The Employment Equity Act (EE) recognises that not every numerical target will be achievable in every reporting period. Businesses operate in conditions that shift – skills pipelines fluctuate, recruitment markets tighten, and organisational circumstances change in ways that are not always foreseeable.

Acceptable reasons for non-achievement must however be substantiated with documentary evidence.

What the Act does not accommodate is unsubstantiated assertion. Where non-achievement is recorded, employers must be able to point to specific, documented circumstances that support their position.

Justifiable Reasons for Target Shortfalls

The following circumstances may be accepted as grounds for non-achievement, provided that they are properly documented as detailed:

• Insufficient recruitment opportunities: If your organisation was under a hiring freeze during the reporting period, you need board or executive committee resolutions or formal memoranda confirming that external recruitment was suspended. If roles were not filled because they became redundant or were automated away, a succession gap analysis documenting this fact is required. The key principle is that the restriction on recruitment must have been real, documented in real time, and not constructed retrospectively to explain an unfavourable outcome.
• Limited promotion opportunities: A flat organisational structure with no vacancies at the occupational levels where designated group targets were missed can justify non-achievement, but only if you can prove that the structure was genuinely flat. Organisational charts showing no vacancies at the relevant level, and retention data demonstrating low turnover at management grades, constitute the necessary evidence. If your organisation promoted anyone during the reporting period at those levels, you will need to explain where EE targets were not considered in those appointments.
• Inadequate suitably qualified candidates: This justification is often cited and frequently fails because it is not properly evidenced. Claiming that no suitable candidates from designated groups were available requires more than an assertion. You need a scarcity report from your relevant Sector Education and Training Authority, recruitment agency feedback showing the scarcity in the market, and applicant funnel data demonstrating that despite active advertising, no suitably qualified designated candidates applied. The inherent job requirements must also be documented and justifiable – qualifications that are set higher than the role demands will not be accepted as a filter for eliminating candidates.
• Commission for Conciliation, Mediation and Arbitration (CCMA) award or court order: Where a non-designated appointment was the direct result of a CCMA award or Labour Court order (e.g. a reinstatement order following an unfair dismissal finding), you must produce a certified copy of the relevant ruling and a case file demonstrating that the appointment was a legal mandate that superseded the EE Plan. This is a straightforward category to evidence if the documentation is kept correctly.
• Impact of economic conditions: Significant economic distress affecting the organisation’s ability to recruit or promote can constitute a justifiable reason for non-achievement. The evidence required is financial and includes abridged financial statements showing a downturn, operational proof such as documentation of Section 189 retrenchment consultations or board-approved payroll budget cuts. A general reference to tough economic conditions without financial evidence will not be accepted.
• Mergers and Acquisitions (M&As): Where a corporate transaction changed the composition of the workforce in ways that negatively impacted EE targets, the transaction documentation is required. Evidence is provided in signed M&A agreements and due diligence reports that specifically identify how the acquired entity’s workforce profile affected the group’s total representation. This category acknowledges that an acquiring entity cannot always control the demographic profile of what it acquires, but expects that the impact was identified, documented, and factored into future planning.
• Transfer of a business: Section 197 of the Labour Relations Act mandates the automatic transfer of all employees when a business transfers as a going concern. If this resulted in the employer inheriting a workforce that negatively impacted EE targets, the Section 197 agreement and proof of the mandatory intake constitute the required evidence. As with M&As, the expectation is that the impact has been identified and that the post-transfer EE Plan reflects a realistic trajectory toward remediation.

Strategic Solutions for Real Barriers

Beyond the formal compliance framework, many employers struggle with structural and operational barriers that prevent genuine transformation from taking hold. Understanding these barriers – and having a credible strategy to address them – is increasingly part of what inspectors assess during substantive compliance reviews.

One of the most common challenges is a pipeline mismatch i.e. the difference in pace at which employees from designated groups are developing and the pace at which senior vacancies arise. Organisations set ambitious senior-level targets but have not invested in the pipeline infrastructure — mentorship programmes, structured career pathing, targeted development plans — needed to deliver suitably qualified internal candidates when those vacancies open. The strategic response is to connect individual development plans explicitly to EE succession goals and to start that pipeline work well before the target deadline arrives.

Many organisations default to external recruitment when senior roles become vacant, bypassing the internal talent pool. This reactive pattern makes EE targets harder to control, because the external labour market is subject to availability constraints that the organisation cannot manage. Building robust succession planning that actively identifies and develops designated group members for key roles gives the organisation far greater control over its EE trajectory and far stronger evidence of ‘reasonable steps’ during any review.

Many organisations default to external recruitment when senior roles become vacant, bypassing the internal talent pool entirely. This pattern – broadly described as reactive external recruitment – makes EE targets harder to manage, because the external labour market is subject to availability constraints that the organisation cannot manage. Building robust succession planning that actively identifies and develops designated group members for key roles gives the organisation far greater control over its EE trajectory and far stronger evidence of ‘reasonable steps’ during any review.

Job specifications, advertising platforms, and screening processes can contain subtle barriers that systematically exclude diverse talent without any conscious intent. Over-specified qualification requirements, exclusive use of networks that lack diversity, and structured interview processes that favour a particular cultural communication style all narrow the candidate pool before the first interview is held. Aligning job specifications and key performance indicators to EE goals opens recruitment to a broader and more representative talent base. Key to achieving this is asking what the role genuinely requires rather than what has been inherited.

Perhaps the most pervasive structural barrier is the EE Committee without real authority i.e. it exists on paper but has little if any power. Without training, executive sponsorship, direct board reporting lines, and genuine decision-making authority, these committees become administrative exercises. They monitor compliance paperwork rather than driving transformation. Empowering the EE Committee means giving it the capacity to interrogate recruitment and promotion decisions, flag deviations from the plan in real time, and escalate to the CEO when progress stalls. The committee should be driving transformation, not documenting it after the fact.

The Boundaries the Act Sets

EE policies must be both legally compliant and genuinely designed to achieve transformation.

Alongside the obligation to pursue targets meaningfully, the Act places firm boundaries on how Affirmative Action (AA) measures may be implemented: Absolute barriers to employment or advancement are prohibited, existing employees may not be terminated as a result of AA measures, and the arbitrary displacement of employees already in post has no legal basis under the EEA.

Where a Director-General review finds that an employer has not engaged seriously with its obligations, the following will not be accepted as a defensible position and may result in referral to the Labour Court:

• Failure to make any genuine effort in workforce planning during the reporting period.
• Setting targets that were artificially low or structured to avoid meaningful commitment.
• Ignoring numerical targets when recruitment and promotion opportunities existed.

The Bigger Picture

Non-achievement of EE targets is not, in itself, a compliance failure – provided that the employer can demonstrate good faith, reasonable effort, and a credible forward-looking plan. What the Act cannot accommodate is inaction dressed up in documentation.

Organisations that build their EE infrastructure properly are not only better positioned during reviews, but are also better placed to achieve the sustainable transformation that the Act was designed to produce.