Busa satisfied with law that gives labour minister power to set equity targets

Business Unity South Africa (Busa) has welcomed the signing into law of the Employment Equity Amendment Act by President Cyril Ramaphosa, but says some aspects of the law remain problematic. 

The body representing organised business said on Thursday the new law ends a long period of uncertainty on the proposed changes to the transformation laws.

The presidency said on Wednesday the law seeks to advance transformation of the workforce by setting employment equity targets for economic sectors and geographical regions and requires enterprises to develop transformation plans. 

It empowers the minister to set employment equity targets for economic sectors as well as regions where transformation is seen to be lagging. 

Employers with more than 50 staff must to submit employment equity plans, specifying  how they will achieve the targets. Employers are also required to submit annual reports to the department.

Busa said it was pleased employment equity targets for sectors would be set by the minister of employment and labour only after consultation with the relevant business and employer bodies in the affected sectors.  

“Meaningful consultation on sector targets affirms social dialogue and will ensure the relevance of the set targets,” Busa CEO Cas Coovadia said. 

Busa said it had raised some problematic aspects of the law during the public hearings in 2021 and 2022.  

One example was measuring compliance and issuing compliance certificates as a licence to do business with the state would depend on whether a company had met its targets and did not have a case of unfair discrimination raised against it at the CCMA or labour court in the previous 12 months. 

“What concerns us is treating targets as quotas, which would be against the spirit and letter of the law”, said Coovadia.  

Busa also expressed concern about fragmentation of policy objectives and enforcement mechanisms within government, with some companies, because of their sectors, expected to comply with different transformation targets administered by different government departments or entities.  

“These complex arrangements increase the compliance burden, which may derail transformation, especially at a time when South Africa desperately needs economic growth to generate much needed employment,” Coovadia said. 

Busa would continue constructive engagements with the department on implementation arrangements, which would hopefully resolve some of the concerns it raised. 

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