Nxesi faces his Rubicon moment with race-law targets – IRR

Institute has submitted demonstrations of at least six grounds on which new EEA is unconstitutional

Nxesi faces his Rubicon moment with race-law targets

16 May 2023

Like P W Botha in the 1980s, Labour Minister Thulas Nxesi has reached his Rubicon moment in publishing proposed “sectoral targets” for so-called “employment equity” that will in effect impose racial moratoria on hiring and promoting staff in the private sector.

Nxesi’s race “targets” have been published for comment under the new Employment Equity Act (EEA), a central feature of the ANC government’s campaign to socially engineer society, which the IRR has warned against for years.

Roughly 85% of the formal private workforce falls directly under these “targets”, which Nxesi recommended to MPs when he said in parliament that “we now need a more aggressive strategy” on race law.

As Nxesi is Minister of Employment and Labour, it is worth noting that under his watch South Africa has come to achieve the worst unemployment rate recorded anywhere.

In addition, it is patently clear that most South Africans are opposed to Nxesi’s race-first policy. In the latest poll commissioned by the IRR, 80% of all respondents and 80% of black respondents preferred merit-based appointments, most with extra training for the genuinely disadvantaged, to the kind of racial moratoria that are now gripping South Africa’s labour market.

Setting up race targets that produce racial moratoria on hiring – as took place at Dis-Chem – is the opposite of non-racialism. Most people want better.

Said IRR Fellow Gabriel Crouse: “My hope is that this is the pivot after which race law is exposed as being so obviously defunct that resistance to it among decent South Africans starts gaining ground. In 1985 PW Botha thought that doubling down on racial oppression would keep him in power, but the racist arrogance of his ‘Rubicon’ moment produced a different result. To my eye Nxesi bears an uncanny resemblance to Botha and South African decency may yet teach him the same hard lesson.”

What the sectoral targets mean

Minister Nxesi has made the sub-regional “5-year sectoral targets” equal to “0.0%” for some racial minorities in the newly gazetted EEA “Sectoral Targets” regulations, which are open for comment for the next 30 days. Should they remain unchanged, they will be enforceable by fines that climb to 10% of revenue for repeat “offences”. The “0.0%” target is most frequently imposed against coloured people.

Noted IRR Fellow Gabriel Crouse: “We have seen targets of ‘0%’ before in the public service for some minority races, but we have never seen ‘0.0%’ in the public or private sector. Many people will be surprised to learn that there is legal significance to the extra zero. This can only be understood, however, once one realises that existing South African race law already turns on treating people, especially racial minorities, as fractions below 1 but above 0.”

The case of Jennila Naidoo, heard in 2012 in the Labour Court, is instructive. Naidoo was denied a SAPS promotion in Krugersdorp explicitly on the basis of race. A black man with lower scores was hired instead. Naidoo first seemed to win her case in court, but the Labour Court of Appeal set the winning judgment aside and replaced it with what remains the standing judicial opinion on what a “zero” percent “target” means in the context of race law.

The formula by which Naidoo was racially excluded from a job she deserved was summarised by the court as follows. “For Indian females the calculation is 19 × 2.5% = 0.5 positions to be filled by Indians, then 0.5 × 30% = 0.1 Indian females and that is rounded off to zero. Of the five available positions 0.125 could go to Indians × 30% gender allocation means 0.037 could be allocated to Indian females and that is rounded to zero.”

The Labour Court of Appeal unanimously held that this rounding “to zero” in the “equity plan did not proscribe the appointment of Indian females”. The court said that Indian females like Naidoo still stood a chance, despite the rounding to zero, because “had there been more posts on level 14 in Gauteng the formula might have yielded a different result that would have made provision for Indians or Indian females”.

In other words “0.037 could be allocated to Indian females and that is rounded to zero” according to the actual plan, but if there had been many more positions to begin with then that might have been rounded to “1”, and then some Indian women might have had a chance.

The court’s opinion then directly added that it “was common cause that two Indian females were appointed on level 14 in KwaZulu-Natal because the requirements of the respective business units provided for such appointments. This also showed that the employment equity plan was not an absolute barrier against the employment of Indian females.” In other words, Indian females like Naidoo from Gauteng could, in theory, move to KZN where the “target” is above “zero”.

Inhumane as that situation was, and remains in the public service, it may now be even worse in the private sector, as the move from “0” to “0.0%” “targets” entails that no matter how many new jobs are added at a given subsector there will never be a rounding up to “1”.

It is also worth noting that in the Barnard case in 2014 the Constitutional Court ruled that it is permissible for a person to be refused a promotion explicitly on the basis of race in a case where the job – a post in SAPS – did not go to someone else. The post was simply left vacant. The Constitutional Court has subsequently held that the “Barnard principle” can be used against any race.

For these reasons Nxesi may be emboldened to think that his race plan will work. It will not.

The EEA “targets” are counter-productive and unconstitutional. Non-racialism is a Chapter 1 foundational value in South Africa’s Constitution. The IRR submitted to Nxesi, the Presidency, and Parliament, demonstrations of at least six grounds on which the new EEA is unconstitutional, including that it is certain to make poor, unemployed black people worse off by making South Africa even more uninvestable.

Issued by Gabriel Crouse, IRR Fellow, 16 May 2023