While the Democratic Alliance’s legal challenge to the Employment Equity Amendment Act (EEAA) has drawn widespread attention, concerns are emerging about the practical difficulties of implementing the law – even if it withstands constitutional scrutiny.
At the heart of the DA’s case, heard in the High Court in Pretoria this week, are the sectoral numerical targets published in April by Employment and Labour Minister Nomakhosazana Meth. These targets, which came into effect on 1 January, divide the economy into 18 sectors and impose binding equity goals on designated employers. Businesses that fail to meet these targets face exclusion from state contracts and fines of up to 10% of turnover.
Judgment was reserved after both sides presented arguments on 6 May.
Beyond the legal and constitutional issues, critics question whether the law can be enforced fairly. They argue that the rigid structure of the sectoral targets, coupled with the lack of flexibility for individual business circumstances, could result in unjust penalties.
Even employers that act in good faith may find themselves unfairly penalised, they warn, because the Department of Employment and Labour is unlikely to have the capacity to process the expected flood of exemption applications.
Thousands may miss equity certificates as department faces overload
Designated employers – those with 50 or more employees or organs of state – must implement new employment equity (EE) plans from 1 September 2025 to 31 August 2030. Smaller employers are exempt from submitting EE plans and reports but may still apply for a compliance certificate under section 53 of the Employment Equity Act.
The EE Compliance Certificate, issued by the Minister of Employment and Labour, is required for designated employers seeking state contracts. It confirms compliance with the Act, which aims to ensure fairness in hiring, promotion, and employment practices.
Employers designated after 1 April 2025 must submit plans covering the remainder of the five-year cycle. All designated employers have until 31 August 2025 to conduct workplace analyses and update, or draft new plans aligned with sector targets and legislative amendments.
The 2025 reporting period runs from 1 September 2025 to 15 January 2026. The Department of Employment and Labour will begin issuing compliance certificates during this period. Employers will not yet be assessed on their progress towards meeting the sectoral targets. This will change in 2026, when evaluations of annual and five-year targets begin.
Employers that fail to meet the targets must provide justifiable reasons. The Act recognises seven such reasons: limited recruitment or promotion opportunities, lack of suitably qualified candidates from designated groups, CCMA awards or court orders, business transfers, mergers or acquisitions, and adverse economic conditions.
Solidarity has published an analysis of the draft targets, arguing they are unworkable unless the economy grows at an “impossible rate”, or employers radically change their workforce demographics – a process the trade union warns would be “enormously disruptive”.
The 2022 list of designated employers included 27 533 entities. In court papers, DA leader John Steenhuisen argues that assessing whether non-compliance is reasonable rests with the minister or director-general – a task that will be practically unmanageable given the volume of expected exemption applications.
“Many of these employers that wish to do business with the state will struggle to comply… and thus will have to justify their failure to comply,” Steenhuisen states. He argues the minister’s office will be “inundated” and under-resourced, noting only R1.2 million has been allocated for implementing the amendments.
“It is thus likely that many designated employers, even those with a reasonable ground for non-compliance, will simply not receive section 53(2) certificates, and so will be precluded from doing business with the state,” his founding affidavit notes.
‘It’s a blunt one-size-fits-all regime’
In a media briefing ahead of the hearing, Helen Zille, chairperson of the Federal Council of the DA, outlined the party’s case against the constitutionality of section 15A of the EEAA. This section empowers the minister to identify national economic sectors and set numerical targets for the equitable representation of designated groups within those sectors.
Zille said the legislation allows the minister to impose national targets that ignore the operational realities of individual companies.
“It’s a blunt one-size-fits-all regime for the entire sector,” she said. “If they do not [meet the targets], a labour inspector can go out [and] the Director-General of Labour can put a huge fine on that company… that is no longer a target, that is a quota.”
Designated employers are also required to set annual equity goals across top occupational levels for all designated groups, including people with disabilities. These must align with both sector targets and the national Economically Active Population (EAP) demographics. The regulations exclude white men without disabilities and foreign nationals from the workforce profile, and the targets themselves do not total 100%.
