Employment equity quotas will shred jobs, DA says

The Democratic Alliance (DA) said on Monday it has gone to court because the Employment Equity Amendment Act would lead to job losses, worsening employment figures after many years in which laws aimed at racial redress were exploited by the corrupt.

DA federal chairperson Helen Zille said the regulations would result in the unintended consequence of jobs being lost. The official unemployment figure is 32.1%.

“Even if the consequences are intended, when you see what the consequences are, you adjust your strategy. You don’t double down.” 

The briefing came on the eve of pleadings in the high court on Tuesday after the DA filed an application to the Pretoria high court arguing that the amendment Act rings in unconstitutional changes.

The court battle signals the latest clash between the two biggest parties in the government of national unity, after a bitter confrontation saw Finance Minister Enoch Godongwana revoke a 0.5 percentage point VAT increase that would have taken effect last weekend.

Zille and labour lawyer Michael Bagraim, the DA’s labour spokesperson, said regulations recently gazetted in terms of the Act could not only hinder employment but see companies fined for the composition of their staff complement.

Both suggested that this harked back to apartheid-era discrimination, at a cost to the economy.

“It will continue to make far more people marginalised in our economy than they already are,” Zille said.

“One thing I’ve already learnt is that you never judge a Bill by the intention, you judge a Bill by the [effect] it has in the real world.

“We’ve had an employment equity regime, which was meant to drive employment, for the last 25 years. And we have seen unemployment almost double since 2008, from 5.5 million on the expanded definition to 11.1 million last year and that is primarily as a result of failed government policies that drive away investment. That was not their intention, I’m sure but it is the effect.”

Zille said the absence of energy security and the terms of labour legislation were the main causes of concern for investors, and the country should judge measures in terms of their effect on South Africa’s population.

The strategy implied in the regulations ran counter to the ideal of an inclusive economy, she said.

It also fell foul of section 9 of the Constitution, because it was clear that redress needed to be fair discrimination.

“There is a benchmark that must be reached to qualify as fair discrimination under section 9(2) and this Act fails that test by 100% and that is the primary argument that we will be making in court.”

Zille said the amendment Act went beyond the prescripts of earlier interactions of equity legislation in that it set “extreme” penalties for companies that failed to comply with targets.

The DA argues in its founding affidavit that the Constitution “prohibits quotas and measures which would establish an absolute barrier to employment or promotion by members of non-favoured groups”.

It said the law hitherto had given a nod to context, when it comes to redress.

“The amendment Act would replace this approach with one that is impermissibly rigid and one-size-fits-all. 

“If the amendment Act comes into effect, every designated employer would have to follow ‘numerical targets’ set by the minister of labour, regardless of the degree of underrepresentation it suffers from and its ability to remedy that underrepresentation.”

The case will probably cause renewed friction between the DA and the ANC, just more than a week after the parties reached a courtroom settlement on the proposed increase of the VAT rate.

At the weekend, President Cyril Ramaphosa rhetorically invited the party to explain its issue with redressing the legacy of apartheid.

Bagraim said the net effect of the regulations gazetted a fortnight ago would be companies letting go staff, for fear of fines, because their current complement fell foul of the legislation.

He said the government was apparently trying to legislate the route to redress but this could never transpire if the result was shrinking the economy.

So if anyone has to be accused of breaching the Constitution it is the government, he said. “The government has passed a law that is wrong. It is wrong for all of us. It is wrong for all of us that need jobs.”

He said the regulations implied a race register, and the DA was trying to avoid this through its court application, adding that the party was trying to ensure economic redress by making sure that job growth was not stifled.