PIET LE ROUX AND RUSSELL LAMBERTI: An impossible employment law in a failing state

This is a story about a failing state in its last throes of insanity, desperate to get away with a totalitarianism so absurd that it unwittingly sets the scene for a new and better order. 

On the face of it, the Employment Equity Amendment Act of 2023 is a catastrophe. In it, for the first time government requires — under penalty of fine and prohibition of trading — the staff of every business in the country to reflect the racial mix of the state’s population.

Beyond some of its bureaucratic complexity, the plan is clear: society is to be forced to serve the power interests and ideological whims of Luthuli House and the Union Buildings, regardless of the consequences. 

Fortunately, the plan stands to fail, for the following reasons:

• Being absurdly impractical, it is impossible for businesses to comply with it.
• The state is so weak and the policy so harmful that most businesses will continue to avoid, hide and defy with clear consciences.
• Whatever enforcement ability the state has left will be kept in check by a network of independent business organisations, civil society organisations and political parties that are growing in confidence and strength. 

The impossibility lies in the act’s sheer disregard of the reality of variations in skills, kinship, language, culture, geography and just about everything else that has characterised employment throughout history. Never have the employees of all businesses everywhere reflected the same demographic characteristics.

What the amendment act requires is not only beyond the realm of the possible, but also beyond the realm of the conceivable to ordinary, sensible people. If no-one other than the most power-hungry ideologues expect mosques and churches, sporting events and political rallies, schools and circles of friendship to all look the same, how could such a thing possibly be expected of hundreds of thousands of businesses run by diverse people, in diverse industries, across diverse regions?

Under the guise of “transformation” the act insists on a stifling stagnation — that first all commercial activity and later, by implication, social activity, should be conducted strictly in specified racial and other demographic ratios. 

Unsurprisingly, the act’s kind of racial profiling and social engineering is plainly illegal in many countries. Failure to comply will be the norm for international investors and companies who not only resent being told who to employ but would otherwise face prosecution in their home countries for compliance. 

What is impossible to achieve, what makes no sense to sensible people, and what is outlawed by the home jurisdictions of foreign investors and their companies, has no chance of being implemented.

Still, impossibility alone will not prevent great harm. As history has repeatedly shown, states and other actors with enough unchecked power can create hell in the vain pursuit of their utopia.

Limiting enforcement

The following stands between government’s reckless insistence on the impossible and societal destruction: an advanced degree of state failure, and formations in organised business and civil society increasingly successful at checking state power.

While detrimental in many ways, state failure has at least the advantage of limiting the enforcement capability of politicians and bureaucrats with harmful plans. With the state at its weakest in living memory and getting weaker, businesses across such a big country, complex economy and convoluted regulatory environment are ever more able to avoid, hide or defy ludicrous legislation such as the act with a clear conscience. What emboldens and spreads resistance is the knowledge that noncompliance is the responsible thing to do. 

Still, as sociologist Robert Nisbet pointed out, balancing power in society requires more than brave individuals operating in isolation. It requires independent institutions and self-regulating associations that pool resources and gain the strength in numbers to provide real checks and balances on state power in the public interest and for the flourishing of society. This type of organising is every bit as necessary among business communities as it is in other areas of civil society.

These are high standards, and not all organisations meet them. It is a serious shortcoming when entities such as Business Unity SA (Busa), appointed by government to represent “business” in the National Economic Development & Labour Council, lack the independence to meaningfully resist economy-destroying policies. That it “welcomes” the act, and for its president, Bonang Mohale, to emphasise in media interviews that Busa supports it, is an effort to legitimise state policy and is wholly out of touch with businesses countrywide.

Legal challenges

These glaring shortcomings among state-recognised business forums have compelled businesses to seek alternative means of representation and co-ordination. Through formal and informal alliances and by setting up effective vehicles to exercise influence and authority, many are — through Sakeliga and other important organisations — independently pursuing a favourable economic environment in the public interest.

Their methods include unprecedented legal challenges, emanating from within and outside SA. They will include co-ordination with international businesses and business organisations equally opposed to the act. And they will include delegitimising the act to the extent that businesspeople and the public consider it absurd and of no effect. 

By acknowledging the impossibility of compliance with this law, recognising the weaknesses of a failing state as an opportunity to get away with doing the right thing, and setting up and funding independent organisations to counter harmful state intervention, businesses are turning the economic tide in SA.

The more they make themselves, their communities and the economy state-proof (resistant to the failings and harms of the state), the more successfully they will execute on what was always their deepest social responsibility: to forge a favourable business environment in the public interest. 

In the end, it will turn out that the Employment Equity Amendment Act inadvertently paved the way for a real “new dawn”. 

• Le Roux is CEO, and Lamberti executive director, at Sakeliga.