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‘SOCIAL, ECONOMIC CATASTROPHE’: HALF-A-MILLION JOB LOSSES UNDER NEW RACE QUOTA LAWS – DA

The Citizen | 26 May 2023


BUSINESS NEWS - The Democratic Alliance (DA) estimates that if the new race quotas in the Employment Equity Amendment Act (EEA) are implemented, about 600 000 South Africans will lose their jobs over the next five years.


The calculations are based on the EEA draft regulations, pertaining to the new targets, which have been published for public comment on 12 May.


Opposition Mounting Against New Race Targets


The gazetted regulations stipulate race and gender targets, determined by the Employment and Labour Minister Thulas Nxesi, in various economic sectors per industry per province.


Since President Cyril Ramaphosa signed the Employment Equity Amendment Bill of 2020 into law on 12 April this year, opposition from trade unions and business stakeholders has been mounting.


The race targets have been slammed for being difficult to decipher and riddled with numerical errors.


According to BusinessTech, law firm Bowmans has also weighed in, saying the draft regulations could face challenges in court due to administrative, procedural and other issues involved.

DA breaks down job 600k loss estimate

The opposition party provided the following breakdown of its alarming total estimate of job losses:

  • 71 518 coloured people;

  • 116 934 Indians;

  • 404 608 white individuals.

“The incoherence of the Act’s quotas betrays the hasty and clumsy manner in which they were formulated,” the DA said, adding that it has submitted questions to Parliament.


The questions are aimed at establishing the basis on which the race targets were determined and what modelling was done by the department.


Race targets a ‘social and economic catastrophe’ – DA


The targets are expressed as a percentage of either the national or provincial population.


The DA argues that this amounts to setting up quotas, as the laws require businesses to effectively terminate jobs based on race over the next five years.


“The targets proposed by government are not faceless numbers. They represent an impending social and economic catastrophe which will slam the brakes on an already slowing machine and risk grinding our economic gears to a complete halt,” the DA said.


Draft EEA regulations: New race, gender targets

The proposed targets would apply to companies employing more than 50 people with the gazetted notice proposing a percentage split across:

  • 18 industries/sectors;

  • Four skill levels per industry (top management; senior management; professional; skilled);

  • Four racial groups per skill level (plus a total for “black”, which includes Indian, coloured and African)

  • Two genders (male and female)

  • 10 regional breakdowns for all of the above (nine provinces and national).

‘Incoherent and incomprehensible’


The department has come under fire for not publishing an explanatory note on how the targets were determined.


In its comment, business interest group Sakeliga pointed out that the targets are “incoherent and incomprehensible”, adding that the proposed numbers don’t add up.


DA, Solidarity heading to court


According to the party’s leader John Steenhuisen, the DA will challenge the act in the Constitutional Court and encouraged people to raise their objections to the targets with the department.


Trade union Solidarity also announced recently that it has served a court summons on Ramaphosa, the Department of Employment and Labour, as well as Nxesi, disputing the constitutionality of the country’s new BEE and transformation laws.


‘Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER’.


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