THE EMPLOYMENT EQUITY AMENDMENTS: seek the substance, not the form - By ANTHONY HARTMAN
Is the recent fuss over the proposed amendments to the Employment Equity Act warranted? Will it really result in massive job losses for coloured persons in the Western Cape? Anthony Hartman, an attorney and Employment Equity consultant, thinks not.
Employment Equity amendments: Substance Matters, not Form.
By Anthony Hartman BA (Hons) LLB, Attorney of the High Court of SA - Mindwalk Consulting
The recently mooted amendments to the Employment Equity Act have certainly provoked comment from all sides of the political spectrum. Lately it has been the issue of demographic targets that has been in the spotlight. The IOL Business Report of Monday 21 February 2011 notes that Cosatu has condemned the reports of possible unprecedented job losses among Coloured workers in the Western Cape if the amendments are passed as being “irresponsible and inflammatory propaganda” and Solidarity has cited claims of “massive social engineering”. The claims and counter-claims, while making for good headlines, do nothing to encourage rational debate around an issue that is often misunderstood and that has already been hugely divisive.
In this brief note I’d like to look at the issue of demographics and targets both in relation to both the current Employment Equity Act (EEA) and the proposed amendments. So where does the notion of employment equity targets come from? The current EEA was originally introduced to correct, inter alia, racial imbalances in the workplace caused by previous unfair discrimination. The setting of targets in terms of improving the representation of Black persons, women and disabled persons is one of the measures that could form part of an affirmative action programme. This is the first notable point – targets were never the be all and end all of Employment Equity. Other interpretations might disagree – but the setting of targets in isolation without taking into account the need to develop skills and to address differences in the workplace meant that Employment Equity programmes would come to nought.
The EEA requires that when employers (those required to develop Employment Equity Plans) implement affirmative action measures then such measures must include “measures to ensure the equitable representation of suitably qualified people from designated groups in all occupational categories and levels in the workforce” The Act continues and says that the measures may include preferential treatment and numerical goals, but exclude quotas.
So, setting targets and preferential treatment such as targeted recruitment are allowed but quotas are excluded.
Also, note that “equitable representation” has not been defined. The Department of Labour’s EE Guideline suggest the use of demographics such as the economically active population and this has been what the drafters of EE plans have typically done – the setting of targets in the Western Cape is a different kettle of snoek when compared to the setting of targets in Gauteng. Nowhere is it cast in stone what the targets must be.
So, what’s all the fuss about? Firstly, the amendments propose to simplify the definition (although legislation is never simple!) of designated persons by grouping designated persons as Black persons, women and people with disabilities who are citizens of South Africa by birth or descent or who have become citizens by naturalisation prior to 1994 or who would have, but for apartheid, been citizens by naturalisation prior to 1994. So, nothing specific in that referring to the exclusion of Coloured persons.
The current Act also refers to targets in relation to the assessment of compliance by the Department of Labour. Section 42 (a) provides some hints as to what might constitute equitable representation. The factors that must be considered when assessing the extent of compliance include the “extent to which suitably qualified people from and amongst the different designated groups are equitably represented within each occupational category and level in that employer's workforce in relation to the –
i) demographic profile of the national and regional economically active population;
ii) pool of suitably qualified people from designated groups from which the employer may reasonably be expected to promote or appoint employees;
iii) economic and financial factors relevant to the sector in which the employer operates;
iv) present and anticipated economic and financial circumstances of the employer; and
v) the number of present and planned vacancies that exist in the various categories and levels, and the employer's labour turnover.”
There are various other factors but the point to be made is that compliance cannot and should never only be assessed in relation to numerical targets.
The amendments propose that the assessment of EE compliance MAY take certain factors into account; one of which is the extent of the equitable representation of suitably qualified persons in relation to, inter alia, the demographic profile of the economically active population – and herein lies the bone of contention: What is meant by “economically active population”? Does it mean regional or does it mean national? If the latter then the writers who are suggesting that up to a million Coloured persons might lose their jobs (hope the CCMA is prepared!!) could have a point… However this would be absurd in the bigger context. Can the drafters of the legislation really have intended to achieve an outcome that goes contrary to the legislation? Interestingly, points ii, iii, and iv are also proposed to be substituted. Most commentators consequently agree that the proposed amendments are more restrictive in their impact and are worded in order to limit the reasons that employers may put forward when questioned about a perceived non-compliance. From that point of view I suggest that the amendment has not been well thought through – there are factors such as regional skills availability, financial factors and so on that do merit serious consideration.
I’d like to close with some passing thoughts:
- Neither the Act nor the amendments stipulate precisely how targets are to be set.
- There is no stipulation excluding any designated group from the ambit of the Act.
- A compliance assessment MAY take certain factors into account.
- One of those possible factors is the degree to which there is “equitable representation” of the economically active population.
- Economically active population is not clearly defined.
- Equitable representation is undefined – using only numbers to determine equitable representation would lead to absurd and unworkable results.
So we have to look outside the Act for a suitable interpretation – my submission is that “equitable” and “equity” refer to a state of “fairness” or “ justice” or “appropriateness”. What is equitable depends on a variety of circumstances that need to be considered holistically. Ultimately what matters is not so much the EE document with its “correct” numbers but rather the actual intention and actions of those implementing the Plan. Ultimately it is substance, and not form that matters.