South Africa’s new transformation laws already facing legal challenge

 ·12 Apr 2023

Trade union Solidarity says that it is preparing for a huge legal battle over the new Employment Equity Act. This comes after president Cyril Ramaphosa signed the Act into law on Wednesday (12 April).

Solidarity has maintained that the amendments are unconstitutional and wrote to the president in August 2022, objecting to the laws.

“Solidarity also obtained legal opinion which confirms this, and it has made submissions to this effect to Parliament,” it said.

“The president is therefore aware of the fact that Solidarity would go to court should he sign this Act into law. This is precisely what he has now done, and we are now preparing for court,” said Solidarity chief executive, Dirk Hermann.

According to Solidarity, the legislation “grants draconian racial powers to the minister (of employment and labour)”.

Under the country’s new laws, the minister is empowered to set specific employment equity targets across various sectors and regions, and businesses who qualify as ‘designated employers’ will be required to establish employment equity plans to meet these targets.

Designated employers are defined in the new Act as businesses who employ more than 50 people. These businesses will also have to do annual reporting on these measures.

Further, to do business with the state, these employers will have to receive a certificate that indicated they are compliant with the laws. However, designated employers will be required to comply with the laws whether they intend to do business with the state or not.

“The minister can now do central racial planning at his own discretion. This would be the most drastic race-manipulating legislation in the world. It is anticipated that the private sector would have to follow the state’s example. Private enterprises will become state-run racial enterprises,” Hermann said.

Solidarity said it is of the opinion that this Act is unconstitutional and that it is, moreover, directly contrary to an earlier finding of the South African Human Rights Commission (SAHRC) which indicated that, even in its current format, South Africa’s racial legislation is unconstitutional and not in accordance with international norms and values.

“This Act which imposes race targets on all sectors will have dire consequences for our economy. New definitions of ‘designated employers’ will force small businesses to remain small and will cost thousands of jobs,” Hermann said.

“Any promotion opportunities for those fortunate enough to keep their jobs will be completely stopped. This will mean that the skills exodus would merely be accelerated and South Africa’s economy – like its public service – will become increasingly trapped in a spiral of inefficiency, contraction and imminent collapse.

“The state’s obsession with race must be opposed at all costs. We simply cannot afford it not to do so. Without intervention, this government would pursue its policy of ineffective centralisation, even going so far as to take over the human resource function in organisations,” Hermann said.

Solidarity said its legal team has started to prepare for litigation and has indicated that it will serve its court papers soon.

Read: Ramaphosa signs major new BEE and transformation rules for South Africa into law

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