MAJOR BLOW TO BUSINESSES EMPLOYING MORE THAN 50 PEOPLE IN SOUTH AFRICA
- BEE NEWS
- Mar 24
- 3 min read
Staff Writer | 23 March 2026
The Supreme Court of Appeal has dismissed attempts to put a stay on South Africa’s new Employment Equity targets imposed on businesses in the country.
The Employment Equity Amendment Act and its accompanying two sets of Employment Equity Regulations, including the 5-year sector numerical EE targets for the eighteen economic sectors, came into effect on 1 January 2025 and 15 April 2025, respectively.
Under the laws, designated employers in South Africa—businesses employing over 50 people—are required to draw up plans to ensure their workforces reflect the country’s demographics at all levels.
To this end, the government is now empowered to set numerical demographic targets for businesses across 18 sectors, pushing for black, Indian/Asian, coloured as well as female and disabled representation.
On top of the targets, designated employers are also now saddled with increased admin and burdensome compliance costs—while facing steep fines and penalties for falling foul of the laws.
After the commencement of the Act and the regulations, a number of legal challenges were instituted against the Minister of Employment and Labour, the Director-General of the Department of Employment and Labour (DEL), and the Commission for Employment Equity (CEE).
These cases primarily challenged the constitutional validity, lawfulness, consultation process, and the implementation of the amended EE legislative framework and the 5-year sectoral numerical EE targets.
Two key litigants, the National Employers Association of South Africa (NEASA) and business lobby Sakeliga, filed an urgent application with the Gauteng High Court in Pretoria, challenging the laws.
The case was heard on 15 August 2025.
In the legal challenges, the groups sought interim relief to interdict or suspend the implementation of the 5-year sectoral numerical EE targets, as well as certain provisions of the EE General Administrative Regulations—Part A of the challenge.
In Part B of their case, they sought substantive relief to declare section 15A of the EE Amendment Act, 2022, and related provisions unconstitutional, including the review and setting aside of the 5-year sectoral numerical EE targets and the EE Regulations. On 28 August 2025, the High Court dismissed Part A of the application.
According to the DEL, the court accepted the urgency of the case, but held that an interdict was not appropriate where the Minister had already exercised statutory powers.
“The High Court declined to suspend what it regarded as a lawful exercise of statutory authority, emphasising the separation of powers,” it said.
“The court further held that the consultation process preceding the publication of the sectoral numerical EE targets was lawful.”
However, Part B—the constitutional validity challenge—remains pending, which played a key role in the latest dismissal.
Appeals process falls flat
NEASA and Sakeliga sought leave to appeal the dismissal of Part A of their application.
The matter was heard on 16 October 2025. However, the Court found that there were no compelling reasons why another court would reach a different conclusion.
It further held that it would be premature to grant leave to appeal before Part B is finalised. Leave to appeal was accordingly refused, with no order as to costs.
The applicants then approached the Supreme Court of Appeal.
On 13 March 2026, the Supreme Court of Appeal ordered that the application for leave to appeal be dismissed with costs on the grounds that there is no reasonable prospect of success in an appeal and there is no other compelling reason why an appeal should be heard.
According to the DEL, this Supreme Court of Appeal Order is a big win for the department.
“It vindicates our position that there is nothing sinister about the EE amendments and the 5-year sector numerical EE targets,” it said.
The department said that, in the absence of any court interdict on the implementation of the EE Regulations and the 5-year sector numerical EE targets, all the designated employers are legally obligated to fully comply with the EE amendments.
Designated employers must align their annual EE targets in the EE Plans with the 5-year sector numerical EE targets.
The department noted that employers retain the flexibility to justify deviations from or non-compliance with the laws.
‘Disclaimer - The views and opinions expressed in this article are those of the author(s) and not necessarily those of the BEE CHAMBER’.