Employment Equity Amendment Bill: A job-destroying jackhammer

9 September 2021

Note to Editors: The following speech was delivered in Parliament today. 

Please find attached English and Afrikaans soundbites by Dr Michael Cardo MP. 

Honourable Speaker

The Employment Equity Amendment Bill is a job-destroying jackhammer.

It is a blunt and brutal tool handed carelessly to the Minister of Employment and Labour, so that he might wield the workforce into a shape the ruling party deems racially acceptable.

The ANC will have you believe this bill is a weapon of transformation. In truth, it is a weapon of economic mass destruction.

Its repercussions will reverberate for generations to come; unwelcome aftershocks to an economy already in upheaval.

There are two fatally flawed clauses in the Employment Equity Amendment Bill.

Firstly, there is clause 4 which introduces Section 15A into the Act. This section empowers the Minister of Employment and Labour to identify national economic sectors and then to determine numerical employment equity (EE) targets for these sectors. The consultation requirements imposed on the Minister are vague and ill-defined. In this way, the ANC seeks to foist its narrow, ideologically-driven goal of ‘demographic representivity’ from the Minister above onto biddable employers below. This is the warped notion that the workforce should mirror exactly the racial and gender composition of the economically active population.

This new provision confers upon the Minister a set of arbitrary and discretionary powers that are wholly incompatible with the drivers of a market-based economy.  There is a simple word for rigid racial targets determined by the Minister, thrust upon employers after a thin veneer of consultation, and backed by punitive measures for non-compliance. In effect, they are quotas.

Secondly, there is Section 53 of the Act, which now comes into operation, as amended by clause 12 of the bill. Henceforth, state contracts will only be awarded to employers who are in possession of a compliance certificate issued by the Minister. Of course, in order to obtain the certificate, an employer must have complied with any sectoral target set by the Minister in the first place.

All of this is a recipe for malicious ministerial meddling.

Section 53 concentrates powers in the hands of the Minister which might be used capriciously to benefit selected companies in the allocation of state tenders. This is a textbook ANC manoeuvre. It allows them to manipulate outcomes – by rigging tenders or funneling contracts – in the guise of righting past wrongs and redressing racial inequalities. Yet, after more than two decades of employment equity- and black economic empowerment legislation, we now know beyond any reasonable doubt that these legislative lynchpins of racial transformation are really a fig leaf for crony enrichment.

What is driving this racial mania?

The ANC looks at the upper echelons of management in the private sector – as opposed to the public sector – and gasps in horror at their complexion. There are too many whites. Able-bodied Coloured men are over-represented here. African women with disabilities are under-represented there. And the ANC comes to the conclusion that the government should shift workers around as if they were pawns on a chessboard. In fact, the ANC goes one step further. It seeks, through diktat, to conjure an entirely new chessboard into existence.

That is not how societies or economies function.

If the ANC wants to level the playing fields, or broaden economic opportunity, let it increase the pool of available skills by putting in place a first-rate education system. Let it foster the conditions conducive to economic growth that allow for opportunities to flourish. But that is not how the ANC thinks.

The Employment Equity Amendment Bill is, to recall Tony Leon speaking on the original legislation, a ‘pernicious piece of social engineering’, pious in intention but destructive in effect.

And, make no mistake, this bill will sew economic destruction. That is what happens in a command economy when a politician hauls out a racial abacus and declares how many beans should be in each row and what colour they should be.

As it is, our economy is mangled – damaged and deformed by decades of ANC policy incoherence, state capture and corruption. It has been disfigured further by Covid-19 and the stringent lockdowns. The numbers are well known. In 2020, economic activity slumped by 7%, the biggest annual fall since 1946. We are still trapped in the longest downward cycle since the Second World War. The economy hasn’t grown by more than 3% annually since 2012. Last year, there were over one million job losses. Our unemployment rate sits at 44.4% on the expanded definition. Almost 12 million people do not have a job.

Meanwhile, as I speak, a huge flight of skills and capital is underway. Desperate, anxious middle-class South Africans of all races are rushing for the boarding gates to put daylight – and continents – between themselves, their families and the ANC government. They can see which way the wind is blowing. They know that ANC policies like expropriation without compensation will bring economic ruin.

The Employment Equity Amendment Bill will hasten that destruction. It will deter investors. It will stunt growth, and it will kill jobs. Why should anyone want to invest in an economy, or create new jobs, when a politician gets to decide what the labour force looks like or how the labour market operates?

The ANC has rammed this bill onto the order paper before we rise for the Local Government Election campaign so that it can lay claim to some conveniently-timed victory for ‘our people’. It is a sham achievement. For this bill will do nothing for the poor, the marginalised, or the rural masses on whose behalf the ANC professes to speak. Its remedial measures, such as they are, do not target the disadvantaged. They do not advance the disadvantaged, and they do not promote the achievement of equality.

As such, this bill is – to put it lightly – constitutionally suspect.

In truth, the Employment Equity Amendment Bill will help only a small, skilled- and politically connected elite.

It will widen the inequality gap between the small black elite that benefits from EE and BBBEE and the 10 million black South Africans who are unemployed and unlikely to find a job because of laws – like this one – that disincentivise job creation.

Our delicate social fabric is frayed. Our economy – if not yet quite in smithereens –  lies broken. And now, Speaker, we propose to give the Minister of Employment and Labour a job-destroying jackhammer.

The DA opposes this bill.

Issued by Michael Cardo, DA Shadow Minister for Employment and Labour, 8 September 2021