Employment Equity Amendment Act: “a boon for some”, a destructive boom for the rest.

EMPLOYMENT EQUITY AMENDMENT ACT

“A BOON FOR SOME”

A DESTRUCTIVE BOOM FOR THE REST

Opinion Piece

by Jaco Swart

On 5 December, the Minister of Employment and Labour issued a media statement titled “BOON FOR SMALL EMPLOYERS AS EMPLOYMENT EQUITY (EE) AMENDMENT ACT COMES INTO OPERATION ON 1 JANUARY 2025”. 

In the statement, the Minister praises the relief small employers (less than 50 employees) will now enjoy, as they will no longer need to comply with employment equity going forward, due to them not, as of 1 January 2025,  being deemed as “designated” employers for the purposes of the amended Employment Equity Act.

The Minister states,“that the regulatory flexibility will enable small businesses to now focus on growing their businesses and create jobs”and that she is“…excited by the latest developments that small businesses will no longer have to go around spending their money on consultancy fees to source legal assistance to develop EE plans and submission of EE Reports”.She further hopes“that the new amendments to Employment Equity, will impact positively on job creation and the unemployment rate”.

The irony contained in these statements is about as obvious as an elephant hiding under the bed.

The mandate of the Department of Employment and Labour must surely be to craft a legislative environment in which business and employees are protected and can thrive.  The statement that the Employment Equity Amendment Act (EEAA) is a“boon for small employers and that they can now focus on growing their businesses”is an indictment on the Department. It is an admission that these racially-based laws, aimed at artificially re-engineering a society, are a drag on business growth and employment. It will never contribute to increased employment. These types of legislation, paired with overall bad government policies, contribute to unemployment dangerously skyrocketing.

The existence of a 50-employee threshold, after which an employer “magically” transforms into a ‘designated’ employer again, will in fact hamper growth, as many employers will simply elect not to grow beyond this point. They will never emerge from the cocoon as a medium or large business, as they simply do not want to deal with even more red-tape and, most importantly, they do not want Government, who for the most part has no idea what it takes to run a business, prescribe to them who they are allowed to employ based on some arbitrary, and irrational, made up racial target.

Speaking of targets, if the last set of draft sectoral targets are to be taken as a yardstick, it seems that they would fit quite nicely into the realm of Alice in Wonderland- completely detached from reality. Although loosely based on the national- or provincial economically active population, it does not take into account that the attrition or growth rates of companies simply do not allow for the transformation of companies into this “equity eutopia”.

Furthermore, the availability of skilled employees from the preferred racial- or even gender groups in certain sectors is a serious issue that further impedes the ability of employers to comply. The effect of this is that compliance will become a very expensive paper exercise in which employers will merely provide a myriad of reasons why it was practically impossible to reach the targets. This compliance exercise naturally comes at a huge financial cost for employers, as admitted by the Minister, in terms of time spent, as well as direct financial costs for experts to draft comprehensive plans and reports simply to show that compliance is impossible.

It is time Government realises that Employment Equity and its big brother, B-BBEE, are futile social experiments, and condemn them to the annals of disastrous history. The time and money wasted on these failed ideological projects could be much better spent.

The only way to address inequality is to create more, educated, skilled potential employees and, in doing so, create a much larger pool for employers to choose from. Employers are only interested in whether a potential employee is suitably skilled for the job, whether he or she will contribute to taking the business forward, and if the person is a good fit. Race and/or gender plays no role.

The insistence by Government that race should be a crucial factor does nothing but diminish the value of an individual from a unique person with specific skills and traits, to just a number on a page, simply because he or she happens to be of a particular race or gender.

Although the unshackling of small businesses from these draconian obligations is welcomed, it will do very little to address inequality or close the skills gap. South Africans, in general, are no longer concerned with race or gender. They accept and welcome that we live in a multi-racial and multi-cultural country. It is only the ruling party that finds it difficult to step away from a racially motivated narrative, which is detrimental to employers, employees and the economy alike.

Jaco Swart is the National Manager at the National Employers’ Association of South Africa (NEASA).  

For more information

NEASA Media Department

media@neasa.co.za

NEASA ... the only labour law specialist an employer will ever need.