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Strict new BEE laws could result in 600,000 job losses – DA



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The DA has raised concerns about the potential impact of the newly proposed employment equity legislation, commonly called the new BEE laws. According to the party’s estimates, around 600,000 South Africans might lose their jobs over the next five years because of these laws.

As per BusinessTech, the president signed the new employment equity laws last month, and the Department of Employment and Labour plans to release the regulations later in 2023. In the meantime, the department has published the sectoral targets under the new laws for public comment. However, these targets have faced criticism from labour unions and business groups for being confusing and containing numerical errors. Legal experts have also raised concerns about potential legal challenges due to administrative and procedural issues.

The essence of the new BEE laws is to encourage businesses in South Africa to achieve greater racial and gender diversity, particularly in top and senior management positions. The laws set specific numerical goals for designated businesses (those with more than 50 employees) to ensure their workforce reflects the racial and gender profiles of the provinces or the nation. Companies are expected to meet these targets within five years, with fines imposed for non-compliance.

The DA argues that these laws effectively establish quotas, which are unconstitutional in South Africa and which the country’s apex court rejected in the past. The party claims strict adherence to the quotas would lead to significant job losses, with 220,000 white individuals, 85,000 coloured individuals, and 50,000 Indians potentially losing their jobs in Gauteng alone. If fully implemented, the party estimates that 404,608 white individuals, 116,934 Indians, and 71,518 coloured individuals could lose their livelihoods within five years.

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While the Department of Employment and Labour did not clearly explain how the targets should be interpreted, some argue that setting a target of 0% for certain racial groups implies the termination of all positions in those roles based on race. The distinction between numerical goals/targets and quotas lies in the flexibility of the standard. Quotas are rigid and prescriptive, while numerical targets are intended to be flexible employment guidelines.

The government maintains that the new targets are not quotas and emphasizes the flexibility built into the system. The Commission for Employment Equity Chairperson, Tabea Kabinde, stated that organizations have five years to reach the sector targets and have the flexibility to determine how to achieve them. She also highlighted the justifiable reasons employers can use to explain why they haven’t completed the targets.

However, the new guidelines’ lack of clarity and explanation has left businesses uncertain about how to make the necessary adjustments. The DA has called for the minister to provide detailed information on the methodology used to determine the targets, including statistical models and techniques, demographic and labour market data, and steps taken to account for confounding factors.

As the debate around the new BEE laws continues, it remains to be seen how the government will address the concerns raised by the opposition party and other stakeholders to ensure a fair and balanced approach to employment equity in South Africa.

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Picture: Unsplash / Cytonn Photography

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