Unpacking the final employment equity sector targets in South Africa

By Melissa Cogger and Talita Laubscher

On 15 April 2025, the Minister of Employment and Labour published the ‘Determination of Sectoral Numerical Targets’ (Final Sector Target Regulations) and the ‘Employment Equity Regulations, 2025’ (General Administrative EE Regulations), which repeal the Employment Equity Regulations, 2014 (collectively, the 2025 EEA Regulations).

The 2025 EEA Regulations are published, following the Employment Equity Amendment Act, 2022 (Amendment Act) coming into effect on 1 January 2025, and the purported consultations that took place between the Department of Employment and Labour (DoEL) and representatives of various sectors.

In the Final Sector Target Regulations, the Minister has identified 18 national economic sectors and set numerical targets for each sector. The ultimate purpose of these sector targets is to ensure the equitable representation of suitably qualified people from designated groups.

In terms of section 20(2A) of the Employment Equity Act, 1998 (EEA) the numerical goals set by an employer must comply with any sector target that applies to that employer and is, in terms of section 42(1)(aA), one of the measures that is considered in the assessment of compliance.

Further, the Minister may only issue a certificate of compliance in terms of section 53 of the EEA if the Minister is satisfied that, among other things, the employer has complied with a sector target that applies to that employer, and if it did not, there were justifiable reasons for non-compliance.

The enforcement of these sector targets will have significant impact on designated employers and their ability to do business with the State.

Further, fines and penalties may apply for non-compliance with sector targets unless a justifiable reason exists for such non-compliance.

History behind the targets

The timeline and process leading to the finalisation of the sectoral targets involved several stages, as set out below:

•  

  18 sectors were identified by the DoEL on 21 September 2018 through the publication of draft regulations (Draft 2018 EEA Regulations). These 18 sectors have remained unchanged, and are based on the broad categorisation in the Standard Industrial Classification Codes.
• Following the tabling of the Employment Equity Amendment Bill in Parliament, various meetings were held with stakeholders during the period from 2019 to 2022 regarding the proposed sector targets, which were initially based on the sector charters published under the Broad-Based Black Economic Empowerment Act, 2003 (BBBEE Act).
• The President only signed the Employment Equity Amendment Bill into law on 6 April 2023. The promulgation and coming into effect of the Amendment Act would be on a later date, which we now know to be 1 January 2025.
• Draft targets were published for public comment on 12 May 2023 (2023 Draft Sector Targets) as well as on 1 February 2024 (2024 Draft Sector Targets). Such publication took place even though the Amendment Act had not yet come into effect.
• The Amendment Act came into effect on 1 January 2025, and section 15A of the EEA empowers the Minister (following a multi-stage process of consultation) to set sector targets.
• During February 2025, the DoEL conducted virtual meetings with stakeholders in the 18 sectors and invited written representations within an expedited timeframe on new proposed draft targets (2025 Draft Targets). These 2025 Draft Targets were not published for public comment.
• Following the virtual meetings, and during February and March 2025 various stakeholders requested and held bilateral engagements with the DoEL as a means to discuss the rationale underlying the 2025 Draft Targets, as well as the rationale pertaining to the identification of the sectors. The sectors had remained unchanged since the sectors were first identified in the Draft 2018 EEA regulations, despite representations by various organisations that these were over-broad and did not take into account the unique circumstances of sub-sectors.
• Finally, the sector targets were published in final form on 15 April 2025 (Final Sector Targets), with no further period for public comment provided, and without prior publication of these Final Sector Targets in draft form.

As with the 2024 Draft Sector Targets, the Final Sector Targets are set for males and females from 'designated groups' generally and are not broken down further per population group.

Further, and as previously recorded in the 2024 Draft Sector Targets, the five-year sector targets are not intended to add up to 100%; as the sector numerical target excludes white males with no disabilities and foreign nationals as part of the workforce profile.

When determining annual employment equity targets towards achieving the five-year sector numerical targets, a designated employer must set numerical targets for all designated groups in each of the four upper occupational levels in relation to the applicable sector targets and Economically Active Population (EAP), and for persons with disabilities.

The General Administrative EE Regulations state that the manner in which designated employers must take the sector targets into account and apply the affirmative action measures is set out in the EEA, the General Administrative EE Regulations and the codes of good practice issued under the EEA.

