New BEE laws let minister ‘make up rules for himself’: business group

Business Group Sakeliga says that the proposed Employment Equity Amendment Bill risks upending companies and hurting workers, as it would introduce onerous new requirements.

In a briefing to parliament on Tuesday (13 April), the group said that the bill empowers the minister of labour to prescribe racial demographic employment targets for individual companies to implement at every workplace and at every occupational level, under threat of fines and denial of compliance certificates.

“The bill envisions a future where every organisation, at each of its workplaces, at every occupation level, and in all its teams, reflect the racial demographics of the country, the province or the sector – whichever the minister picks.

“Any deviation from this standard is considered by the bill to be an affront and subject to remedy by the state, under penalty of fines or worse,” said Sakeliga chief executive Piet le Roux.

Le Roux said this is problematic as it can only be achieved by limiting employment opportunities for some people in those areas where they are ‘over-represented’ and requiring them by whatever direct or indirect means to seek employment where that racial category is ‘under-represented’.

He said that the bill also does not deal with the reality that the pool of skills from which employers may wish to draw does not reflect the racial demographics of the country.

“The way to remedy this is not to ignore the variance, but to commit to the sustained educational and training efforts by which all such variance over time incrementally can change and does change and has changed.”

As a matter of timing, Le Roux said that with South Africa’s poor economic growth in the context of the Covid-19 lockdown, now is the worst time to introduce more red tape into the economy.

Other problems

Martin van Staden, legal fellow at Sakeliga, presented three technical problems with the bill:

• That it allows the minister of labour to make rules for himself;
• That an unacceptably wide ministerial discretion is being granted;
• That either there was no impact assessment conducted on the bill or one was conducted and not published.

Van Staden said that the bill empowers the minister to prescribe the criteria that the minister must comply with when he identifies economic sectors to set racial-representative targets for.

“We cannot have people making the rules they themselves must comply with”, he said. “Parliament must set the criteria in the legislation.”

On a related issue, the bill bestows wide discretion on the minister to decide whether to grant a certificate of compliance with these targets to a business.

Van Staden argued that “the minister’s ‘satisfaction’ is an insufficient legal control on a discretionary power”, and that this “unqualified discretion” would be incompatible with the Rule of Law, which requires Parliament to make the law with which South Africans comply, not ministers.

Van Staden concluded by pointing out the concerning absence of a socio-economic impact assessment on the bill.

This contravenes a 2015 government policy that all new policies, regulations, and legislation proposed by government departments would be accompanied by such an assessment.

Read: Major BEE changes are coming for some of South Africa’s biggest industries