The business organisation says the recently published race and gender targets are unrealistic, and no meaningful public participation took place.
Business Unity South Africa (Busa) is the latest business group to head to court to challenge recently published regulations that dictate the race, gender and disability composition of companies employing more than 50 people.
Busa has applied to the Johannesburg Labour Court to review and set aside numerical employment targets for 18 economic sectors under the Employment Equity Amendment Act (EEAA), which became law in January 2025. It argues that the targets, gazetted in April 2025, are irrational and arbitrary.
The minister of employment and labour and the Commission for Employment Equity have been cited as respondents.
Deposing for Busa, CEO Khulekani Mathe says the numerical targets – intended to more accurately reflect the racial, gender and disability demographics of the country – were decided without following proper procedures, and that affirmative action measures are designed to ensure suitably qualified people from these designated groups have equal employment opportunities.
Busa says the minister jumped the gun in consulting with members of the labour market to determine what these numerical targets should be, even though the proposed amendments to the Act had not yet been signed into law.
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“The Employment Equity Amendment Bill envisages a multi-step process to be followed before the minister may set numerical targets for a sector. These steps include identifying a national economic sector by notice and issuing regulations prescribing the criteria to be taken into account in determining numerical targets,” deposes Mathe.
Busa says the decision to approach the Labour Court follows years of engagement with government, labour, and other social partners over workplace equity and transformation. The business organisation says it is not opposing the EEAA or the principle of sectoral numerical targets under Section 15A of the Act. Its objection lies with the process that was followed. Section 15A empowers the minister to identify national economic sectors to establish numerical targets, but only after consulting the relevant stakeholders.
The group says the current sector targets are fatally flawed, both substantively and procedurally. If allowed to stand, they risk undermining the goal of building an inclusive, transformed economy. It engaged with the Department of Employment and Labour (DEL) in good faith, by way of formal meetings, data submissions, and a detailed presentation to the minister raising urgent concerns about the consultation and methodology process.
“What took place was not meaningful consultation; it was a presentation. As social partners, we cannot allow performative engagement to substitute for genuine collaboration,” says Mathe.
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In its court papers, Busa highlights input from sector-specific business groups such as the Consumer Goods Council of SA and the Agricultural Chamber of Business. Rather than tailoring the numerical targets in line with regulatory requirements, the proposed targets appear to have been derived from broad-based black economic empowerment (B-BBEE) codes. In effect, what the minister is doing is imposing a national target, rather than sectoral numerical targets.
Two other business groups, the National Employers’ Association of SA (Neasa) and Sakeliga, have launched their own legal challenges to the EEAA. Last month, the Pretoria High Court threw out their application to interdict or suspend the implementation of the numerical targets, with Judge Graham Moshoana ruling that the minister had set numerical targets rather than goals, and that the court was in no position to determine whether the numerical targets set by the minister were lawful or not.
Neasa and Sakeliga say they will appeal this “deeply flawed judgment” to both the Constitutional Court and the Supreme Court of Appeal. They also advise their members that they are under no obligation to racially classify themselves on the EEA1 forms they are expected to submit to the DEL. Furthermore, they advise members to make a note on these forms stating that they cannot be held accountable for the racial classifications, as there are no criteria or guidelines to govern how the classification should be made.
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Issues of contention
Among the key issues raised by Busa in its court challenge are:
- Limited consultation period: Employers were given less than a week to respond, with many receiving the draft numerical targets only the night before meetings, which lasted only an hour.
- Insufficient information provided in relation to the methodology used in reaching the targets: For example, the employment equity disability target was raised to 3% without the DEL providing sufficient supporting data or adequately explaining how this figure was reached – despite acknowledging the lack of disability statistics.
- Insufficient sectoral analysis: Limited assessment conducted to determine whether targets were achievable across industry-specific realities.
- Conflicting compliance frameworks: The targets are not aligned with B-BBEE sector codes, creating regulatory confusion.
- One-size-fits-all targets: DEL’s refusal to differentiate between subsectors ignores operational, geographic, and structural diversity.
“The need for transformation is urgent, but urgency must not become recklessness,” says 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.
“Poorly developed targets risk damaging vital sectors of the economy. If the targets are unrealistic or not based on the skills available in each sector, companies may find themselves unable to comply. This creates uncertainty and weakens the integrity of the regulatory process, ultimately undermining the transformation and inclusion that the Employment Equity Act is meant to achieve.”
Busa says the decision to initiate legal proceedings was not undertaken lightly. It follows numerous attempts to resolve the matter constructively, including through the National Economic Development and Labour Council [Nedlac] and the Government Business Partnership.
This article was republished from Moneyweb. Read the original here.
