Employment Equity Bill sets BEE targets

…..article July 26….

Minister gets tough on B-BBEE…. 

At the same time as Minister of Employment and Labour, Thulas Nxesi, tabled in Parliament the new Employment Equity (EE) Amendment Bill proposing that new BEE targets for business and industry should be set, the Department of Labour (DoL) appears to be acting as if the legislation is already in place.

Already government has been making overtures to the public in general on what the employment changes will be and how they will be implemented giving full details of the proposed outcomes of the parliamentary process.

This is all happening before Parliament can even meet to debate the Bill, both the Department of Labour and the Commission for Conciliation, Mediation and Arbitration (CCMA), recently announcing in a joint statement that that they  have teams touring the country to educate the public “on the new amended labour law processes and targets involved”.

Hold on

Opposition parties have objected to such premature announcements, stating that such a move will only hurt further an already troubled investment climate.    DA leader John Steenhuizen has stated that the setting of targets and quotas is “racial bean counting” and has queried the constitutionality of such proposals, even if they are set “after discussion with industry sectors”.

After nearly three years of beating about the bush with a draft Bill for discussion, its sudden tabling in final form would seem to come at a most inopportune time.   Commentators note that business morale is understandably low in the light of COVID 19 restrictions, unemployment figures are at the worst since the Great Depression and any new investment is only on a distant horizon.

Low punch

It is also difficult  to understand why Cabinet would chose this particular time to damage even any fertile territory for investors wishing to buy in at the bottom of the opportunity curve.   Some worry that the persistent clash over labour policy in the upper echelons of the governing party maybe to blame for its sudden introduction, the Bill being tabled just as Parliament was closing for a short recess.

The heavy-handed approach appears to be an attempt to use the parliamentary majority to rubber stamp what the COSATU power base has always wanted  from NEDLAC negotiations on BEE outcomes. The route was chosen some eight years ago by the trade union movement and to many the EE Amendment Bill is merely part of a pre-destined process.

Even major businesses, banks and mining houses, reading between the lines, seem to have accepted the Bill’s inevitability and seem also to have been mesmerised into the  acceptance of a status quo governed by agreed targets and have agreed also with Minister Nxesi that that such are not “quotas”.

The DA disagrees and calls the target proposals “racial”.  From the perspective of inequality in the workplace, the EE Bill will also bring in mandatory training of employees, meaning that companies will have to focus on their training and development which the mining companies have already accepted publicly in statements. They note to their members in a circular that they will not get government business unless they meet both the employment “targets” and get certification on the new training requirements.

 War talk

“We are not waiting for this Bill and the process has started already,” said soft-spoken Thembinkosi Mkhaliphi, Director of Labour Relations and top man in government as the draft Bill went up on the DoL website.

Nice guy that he is most of the time, Mkhaliphi is fully aware that the well-known quartet of laws, the Basic Conditions of Employment Amendment Act, the Labour Relations Amendment Act the Employment Services Act ,and the soon-to-be, it appears, the Employment Equity Amendment Act is all that it is needed to tame the private sector on any labour matter, particularly if either quotas or targets are legalized.

To many in the older generation, putting people into quotas is one short of putting then into cattle trucks and calling them “targets” is merely the use of synonyms.

One realizes that the mining industry is wearisome after some five years of argument with such obdurate politicians as the past minister of mining, Zuma’s Mosebenzi Zwane.  Probably, and understandably so, mining captains wish to get on and at least get back to mining whatever the labour environment, accepting that compulsory training is certainly morally acceptable.

Racial facts

Whatever the current situation is, an explosive report suddenly appeared recently in the labour environment. A report of the Commission for Employment Equity (CEE) showed that after 20 years whites still dominate top management positions in the private sector.  In top management, 65.5% of positions are held by whites, 15% by Africans, 5.3% by coloured persons and 9.7% by Indians.   This ammunition was devoured by the labour camp and shortly after that, the EE Bill was tabled.

