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Equity law in South Africa represents one of the most unjust areas of law. It is enforced without clear public support, and it contributes significantly to the economic devastation, writes Martin van Staden.
After years of controversy, President Cyril Ramaphosa finally signed the Employment Equity Amendment Act into law on 12 April. Labour minister Thulas Nxesi has received the 'more aggressive' affirmative action dispensation he demanded in 2021.
The Employment Equity Act, as now amended, allows the labour minister a wide discretion to determine racial 'targets' – quotas in all but name – for private businesses, enforce them on any economic sector and occupational level, and differentiate these quotas regionally and professionally as he deems fit. This displaces the status quo where employers were primarily responsible for setting their own demographic targets for their workforce.
Not complying with the minister's edicts precludes a business from tendering with government.
These amendments take government central planning of commercial affairs to a new level. It is no surprise then that Mr Nxesi is also the deputy national chair of the South African Communist Party.
READ | Employment Equity Amendment Act: DA heads to court, says it categorises citizens along racial lines
'Equity' and 'equitable' are legal terms related more to fairness than to 'equality'. The early common law courts of equity were established precisely to give access to justice and a fairer hearing to those disadvantaged by ordinary common law courts and their intricate procedures. It seems perverse that in South African law today, 'equity' – used almost exclusively in connection with the Employment Equity Act – has become synonymous with race essentialism and exclusion.
Social engineering
But when society decided to recognise legislation as a (debatably) legitimate form of civil law that could displace the common law (the law that develops spontaneously over centuries without conscious design), this opened the door to the law becoming a tool for social engineering. The legal positivist creed that law stands pure and untainted in its own domain, separated from morality and politics, has long been discredited.
This fact, however, is not to be wholly embraced. Constitutionalists realised centuries ago that limits were required on what the political class may use the law to achieve. While total exclusion of ideology was impossible, ultimately, law had to serve a public purpose, had to recognise the equal citizenship of all those bound by law, and not interfere in social intercourse any more than was necessary to cure an identified and specific mischief.
Apartheid legislation paid no mind to any of these constitutional standards, foreseeably doing great economic harm in the process. But the democratic government is playing equally fast-and-loose with the integrity of the law, using it as a crude tool to realise its ideological aspirations.
The Institute of Race Relations (IRR) launched the Index of Race Law (racelaw.co.za) in December 2022 and recorded that since 1994 the South African Parliament had adopted at least 116 pieces of legislation that make or keep skin colour relevant as a matter of law.
There are still those who claim that race law is necessary to undo the legacy of apartheid. This is a tired old argument that has negligible application in the real South Africa today. There are 13.4 million formally unemployed people. Employment equity does them no good and instead contributes to the burdensome labour environment that potential employers wish to limit their exposure to.
It would not be surprising, in the wake of the amendments to the Employment Equity Act, that businesses will try to find new (always costly) loopholes to lessen the impact of the law on their bottom lines. It is even more likely that the Amendment Act’s single redeeming provision, which exempts employers with fewer than 50 employees from having to comply with the Act’s racialist demands, will be liberally utilised, capping many businesses with job growth potential forever at 49 staff.
READ | EXPLAINER: What do the changes to the Employment Equity Act mean?
The problem with the legislation is not merely that it keeps alive (and thriving) in South African law the same racial categories proclaimed in the Population Registration Act of 1950. Indeed, in a free market, some businesses might well discriminate between employees and prospective employees on the basis of race, and if they wish to handicap themselves in a competitive economy in this fashion, that is their burden to carry.
The problem is that the law breathes non-commercial considerations into the commercial decision-making process. Human resources officers, who should be focused on choosing candidates based only on their competence and compatibility with company culture, are required also to enforce the ideology of the African National Congress.
Employment equity does only one thing, and that one thing is exclusively ideological in character: it increases 'representivity'. There is no good or objective reason to suppose that any socio-economic phenomenon, like a workforce, must reflect the racial composition of society. It is an entirely arbitrary goal to pursue that which could only acquire meaning when approached from a particular ideological perspective. Representivity does not increase prosperity, it simply exchanges one person of a particular race with another person of a different race.
Ideological plans
The ostensible 'psychological' benefits of representivity are also not borne out in South Africa. The government is entirely racially 'representative' and this fact alone has done nothing to lessen South Africans’ lack of confidence, and perception of corruption, in government.
In fact, vanishingly few South Africans consider representivity to be one of the two issues that should be top priorities for the government. A 2022 IRR survey found that only around 3% of black South Africans mention black economic empowerment, and at most 2% mention racial inequality (not to be confused with addressing poverty) and combating racism, as one of the top two issues. In an extrapolatable question regarding the selection of sports teams, a full 91% of black South Africans believe selections must be made exclusively on the basis of ‘merit and ability’ and not in the name of racial representivity.
This demographically representative survey included 607 South Africans with a margin of error of 5%.
Originally equity was meant to provide relief to the unjust application of law. Today, equity law in South Africa represents one of the most unjust areas of law. It is enforced without clear public support, and it contributes significantly to the economic devastation left in the wake of government's ideological ambitions.
Martin van Staden is Deputy Head of Policy Research at the Institute of Race Relations.
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