Labour Laws: Cosatu and Labour Department claims over "ambiguous" provision do not stand up to scrutiny

The Democratic Alliance (DA) notes with surprise the response by both the Department of Labour and Cosatu to yesterday's reports on the job-killing demographic provision of the Employment Equity Amendment Bill.

The proposed legislation seeks to amend section 42 of the Employment Equity Act, which currently imposes regional racial demographics as the qualifying criteria for employment equity compliance. The Amendment Bill replaces the regional criteria with a national benchmark.

Firstly, according to a report in the media today, a Department of Labour spokesperson is claiming that coloured South Africans have nothing to worry about because they are "under-represented in management positions in businesses and this is what the changes to the act plans to address."

Wrong.

Section 42 of the Employment Equity Act deals with employment equity within a company's entire workforce, not within management only. Section 42(a) refers to "the extent to which suitably qualified people from and amongst the different designated groups are equitably represented within each occupational category and level in that employer's workforce" (my emphasis).

The Department of Labour, in other words, is straw manning.

Cosatu tried a slightly different tack today, by claiming that "this amendment was ambiguously drafted, since no intention to delete [the] 'regional or provincial' [clause] or to change this clause has ever been moved or even suggested by government ministers or officials in discussions around amendments to the labour laws."

In other words, they appear to be saying that this amendment was some sort of accident.

That is even more absurd.

The fact of the matter is that the Employment Equity Amendment Bill specifically removes the regional clause from the Employment Equity Act. Section 42(a)(i) previously referred to the "demographic profile of the national and regional economically active population". The Amendment Bill explicitly removes this criterion, and replaces it with a one-size-fits-all requirement. That is not ambiguous - it is clear as daylight.

What remains unclear is whether Cosatu would like the legislation to be redrafted. They have not said so, but presumably, since they believe that the clause is ambiguous, they do not wish to impose a national demographic quota in the place of the current regional benchmark. If that is the case, they would need to come out in favour of relooking at this legislation, and if that is the case then this is the first time anyone in the tripartite alliance has hinted that this legislation should be reviewed. And that is something we would welcome.

We believe that by benchmarking against national rather than regional demographics, the Employment Equity Amendment Bill will force employers to scale back their employment of race groups that happen to be highly concentrated in certain regions. In practical terms, this means that an employer in the Western Cape or Northern Cape will now be expected to show the Department of Labour that it is scaling back on coloured employees, a firm in KwaZulu-Natal will need to show it is reducing its number of Indian employees, companies based in Limpopo or Mpumalanga will need to show they are reducing the number of black employees on their books, and so on. This is centralised planning on a grand scale; it places existing jobs in jeopardy, and it will stifle the creation of new ones.

Statement issued by Ian Ollis MP, Democratic Alliance Shadow Minister of Labour, February 21 2011

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