Business group Sakeliga is lobbying its more than 12,000 members to defy the Employment Equity Amendment Act when it comes into effect in January — setting it on a collision course with the government.
Sakeliga said employers are in a strong position “in 2025 and beyond to avoid implementation of hiring quotas under the [Act]”.
“Sakeliga encourages business people to remain firm and not make any changes to their employment policies for the sake of the Act. Businesses should prepare for maximum achievable non-cooperation with an irrational, harmful, and unconstitutional Act for as long as it takes to have it scrapped or rendered practically impotent,” it said.
The business group, founded in 2011, has scored notable victories in rolling back BEE. In 2022 it successfully challenged the constitutionality of the 2017 public procurement regulations, which disqualified companies from tendering based on the race of their owners.
“Unsurprisingly, the Act’s racial profiling and social engineering is plainly illegal in many countries. Reservation to accede to unreasonable state demands will be the norm for international investors and companies who not only resent being told who to employ but who might also face prosecution or penalties in their home countries for complying with race-laws abroad,” Sakeliga said.
President Cyril Ramaphosa recently proclaimed the Act will come into effect in January. Among other features, the Act it empowers the minister of employment & labour to set numerical race-based targets for the 18 different sectors in the economy.
Once the minister has done so, employers with more than 50 workers (designated employers) will have to comply with the sectoral targets.
Once sectoral targets are published in their final form, designated employers will need to review their employment equity plans to ensure that their numerical targets and goals align with any sectoral targets that may be published by the minister, and where they do not, that there is reasonable justification.
The amendment also extends the definition of people with disabilities to include those with intellectual or sensory impairments which may limit their prospects of entry into employment.
The National Employers’ Association of SA (Neasa) has also threatened legal action over the implementation of the Act, saying it “remains unequivocally opposed to any legislation which forces an employer to appoint employees on any other basis than merit”.
“Neasa will, in the face of these looming race-based targets, continue to advocate for the freedom of employers to run their businesses as they see fit, without undue state interference.”
Law firm Bowmans said it would be “immature at this stage” for employers to amend their employment equity plans until the final sectoral targets are published.
“The most controversial of all the amendments by far, is the introduction of sectoral targets, and it remains to be seen what the final version of the sectoral targets will look like,” said Melissa Cogger, a partner at Bowmans.
“The Department of employment & labour published draft regulations for public comment identifying sectors and proposing various sectoral targets in respect of designated groups on May 12 2023 and again on February 1 2024. It remains to be seen whether the February 2024 draft regulations will be published in final form or whether another version of the sectoral targets will be published for public comment,” Cogger said.
Minister Nomakhosazana Meth said the new legislation will allow employers to comply with their set annual employment equity targets towards the achievement of the five-year sector targets.
“In the next 2025 employment equity reporting cycle starting on September 1 2025, employers will have to use the published employment equity amended legislation to submit their employment equity reports,” Meth said.
“We are excited by the latest developments that small businesses will no longer have to go around spending their money on consultancy fees to source legal assistance to develop EE plans and submission of employment equity Reports. We hope that the new amendments to employment equity, will impact positively on job creation and the unemployment rate.”
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