President, veto the EEA Bill! – IRR

Institute says should Ramaphosa not do this, he will be allowing an unconstitutional derogation of basic rights

President Ramaphosa, veto the Employment Equity Amendment Bill!

23 November 2021

President Ramaphosa is soon to receive the Employment Equity Amendment (EEA) Bill, approved by the National Assembly last week. While the Bill will pass to the National Council of Provinces for potential alterations, the President has a say, and can veto the Bill. Should Ramaphosa fail to exercise his veto, he will be allowing an unconstitutional derogation of basic rights.

The Bill derogates rights on two fundamental points. First, it allows the Minister of Employment and Labour, currently Thulas Nxesi, to effectively set race quotas in the private sector. Businesses that fail to meet those quotas can be fined R2.7 million, or 10% of annual turnover, whichever is greater. That would be a death warrant for affected businesses, condemning their workers to the unemployment queue.

Second, the Bill mandates the Minister of Labour to issue compliance certificates. Without compliance certificates, businesses would be barred from government contracts. Minister Nxesi himself poses this as a seizing by the state of “the force it needs”.

Besides these two points, the EEA will deter investment, both domestic and international, ultimately punishing the unemployed.

IRR head of campaigns Gabriel Crouse notes: “The argument for race quotas has never been weaker. Since 2015 the white top 10% got 10% of national income. By contrast the ‘black’ top 10%, in the broad definition, got three times as much, according to Stats SA, at 32%. This ‘transformation’ has not ‘trickled down’: the black bottom 40% earned a mere 3.7% of national income, with the EEA only further rewarding the rich while expanding unemployment.”

What is more, the EEA will undermine the concept of non-racial meritocracy entrenched in our Constitution. The Constitution is unambiguous in this regard, stating: “National legislation must be enacted to prevent or prohibit unfair discrimination.” The EEA would do the opposite. Therefore, the EEA should be struck down on principle, in defence of private life, non-racialism, and non-discrimination.

Beyond this, it should also be struck down on procedural grounds. The law requires that a socio-economic impact assessment be produced, yet this is missing in relation to the EEA. Furthermore, by delegating the power to determine race quotas across the economy, effectively granting a cabinet member the power of writing major laws, the EEA may be challenged on the grounds of eroding the separation of powers.

Crouse highlights the EEA’s legal fragility, noting: “While the state prepares to roll out race quotas across private life it has yet to provide any legal standard to judge who belongs to which race. If the EEA cannot be blocked either by veto or court action, expect people of all hues to describe themselves as ‘African’, which is justified since that is what all South Africans are.”

Issued by Gabriel Crouse, IRR Head of Campaigns, 23 November 2021