Are numerical goals really the same as quotas and must employers use national or regional demographic statistics ?
Carol Paton’s article Race statistics fears in equity bill unfounded first appeared in Business Day on 16 July 2012 and there have been a number of letters responding to it and which will be found below.
The complete article should be read by clicking on the link or going to Business Day. Thanks to Business Day here are some random extracts.
“The controversy over proposed changes to the Employment Equity Act, which it was feared would cause coloured and Indian workers to lose their jobs in some provinces, turned out to be a storm in a teacup.”
“Negotiations between business, labour and the government on the proposed amendments to the act had been finalised in the National Economic Development and Labour Council (Nedlac), the Department of Labour said last week.”
“The contentious issue of whether employers should use national or regional demographic statistics to calculate the employment equity target for their workforce has not been significantly changed.”
“There was an uproar last year when an initial draft of the amendments proposed that employers be forced to use national demographics as a measure, which would have meant that the workforce had a disproportionate number of coloureds in the Western Cape and of Indians in KwaZulu-Natal.”
“However, the amendment bill — which has not yet been published as it will first be presented to the Cabinet for approval — is believed to leave the present regulatory regime very much the same, with the exception that the labour minister will have the power to produce regulations on the matter. The regulations will allow a company — that is designated as a national company — to use national demographics as its employment equity measure. Companies that are not national will not use national demographics.”
“As the final draft agreed upon at the last meeting was still to be presented to the parties, Ms Phala said it was not quite correct that the Nedlac process had been finalised.”
LETTER: Unworkable red tape (17 July)
Dr Anthea Jeffrey, Head of Special Research South African Institute of Race Relations, responded in a letter first published in Business Day on 17 July which should be read by clicking on the link of going to Business Day. Thanks to Business Day here are some extracts.
“You report that the new Employment Equity Amendment Bill of 2012 makes earlier fears about national demographics trumping regional ones to the detriment of coloured people in the Western Cape and Indians in KwaZulu-Natal “a storm in a teacup” (Race statistics fears in equity bill unfounded, July 16).”
“Since the bill has not been published, it is difficult to know if this is really so. At least four warning flags remain visible, however.”
• “First, confining the use of national demographics to national employers by means of ministerial regulation (as the bill apparently now does) will still do much harm in the Western Cape, for instance.”
• “Second, giving the power to the labour minister to change the rules by regulation means that the regulations adopted over time could quietly put still more emphasis on national demographics in wider-ranging circumstances.”
• “Third, persistent skills shortages make it extremely difficult for employers to meet the ambitious racial quotas set down in the Employment Equity Act of 1998 and further reinforced via the bill.”
• “Fourth, fines for noncompliance are still to be based on a percentage of turnover.”
“What SA needs are proper schools, vastly increased investment and effective incentives to business to expand the jobs they offer. Instead, however, the ruling party is once again seeking to truss the private sector up in yet more reams of unworkable red tape.”
LETTER: No quotas in equity act (24 July)
Professor Paul Benjamin, University of Cape Town, responded in a letter first published in Business Day on 24 July which should be read by clicking on the link or going to Business Day. Thanks to Business Day here are some extracts.
“It is a widely held myth that the Employment Equity Act sets quotas that require employers to employ people who are black, regardless of whether they have the qualifications for the job. This inaccurate perception is reflected in a letter by Dr Anthea Jeffrey (Unworkable red tape, July 17) in which she refers to the “ambitious racial quotas set down in the Employment Equity Act”.
“There are no such quotas in the Employment Equity Act. Section 15(3) of the act states that the affirmative action measures required of employers ‘include preferential treatment and numerical goals, but exclude quotas’. It could not be clearer.”
“The act’s thrust is very different to that of rigid externally imposed quotas. Designated employers (in essence, those with more than 50 employees) are required to carefully analyse their employment policies, practices and procedures. They need to identify barriers preventing the advancement of employees who are black, women or have a disability. They must then, after consulting trade unions or other employee representatives, prepare and implement an employment equity plan. These plans must identify the affirmative measures that the employer will implement. Numerical goals and time-tables must be set for achieving ‘equitable representation of suitably qualified employees’ in all occupational categories and levels.”
“When evaluating whether an employee is suitably qualified, the employer may take into account formal qualifications, prior learning, relevant experience as well as the ability to do the job within a reasonable period.”
“Serial commentators such as Dr Jeffrey would do well to read the statutes they critique. The misperceptions spread by uninformed critics perpetuate the widespread myths about the Employment Equity Act and other labour laws.”
LETTER: Havoc of quota fines (25 July)
Dr Anthea Jeffrey responded in a letter first published in Business Day on 25 July which should be read by clicking on the link or going to Business Day. With thanks to Business Day here are some extracts.
“The authors of the Employment Equity Act of 1998 were, of course, careful to use the word ‘numerical goals’ rather than ‘quotas’ (No quotas in equity act, Letters, July 24). But in practice it is quotas that are applied.”
“The difference in the words is anything but semantic. ‘Numerical goals’ are often voluntarily agreed by business to set objectives and guide activities. They can always be adjusted and there are no penalties for failing to fulfil numerical goals.”
“Quotas are externally imposed — via legislation, for example — and the failure to fulfil them is punishable and subject to sanctions of various kinds.”
“In the case of the Employment Equity Act, employers are required to attain demographic representivity at every level from top management down — and punishment starts with a fine of up to R500 000 for a first ‘contravention’ of this obligation.”
“Professor Paul Benjamin played a major part in a regulatory impact review of the Employment Equity Amendment Bill of 2010 (and of three other labour bills). This review warned that fines of this magnitude could result in ‘company contraction and retrenchments, and even company closure, resulting in job losses and negative impacts on economic growth’.”
“Equipped as he is with this insight, Prof Benjamin would do better to publicise this warning than try and deflect attention from the many adverse consequences of the existing act and the planned amendments to it.”
“Contrary to what Prof Benjamin says, this means that employers often do have to take on people ‘regardless of whether they have the qualifications for the job’. This process is most advanced in the public sector, where (as the auditor-general now reports) officials in key positions in some 70% of local councils are ‘incompetent’ in applying essential financial controls.”
LETTER: Ignores constitution (26 July)
Willem Cronje’s letter first appeared in Business Day today and thanks to Business Day for allowing me to post it here.
“Paul Benjamin has a too facile interpretation of the Employment Equity Act (No quotas in Equity Act, Letters, July 24). He states that the act includes numerical goals, but excludes quotas. However, where the base is determined, goals are the same as quotas. If a company has 10 senior managers, all white, and the goal is to have eight black senior managers, this is tantamount to a quota of 80%.
‘Yes’ to numerical goals and ‘No’ to quotas is mealy mouthed and ambiguous. Unless the company or other organisation is rapidly growing, numerical goals are the same as quotas.
Section 20(2)(c) of the act states that where designated groups are underrepresented, the company must state the numerical goals to achieve equitable representation.
This in effect defines ‘equitable’ as statistical representation. What else can ‘underrepresented’ mean?
The act therefore departs from the wording in section 195(1)(i) of the constitution, which requires ‘broad representation’ of the various groups. It seems the act is trying to insinuate blind statistical representation into the workplace, and that it is at odds with the constitution.”