The National Employers’ Association of South Africa (NEASA) has warned that the government’s new employment equity quotas threaten the viability of firms across the country. In a statement issued earlier this week, NEASA said compliance with the recently gazetted five-year racial targets will impose “impossible and discriminatory” obligations on employers.

The association argued that companies would be forced to compromise core principles of merit and competence to meet the Department of Employment and Labour’s requirements. “Compliance with racial quotas is impossible and will spell the downfall of any company that attempts to comply therewith.”

NEASA, together with business organisation Sakeliga, had sought to block the quotas in the High Court but the application was dismissed. The association confirmed that it would appeal the ruling and vowed to keep contesting the policy. NEASA said it would fight racial quotas from “trench to trench.”

Despite its opposition, NEASA noted that employers were already compelled to submit equity plans and reports to the Department from the beginning of this month. It warned that the regulations would damage workplace culture, erode investor confidence, and weaken job creation if left unchecked.