Sectoral Employment Equity Targets: BUSA and DEL Navigate Complex Transformation Landscape

John Botha
Jun 23
3 min read

The Department of Employment and Labour (DEL) has maintained its position on sectoral Employment Equity (EE) targets following engagements with Business Unity South Africa (BUSA), despite significant concerns raised about both the process and substance of the proposed regulations.

Background and Consultation Process

BUSA, while supporting transformation principles, requested a meeting with the Minister to address concerns about how sectoral EE targets were formulated and consulted upon. The organisation participated in extensive consultation processes and public comment periods, with DEL incorporating input into revised regulations. However, fundamental disagreements remain about the approach and methodology.

Target Framework and Performance Analysis

A key distinction has emerged between sectoral EE targets and BBBEE Code targets. While BBBEE Codes focus primarily on black representation with higher targets, sectoral EE targets encompass all designated groups, including black people, women, and people with disabilities across all racial categories. Sector stakeholders have rejected adopting B-BBEE code targets as binding requirements, preferring to treat them as aspirational guidelines.

The recent three-year trend analysis reveals mixed but generally positive performance across key sectors:

Consumer Goods Council (CGCSA) members generally exceed the proposed five-year EE targets at upper management levels, with only minor shortfalls at junior management
Minerals Council shows above-target performance at top and senior management levels, with slight deficits at middle and junior levels that annual progression rates suggest are achievable
ASISA (Financial & Insurance) falls slightly below targets across all levels, but progression data indicates five-year targets remain attainable

BUSA's Primary Concerns

BUSA has raised several substantive concerns about the regulatory framework:

Process Issues: Consultations commenced before legal authority was in force, raising questions about procedural validity. The organisation argues that consultation processes were inadequate, particularly regarding sub-sector differentiation.
Methodological Concerns: BUSA contends that targets require unrealistically high annual increases given current economic constraints and that the lack of empirical data and clear methodology for setting targets undermines their credibility.
Implementation Challenges: Key concerns include the 3% disability target set without supporting statistical analysis, potential contradictions with primary legislation, skills shortages in critical areas, and risks of narrow interpretation by labour inspectors.
Legal Risks: The organisation warns of potential legal challenges due to perceived process flaws and procedural fairness issues.

DEL's Response and Rationale

The Department has comprehensively addressed BUSA's concerns:

Legal Authority: DEL maintains that consultations before the law's commencement are legally valid, with public comments incorporated and deadlines extended as needed.
Ministerial Discretion: The Minister retains discretion to set sector or sub-sector targets, with DEL arguing that no compelling case for sub-sector targets has been presented.
Target Setting: Employers can self-regulate annual targets and provide justification for non-compliance. The Department used trend analysis and sector workforce profiles, noting no legal requirement to determine "suitably qualified" pools.
Disability Targets: The 3% disability target is inclusive across all demographics and falls below National Development Plan targets, with justifiable reasons for non-compliance being accepted.
Skills Development: Employers are expected to develop skills and train artisans, with ongoing inspector training addressing implementation concerns.

Regulatory Changes and Implications

Several significant changes have emerged from the process:

Only employers with more than 50 employees are now designated as "designated employers".
Sectoral targets are binding for compliance certificates required for government work
The definition of "people with disabilities" has been broadened.
Labour inspectors have enhanced authority.
Employers must compare workforce profiles to the Economically Active Population (EAP) benchmarks and document progress.
Targets for semi-skilled and unskilled levels are based on EAP figures rather than fixed sector targets.

The Way Forward

DEL has rejected BUSA's recommendations for withdrawal and redrafting of regulations, citing extensive consultation processes and comprehensive long-term trend monitoring. The Department maintains that the process was procedurally fair and legally compliant.

Moving forward, sectoral EE targets will be maintained with flexibility for employers to set and justify annual targets. Compliance certificates for government work will require meeting targets or providing justifiable reasons for non-compliance, with the 3% disability target applying inclusively across all demographics.

The framework represents a significant evolution in South Africa's employment equity landscape, balancing transformation imperatives with practical business considerations while maintaining regulatory oversight and accountability mechanisms.

LAST CHANCE to join us at our Mid-Year Labour Law Update, where we'll unpack over 40 cases, following themes that are emerging in case law and statutory amendments, and which can not be ignored (Digital Transformation and Employment Law; Recent Labour Court, Labour Appeal Court and Constitutional cases; NEDLAC Proposed amendments on the LRA, BCEA, EE, and NMW Acts; Risk Management and Compliance)

Innovation in LR Practices. This year's theme is Labour Law Evolution: The New Face of

Labour Relations & Case Law in Disrupted Businesses. What you'll gain: