DA takes aim at ANC’s race quotas in court battle over jobs and growth - Katzenellenbogen

Key topicsDA challenges ANC’s racial hiring quotas in High CourtANC, COSATU, and Ramaphosa hit back at DA challengeSmall businesses may face collapse under strict race targets.Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here.Support South Africa’s bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up to the BizNews channel here..By Jonathan Katzenellenbogen*Within a month after its legal victory overturning the VAT hike, the DA was back in court yesterday to challenge racial quotas for hiring by the private sector.The battle over racial quotas goes to the heart of the ANC project.Regulations issued last month lay down different percentage quotas for previously disadvantaged people – blacks, women, and the disabled, in 18 sectors of the economy. In a large number of cases, the workforce racial composition targets for companies with more than 50 employees are specified to one decimal place. There are exemptions, but if companies fail to meet these targets in five years’ time, they could face fines of up to ten percent of their turnover. For some companies in a weak financial position, that would result in bankruptcy, and hence fewer jobs.The start of the DA’s challenge in the Pretoria High Court yesterday against the Employment Equity Amendment Act is a landmark. Other bodies including the National Employers’ Association of SA, Sakeliga, and the Institute of Race Relations are also mounting legal challenges.If the regulations laying down race quotas are overturned by a court decision, the way could be opened for other challenges to “employment equity” in government job hiring and black economic empowerment.Even though the Constitution, under Section 9(2), allows the adoption of affirmative-action type measures to promote substantive equality, this has to be applied with caution. Such measures must be “fair”, cannot invade the dignity of those affected by the quotas, and it also depends on the context whether or not they are permitted. One-size-fits-all measures are not permitted under the Constitution. This gives the High Court some discretion to decide on what constitutes the delicate balance between fair and illegal. The DA received a big boost in the polls from its campaign against VAT. To gain traction on the race quota issue, the DA needs to position this as a growth-and-jobs issue for all, which is the case. But even then, it just might be hard to make the direct connection.Unlike its campaign against the rise in VAT, which was a pocket-book issue for all, the fight against race quotas might seem to appeal to a narrower group – mainly whites and other racial minorities. But there are growing sections of the electorate that simply don’t believe ANC promises about transformation and jobs. Their prime concern is getting or keeping a job, rather than racially dividing up the workforce along racial lines.Slew of statementsAs the racial project is so vital to the ANC project and its campaigns, the party and its allies are taking this battle over the Act very seriously and have issued a slew of statements. The ANC seems to believe that insistence on race quotas will be viewed by its support base as a promise of job prospects.Read more:.Gayton McKenzie olive branch to DA – Let’s take hands, focus on unseating ANC.The ANC’s parliamentary caucus wants the DA kicked out of the government of national unity (GNU) for what one MP told the Sunday Times was “misbehaving”, by resorting to legal challenges to this Act and the rise in VAT. Any attempt to push the DA out of the GNU would backfire on the ANC, as voters like the idea of different parties cooperating. The uproar over the DA’s actions in the ANC caucus has more to do with the campaign of Deputy President Paul Mashatile to replace President Cyril Ramaphosa than the actual issues.The President, the ANC, the Minister of Employment and Labour, and the Congress of South African Trade Unions (COSATU) have all rushed in to slam the DA over its legal challenge. This comes from a hope that playing the race card can work in their efforts to regain support.In his letter from the “Desk of the President” earlier this week, President Ramaphosa demanded that the DA, “come and explain to me what grudge they have about transformation.”He argued that legislation “to break our apartheid past” is still required because we have far to go, “in ending race-based disparities in our economy.”The ANC argument is fundamentally about dividing the pie along racial lines, rather than growing the economy to raise living standards.As if to prove the case that regulation is required to bring about racial “transformation” the President wrote in his letter, “Despite Africans constituting the majority of the economically active population, the majority of top management positions in the private sector are still held by white males.”Yes, most top positions, more than 60 percent, are held by white males. And yes, white males have been relatively privileged in their access to educational opportunities. Rather than raising the argument that continued racial discrimination is the continuing reason for this racial job disparity, the path to rectifying the situation is to ensure greatly improved and expanded educational opportunities. One big problem is that we have a poorly-managed public education system. And importantly, students should be urged to take up the technical subjects that will feed them into areas where there are skills shortages. There is no other real solution but this.Racial complexionIt is not as though large private companies are not keen to bring in young black graduates and promote them. The racial complexion of the bosses of corporate SA will look very different in just ten years’ time. That is not largely the result of government diktat or empowerment ratings, but because big companies need the talent to grow and it is gradually coming through. Besides, whites are a diminishing proportion of the population.Ramaphosa pointed out that the amendment to the Employment Equity Act had been approved by the National Economic Development and Labour Council (NEDLAC) which brings together big business, labour and civil society. NEDLAC has not offered opposition to the ANC on any major piece of legislation. It is small business, rather than large, that will be hurt by the race quotas. Big business can afford to pay the high salaries and bonuses to bring in talent.If the court challenges fail, it just might be up to small businesses alone to fight the race quotas. Some might refuse to comply and risk fines. Others might apply for exemptions. Others might reduce the size of their workforce in order not to have to comply. And some might hold back on their investment and hiring plans. And others with low margins may view the burden of regulatory compliance as too great, and may liquidate.The tragedy is that the ANC might be incapable of even noticing the disastrous consequences of their laws..This article was first published by Daily Friend and is republished with permission .Jonathan Katzenellenbogen* is a Johannesburg-based freelance journalist. His articles have appeared on DefenceWeb, Politicsweb, as well as in a number of overseas publications. Katzenellenbogen has also worked on Business Day and as a TV and radio reporter and newsreader. He has a Master's degree in International Relations from the Fletcher School of Law and Diplomacy at Tufts University and an MBA from the MIT Sloan School of Management.

DA takes aim at ANC’s race quotas in court battle over jobs and growth - Katzenellenbogen

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