Employers are in a strong position against new employment quotas

7 February 2024

Labour minister Thulas Nxesi's latest employment equity quotas are so weak and watered down that it actually reveals severe weakness in his department’s position. Employers are in a strong position to avoid and oppose further state interference in hiring processes.

The new quotas, as contained in the minister's latest draft regulations, are intended to reflect the amended Employment Equity Act of 2023. This Act aims to empower the state to force businesses to hire employees according to the government's targets for race and gender. On paper, the state could even impose fines of up to 10% of turnover on companies that continue to hire employees freely.
 
In practice, however, the state’s efforts have been engulfed at every turn by its own decline and failure. Despite its claims to strong implementation capacity, the Department of Labour has shown itself unable to publish even a coherent set of regulations, let alone capable of enacting and enforcing the law.
 
Sakeliga opposes the entry into force of the Amendment Act as well as the draft regulations (see here for our statement on the Amendment Act).
 
Although the latest regulations are also unacceptable and harmful for how they impede business growth and hiring, they represent a drastic setback for Minister Nxesi. In May 2023, in page after page filled with tables and percentages he proposed a multitude of quotas for men and women, subdivided for coloured, black and Indian persons, and then divided again over 9 provinces and 18 different "sectors".
 
In the face of widespread domestic and international resistance, the Minister has now published the February 2024 version. Without any explanation, he has deviated drastically from his previous aspirations. The new version contains only national figures and no provincial breakdown, and only specifications for men, women and the disabled. Although it mentions "designated groups", there is no clarity in the regulations as to how this should be applied.
 
This month's significant watering down indicates that the minister recognises the considerable problems with his planned policies. As Sakeliga's lawyers pointed out to the minister last year, his previous regulations would be defeated substantively as well as procedurally in a legal process. The new version may be different on the surface, but it has the same substantive and procedural problems as the previous one and should likewise be withdrawn.
 
Sakeliga advises businesspeople to remain firm and not make any changes to their employment policies for the sake of the Amendment Act and the draft regulations. Given the minister's apparent willingness to make such 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. Opposition from the side of businesses and others has caused the state to retreat. This pressure must be maintained.
 
Both the amendment and the draft regulations remain highly contentious in litigation, unenforceable in practice, and altogether against the public interest.

Issued by Piet Le Roux, CEO, Sakeliga, 7 February 2024