By Lehlohonolo Lehana.
Business Unity South Africa (BUSA) launched a court application to challenge recently published regulations that dictate the race, gender and disability composition of companies employing more than 50 people.
BUSA wants the 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.
Busa says its decision to initiate litigation was not taken lightly and follows numerous attempts to resolve the matter constructively.
The organisation says it has consistently engaged with the Department of Employment and Labour (DEL) in good faith. These engagements included formal meetings, data submissions and a detailed presentation to the Minister, raising urgent concerns with the consultation and methodology process.
Busa CEO Khulekani Mathe states that what took place was not meaningful consultation, but rather a presentation. “As social partners, we cannot allow performative engagement to substitute for genuine collaboration,” he says.
The organisation’s main gripes with the EE Sector Targets include limited consultation time, with employers having had less than a week and, in some instances, only a few hours to respond.
Busa adds that insufficient information was provided on the methodology used in reaching the targets, including an insufficient explanation for how the DEL calculated the targets or the demographic assumptions used.
For example, the EE 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.
Busa also believes the EE Sector Targets have insufficient sectoral analysis, with government having undertaken limited assessments to determine where targets were achievable given industry-specific realities.
Moreover, Busa says the targets are not aligned with broad-based black economic empowerment sector codes, which creates regulatory confusion.
Mathe states that “one-size-fits-all targets ” and the 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. 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 continues that poorly developed targets risk damaging vital sectors of the economy.
“If 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,” he adds.
Busa emphasises that this legal action is not aimed at opposing transformation or undermining the EE Amendment Act.
On the contrary, the business community has consistently worked to champion measures that foster diversity, inclusivity and redress.
The concern lies with the manner in which these targets have been developed and imposed.
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.