National Federated Chamber Of Commerce (NAFCOC)
Comment on the Employment Equity Bill

For over thirty years of its existence, Nafcoc has always resisted any form of legislation that impedes equal opportunity and promote discrimination. Nafcoc therefore hoped that one of the post 1994 governments foremost tasks will be to transform the South African labour market into an efficient, effective, productive and equitable one geared to driving the country's economic era social development.

Nafcoc therefore welcomes the invitation to comment on the Employment Equity Bill which we view as a major step by government in redressing past imbalances with respect to designated groups.

T T Mboweni, MP - Minister of labour states in his note to the public "apartheid has left behind a legacy of inequality reflected in disparities in the distribution of jobs. occupations and income. The government's view is that it is necessary to redress the imbalances and immobilise within every workplace a culture of non discrimination and diversity. From this statement follows two logical objectives of the bill.

a) Elimination of unfair discrimination.
b) Provision of affirmative action,

Let us define affirmative action:
Nafcoc defines affirmative action as a conscious effort to redress past imbalances by deliberately targeting disadvantaged groups for promotion employment and training. We are convinced that before the above can take place the environment must be conducive. To this end we see the target of affirmative action as both the environment and the individual.

We note that the concept of unfair discrimination is covered in the Labour Relations Act. We however maintain that there is even more relevance in context in concept being covered in this bill.

Must this Bill concern itself with Employment equity:
Nafcoc is of the view that the depth of inequality in the labour market has resulted or results from many other factors, such as ownership of productive assets, the unequal division of household labour and geographic distribution of population groups under apartheid. It is therefore logical that this bill encompasses these aspects in addressing the nature of equality to be achieved and in determining the process that affirmative will take - subjects that we shall deal with in this submission.

What is the nature of equality envisaged:
As per our definition of affirmative action, it is clear that the process is not indefinite i.e. it has no time limit.

Nafcoc is of the view that adequate progress by designated employers in implementing their employment equity plans, to the satisfaction of both government and the stakeholders particularly employees (as the key players) will determine equality. It is therefore obvious that the test of equality as well as its nature is a subject that shall be guided by the level of commitment, compliance progress and sustainability of the equity programmes.

South Africa has ratified ILO Conventions dealing with non discrimination and equality in the workplace. This also requires of us to take measures to ensure that our companies do comply with this convention.

The labour market commission notes that our skewed income distribution is reflected in the fact that the bottom 20% of income leaves … a mere 1.5 % of national income, while the wealthiest 10% of households receive fully 50% of national income. Further 95% of the poor are African and 65% of Africans are poor. Using an expanded definition of unemployment among Africans, unemployment stands at roughly 41%, among coloureds it is 23%. whilst among Asians 17% but is only 6.4% amongst whites. There is also gender element to the inequality with women having a higher unemployment rate than men.

Govan Mbeki, a veteran of our struggle states that " It is perfectly clear that the political transformation we striving for, can never be sustained if economic matters are not attended to. Those who were disenfranchised must experience practical improvement in their quality of life and standard of living for them to support the democratic order. Without this, the country will be thrown to a level of disorder. which may lead to dictatorship and anarchy, to which we are strongly opposed."

Nafcoc therefore echoes Mbeki's statement that there are matters demanding action if we are to save this democracy. 95% poor Africans is an explosive situation and can not guarantee any form of true and lasting reconciliation and peace.

About demographics:
Nafcoc supports the view that there should be clear national targets. As it has been clarified in our definition of affirmative action, these targets should deliberately and consciously aim at the previously disadvantaged members of society. Serious effort should be made at training, recruiting and promotion of such people.

The level of the impact of the disadvantaged should determine the extent of remedy e g give preference to Africans, Coloured, Asians and lastly whites. This should be so in respect to all designated groups.

Specific attention shall have to be given to racial distortion which were by apartheid migrant labour policies. group areas policies and race preferential employment policies. It is our view that a conscious decision in line with national objectives and aimed at correcting regional distortions should be taken in addressing the issue of demographics e.g. Western Cape companies may have to decide to recruit more Africans as against coloureds, even though the area may be predominantly Coloured

Nafcoc therefore recommends that national targets be set per industry and sector. We are of the view that the bill should speak loud on access to the economic main stream by previously disadvantaged groups through creating an environment that removes such barriers to entry as access to finance, training, joint ventures etc.

Employment Equity Plans.
Nafcoc understands the 5 (five year) period as the period during which the employer may develop redefine and reshape his plan. We believe that this is enough time. We however wish to stress that there should be convincing progress shown on the reports submitted to the department.

We recommend that section 12(3) must be deleted as it opens up too many loopholes. In our view a law that aims at bringing about change can never be unclear and that wide open.

We further suggest that broad consultation has to take place even with respective organisations of designated groups when drafting Employment equity plans.

We are encouraged by the efforts of the department of labour at researching the relevant technology to be used in the reporting process. This, we certainly hope will be most effective. This is one law where we can not afford to be caught off guard.

Penalties:
Nafcoc supports the idea of penalties and dismisses the notion that this is tantamount to ….. labour law. Our view is that for too long we have had so many businesses in South Africa who have served as agents of apartheid and oppression. The penalties send a clear message that we all are committed to transformation and that there is no room for culprits. We do not believe that there is any reason to hide behind small businesses and argue reduction of fines. People must comply or face the harsh realities of non compliance. The issue about the effect of this bill on employment creation is a mere …. non issue.

Employment equity commission.
We support the establishment of this commission but wish to suggest that its powers be extended from those of just advising the minister.

It is our view that the commission should be headed by a Black person preferably a woman and that all designated groups be adequately represented. As against the notion that Blacks are incapable, we proudly place on record that there are many very capable black women in South Africa.

In summary therefore:
Nafcoc view the bill as a major step by government in redressing past imbalances with respect to designated groups.
· Nafcoc is opposed to setting quotas, but proposes industry and sectoral targets.
· We are supportive of penalties accompanied by rewards to employers displaying good progress in implementing the act.
· Nafcoc believes that the South African economy requires a good Human RESOURCE balance sheet, and that the one we have currently shows a serious loss.
· Nafcoc sees equity beyond the employment relationship but also to include removal of business to include removal of barriers to entry into the South African economy by the designated groups.
· In our view the bill has a lot of grey areas. We believe that a legislation that aims at introducing change must be concise, clear and send a message that is a non equivocal …. change is hard to foster, and therefore a law that shall guide the nation in this route must be clear.
· Nafcoc rejects the notion that this law is apartheid in reverse. It is simply about balancing the equilibrium. In our view THE GUILTY ARE AFRAID". This law is in the interest of economic growth.
· Nafcoc is disturbed by forces in the country that continue to attack any effort to bring about equality and refer to "MARKET DRIVEN PHENOMENA". People must take action to bring about change, and not any undefined market forces.
· Nafcoc wishes to warn that reconciliation cannot take place at the expense of Blacks. Our democracy and its sustainability depends on how successful we are in answering the many questions affecting the majority of our people. We urge all stakeholders to show commitment to this course.
· Nafcoc is of the view that broad concepts are adequately covered in the bill, but warns "THE DEVIL IS IN DETAIL".