2 December, 2013
Employment Equity Bill
November 21st, 2013
Labour Race quotas
Zille-bashing obscures essence of new law
some media outlets that organised business and Business Unity South Africa
(BUSA) specifically, is rubbishing Democratic Alliance leader, Helen Zille's,
race quota charges against the Employment Equity Amendment Bill, obscures some
serious implications of the bill.
BUSA was party to the
negotiations that preceded the passing of the bill by both houses of
claimed that "several leading labour lawyers" rejected Zille's view that the
bill will enforce "rigid racial quotas" and is "draconian".
official BUSA statement to this effect could be found and this seems to be
based solely on a statement made by a single BUSA negotiator, Tanya Cohen and
only one labour lawyer is referred to. Glossed over is that many labour lawyers
and BUSA still have a number of serious criticisms and concerns relating to
amendments in the bill.
"racial quotas" Cohen and the lawyers reportedly said the bill has not really
changed anything and goes no further than the previous Act.
contested amendment in this regard has however narrowed down compliance
criteria to be considered by Department of Labour officials to national
demographic criteria. Previously the Act allowed other criteria also to be
considered, including: regional demographic criteria; the pool of suitably
qualified people available; and sectoral economic and financial circumstances.
according to Cohen and the unnamed lawyers, these criteria are still available
when the Labour Court - as opposed to the Department officials - assesses
compliance and looks at "the reasonable steps taken by an employer to
appoint and promote people from designated groups".
What goes unsaid is that this
broader range of criteria are by implication only available at a dramatically
increased cost after a lengthy and very costly legal process in an already
backlogged and over-burdened Labour Court system.
raise the barrier frustratingly high for business. If a business seeks to avoid
this costly route, it will be judged by departmental officials on race-based
national demographic criteria - Zille's "racial quotas" - to make
may have gone overboard in her choice of language in the fever of an
approaching election, but she and many other South Africans and business do
have every reason to be concerned. So do many other.
also quoted as saying "... we are hopeful that all the other criteria will be
taken into account in regulation and when a court applies its mind."
not sure. It creates no certainty. In the end it will be a matter of
interpretation that could go any direction.
And, when it
comes to interpretation, the bill itself is woolly and ambiguous at best. It
says an ordinary official in his/her assessment of compliance must strictly
consider national demographics; and when a Labour Court decides compliance it
"can" go further and "may" also consider the reasonable steps taken by a
business towards this end.
But, to what
extent will the latter be considered, and who gets to decide the range and
nature of these "reasonable steps?" Why subject business to this substantial
additional administrative-, legal- and cost burden to achieve what was
achievable under the existing law?
government's aim of speeding up transformation through stepped up compliance
and enforcement is unlikely to be met, as companies seeking to avoid the hefty
fines and other punitive measures, could find themselves tied up in Labour
Courts for many months or years.
lost in the "Zille-bashing," are other serious criticisms and concerns relating
to amendments aired by amongst others Cohen.
they reportedly said the amendments are "fuzzy" and that the
intentions of the legislators are hard to discern in some of them.
How do you
interpret a law when the intentions of the original lawmakers are so obscure?
It makes for
even more uncertainty when business and investors are crying out for exactly
Meanwhile three other major
areas of contention were not resolved by negotiations in the National Economic
Development and Labour Council and found their way into the approved bill:
- The scrapping of the compulsory requirement that the Department of
Labour must obtain an undertaking from employers;
- Removal of employers' right to appeal against compliance orders;
- The introduction of fines based on company turnover for breaches of
these aspects may be detrimental to business and investment and will
considerably increase the administrative, legal and cost burdens for businesses
trying to prove their compliance.
to a messy attempt at more social-engineering will most likely prove to be
counterproductive for all parties concerned, especially those who are supposed
to benefit from it. While government says all it wants is for businesses to
comply it makes no sense to try and kill the goose that lays the golden eggs in
by Stef Terblanche