Issued by the FW de Klerk Foundation on 22/06/2023

Last week, the FW de Klerk Foundation made a submission to the Department of Employment and Labour on the Draft Employment Equity Regulations 2023. The Foundation pointed out that the Regulations – which seek to impose demographic representivity in the private sector in the same manner it has crippled the public sector – have their origin not in the Constitution, but in the racially motivated National Democratic Revolution (NDR) ideology of the ruling ANC/South African Communist Party/COSATU Alliance and its latest iteration, Radical Economic Transformation (RET).

The Foundation believes that the Regulations, along with the EEA Act and the practice of demographic representivity (DR), constitute one of the most serious threats to our constitutional order since 1994. In particular, they are irreconcilable with the foundational values of non-racialism, equality, human dignity and the rule of law upon which the entire constitutional order depends.

While the Foundation strongly supports the goal of an economy that is broadly representative of the population of South Africa, it believes that the proposed sectoral numerical targets outlined in the Regulations would lead to unfair discrimination, contrary to Section 9 of the Constitution, and would amount to de facto racial quotas – which are prohibited by the principal Employment Equity Act.

Additionally, they fail to meet the tests laid down by the Constitutional Court’s 2004 judgement in Minister of Finance v Van Heerden. In terms of the tests, a remedial measure is permissible only if it (1) “targets persons or categories of persons who have been disadvantaged by unfair discrimination”; (2) “is designed to protect or advance such persons or categories of persons”; and (3) “promotes the achievement of equality”.

The Foundation points out that the Regulations failed the first test. In terms of income and educational qualifications, black, coloured and Indian South Africans in the elite and middle classes can no longer be regarded as people who have been disadvantaged by unfair discrimination. They comprise over 70% of elite and middle-class South Africans – the segment of the population that will be competing for employment in the categories listed in the Regulations. Many of them have entered the employment market since 1994 and have been protected against unfair discrimination throughout their careers.

The Regulations also fail the second test. They were clearly not designed to protect or advance the great majority of South Africans in the bottom strata of the economy who continue to be severely disadvantaged.

The measures that the State should have taken to promote the achievement of equality for the vast majority of South Africans should have included the allocation to them of disproportionate resources to improve education, housing and social and health services. The state should also have adopted policies to ensure sustained high levels of economic growth with a view to the creation of employment opportunities to address the unsustainable levels of unemployment in South Africa.

In the Foundation’s view, the Regulations also failed the third test because they will not promote the achievement of equality. The failure of the Government’s measures to promote equality is clearly illustrated by the fact that, after 29 years, South Africa – with a GINI coefficient of 0.63 – is widely regarded as the most unequal country in the world. The inequality divide is no longer between black and white South Africans. It is between the 15,4 million people in the top two strata – comprising 9 million black South Africans; 1,25 million coloureds; 760 000 Indians and 4.4 million whites – and the 41 million people, 95% of whom are black, in the bottom three strata.

The Foundation finds it difficult to understand how equality would be promoted if black South Africans in the top socio-economic strata were to enjoy an automatic advantage over white South Africans from lower strata. In such circumstances, the outcome would inevitably increase inequality.

Demographic representivity-based affirmative action in the public sector may, indeed, have led to greater inequality to the degree to which it may have been a major factor in the marked deterioration in the delivery to South African citizens of essential services by the public service, municipalities and SOEs. 

Apart from their failure to pass the three tests set by Van Heerden, the Draft Regulations would also breach the critical limitation set by the judgement that “a (remedial) measure should not constitute an abuse of power or impose such substantial and undue harm on those excluded from its benefits that our long-term constitutional goal (of a non-racial, non-sexist society) would be threatened”. 

The Foundation pointed out that, if the targets were ever achieved, a great majority of white and Indian South Africans would simply be displaced in all sectors of the economy and in all four categories of employment dealt with by the Regulations. Similarly, most coloureds in the Western Cape who work for retail chains, banks and other businesses with national operations would lose their jobs because they would be subject to national and not provincial demographics.

What would become of these South Africans? 

It would be impermissible to fire or retrench employees who exceed their quotas. However, companies would be under great pressure to show progress in reaching targets – and would inevitably do everything they could to manage down supernumerary personnel – either through voluntary retrenchments, promotion freezes or a ban on the employment of unwanted racial categories.

This would send a chilling message to excluded minorities – and especially to young members of the excluded communities – that they were no longer wanted in the country of their birth.

The policy of demographic representivity, upon which the Regulations are based, would not affect only the employment prospects of South Africa’s minorities – it would pose an existential threat to their future viability.

The imposition of demographic representivity would mean that the minorities’ share of land, property, jobs and wealth would decline in accordance with their diminishing share of the population. This would be irrespective of their existing rights, their qualifications, their investment in time and resources, and their economic and entrepreneurial contribution. The sole criterion would be the size of the racial group to which they belong.

The future share of minorities in the South African population would diminish further if laws such as the EEA Act left them with little option but to emigrate. Their communities’ share in jobs, property and land would be ratcheted down further.

In terms of the EEA Act and Regulations, South Africans are viewed and treated not as individuals who are the bearers of constitutional rights, but simply as members of one of South Africa’s four racial groups – a category that does not exist in the Constitution. It means, inevitably, that communities that are further along the spectrum of socio-economic development will have to be brought down to the level of the national average. This cannot be achieved without pervasive racial discrimination – which, in turn, must inevitably impact human dignity, the right to equality before the law, and an array of other rights and freedoms of the affected individuals.

All this would cause irreparable harm, not only to excluded groups but also to the vision of South Africa as a non-racial constitutional democracy united in its diversity.

Finally, the introduction of numerical race-based targets at all occupational levels in the workforce appears unnecessary when judged by the Commission for Employment Equity (CEE) reports. As early as 2016, the CEE noted “a positive trend towards equitable representation…at Professionally Qualified/Middle Management Level”. The CEE interprets this trend as positive towards reaching an equitable representation at the Senior Management level, as this level serves as a feeder to the Senior Management level.

In light of these concerns, the Foundation proposed a comprehensive overview of the Regulations, along with the Employment Equity Act and any amendments to it. Such review must be guided by the Van Heerden tests and Section 9 of the Constitution, taking into account relevant factors beyond race that are crucial to employment, such as qualifications, skills, experience and the capacity to acquire necessary abilities within a reasonable timeframe.

The FW de Klerk Foundation firmly believes that achieving an open economy accessible to all South Africans, at all levels, is best accomplished through natural economic evolution and the prohibition of any kind of unfair discrimination against anyone. Appointments, promotions and tenders should be based on individual merit and effort, rather than on race. By promoting a system that values personal achievement and endeavours to eradicate unfair discrimination, we can achieve broad representivity in the economy much more quickly and effectively than through the imposition of new forms of unfair racial discrimination.

Read the Foundation’s full submission here.