Nxesi says no empirical evidence Employment Equity targets will have consequences on employment

Employment and Labour Minister Thulas Nxesi

Employment and Labour Minister Thulas Nxesi

Published May 22, 2023


Cape Town - Employment and Labour Minister Thulas Nxesi has scoffed at suggestions that the Employment Equity Amendment Act that sets employment equity targets would lead to higher levels of unemployment.

This comes after DA MP Michael Bagraim wrote to Nxesi asking him whether he had been advised that the provisions of the Employment Equity Amendment Act might encourage employers to pursue manufacturing operations outside of the country and/or to computerise, mechanise and/or restructure their operations if they could not meet the specified set targets.

Bagraim said if employers could not meet the targets, that would lead to higher levels of unemployment and/or the loss of job opportunities.

In his written response, Nxesi dismissed suggestions made by Bagraim.

“It is important to highlight that thus far, there is no empirical evidence to indicate that the employment equity amendments in relation to regulation of sector EE targets might have unintended consequences on employment or in encouraging employers to change their operations to pursue restructuring or computerise and /or mechanise operations.

“Noteworthy is that investors and all employers operating within the Republic are required to comply with national labour laws,” Nxesi said.

Nxesi and the department have come under pressure with some saying the amendment bill is promoting racial quotas and racially obsessed legislation.

President Cyril Ramaphosa assented to the amendment bill in April after Parliament approved it last year.

The amendment seeks to empower the minister to regulate sector employment targets after consultation with sector stakeholders and advice of the Employment Equity Commission.

Companies doing business with the state will be issued with compliance certificates.

Those that employ less than 50 will be exempted with certain administrative processes but will still be expected to eliminate all forms of unfair discrimination in employment policies and practices.

Employment and Labour Minister Thulas Nxesi has previously described the amendment as representing part of a continuous task to transform the labour market and society still marked by the legacy of colonialism, apartheid and patriarchy.

Responding to criticisms, the department said the employment equity amendments was not introducing any new legal obligations on employers because for over 24 years of the Employment Equity Act, employers have been legally required to set their own employment equity targets taking into account both the national and provincial demographics.

“The only change with these amendments is that the Minister of Employment and Labour after consultation with the relevant sector stakeholders and on the advice of the Commission for Employment Equity, has now regulated sector Employment Equity targets in a form of five-year milestones towards achieving the equitable representation of the various groups in respective economic sectors.”

It has maintained that sector targets were not quotas as employers still maintained powers to determine their own annual employment equity targets towards achieving the regulated five-year sector targets.

Cape Times