Transformation laws without end

Minister of Employment and Labour, Thulas Nxesi, says that South Africa’s employment equity and transformation laws will stay in place until the “primary objectives” of the regulations are achieved.

Responding in a written parliamentary Q&A this week, the minister said that he has no legal powers to implement or place a moratorium on the implementation of any labour legislation or
Act enacted by the Parliament of the Republic of South Africa.

The minister misunderstood or intentionally misinterpreted a question from the Democratic Alliance asking for his views on recent incidents where a moratorium was placed on the appointment of persons of specific racial groups in pursuit of employment equity targets.

Instead of giving his stance on the question, Nxesi said that transformation laws, such as the Employment Equity Act (EEA), would remain in place until such time as its main goals were achieved.

“Until the primary objectives of the EEA are achieved to enable the majority of the people to access substantive equality in relation to equal opportunities and fair treatment in employment, including realising workplaces free from bias and unfair discrimination based on race, gender, disability to mention a few, there will be no moratorium on the implementation of the EEA,” he said.

South Africa’s transformation laws have come under sharp focus in recent months owing to two major events that have taken place.

The first was the public blowout from healthcare retailer Dis-Chem issuing a notice to managers, placing a moratorium on the hiring of white people at the company. This was done to boost the company’s transformation goals and meet employment equity targets.

The notice has since been fully withdrawn, but the incident drew criticism from several groups, including the government itself.

In a statement following the Dis-Chem incident, the Department of Employment and Labour noted that the policy didn’t break any laws and was, in fact, in-line with the EEA. But the department did say that it went against the spirit of the laws and could amount to malicious compliance.

It said that the EEA laws do not seek quotas but rather to entrench transformation goals within the business operations by promoting equal opportunity in the workplace by eliminating unfair discrimination in any employment policy or practice.

However, this position comes with deep-seated irony in that the newly amended Employment Equity Act – awaiting the president’s signature, set to come into operation in September 2023 –  empowers the employment and labour minister to set specific EE targets and compliance criteria across all business sectors in the country.

When in effect, these changes will have wide-sweeping implications for all businesses, private or public, in all sectors.

Responding in a separate Q&A, Nxesi said that the amended EEA is not strictly about race and promotes employment equity across all disadvantaged groups. He said that the department is working to educate different stakeholders about the coming changes.

“Upon the EE Amendment Bill being promulgated into law, EE workshops will be conducted in all provinces in 2023 to provide guidance to employers, employees and trade unions on how to implement the amendments,” he said.

The second incident of significance was the recent change to South Africa’s preferential procurement rules, which reversed the changes made in 2017 to force state companies and municipalities to procure 30% of their contracts through black-owned companies.

Some interpretations of the changes have painted a picture of government entities now being able to drop BEE requirements from procurement completely – however, the government, through National Treasury and president Cyril Ramaphosa – have made it clear that BEE and EE targets are still in place.

Writing in his letter to the public this week, Ramaphosa doubled down on BEE and transformation in the country, saying that empowerment in public procurement is enshrined in the Constitution, and as such, is not going anywhere.

“Government remains wholly committed to transformation and empowerment as envisioned in the Constitution,” he said.

He said that under the National Treasury’s new Preferential Procurement Regulations, when public bodies contract for goods and services, they must do so in a manner that is fair, equitable, transparent, competitive and cost-effective.

The new regulations have no effect on the Broad-Based Black Economic Empowerment Act, as all organs of state must fully comply with this Act when developing their procurement policies. This Act remains in force as one of the most transformative pieces of legislation to come out of democratic South Africa.

Empowerment criteria will still be applied in government contracting, and organs of state must comply with the BBBEE Act when developing their procurement policies, said Ramaphosa.

Treasury, meanwhile, said that the rolling back of BEE procurement to the status before 2017 was only a temporary measure, with a new Public Procurement Bill still in the works for 2023.

Read: Ramaphosa stands firm on BEE and transformation laws in South Africa