South Africa’s new BEE laws face constitutional challenge

 ·15 Jun 2023

The Democratic Alliance (DA) has launched a legal bid challenging the constitutionality of the Department of Employment and Labour’s new employment equity laws.

The party is arguing that the laws – which were assented to by President Cyril Ramaphosa in April – turn the country’s Employment Equity Act (EEA) into a racial quota system that seeks to impose apartheid-era social engineering and harmful racial categorisation.

“This latest batch of regulations has turned the EEA…threatens the very social fabric of South African society by replicating apartheid-era race quotas in the labour market under the guise of employment equity,” the party said.

The news laws seek to, among others, set particular demographic compositions that designated employers must achieve, or face severe penalties – including the inability to do business with the state, the cancellation of existing state contracts, compelling orders, and fines.

Designated employers include every private-sector employer employing 50 or more people, every municipality, and almost every organ of state.

“In essence, the (laws) blatantly violate the constitutional principle of non-racialism, favouring a harmful policy of selective and exclusive employment which infringes upon the constitutional rights of South African citizens, and contradicts the core values of equality and freedom in trade, occupation, and profession,” the DA said.

“Furthermore, the most recent regulations disregard the original EEA’s explicit prohibition on quotas, essentially violating a core tenet of the Act itself.”

The DA’s latest court bid joins ongoing and incoming court action over the new laws, where business groups, unions and other stakeholders have also characterised the racial targets as quotas.

The department has hit back against this characterisation, saying that the targets do not amount to quotas because the system is not rigid – businesses have five years to meet the targets and can apply for exemptions or suspensions for various reasons.

Despite this, groups like trade union Solidarity have demonstrated why the targets cannot be seen as anything other than quotas. Specifically, the union said that the levels of economic growth needed to meet the targets without replacing the current workforce is not realistically attainable.

As such, businesses will be left with no option other than simply firing and hiring based on race – a de facto quata system.

The DA’s thinking is along similar lines. The party said it would seek a court order declaring, among others, the latest EEA regulations an unconstitutional violation of Section 9 of the Constitution.

Even if the laws are not characterised as a quota power by the courts, it wants a ruling declaring the system “a blunt and entirely disproportionate restitutionary scheme” that does not meet the requirements of section 9(2) of the Constitution, and which constitutes unfair discrimination in terms of section 9(3) thereof.

Responding to criticisms of the law, the department this week said that the new laws are not about race, and look at all forms of employment equity, including gender and disability.

The department’s deputy director for employment equity, Niresh Singh, said critics were making a “small issue” into a big issue, and encouraged workers to engage with employers to make sure the targets were met.

Read: South Africa’s new BEE targets a ‘small issue’ – ‘not about race’: departmen

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