JAUNDICED EYE

The Employment Equity Amendment Act — given some of the horrified reactions it’s elicited, let’s just call it EEAAk!— has unleashed a furore of impressive proportions in a country that’s mostly unfazed by developments that would be considered tempestuous elsewhere in the world. Whether this one is a pukka Force Nine gale that’s going to raze the neighbourhood or just a storm in a tea-cup, remains to be seen.

Undoubtedly, however, there’s been nothing in recent years to rival the public anger and dismay sparked by EEAAk’s enactment, except possibly the African National Congress government’s periodic spasms to embrace property expropriation without compensation. Or the on-again, off-again implosion of Eskom and the possible collapse of the national grid. 

Or the Gupta gang escaping justice because Director of the National Prosecution Authority’s inability to properly complete an extradition application. Or … (take your pick from our lavish national smorgasbord of political disaster).

There had been hope that the legislation, which had been languishing in President Cyril Ramaphosa’s in-tray for more than a year, would be allowed to quietly gather dust. That was not an entirely far-fetched hope. The conceptually complex Act is, even by ANC standards of incompetence, exceptionally poorly drafted. It’s filled with legal ambiguities that invite challenges all the way to the Constitutional Court. ___STEADY_PAYWALL___

Also, crucially for legislation that in effect shifts the onus for regulation from government officials onto the self-policing shoulders of business, is the issue of consultation with those affected. The Act has been passed without adequate, meaningful consultation with those affected. 

While the Department of Employment and Labour (DEL) consulted with Nedlac, the National Economic Development and Labour Council, the regulations were not canvassed with stakeholders. There is now a month-long window through to mid-June during which the public can lodge objections and suggestions, but that’s not how the constitutionally mandated process around the new regulations is supposed to work. First consultation, then promulgation. Not vice versa.

Marleen Potgieter, director of the consultancy EquityWorks, tells me that DEL Minister Thulas Nxesi’s statement that the published demographic targets, the main cause of the consternation, were only put in place after “stakeholder engagements” is simply untrue. In 2020 already, the textile and clothing industry submitted to the minister an analysis of what would constitute realistic targets based on actual numbers in their sector. “To date, they have not heard back from the minister.”

Potgieter is especially critical of the legislation’s “narrow approach” to transformation. “What about the real hearts and minds stuff — such as removing unfair discrimination — that companies should be doing? Slavishly driving targets does not lead to transformation.”

But, hey, next year the ANC faces its most challenging general election yet. It needs meat to throw to the restive hordes. What could be better in a country with 33% unemployment — among the highest in the world — than telling its largest constituency, black African voters, that it’s going to make sure that minorities are squeezed out of the top echelon, highest paying jobs in 18 sectors of the economy?

The Democratic Alliance has pegged EEAAk as a pernicious piece of race-based legislation reminiscent of the apartheid era, predicts that it will discourage both local and foreign business start-ups, and claims that could cost the economy 600,000 jobs over the next five years. Provocatively finding inspiration in the liberation struggle, the party is calling for a national Defiance Campaign.

DA leader John Steenhuisen has called on employers to defy the regulations. “It is time for us - for all South Africans - to rediscover our spirit of disobedience. As 2024 (the general election) approaches, we are going to need it," Steenhuisen told an audience in the predominantly Indian area of Chatsworth in KwaZulu-Natal.

The chairman of Solidarity, Flip Buys, warned: “Company bosses must know: You do not have the right to obey injustice. It is time for us – for all South Africans – to rediscover our spirit of disobedience.”

The ANC, in turn, insists that opposition to the Act is based on misinformation and craven racism underlies the DA’s “malicious” interpretation of the legislation. But as befits a government that is deeply divided, the ANC’s justifications of the Act are contradictory and vary according to the audience they’re being pitched at.

On the one hand, Nxesi has said there was a need for “aggressive” legislation, to compel corporate South Africa to improve the race and gender balances in the least “transformed” sectors. On the other hand, the party says that the current brouhaha is completely overdone, since the Act is a benign adjustment to the existing order that merely affects big businesses seeking to do business with the State and that it will, in fact, ease the compliance burden on companies with fewer than 50 employees.

The four job levels affected by EEAAk are top management, senior management, professionally qualified workers and skilled workers. Solidarity’s analysis of the targets shows that if conscientiously implemented by employers, we are entering an Orwellian landscape.

Given the existing demographics of the country, with coloureds — as former Director-General of Labour Jimmy Manyi infamously put it some years back — “over-represented” and in “over-supply” in the Western Cape, and Indians similarly so in KwaZulu-Natal, the targets mean that:

No coloureds may be appointed in sectors such as agriculture, forestry and fisheries, manufacturing, finance or the arts in Limpopo, Mpumalanga and North West; and

Only 0.1% of the workforce of enterprises in Limpopo, Mpumalanga, North West, the Northern, Western and Eastern Cape may be Indians. 

Solidarity also claims that this effect on the entire workforce will mean that there are 71,518 coloured people, 116,934 Indians and 404,608 white people "too many" in the workforce nationwide and who will therefore lose their jobs within the next five years. “In short, to meet the national sectoral targets, two out of three white people, two out of three Indians and one out of four coloureds must vacate their jobs in the top four job levels," says Solidarity.

When I challenge Michael Bagraim, the DA Shadow Minister of Employment and Labour, on the staggering figures being bandied about regarding potential job losses among minority groups, he says he honestly believes the figure of 600,000 may be an underestimate. 

“Many of the businesses that I do speak to are holding off any new employment and waiting to see how this whole piece of legislation pans out next year. I speak to dozens of small companies every week and most of them have told me that they are either going to drop their numbers to below 50 or they have put on hold plans to expand.

“The legislation is badly drafted … a complete mess The regulations are even worse.”

The angry rebuttals and abuse that have greeted Solidarity’s analysis hinge largely on nomenclature. Solidarity is being roasted for implying that the EEAAk targets will be enforced as quotas.

In theory, the defenders of the Act are correct. Since Constitutional Court has previously ruled that “targets” and “goals” pass legal muster but “quotas’ do not, it is true that the DEL will not prosecute corporates for not meeting their targets. 

But the prospect of fines (up to 10% of turnover) and other administrative sanctions (not being allowed to tender for state contracts) means that they won’t have to. Business will do the government’s dirty work for it. 

A perfect illustration of this reality was last year’s contretemps around Dis-Chem CEO Ivan Saltzman’s leaked memo to top staff. Saltzman placed a moratorium on hiring whites because of the multiplier effect that such a hire had on employment equity targets. As he wrote at the time, “It's the ratio between white and black that counts. So, when no suitable black candidate is found, and a white is appointed, we need several blacks just to maintain the status quo, never mind moving forward.”

While Dis-Chem was briefly boycotted by angry white customers, Saltzman’s approach was no different from that of every other corporate in the country. His only miss-step was putting it in writing.

Such is the crude and reductionist arithmetic of race.

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