PATRICK BULGER: Ill-considered equity law is no tonic for growth, jobs

While all around us South Africa falls apart, be assured that if nothing else the one-eyed campaign for the promised land of equality by legislative coercion is alive and kicking. I refer here to the Employment Equity Amendment Act, now the subject of a court challenge by the DA, predictably criticised as a rearguard action to resurrect apartheid.

The law comes to us, of course, from that temple of impractical and misguided notions, parliament, slow-cooked by MPs in 2022/23 but making an appearance on the grand stage now after being gazetted in April 2023 to take effect from January 2025.

Who, with South Africa’s best interest at heart, wants this odious law? The race-addled ANC, that’s who, and its elite and trade union pals.

South Africa is no stranger to employment equity, with the first legislation dealing with the subject emerging in 1998. Progress was made but presumably not enough.

So where the previous iteration sought to empower business to enact policies described as an attempt to redress the injustices of the past, the new version dispenses with such niceties in near-total disregard for private property and enterprise.

Normally, no business would allow itself to be guided by taxpayer-supported freeloaders living in state-subsidised housing, ferried by state-subsidised transport and flying up and down gratis on our broken national airline. But in Alice in Wonderland SA, this is quite normal.

Such are the peculiarities inherited from our troubled history that it has come to pass that MPs put pen to paper (or their consultants did) and devised a new, blunter, law to enforce employment equity in a misguided attempt to boost the economy by putting many more out of gainful employment. That will be the outcome unless companies deliberately employ fewer than 50 people. Of course, for big business it’s just another pesky impost, but for smaller companies it could be a death sentence.

The DA has objected to the sweeping powers granted by the legislation, in particular arguing that the minister’s powers to set EE targets in 18 different sectors are unconstitutional in that they amount to quotas. No, says the government, they’re not quotas, they’re targets.

According to Afrikaans business group Sakeliga and the National Employers’ Association of South Africa, the “regulations herald perhaps the most sweeping racialisation of the labour market ... threatening to destroy hundreds of billions of rands in economic value if diligently applied”. Fat chance of the latter, though, so the legendary lack of diligence and rigour from our government may be the only salvation in this case. And why not, it’s worked before.

Section 15A calls for sectoral targets, mostly racial, and favours “designated groups”. As one report put it, “Able-bodied white males are not explicitly mentioned and are considered the remaining percentage after the designated groups are accounted for.”

A law that forces employers to fire or refuse to hire people based on race, whether they are black, coloured, Indian or white is not redress. It is unconstitutional discrimination.

—  DA

The DA says “a law that forces employers to fire or refuse to hire people based on race, whether they are black, coloured, Indian or white is not redress. It is unconstitutional discrimination”. The ANC says opposition is anti-transformation.

The law was hatched long before the government of national unity came into being after the 2024 national elections, when the ANC fell to 40% and was forced to bring in the DA to make up the numbers. Having secured Cyril Ramaphosa as president of the republic for a second term, the ANC appears dead set on excluding the DA and other minority parties from any sort of reasonable shared programme. Looking again at this law should be a GNU priority.  

Wrapped in its cocoon in parliament, the ANC legislates with one eye on the voters and the other on its constituencies, especially the trade unions.

The law reflects the party’s destructive thinking on business, which 31 years after the end of apartheid is still seen as the enemy regardless of the millions it employs and the tax and other benefits it delivers to the economy.

While the formal business sector buckles under a growing weight of regulations, the informal sector gains ground, unshackled by laws cramping its style.

Yes, we do need regulation, relating to health and safety, conditions of employment, and agreements reached by employers and representative unions. And affirmative action has its place, for all who merit it.

But between the lines of this egregious piece of heavy-handed legislation lurks a view of the world that betrays a misguided belief in the efficacy of race-based solutions, which has been disastrous in the past. 

With millions unemployed, enacting another measure to obstruct and racialise the workplace is hardly the way to grow the economy and raise people out of poverty.

We need realistic and workable solutions, not race-infused legislative vanity projects.