Comparison of the 2024 Draft Sector Targets and the Final Sector Targets

In comparing the 2024 Draft Sector Targets and the Final Sector Targets, the following is notable:

• Overall, the Final Sector Targets are significantly higher than the 2024 Draft Sector targets, with significant increases particularly for females in the designated groups. For instance, the target for females in senior management in the Finance and Insurance sector has increased by 21.3% when compared to the 2024 Draft Sector Targets. Targets set for females in senior management have similarly significantly increased in the Professional, Scientific and Technical Activities sector by 23.1%. Conversely, there have been some decreases in the targets for males in the designated groups.
• The target for people with disabilities has been increased from 2% to 3% across all sectors.
• Some of the principles agreed to between the South African Government and Solidarity trade union during 2023, which were previously included in the Draft 2024 Targets are absent in the 2025 EEA Regulations. For example, the 2025 EEA Regulations do not explicitly contain the principle "No employment termination of any kind may be effected as a consequence of affirmative action." The principle that “affirmative action shall be applied in a nuanced way” is also missing from the 2025 EEA Regulations, however the regulations do outline guidelines for implementing affirmative action.
• Unlike the 2024 Draft Sector Targets, the DoEL has not explained in the Final Sector Targets what factors it took into account when setting the five-year sector targets. For example, it does not refer to the latest workforce profile statistics, the EAP, the various sector codes published under the BBBEE Act, or the unique sector dynamics.
• Similar to the 2025 Draft Sector Targets, guidance is provided on the over-representation of any particular group. The 2025 General Administrative EE Regulations discourage designated employers from perpetuating the over-representation of any group if their representation exceeds the applicable EAP in a particular occupational level.
• Further information is provided in circumstances where a designated employer exceeds the sector target. For example, if a designated employer has exceeded the numerical target set for a particular designated group at an occupational level, it should continue to set targets that maintain compliance with the EAP. There is no longer a prohibition on “regression” in a particular race/gender group, which was contained in the Draft 2024 Sector Targets.
• It is possible for designated employers that operate in more than one province to adopt multiple provincial EAPs, taking into account the nature of their operations and geographical area. This was not previously permitted in the Draft 2024 regulations.

Rationale for revised targets

For various sectors, the Final Sector Targets are the same as those targets shared by the DoEL during the virtual meetings held in February 2025 and are unchanged despite representations and bilateral engagements. Importantly, those draft targets shared in February 2025 were not published in the Government Gazette for public comment.

The DoEL explained in the meetings that the 2025 Draft Targets were based on the feedback received in the prior public participation process, the latest workforce profile statistics and sector dynamics.

The DoEL indicated that the rationale for the change in draft targets was due to various sectors comparing well and exceeding the 2024 Draft Sector Targets in the last reporting period, which appears to explain the markedly increased and different Final Sector Targets.

During engagements and in some of the bilateral engagements, the DoEL further explained its rationale and ‘formulae’. The DoEL considered the workforce profiles of the various sectors for 2023 and 2024. It then set the target for the top four occupational levels at 6%, 7%, 8% and 9% respectively. This appears to be based on the DoEL’s view that these are appropriate targets.

The Final Sector Targets therefore do not appear to have been formulated on any scientific or empirical basis. The challenge arises when the workforce profiles of subsectors are considered. In some instances, the targets are then much higher than the 6%-9% principle applied by the DoEL, which makes compliance with the sector targets a challenge for these subsectors.

Some comfort for designated employers

Whilst section 20(2A) contemplates peremptory compliance with the Final Sector Targets when setting numerical goals, comfort should be taken in the well-established principles in employment equity law that have been interpreted and developed by our courts.

In this regard, section 15(3) explicitly states that affirmative action measures include preferential treatment and numerical goals, but exclude quotas, and that there should not be absolute barriers to the appointment or promotion of over-represented groups.

Regard should also be had to the justifiable reasons for non-compliance which are repeated in the General Administrative EE Regulations, which remain unchanged from the Draft 2024 Sector Targets.

Melissa Cogger and Talita Laubscher are partners at Bowmans.

** The views expressed do not necessarily reflect the views of IOL or Independent Media.

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