The Department of Labour has withdrawn its controversial proposal for national and regional demographics to be used for employment purposes, during National Economic Development and Labour Council (Nedlac) negotiations on the draft employment equity regulations.

The department’s capitulation came in the face of stiff opposition by organised business, unions and even the African National Congress (ANC) in the Western Cape, to the proposal that national and regional demographic profiles be used in particular circumstances.

They argued that this would have resulted in discrimination against coloureds in the Western Cape and the Northern Cape, and against Indians in KwaZulu-Natal.

The move came ahead of threats by both the Democratic Alliance (DA) and trade union Solidarity that they would contest the regulations in court should they become law.

The draft regulation arose from a provision in the Employment Equity Amendment Act, which was signed into law by President Jacob Zuma in January.

This empowered the labour minister to pass regulations to specify the circumstances in which employers had to use the demographic profile of either the national economically active population or the regional economically active population.

Organised business, Solidarity, the South African Clothing and Textile Workers Union and the ANC in the Western Cape opposed the proposal. Labour experts also emphasised that the proposals would not pass constitutional muster.

Coloureds represent 53% of the economically active population in the Western Cape but less than 11% nationally. Indians make up 12% of workers in KwaZulu-Natal but only 3% nationally.

Business Unity SA (Busa) executive director for social policy Vanessa Phala — who represents Busa in Nedlac — welcomed the withdrawal of the proposal. She said the government had dropped only the proposals regarding the assessment of compliance with employment equity plans (those related to national and regional demographic profiles) and was proceeding with the rest of the regulations as amended, and agreed to, by the Nedlac partners. She also said the act would apply with regard to compliance.

Ms Phala said the Nedlac deliberations were now complete, and the council would compile a report on the proceedings and the agreements reached for submission to the labour minister.

The Department of Labour’s acting deputy director-general for labour policy and industrial relations, Thembinkosi Mkalipi, refused to comment on the developments, saying the minister had to be briefed first.

In terms of the withdrawn draft regulations, a designated employer employing 150 or more people would have been required to use the national demographics for the upper three levels of the workforce (ie top and senior managers and professionals), and an average of the national and regional demographics for the lower levels (skilled, semiskilled and unskilled individuals).

Those employing fewer than 150 people would have to use national demographics for top and senior managers and regional demographics for professionals and lower levels.

In the absence of such a regulation, the law simply says that employers may opt to take the demographic profile of the national and regional economically active population into account in setting out their employment equity plans — there is no obligation on them to do so.

The onus will be on employers to present reasonable grounds for their failure to do so if taken to court for noncompliance. This leaves the situation as ambiguous as it was previously, but the head of Solidarity’s Centre for Fair Labour Practices, Dirk Groenewald, said there was a sufficient body of case law to guide them.

The courts had ruled that national demographics could not be the only criterion, saying regional demographics had to be considered as well.

They had also ruled that employment equity could not be applied on a mathematical basis as this would result in quotas, which were specifically prohibited by the act.

Employers, said Mr Groenewald, would not be bound by national and regional demographics, and “could take into account a number of relevant factors and set up their own demographics as long as it is aimed at achieving specified numerical goals with regard to representation. As long as employers have valid reasons for their numerical goals, the Department of Labour cannot force on them national and regional demographic representivity.”

He said the department should reintroduce the subordinate clauses in the Employment Equity Act of 1998, which were removed in the amendment bill. “This is a rational, nuanced way of setting targets. The aim of the act is to achieve equitable representivity not absolute representivity.”