New Employment Equity draft regulations are unworkable quotas

3 May 2024

- The February 2024 Employment Equity draft Regulations propose an elaborate quota system for employment based primarily on race. The Regulations are unworkable.

- In submissions today, Sakeliga recommended to the Minister of Labour that the Regulations should be withdrawn, as was done with the previous Regulations (published in 2023) after extensive pressure from Sakeliga and others.

- We advise businesspeople to remain firm and not make changes to their employment policies for the sake of the draft Regulations. Doing so would amount to taking on the considerable legal and ethical risks that the Minister appears unwilling to deal with himself.

Sakeliga has submitted our comments on the latest Employment Equity Act draft Regulations. We suggest that the draft Regulations – which set extensive quotas for hiring based on race – are unworkable and should be withdrawn. 
 
In our comments, Sakeliga submits that: 

1.      The draft Regulations are incoherent. It offers very little transparency as to the data and methods, if any, that were applied to set the quotas (called “targets” in the regulations). Our attorneys have sent a letter of demand and a PAIA request for the Minister to provide all data relied on and methodologies used to set the “targets”.

2.      The draft Regulations constitute an attempt at getting business to do things that the government fears would be found illegal if the state did so itself. By limiting himself to merely setting “targets” for businesses, the Minister is skirting the key question of how these businesses are supposed to change their staff composition based on race, without being legally and ethically liable for hiring and firing people based on race.

3.      The draft Regulations are just the first step in what is intended to be a series of quota escalations in the coming years. Once a business somehow achieves meeting one of the Minister’s quotas, it will be prohibited from deviating from that benchmark thereafter, under penalty of ruinous fines. Moreover, businesses will continually be forced to implement higher and higher quotas for some races and sexes and lower and lower quotas for others, until their staff composition supposedly reflects at every level of seniority the estimates of the economically active population in South Africa.

The current draft Regulations follow the now defunct draft regulations of 2023, quietly withdrawn after strong opposition from Sakeliga and many others.  
 
Sakeliga’s comments on the 2024 draft regulations notwithstanding, we remain of the opinion that the 2023 Employment Equity Amendment Act is itself unconstitutional.  
 
The Amendment Act, signed on 6 April 2023 by President Cyril Ramaphosa, purports to allow government to prescribe demographic quotas to private employers, regardless of whether they do business with the state. That the prescriptions will, for now, be limited to companies with 50 or more employees, is no cause for comfort since it amounts merely to the piecemeal introduction of a fundamentally unacceptable policy eventually to be extended to employers with staff numbers at lower thresholds.    
 
Sakeliga advises businesspeople to remain firm and not make any changes to their employment policies for the sake of the draft Regulations. Given the Minister’s apparent willingness to make wild swings in quota design, there is currently no clarity on what the final Regulations are that he hopes to make, let alone the timelines by which he would be able to get them implemented.
 
Both the Amendment Act and the draft Regulations remain highly contentious in litigation, unenforceable in practice, and altogether against the public interest.
 
Read Sakeliga’s submissions here: https://eu1.hubs.ly/H08WBgQ0
Read Sakeliga’s attorney’s letter here: https://eu1.hubs.ly/H08WBdB0

Issued by Piet le Roux, CEO, Sakeliga, 3 May 2024