Another legal challenge to new Employment Equity quotas

Organised business group Business Unity South Africa (BUSA) is the latest organisation to take the Department of Employment and Labour (DEL) to court over new Employment Equity targets. 

The Amendment to the Employment Equity Act establishes explicit quotas for companies in terms of race, gender, and disability. 

These are handed down to companies based on their size and sector. From 1 September, companies with over 50 employees have five years to comply with the regulations, but risk fines for slow progress.

BUSA said that it is not opposing the Act itself or the implementation of racial, gender, and disability numerical targets.

Rather, the organisation said that the targets the department has settled on are “fatally flawed both substantively and procedurally.”

“If allowed to stand, they risk undermining the very goal of an inclusive, transformed economy,” BUSA said. 

This is due, according to BUSA CEO Khulekani Mathe, to failures in the public consultation system.

“What took place was not meaningful consultation; it was a presentation. As social partners, we cannot allow performative engagement to substitute for genuine collaboration,”  he said. 

He added that employers were given less than a week to respond to the new regulations, and most received the draft targets the night before meetings, which lasted only one hour. 

BUSA is questioning the methodology the department used to reach the decided targets, arguing that DEL has not provided a sufficient explanation for this. 

“For example, the EE disability target was raised to 3% without DEL providing sufficient supporting data or adequately explaining how this figure was reached, despite acknowledging the lack of disability statistics,” BUSA said. 

The organisation added that there was limited assessment to determine if these targets are achievable across industry-specific realities, and said DEL’s refusal to differentiate among subsectors ignores operational, geographic, and structural diversity.

“The need for transformation is urgent, but urgency must not become recklessness,” said Mathe.

“We’re acting now to protect the credibility of equity policy. Unworkable targets do not advance transformation. They deepen frustration and erode trust in public policy.”

Mathe worries that companies will find themselves unable to comply with unrealistic targets that don’t take skills availability into account. 

Targets are “impractical and unenforceable”

BUSA said that these “rushed, opaque and procedurally irregular processes” in drafting the targets have failed the test of legality and undermine the goal of transformation by making compliance “impractical and unenforceable.”

The organisation said the decision to take the matter to court was not made lightly, and follows numerous attempts to resolve the matter outside of court. 

BUSA is not the first to initiate court proceedings to stop the new regulations. The National Employers Association of South Africa (NEASA) and lobby group Sakeliga are attempting to have the amendments declared unlawful and unconstitutional in the Constitutional Court.

This is after NEASA and Sakeliga’s request for an urgent interdict on the new laws was denied by the Pretoria High Court. 

Sakeliga said that gender quotas would be impossible to meet for jobs favoured by women, such as nursing, and for jobs favoured by men, such as construction. 

“The racial quotas are even more far-fetched,” the lobby group said. This would restrict white male employees to as low as 4% in some company categories, according to Sakeliga.

The group called these “targeted economic sanctions” against white men and their families and argued that it would severely harm business operations.

In the case for an urgent interdict, NEASA already raised the argument that the public consultation process was insufficient. 

The group said that Minister Nomakhosazana Meth failed to follow the required administrative procedures or conduct adequate consultations and socio-economic impact assessments, and argued that the resulting targets were arbitrary.

However, Judge Graham Moshoana disagreed and ruled that the public consultation process was sufficient and the targets were based on data from Statistics SA and input from the Commission for Employment Equity. 

Following the court proceedings denying an immediate interdict, Meth called the ruling “a victory for equity, justice and the rule of law.”

“It affirms that the Department has acted within its legal mandate to advance transformation in the workplace. We urge all employers to comply with the Employment Equity Regulations and to prepare for the submission of their 2025 EE reports. The time for meaningful change is now,” she said.

The minister warned all businesses with over 50 employees to comply with the regulations, which are now effective.

“Employers are reminded that the reporting period for the 2025 EE submissions opens on 1 September 2025 and closes on 15 January 2026,” she said.

She added that compliance with the published regulations is not only a legal obligation but a moral imperative in building a more inclusive economy.