Meet the “targets” and the companies qualify for certificates of compliance to do business with the government. Fail to make the numbers and bosses face a penalty of up to 10% of annual turnover.

On May 12, Minister of Employment and Labour Thulas Nxesi published a gazette calling for comments on the sectoral targets. Companies have been given 30 days to offer their input.

Already, opposition parties are calling the bill nothing but a more stringent and draconian quota system. A “pencil test” that favours black South Africans over whites, coloureds and Indians – who stand to be completely barred from entering certain sectors and regions in the economy.

Other critics warn of the impact on an economy already battered by load shedding and inflation, productivity, efficiency and an exodus of skills from the South African job market.

The Department of Labour however insists there is nothing substantially new about the act, which has been around for over 24 years.

The only change is that the bill empowers the Employment and Labour Minister to “set employment equity targets for economic sectors, as well as regions where transformation is lagging. The bill also empowers the minister to regulate compliance criteria to issue compliance certificates”.

Employers still maintain powers to determine their own annual employment equity targets towards achieving the regulated five-year sector targets, the department said.

The Department of Labour needs to engage with each sector to establish realistic targets for the next five years.