The Steel and Engineering Industries Federation of Southern Africa, a constituent member of Business Unity South Africa, supports the BUSA legal challenge against the recently promulgated Employment Equity Sector Targets.
The slow pace of transformation in the country, including in the Metal and Engineering (M&E) Sector, continues to be of great concern. The Employment Equity Act (EEA), the Skills Development Act (SDA) and the Broad-Based Black Economic Empowerment Act (BBBEE) provide the basis for addressing indicators of inequality in the labour market. These three pieces of legislation were intended to complement each other in addressing inequalities and unfair discrimination in human capital development, thus helping the country to harness the potential of its diverse human capital.
The manufacturing industry in general and the M&E Sector in particular are very much in need of transformation. This is the case not only when it comes to general business ownership, but also with regard to appointments to senior leadership positions and the composition of Boards of Directors.
The Employment Equity Amendment Act of 2022, which came into effect with the accompanying regulations on 15 April 2025, is the latest attempt to accelerate the slow pace of transformation. The new Employment Equity Regulations introduce specific targets for designated groups in South Africa. These targets aim to increase the representation of black people, women and individuals with disabilities in the workforce, particularly in upper occupational levels. Designated employers will have to align their employment equity plans with these targets or face potential fines, compliance orders and exclusion from doing business with the state.
SEIFSA has no in-principle objection to the provisions of the EEA in pursuit of meaningful workplace transformation. We do, however, remain seriously concerned about the numerous irregularities that occurred in formulating the final sector targets. This is despite ongoing consultations between SEIFSA and Senior Officials in the Department of Employment and Labour, and also between BUSA and the Minister of Employment and Labour.
Business concerns are focused on serious and irrational substantive and procedural irregularities. The nature, tone and content of consultations between business and government fell well short of what would be considered good faith consultations. The categorisation of manufacturing in the Act, as an all-encompassing category which includes all forms of manufacturing across the board, is patently wrong. Manufacturing entails vastly different economic sub-sectors and activities across the economy, all differing very significantly in size, complexity of operations, demographics, input costs, etc. Even within the M&E Sector, there is no uniformity between the twelve sub-sectors that make up the metals and engineering industries. The Minister of Employment and Labour has the power to identify sub-sectors and has failed to do so.
Business is also concerned about the apparent lack of empirical and/or statistical data and the methodology used in arriving at the sector targets. Consultations around these matters and others, which will be ventilated in legal papers, need to go beyond being a mere tick-box exercise. Genuine engagement marked by transparency, sector-specific insights and meaningful feedback, all of which have been absent in the lead-up to the promulgation of the Act, are key ingredients of any good-faith consultation engagement.
The Employment Equity Regulations will now be the subject of a legal challenge. As the legal challenge moves through the courts, the courts will make their call on the matter brought to them. Regardless of what the courts may decide in this and the legal challenges launched by other stakeholders, the reality is that South Africa will not reach its full economic potential if transformation is halted in its tracks. Business is not against the notion that transformation must be accelerated, but transformation must be pursued in a way that expands opportunity, not limits it. Not only is it in South Africa’s interest for that to happen, but it is also fundamentally in the long-term interest of business.
It is of critical importance that a concerted effort is made by South Africa Inc. to create meaningful opportunities for all South Africans so that the country becomes a fairer, more just and prosperous place. We deserve a future that values merit alongside diversity; stability alongside redress and – as framed in our Constitution – the promise to “improve the quality of life of all citizens and free the potential of each person.” This is the responsibility of all of us.
Opinion piece by Lucio Trentini, SEIFSA Chief Executive Officer.
