- Parliament heard that each sector's unique characteristics must be taken into account when setting equity targets.
- The Employment Equity Act amendments seek to give the minister of employment and labour the power and discretion to set targets in specific sectors.
- One submission expressed concern that when the minister sets targets, employees in affected sectors will not be heard.
Business formations from different sectors in the South African economy told Parliament's Portfolio Committee on Employment and Labour that the Employment Equity Amendment Bill had to have a clause for adequate sector-by-sector consultation if it were to succeed without frustrating commercial interests.
The amendments to the Employment Equity Act of 1998 seek to give the minister of employment and labour the power and discretion to set targets in specific sectors with a view of driving transformation in each sector and, ultimately, the economy.
On Thursday, the portfolio committee heard from general business formations and businesses in agriculture, information and communications technology as well as construction and engineering on the amendments.
Agri SA executive director Christo van der Rheede said the agricultural sector consists of numerous sub-sectors and setting a single target for all of them would not be feasible since their profitability and labour requirements are vastly different.
"Meaningful consultation with all relevant stakeholders within the agricultural sector must be of utmost importance because allowing the Minister to impose such targets without significant consultation will result in a one-size-fits-all approach," said van der Rheede.
Van der Rheede said in the absence of consensus-based consultation with the relevant stakeholders in the industry, it would be difficult to understand how the minister could arrive at any sort of informed or rational decision.
Business Unity SA's (BUSA) chair of social policy Kaizer Moyane said, despite an agreement reached by all social partners at the National Economic Development and Labour Council, version B14-2020 of the amendment bill omitted the consultation requirement.
"For reasons unknown to BUSA, the version of the amendment bill currently before Parliament has omitted the requirement for the minister to consult sectors before setting the targets. This is, for the reasons which follow in this submission, of significant concern to BUSA and its members," said Moyane.
Essential to consult all sectors
Moyane said it was essential that all sectors are consulted, and targets are set with the respective industry bodies who can share meaningful information regarding the economic challenges faced in the industry, the state of transformation and transformation within the industry.
"BUSA further believes that the Act needs to make provision for instances where agreement cannot be reached between the Minister and the relevant sector. How these amendments will impact foreign organisations must be factored into the consultations and presents considerable uncertainty particularly in that they may be lagging in the representation of designated persons for justifiable and objective reasons," Moyane said.
He said in terms of section 16, read with section 17, of the current Employment Equity Act, designated employers are legally required to consult with their employees on the content and implementation of their employment equity plans.
"Those targets are imposed on the sector without them being consulted and they are almost there as quotas. If you don't meet them, you have automatically not complied. The consultation must be done with all consideration to the businesses in the sector," he said.
Moyane said if the Employment Equity Act is amended, it will mean that an employer will be bound to use the sectoral targets fixed by the minister in its employment equity plan, consultation with employees would be rendered meaningless, regardless of their views.
"I don't know whether this is a consequence that was foreseen, but it needs to be looked at because it may have unintended consequences where the structures meant to inform the targets and have the conviction not hold the employer to them will be disempowered and have to enforce a target that never originally intended to," he added.
Telkom group executive for regulatory affairs and government relations Siyabonga Mahlangu said that it is imperative that the minister undertakes an extensive public consultation process involving the ICT sector which comprises all electronic communications operators and industry players affected by the proposed numerical target setting before the notice setting out the numerical targets is published.
"The minister should take into account all submissions, comments by industry players and other relevant considerations before publication of the notice in order to ensure that such targets are rational, informed and capable of implementation," said Mahlangu.
Mahlangu said a study to determine which targets would be practical for the electronic communications sector as well as extensive prior consultation with the ICT sector and electronic communications operators before publication of the notice setting of numerical targets.
"Targets should take into account various structures. We must monitor and enforce with existing types of regulations, policies and laws to ensure that the main objective that Parliament seeks to achieve is realised," Mahlangu said.
South African Federation of Civic Engineering Contractors' senior construction coordinator Ingrid Campbell said professional bodies had different statistics depending on the sub-sector they were in and this had to be taken into account in the bill.
"It must be accepted that any target setting for contractors and consultants cannot be the same, nor can this be applicable to construction material suppliers who fall under the construction sector codes, but report under manufacturing on their employment equity reports to Department of Employment and Labour," said Campbell.
During a session of oral submissions on the amendment bill on Tuesday, the Institute of Race Relations maintained that the proposed amendments were inconsistent with the South African Constitution.