The Employment Equity Amendment Act 4 of 2022 (“the Amendment Act”) was assented to by President Cyril Ramaphosa on 6 April 2023. The Amendment Act, which amends the Employment Equity Act 55 of 1998 (“the Act”) has re-introduced divided opinions about transformation in the workplace into the public discourse.
This begs the question – What are the significant amendments and what views are held about the amendments? Section 9(3) of the Constitution of the Republic of South Africa, 1996 prohibits unfair discrimination on the basis of race, gender, disability and other characteristics. However, section 9(2) of the Constitution states that to promote the achievement of equality, legislative and other measures designed to protect or advance persons, or categories of persons, disadvantaged by unfair discrimination may be taken. The Act and the Amendment Act are therefore empowered by section 9(2) of the Constitution.
The abovementioned legislation recognises that the results of apartheid include current- day disparities in employment, occupation and income within the labour market which need to be redressed beyond repealing apartheid laws. Thus, the Act aims to advance suitably qualified people from designated groups (defined in the Act as Black people, women and people with disabilities) in the workplace by implementing targets. The Act includes Black African, Coloured and Indian people in its definition of Black people.
Notably, the Amendment Act allows the Minister of Employment and Labour to identify and set sectoral-, regional-and occupation-specific targets in an effort to achieve transformation. The Minister is required to consult relevant stakeholders such as employers, trade unions and the Employment Equity Commission prior to setting the targets. Once the targets are set, section 53 of the Act requires the Minister to issue Compliance Certificates to compliant employers. It is noteworthy that the failure of designated employers to reach the targets without a reasonable ground for non- compliance may lead to their inability to contract with the State and they may face substantial fines.
The Amendment Act has been met with mixed reactions. For instance, the definition of “designated employer” (i.e. an employer who should comply with the Act) now excludes employers with fewer than 50 employees, irrespective of their annual turnover. This amendment has been praised as the regulatory limitation provides relief to small businesses who may not be able to afford to reach the targets. However, the unintended consequence could be that designated employers seeking to resist transformation may intentionally set up subsidiaries with fewer than 50 employees.
Alternatively, recalcitrant designated employers may consider outsourcing or automising their goods and/or services. It should be highlighted that public debate over-emphasises the Amendment Act’s effects on the racial makeup of the workforce.
There is not enough discussion about the broadening of the definition of “disabilities”. The amended definition of disabilities should be applauded as it now includes people who have a long- term or recurring physical, mental, intellectual or sensory impairment.
This definition mirrors that of the United Nations Convention on the Rights of Persons with Disabilities, 2007. Many designated employers lament the Amendment Act’s inability to recognise that due to South Africa’s education challenges, there is a small pool of suitably qualified candidates from designated groups to recruit from for certain sectors and therefore it will prove difficult to fulfill the targets. However, this can be seen as a reasonable ground for non- compliance. Moreover, to address this challenge multi-pronged coordination is required amongst various governmental departments to make quality education and skills development accessible for people from designated groups.
A common criticism of the Amendment Act is that it may hinder economic growth and discourage investors in a time where South Africa’s economy is in dire straits. It should be considered that transformation is not the antithesis to economic growth. Innovative measures should be implemented for economic growth that consists of an inclusive labour workforce.
Amongst the myriad arguments for and against the Amendment Act, the most discussed (and perhaps the most complex) argument is the assertion that the targets amount to quotas.
Targets or Quotas?
In South African Police Service v Solidarity obo Barnard 2014 (6) SA 123 (CC), the court observed that “the primary distinction between numerical targets and quotas lies in the flexibility of the standard. Quotas amount to job reservation and are properly prohibited by section 15(3) of the Act. The same section endorses numerical goals in pursuit of workplace representivity and equity. They serve as a flexible employment guideline to a designated employer.” In Minister of Justice and Constitutional Development v South African Restructuring and Insolvency Practitioners Association 2017 (3) SA 95 (SCA), the court found that quotas violate the rights to equality and dignity and are thus impermissible under section 9(2) of the Act. Curiously enough, the Act fails to define “quotas” and the courts have not provided much clarity in this regard either. It then becomes difficult for designated employers to avoid quotas in circumstances where its parameters are not clearly defined. However, it can be deduced that a quota is rigid, i.e. a fixed number or percentage to be met despite ever-changing circumstances and context.
It is yet to be determined by the courts whether the targets in the Amendment Act can be interpreted to be quotas. It should be noted that on 12 May 2023, the Minister published the draft targets contemplated by section 15A of the Amendment Act for public comment.
One can argue that transformation should not be treated as a compliance burden or a box-ticking exercise by designated employers. Instead, transformation requires a sustained team effort as well as a workplace culture shift from employers, employees, trade unions and government. An actionable commitment to substantive, transformative employment equity therefore can foster South Africa’s values of reconciliation, diversity and unity