Most unfortunately, President Cyril Ramaphosa has signed the new BEE transformation rules for South Africa into law.
The Employment Equity Act brought into our statute book 20 years ago has not only been disastrous as a piece of legislation, but it has had far-reaching destructive effects on the business community.
Government officials have unfortunately taken a decision that if the law has not worked for the past 20 years, then obviously one would have to make it much more stringent and bring in harsher regulations.
This is a sure sign of madness. If a law doesn’t work, it might be useful to go back to the drawing board and remove the repugnant legislation and tackle the problem from another angle.
The government and the governing ANC don’t want to admit that social engineering, so fondly practised by the Nazis and the Nationalist Party, is not the way to go in the future. The world of employment has moved on. To force employment of individuals on the basis of their skin colour has always been immoral and backward thinking.
The system of apartheid was based on exactly the same type of legislation that we see repeated in the Employment Equity Legislation. Clearly, the business community are just trying to make a profit despite the negative regulations imposed upon them.
Even these regulations did not produce results. Negative legislation with no functional reasons cannot produce positive results. It is clear that we have still not overcome the apartheid negativity and that the higher echelons of staff structures still reflect a disproportionate white and male managerial class.
To bring in harsher legislation to force this change will merely encourage businesses to produce elsewhere, outsource work to foreign jurisdictions, and will probably put further projects on hold.
We have seen over the past 20 years how many businesses have gone on an investment strike, and others have just merely closed their doors.
Negative legislation coupled with a myriad added factors has been evidenced in the worst unemployment in the world coupled with the worst productivity in the world. Every factor is another nail in the coffin of employment in South Africa.
We have had a few glimmers of hope, including the last two quarters of last year, where there was slight increases in employment. This is owed to temporary jobs during a bumper tourism season.
Unfortunately, this will be quickly turned around, taking into account the vulnerability of our currency and other very worrying factors, such as the lack of generation capacity within Eskom. This has likewise destroyed small businesses, and in particular businesses in previously disadvantaged areas.
A very worrying study done by Nedbank showed how the spaza shop economy has been almost decimated, mostly because of electrical failure.
Coupled with the minimum wage legislation, small businesses are being battered from every side – mostly small businesses in the townships.
Economists the world over tell us that it is small businesses that will be creating the jobs in the future. Our government, under the ANC, has been hellbent on incredibly negative labour legislation, which is affecting small black businesses more than the larger established business community.
Now we have the absolute folly of the Employment Equity Amendment Bill, which was passed by Parliament on May 17 last year. This bill is now law, empowering the government to set specific equity targets by sector and region.
To my mind, unemployment is our biggest problem in South Africa today. The ANC government has just ensured that an amendment to our labour legislation will make it worse.
* Michael Bagraim.
** The views expressed here are not necessarily those of Independent Media.
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