The impact of the Employment Equity Amendment Act on foreign businesses in South Africa

The Employment Equity Amendment Act will take some legal effect on 1 January 2025. Unmitigated, the amendment act will have profound implications for foreign incorporated businesses operating in South Africa.

The purpose of this letter is to inform you that Sakeliga is taking steps against harmful elements of the amendment act and to offer further information.

Our course of action includes litigation and will take into account what, if any, final regulations the Minister of Labour promulgates in coming weeks. In January, we intend to offer a closed briefing on the act and its prospects, as well as our litigation strategy, with special reference to foreign incorporated businesses.

Inter alia, the amendment act provides for the Minister of Labour to prescribe so-called ‘targets’ (in effect, quotas) for employment based on race and other criteria. Final regulations have not been published, but drafts indicate an intention by the Department to define in increasing detail what the demographic composition of the workforce of a company should be at each workplace of the company, and by level of seniority or employment category within the company. The amendment act provides for substantial and ruinous penalties for businesses found to be in contravention.

Obtaining further information

Should you wish to be kept abreast of developments and our January briefing, or obtain further information, you may indicate so by replying to this email.

Should you wish to bring specific information to our attention, we would welcome it. 

For example, it might be that businesses incorporated in your country are legally or ethically restricted from co-operating with race-based legislation, creating potential liabilities for their executives and directors. Or, it might be that chambers of commerce in South Africa composed of foreign businesses from your country have made submissions on the amendment act or otherwise expressed concern. 

Feel free to point us in such directions.

About Sakeliga

Sakeliga is a non-profit company that promotes a favourable economic environment in the public interest.  It is supported by thousands of businesses and professionals. 

Visit www.sakeliga.org.za for more information.