The amendments to the Employment Equity Act (the EEA) which are envisaged to be promulgated on 1 September 2023, have been a cause of grave concern for many employers in South Africa and may in fact prove to be a further obstacle to increasing the employment rate.
The amendments are only applicable to businesses who employ 50 employees or more and employers who are on the cusp will have no incentive to employ more than 49 employees.
They will empower the Minister of Labour to set sectorial specific numerical targets based on race and gender, so as to force many designated employers to change the demographics of their workforce.
The dilemma that employers will face is twofold:
Employers will need to increase the size of their workforce so as to ensure that they are able to meet the numerical targets. This is unlikely to be a viable option given the current state of the economy and the poor financial positions of many businesses; or
Employers will be forced to restructure their businesses so as to meet the numerical targets. This will no doubt result in many employees with the requisite skills and experience being retrenched and, in many instances, replaced by employees who do not have the requisite skills and experience to perform the functions. There is no doubt that given the current economy, many businesses will not be able to afford the costs associated with retrenchments as well as the dire consequences that the business may face having lost employees with critical skills and experience.
Further, it appears that very little thought has gone into the fact that South Africa has a shortage of skills and that these numerical targets will no doubt increase the “brain drain” which has been a concern for the economy for a number of years. The fast tracking of employees who do not possess the requisite skills and experience merely for the purpose of reaching “numerical targets” is in itself a recipe for disaster.
The Democratic Alliance are expected to launch an application to the High Court in which it is anticipated that they will argue that the “numerical targets” can be interpreted as “racial quotas” and violate the constitutional rights to equality, freedom of trade, occupation and profession, as well as the original Employment Equity Act’s own prohibition on quotas. There is no doubt that many employers will follow the outcome of the application with interest.
Contact Lisa-Anne Schäfer-King for all over your employment and labour requirements.
