Urgent court action aims to halt employment equity quotas
The court papers highlight what appear to be substantive procedural flaws in the setting of race quotas. Picture: Moneyweb
Sakeliga and the National Employers Association of SA (Neasa) filed an urgent Gauteng High Court application this week challenging race and gender targets under the Employment Equity Amendment Act (EEAA), which became law in January 2025.
The act sets hiring quotas for 18 economic sectors, from agriculture and mining to transport and construction.
'The application challenges the legality and constitutionality of the newly introduced employment equity framework, which introduces rigid race and gender quotas across 18 economic sectors on the top four occupational levels,' according to a statement by the business organisations.
These quotas, formally published in April 2025, require employers with 50 or more employees to restructure their entire workforce to reflect the national gender and racial demographics of the country, or face dire consequences.
The EEA defines 'designated groups' as blacks, women and people with disabilities, and is intended to increase their representation in the workplace.
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The challenge involves two steps:
The first asks the court for a judicial review of the 'procedurally flawed' manner in which the minister went about setting the quotas; and The second part, yet to be launched, attacks the constitutionality of the quotas under the relevant parts of the EEA.
Neasa and Sakeliga argue that Minister of Employment and Labour Nomakhosazana Meth skirted the Promotion of Administrative Justice Act (Paja) by not applying the relevant sections of the EEA in arriving at the race quotas.
The policing of the act and its associated regulations will require 10 000 labour inspectors by the Department of Employment and Labour.
The act has received pushback from business, the DA and trade union Solidarity.
'When the legislation was passed, we informed the government that we would bring an urgent application to set it aside as they had not done proper consultation, as required by law,' says Gerhard Papenfus, chief executive of Neasa.
ALSO READ: Employment Equity Act amendments to come into effect on 1 January 2025
'They then started consulting, but with whom?
'They chose 18 industries. The act says you must first determine what these industries are. You can't just decide this on your own,' he says.
'On top of that, the consultations took place over seven days. They scheduled for each and every consultation for one and a half hours, allowing just 15 minutes for questions. That's not consultation.'
Neasa also criticises the way industries were demarcated. For example, manufacturing – including steel, plastics, agro-processing, clothing and chemicals and other sub-sectors – was treated as a single industry.
ALSO READ: Five-year Employment Equity targets: What must each sector aim for?
Substantive flaws
The court papers highlight what appear to be substantive procedural flaws in the setting of race quotas.
Failure to identify and gazette economic sectors: The identification of 18 national economic sectors for purposes of setting quotas was not carried out as required under the EEA, which meant there were no sectors existing in law with whom the minister could consult. It further resulted in different sub-sectors with different characteristics being lumped together under a one-size-fits-all quota.
Improper consultation: Inadequate notice was given for online consultations and these were limited to 1 000 attendees, with just 15 minutes allocated to questions. The minister neglected to consult with employees in the economic sectors who will be severely affected by the quotas.
No lawful publication: The two business organisations say the final 2025 quotas differ radically from the earlier draft quotas published in 2023 and 2024, and were never published for renewed public comment as required under the act. This is a legal requirement and failure to adhere to it renders the quotas invalid.
Quotas are arbitrary: The minister set irrational and arbitrary quotas that do not take into account the nature, circumstances and challenges of each sector. No consideration was given to the pool of skills available in each sector, the natural gender disparity in certain sectors, or the difference in racial demographics across provinces in SA.
No socio-economic impact assessment performed: The regulations are ultimately aimed at compelling the workforce of every single designated employer in SA, in every sector, on every occupational level, to conform to the racial and gender demographic profile of the country's economically active population. This cannot be rationally introduced as a legal requirement without a proper assessment of its socio-economic impacts.
Violation of The Constitution: The quotas disregard South Africa's constitutional stipulations on non-racialism, equality before the law, and administrative justice.
Businesses will be forced to spend vast amounts of time and resources complying with these employment equity quotas, say Neasa and Sakeliga in a statement.
ALSO READ: DA legal challenge to Employment Equity sparks political divide
'Individuals will be employed or not employed, and promoted or not promoted, based on unlawful quotas. Employers will restructure and make other permanent changes to their workforce and corporate structuring, employ new employees and forego opportunities and take on the expense that this involves, all based on unlawful quotas.
'This [court] filing marks the next important step in preventing these impossible, irrational, and harmful employment quotas for the benefit of employers, employees, and all communities across the country.'
Papenfus was part of a delegation of Afrikaner leaders to visit the US White House in June, during which the US administration set out a number of preconditions for normalising relations with SA, including exempting US businesses from BEE requirements, classifying farm attacks as a priority crime, no land expropriation without compensation and an unequivocal condemnation by the ANC of the 'Kill the boer, kill the farmer' slogan.
Law firm Norton Rose Fulbright has filed a separate court challenge to the Legal Sector Code – which sets firm-level targets of 50% black ownership, voting rights and executive management positions within five years – arguing that these targets are unrealistic given that blacks made up just 38% of the profession in 2023. It argues that the introduction of the code was arbitrary, unlawful and procedurally flawed.
This article was republished from Moneyweb. Read the original here.
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