The final results of the discussions between all parties apparently is that the new Bill gives the Minister the authority to set employment equity targets for employers across the economy; that the wording of the Bill proposes fines of up to 10% of turnover for failure to meet gazetted targets, with the State having the powers to disqualify firms from “working with government” for failure.

Enough said

The department has said the targets will be set at sectoral level after consultation with business and it will be up to companies to implement these according to conditions laid down in the Bill. “A company that does not meet the target must have a justifiable reason. If it does not, then it is not in compliance with the law.”

In terms of timing, using the law would seem to be the final route taken by the Department of Labour as the only way the CEE figures as published can be changed.

For Tembinkosi Mkhaliphi, also previously acting director at NEDLAC, this is the end of a long journey and the beginning of a new adventure.   When asked by Business Day, during an interview at NEDLAC in 2019, whether NEDLAC was relevant to the labour movement, he answered that indeed it was.

“The issue of the national minimum wage and the strike ballot and the amendment of the Basic Conditions of Employment Act were all implemented at NEDLAC” he said, endorsing apparently the value of the entity to both himself and COSATU.

Railway line

Looking back, the EE Bill  indeed began its journey twenty years ago in draft form at NEDLAC.  In 2003, President Mbeki, in his opening address to the National Assembly in February 2003, said that legislation would be finalised for a strategy for Broad-Based Black Empowerment, which was the formalisation of partnerships and ‘charters’ with the private sector the use of a ‘balanced scorecard’ approach to gauging success.

Everybody got to work, and redress was not only found acceptable but necessary.   Now, in 2020, things are to change further, says Minister Nxesi in his Bill, but this must be in the knowledge that argument is bound to arise that whilst human rights treaties endorse the redress measures as promoted by B-BBEE,  whether to enforce black empowerment at law with targets is acceptable.

Latest moves

In a virtual  interview last week, in a well-tempered and firm tone,  “It is recognised that B-BBEE was operated on the premise that there should be no involvement of government enforcing transformation in terms of target setting and it had left it to companies themselves to set their own targets and goals”, he said, “but we have got nowhere”.

He continued, looking straight at his camera,” It has been government’s role to monitor these targets over the last 21 years but nothing has happened that should have happened and no real significant change has taken place”,  inferring that the Minister’s Bill would do this.

The other side

Martin Kingston, vice-president of Business Unity SA, has said on the side lines that the Bill has been two years in the making and that business will indeed be involved in setting targets. “The Minister has to consult with each sector and the consultation process leads to agreeing targets, which go to NEDLAC, a process that is already currently underway with retail and mining”.

No doubt, Parliament will allow for hearings in the new session starting 18 August and full details of BUSA’s view will be expressed although they will obviously be happy with concessions given to small business.

The DA’s shadow minister of labour, Michael Cardo, has been more vocal, stating, “This Bill will have the effect of choking SA’s barely breathing economy and its will  be opposed tooth and nail. These numerical targets imposed by ministerial fiat are quotas in all but in name.  The minister has no business in ramming them down the throat of employers.”

Next stage

Tembinkosi Mkhaliphi has repeated in a subsequent virtual media briefing that consultations on the new amending Bill, then still a draft, had already been conducted with the mining, banking and retail sectors. He did not elaborate on the responses, however.

The Bill does, however, propose the reduction in regulatory burden upon small employers, since those with less than 50 employees will no longer have to report on their employment equity targets, irrespective of their turnover, Mkhaliphi said .

He put forward a different view. He said that with B-BBEE, “target setting is not new except that now government comes into the picture”.   It’s a question of give and take, he said, admitting that the proposal in the Bill to lessen the burden on small business “was to sweeten the carrot”.

Kicking it along

Mkhaliphi said in conclusion that he realised “not everyone at NEDLAC was happy with the Bill.”

Indeed, it does seem, from a parliamentary viewpoint, a total contradiction that in the light of President Cyril Ramaphosa’s recent commitment that government was making “structural economic reforms that will ease regulations for investors”, that the Cabinet has now approved a Bill for tabling in Parliament which raises the bar by a whole number of regulation notches – and difficult ones at that.

The Bill will now be scheduled for meetings into the next session of Parliament to commence mid- August.


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