Critics warn that companies – particularly those in sectors with limited labour mobility or scarce specialist skills – may struggle to meet these targets despite acting in good faith. This raises the risk of being sanctioned for circumstances beyond their control.
Zille further cautioned that the law could deter investment and stifle job creation.
“If government sets policy that creates terms that are unacceptable and impossible to meet without fear of tremendous penalties… who’s going to take that chance?” she asked. “People are going to close down their businesses and certainly are not going to invest here.
“This is the very opposite of redress and the very opposite of transformation… We can’t keep on pushing a failed experiment and tightening the screws tighter and tighter and believe things will improve.”
She argued that the EEAA fails the test for fair discrimination under section 9(2) of the Constitution.
“Section 9(2) says there is such a thing as fair discrimination to redress the legacy of the past. But that is not a blunt instrument,” Zille said. “Any discrimination that is deemed to be fair has to be proved to be fair. You can’t just do anything in the name of redress and claim it is fair discrimination. There’s a benchmark that has to be reached to qualify. As fair discrimination under section 9.2 and this Act fails that benchmark test, 100% we believe and that is the primary constitutional argument that we will be making in court.”
In court, Advocate Ismail Jamie, representing the DA, echoed these concerns, calling section 15A both “blunt and rigid”.
“Because all designated employers would have to follow the applicable sectoral target, regardless of the differences between them. And rigid, because compliance with the mandated target would be compulsory,” he said.
“This is unconstitutional. Our courts have repeatedly held that an affirmative action measure that is rigid, and which fails to take into account all relevant circumstances (i.e., one that is blunt), is not protected by section 9(2) and violates section 9.”
Quotas allegation a ‘red herring’
The African National Congress condemned the DA’s legal challenge as a regressive attempt to derail South Africa’s constitutional transformation agenda.
“This regressive action is not only an affront to the national Constitution, but a direct assault on the very foundation of South Africa’s transformation journey – a journey paved with the sacrifices of those who fought against apartheid’s racial capitalism and institutionalised exclusion,” the ANC said.
The party rejected the DA’s argument that section 15A imposes quotas, calling it a misrepresentation of the Act’s purpose.
“The Employment Equity Act is not about quotas. It is about justice. It is about correcting structural imbalances in the economy and ensuring that all South Africans have a fair shot at opportunity.”
The ANC added that the Constitution requires not only formal equality but meaningful redress:
“We must remind the DA and its allies that South Africa’s Constitution explicitly recognises the need to redress past injustices and to achieve substantive equality. The Employment Equity Amendment Act is a critical tool in realising that vision, particularly in a country where white South Africans, who make up less than 8% of the population, still dominate top management positions in the private sector.”
In their heads of argument opposing the DA’s application, Meth and the Commission for Employment Equity (first and second respondents) defended the EEAA as a constitutional measure to promote genuine workplace equality.
Advocate Fana Nalane, representing the respondents, argued the legislation aligns with section 9(2) of the Constitution and does not impose quotas.
“The Amendment Act seeks to level the fields and ensure equal opportunities,” he said.
The respondents noted that section 15A permits the minister to set numerical targets by sector and region, and that employers retain flexibility to justify non-compliance where reasonable grounds exist.
“A literal reading of section 15A does not say or suggest that it contemplates the imposition of quotas,” they argued.
They also challenged the DA’s characterisation of the law as inflexible, highlighting procedural safeguards. Designated employers must file annual equity reports with the director-general. Penalties may be sought in the Labour Court if reports are not submitted, or employment equity plans are not implemented. However, employers are entitled to provide reasonable explanations, and the Labour Court maintains oversight in disputes.
The respondents described the DA’s arguments as an effort to derail a legitimate and constitutional redress initiative.
“The Amendment Act is an honest, bona fide and constitutional commitment to end the effects of decades of systematic racial discrimination entrenched by the apartheid legal order. The DA seems committed to derailing that endeavour wherever it may arise. We urge this court not to allow that.”
