NEASA on ‘ill-conceived’ Employment Equity Bill signed into law

The President, on 12 April 2023, signed into law the Employment Equity Amendment Act.

This amendment of the Employment Equity Act is yet another ill-conceived idea pulling the country into the abyss. Although this venture is guised under different terminology, this is nothing other than a race-based quota system forced upon employers. 
This amendment simply confirms what we already know: this Government has no clue as to what it takes to build a successful business; and this Government needs successful businesses to keep South Africa afloat. This legislation is just another step in killing the goose that lays the golden eggs.
Government does not understand that employing the best person for the job, without exception, is critical for business to succeed. This principle and employment practice dictates that when employing a person in a position, various critical factors, but definitely not race and gender, have to be considered. 
Government simply does not comprehend that not following this golden rule in employment, is causing the failure of all government departments and state-owned enterprises. No business can afford to go down this route. Business does not have the luxury of bailouts; they do not survive on ‘other peoples’ money or taxes, but are responsible for their own survival. 
When business fails, it fails. Government does not understand this, simply because they do not have in their ranks anyone who has ever built a successful business without some form of assistance. I will personally apologise if this generalisation offends any particular individual who does not fall within its scope.

In terms of the Amendment Act, signed into law, the Minister of Employment and Labour is empowered to set sector specific employment equity (EE) targets (which is nothing other than ‘quotas’) which employers within each respective sector must reach.

A major difference between the old and new acts is that the Minister will now determine targets (‘quotas’) for all designated employers (those employing more than 50 employees) within a specific sector whereas, under the old Act, these targets were within the purview of individual employers, taking into account the economically active population.

Employers who fail to comply with EE targets will eventually face severe penalties and fines and will not be issued with a compliance certificate which is required to tender for government contracts.

Forcing employers to employ a person from a specific ethnic group will probably deter employers from filling vacancies if the applicant, from the designated group, is deemed not to be the most suitable candidate. It is, in any event, degrading to people falling within the designated target groups who will always wonder whether he or she was appointed on merit or simply to comply with an artificial target set by someone who has no idea of the specific operational needs and culture of a particular business.

All that B-BBEE, of which EE is an element, managed to accomplish is to create a whole new class of corrupt individuals colloquially known as tenderpreneurs, who have become extremely wealthy by milking the system and contributing nothing to economic growth or true transformation. It has further caused large social discontent in respect of Government’s persistent interference in the private sector, which should simply be left to do what it does best, to drive and grow the economy.

Government should rather focus on creating an economic framework which will aid the private sector in growing the economy, increase employment and consequently addresses inequality. This message however has fallen on deaf ears.

ESKOM is the quintessential example of the consequences of enforced transformation which led to such a massive skills gap that it can no longer fulfil its only mandate to provide electricity to the country. Instead of learning from its mistakes, Government seems hell-bent on pursuing economic transformation policies which time and time again have proven to be destructive and counterproductive.

NEASA is of the view that the new ‘quota’ system is entirely unlawful and unconstitutional.  We will soon communicate our further actions in this regard.

In the interim, NEASA’s advice to employers is to never deviate from appointing the best person for the job, without exception, without taking into consideration the race or gender of that person.

We can only hope that Government will, sooner rather than later, come to its senses and repeal these destructive pieces of legislation. 

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