Sakeliga and Solidarity are preparing for a legal battle over South Africa’s new Employment Equity Act (2020), signed into law on Wednesday, 12 April 2023.
The Act was passed by Parliament and the National Council of Provinces in May 2022 and was signed into law by President Cyril Ramaphosa earlier this week.
Amendments to the existing Employment Equity Act aim to promote diversity and equality in the workplace while empowering the government to set specific equity targets by sector and region.
Employment and Labour Minister Thulas Nxesi would be enabled by the Act to unilaterally declare sector-specific employment equity targets and determine compliance criteria.
Effectively, employment equity targets and compliance will be at the minister’s discretion.
Labour inspectors will be instructed to inspect workplaces and issue employers with compliance orders. The compliance assessment will be done annually.
The government plans on increasing the number of its labour inspectors to ensure they can enforce compliance with the Act.
Companies with more than 50 employees will have to submit employment equity plans to the Department of Employment and Labour outlining how they plan on meeting employment equity targets.
To do business with the state, companies will require certification from the department confirming that they comply with the Act.
Businesses with less than 50 employees, regardless of their annual turnover, do not fall under the amended designated employer definition. Thus, they do not have to comply with the Act.
Legal challenges to the Act
Sakeliga and Solidarity have announced their intentions to challenge the Employment Equity Act in court, and both are in the process of preparing litigation.
Sakeliga, in a media statement, said that they are challenging the Act as it allows the government to prescribe demographic quotas to private employers – regardless of whether they do business with the state or not.
This is part of the “piecemeal introduction of a fundamentally unacceptable policy”, Sakeliga said.
The non-profit said it would liaise with other organisations who oppose the Act and encourage employers not to comply with the “unconstitutional and harmful legislation”.
Solidarity is another organisation preparing for a legal battle over the Act.
The trade union wrote to President Cyril Ramaphosa in August 2022 pointing out that the amendments to the Act are unconstitutional. It also submitted its argument to Parliament.
According to Solidarity, not only are the amendments to the Act unconstitutional, but so is South Africa’s existing racial legislation, as indicated by the South African Human Rights Commission.
The new legislation grants immense power to Minister Nxesi and is effectively “central racial planning”, Solidarity said in a media statement.
Solidarity said employment equity targets would be forced onto private companies, resulting in dire economic consequences such as job losses, an exodus of skilled labour, and decreased economic efficiency.