Supreme Court sets the boundaries on SA BEE laws – it can’t just be about ‘naked preference’

The Supreme Court of Appeal has ruled that Black Economic Employment practices can’t simply be about “naked preference” and “pushing up the numbers”.

The case in question revolved around a new policy that sought to regulate the appointment of insolvency practitioners in South Africa by introducing new “transformation requirements”.

The policy gave the Master of the High Court the power to appoint an insolvency practitioner regarded as a ‘previously disadvantaged individual’ (as defined in the policy) to act as a co-trustee alongside an experienced practitioner so that he or she could learn from the experienced trustee in order to gain sufficient experience in the industry.

However, the High Court (and later the SCA) agreed that the policy “needed to do more than just increase the numbers“.

Speaking on the case, Mongezi Mpahlwa, senior associate at Cliffe Dekker Hofmeyr noted that affirmative action measures were first introduced in South Africa to reconcile the injustices of the past.

“Although policies have been implemented for the achievement of equality for persons previously disadvantaged, at what point do these policies unjustifiably infringe the rights of persons affected by them?”


The SCA noted that regulations created by BEE policy intended to address past discrimination “must operate in a progressive manner assisting those who, in the past, were deprived, in one way or another, of opportunity to practice in the insolvency profession.”

In addition, they cannot be “arbitrary”, “capricious” or “display naked preference”, but must actually aim to assist the individuals involved and redress the issues of the past, as per a similar 2004 judgement.

Mpahlwa believes this new judgement will call for an intensification of discussions surrounding the positives and shortcomings of current affirmative action policies.

“As can be seen from the judgment, such policies should provide clear deliverable timelines or targets to determine whether they are likely to achieve the intended objectives within a clearly defined period. Policy makers should look beyond increasing the numbers,” he said.

The Minister of Justice has applied for leave to appeal the case in the Constitutional Court.

Read: 3 ways of tackling obesity in SA that are more effective than a sugar tax

Must Read

Partner Content

Show comments

Trending Now

Follow Us

Supreme Court sets the boundaries on SA BEE laws – it can’t just be about ‘naked preference’