Letter: Unworkable red tape - Business Day, 17th July 2012.

What SA needs are proper schools, vastly increased investment and effective incentives to business to expand the jobs they offer. Instead, however, the ruling party is once again seeking to truss the private sector up in yet more reams of unworkable red tape.

You report that the new Employment Equity Amendment Bill of 2012 makes earlier fears about national demographics trumping regional ones to the detriment of coloured people in the Western Cape and Indians in KwaZulu-Natal "a storm in a teacup" (Race statistics fears in equity bill unfounded, July 16).

Since the bill has not been published, it is difficult to know if this is really so. At least four warning flags remain visible, however. First, confining the use of national demographics to national employers by means of ministerial regulation (as the bill apparently now does) will still do much harm in the Western Cape, for instance.

Here, the Department of Correctional Services is already pegging coloured representation at 11% (the national number) rather than 55% (the regional demographic), to the detriment of the local coloured population. The regulatory change will give the department — national departments, along with banks, retail chains, and other organisations — a legal obligation to refuse employment to coloured people in the Western Cape once their 11% "coloured" quota has been met.

Second, giving the power to the labour minister to change the rules by regulation means that the regulations adopted over time could quietly put still more emphasis on national demographics in wider-ranging circumstances. This will, of course, be possible to achieve without the minister having to bother about parliamentary scrutiny and objection.

Third, persistent skills shortages make it extremely difficult for employers to meet the ambitious racial quotas set down in the Employment Equity Act of 1998 and further reinforced via the bill. In these circumstances, taking employers battling to fill racial quotas straight to the Labour Court to punish them for their transgressions will add significantly to the already heavy burden of doing business in SA.

Fourth, fines for noncompliance are still to be based on a percentage of turnover. Such fines could well be high enough — as the government’s own regulatory impact analysis has warned — to close down many firms and cause the loss of thousands more jobs.

What SA needs are proper schools, vastly increased investment and effective incentives to business to expand the jobs they offer. Instead, however, the ruling party is once again seeking to truss the private sector up in yet more reams of unworkable red tape.

- Dr Anthea Jeffery

Head of Special Research South African Institute of Race Relations

 

(To read the letter on the Business Day website please click here.)

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