Employment Equity Amendment Act: what you need to know and how Sakeliga is fighting back

Thulas Nxesi

What the Employment Equity Amendment Act means to you
President Cyril Ramaphosa recently signed off on the Employment Equity Amendment Act (EEAA). By prescribing demographic quotas on who you must employ to manage and operate your business, the Act violates the required separation of society and state and seeks to replace entrepreneurial control of businesses with political control.
No businessperson who considers it his duty to create value and ensure a favourable environment for business in the public interest can accept such political infringement on the economy. To the extent that it is implemented, the EEAA will be detrimental to employment, production, and the independent ability of businesses to serve the public. Sakeliga will therefore never accept it and view it as our task to oppose the EEAA to the point where it is officially reversed or of no effect.
In this note we offer you a summary of our views, our recommendations to businesses and the steps we are taking to challenge the EEAA.
On Wednesday 7 June we will host a webinar with more information. Click here for the webinar.
We also intend to offer you further and more formal guidance on your legal and strategic options as the matter develops. However, as we point out below, there is no urgent need for you to do anything, except for businesses to support organisations that possess the willingness and capability to oppose the attempted implementation of the EEAA.
The take-away:

  • The EEAA provides for racial and other employment quotas (called “targets”) proportional to the country’s population mix, and purports to give the Minister of Labour the option to fine and/or restrict the operations of businesses that do not comply.
  • Fortunately, the EEAA is impossible to implement, unconstitutional, and beyond the enforcement powers of a failing state.
  • While the EEAA has been promulgated, it has not taken effect and likely won’t any time soon.
  • Don’t try to comply with the impossible, but rather help Sakeliga, your fellow businesspeople and other organisations to resist the EEAA in the public interest.

The current state of affairs:

  • While promulgated in May 2022 and assented to by the President in April 2023, the EEAA has not taken effect. The Act is not in force currently and was simply signed by President Cyril Ramaphosa and published in the Government Gazette.
  • Government intends to make the EEAA take effect in September 2023, but this still requires a separate and official proclamation in the Government Gazette, and for the quotas to take effect requires separate regulations by the Minister of Labour.
  • Draft regulations were published in May for public comment but are of a hopelessly poor quality, amounting to 60 pages of convoluted tables filled with unimplementable percentage values for race, sex, employment level and province.
  • Sakeliga and multiple organisations have announced legal challenges and are co-ordinating to ensure comprehensive challenges from many different angles against both the EEAA and any regulations.
  • The purported requirements regarding race-based appointments and, by implication, lay-offs, to meet quotas, are illegal in several international jurisdictions. Companies registered in such jurisdictions, or the foreign executives from such jurisdictions working for local companies, face charges of non-compliance back in their home-countries if they were to try to comply with the EEAA.
  • South African companies conducting business with international partners may face having their contracts suspended or cancelled due to non-compliance with international norms and standards against race-based discrimination.

What you can do:

  • Sakeliga recommends that you continue building value-focussed businesses and avoid, circumvent, or defy legislation that is harmful to the public, harmful to your business, and harmful to your employees.
  • If you employ consultants to deal with regulations, make sure that they are the kind eager to help you get away with doing the right thing with a clear conscience. They should not be the kind who thinks that compliance is inherently the right thing.
  • Fund Sakeliga and other organisations to counter the legislation.

What Sakeliga is doing:

  • Challenging the EEAA in court and co-ordinating with other litigants to ensure all angles are covered.
  • Co-operating with other organisations from business and civil society and political parties to ensure unceasing resistance to the EEAA
  • Working with our legal team to bring businesses useful information on how to do proper business with the least possible risk.
  • Canvassing public support against the EEAA.
  • Canvassing international opposition to the EEAA.

The proposed EEAA threatens to dismantle freedom of trade in South Africa and risks further jeopardising the international standing of businesses operating within its borders. It is both legally and morally reprehensible and would have devastating effects on the ability of businesses to serve society as well as the economy.
The risks posed by the EEAA demand coordinated resistance by business leaders and comprehensive legal action against its implementation. Support Sakeliga’s challenges to this destructive law by funding our court action.