It is important to understand that in enacting labour legislation, such as the Employment Equity Act of 1998, parliament did not intend to interfere with the inherent structures within organisations other than to ensure a measure of internal equity, given South Africa’s discriminatory past. The free market ensures that there will be external equity in the private sector. Legislation uses and accepts the macro and micro aspects of doing business in South Africa: “operational requirements” of the enterprise and the “inherent requirements of the job”. Needless to repeat that in the private sector the ultimate worth of any job is the employer’s ability to pay for it.
TO MEASURE progress and the return on national investment in employment equity over the past 12 years by the “one size fits all” measurement of demographic representation is a gross oversimplification and a reckless disregard for the complex nature of organisational development.
Section 6(2) of the act (Employment Equity Act) is a thumbnail description of the established organisational development process, which is intentional, continuous and systematic. Organisational development is the process of planning and adjusting the relationship of jobs to one another to create a living social organism that is able to react to operational circumstances. The correct interpretation of the act in the context of existing labour laws is that it respects the management prerogative to structure and develop organisations within unique operational circumstances.
The extracts are from an article by Daan Groeneveldt (Institute for Accountability in Southern Africa) published today in Business Day: Job creation – Let employment equity law do the job it is meant to do which needs to read in its entirety.
See also the earlier post Decent work and worth (differential, relative and comparative): need for an independent body.
Unique operational requirements of every business
No matter what is said about workplace and employment practices, be it job creation, decent work, equal pay for equal work, the wage gap or equity, the reality is that all these issues have to be interpreted and measured on every organisation’s unique operational circumstances. This is also true at sector level, where, for example, the employment practices in the public and private sectors are vastly different.
Employer’s ability to pay
In the private sector, the rule is that the ultimate worth of any job is the employer’s ability to pay for it. Proof of this rule is that over the past four years the private sector has reduced jobs by 2,6%, while the government has increased jobs by 15%. Is the net shift from wealth-creating to wealth-absorbing jobs sustainable in the longer term?
What does this information tell us about the inwardness of the notion of employment equity? Employment equity and constitutionally compliant affirmative action are important focus areas to build the national pool of competent citizens. Race, gender and the other prohibited grounds of unfair discrimination are important considerations when developing competence- building initiatives, but on their own they hardly affect the determination of competency requirements.
Competence (job requirements)
Competence (job requirements) has everything to do with what an individual needs to know, do and how to behave to perform the requirements of a job, satisfy the customers’ needs, create wealth and ensure the sustainability of their jobs into the future. The Employment Equity Act of 1998 deals with this important understanding of the purpose of this legislation in section 6(2): it is “not unfair discrimination to (a) take affirmative action measures consistent with the purpose of this act; or (b) to distinguish, exclude or prefer any person on the basis of an inherent requirement of a job”.
Code: Integration of Employment Equity into Human Resource Policies and Practices
In what must have been an attempt by the minister of labour to broaden the reach of employment equity, the Department of Labour published a Code of Good Practice on the Integration of Employment Equity into Human Resource Policies and Practices in August 2005.
This integration of employment equity and human resource planning would not have been the only benefit of this code. Human resource planning and budgeting is the process used to determine the operational requirements to support overall business plans and budgets. Consequently this code should have resulted in employment equity becoming a routine business consideration, rather than another statutory requirement. Despite this code offering valuable insights into the benefits of properly structured organisational development plans, its value has been lost in the noise of promoting race- based indicators to measure compliance.
Ministerial interference and punishment
With the much-discussed changes to labour law, it was expected that the barriers to the progress of employment equity as a business tool would have been addressed and amendments structured accordingly. This is not the case. The critical amendments seek only to increase the opportunity for the minister and the various commissions to interfere in the running of businesses. Where they are not able to interfere sufficiently, they will punish offenders to the extent that they may not be able to survive.
Wealth creation
As far as the amendments to the act are concerned, there are clear signs that the politicians don’t understand the importance of allowing management to do what they do best — create wealth — and rather than punish employers, they should find ways to support them as allies in the interests of tax revenue generation and job creation.
Distinguish public and private sectors
If a proper, and constitutionally compliant distinction is drawn between the public sector (governed by the values and principles of section 195 of the constitution) and the private sector, which is ruled by market forces, progress is possible. The government needs to take the whole act back to square one and engage on the real or perceived barriers to employment equity being the base organisational development framework to create the much-needed jobs that can ensure future peace and prosperity. It is time.