Tag Archive | employment equity

SA’s economic woes not BEE, says DTI

BEE and economic climate not connected…..

lionel october 3In his introduction to the Department of Trade and Industry (DTI) presentation to Parliament on the current position with regard to the implementation of Black Economic Empowerment (BEE) as of August, 2015,  DTI’s DG, Lionel October, said that contrary to some claims, BEE was nothing to do with the many economic problems that beset South Africa.
In his overview, before discussing the detail of the B-BBEE Act, the Codes and Sector Charters, October said he wanted place the need for urgent transformation in its proper context. He said that indeed South Africa, as an emerging economy, had been hurt by global factors recently by Chinese currency interventions and originally by its own energy supply problems.

Key to future, says DTI

However, he said, economic transformation in the form of black advancement, procurement from black entrepreneurs, the transfer of basic mineral wealth into beneficiated products and a rebuilt and transformed manufacturing sector held the key to development.   BEE was nothing to do with the pervading “doom and gloom” scenarios that were persisting in business and industry circles.

Lionel October said “things now needed to be speeded up”. He claimed that the country now had all the legislation, tools and direction needed to contribute the shortage of jobs and quoted JP Landman by saying that South Africa faced a further problem that population growth of 200,000 births a year more than the previous year every year was as much a problem currently, he said.

The big sell

In tracing the development of BEE since the commencement of the B-BBEE Amendment Act in 2014, the adoption of the B-BBEE Codes of Good Practice in May this year, DTI had held 46 workshops to explain and help in the development and understanding of the need for black empowerment. It was not a racial issue, he insisted, but a programme of necessity if South Africa was to survive economically.

He said that the process of establishing at BEE Commission was at “an advanced stage” – the new acting commissioner having been announced recently.

B-BBEE ACT trumps all

Acting chief director of BEE at DTI, Liso Steto, then reported that the new “trumping” provision in the Broad-Based Black Economic Empowerment Act will take effect in two months time when the 12-month transitional period expires. An example of “trumping”, he explained to MPs, was if, for example, a government department put out for tenders and ignored the provisions of the B-BBEE Act. In that case, the Act would “trump” any regarding the tenders.
This trumping therefore, he said, will take precedence over any other law and relates to all other instruments of black economic empowerment, such as Codes of Good Practice and Sectoral Charters. The provision would come into effect in October 2015, by regulation.

Codes get to nitty gritty

On Codes, Steto said, the major development had been the issue of relating “employment equity” to “management control”, with the latter now being the uniform name. Also “preferential procurement” and “enterprise development” were merged for evaluation into one element re-named “enterprise and supplier development”.

Minimum requirements had been introduced for “ownership”, “skills development” and “enterprise and supplier development”, as above.

Fighting “fronting”

Acting DG Steto re-confirmed that 25.1% remained as the target for black ownership. Emphasis was laid on the expression “true ownership” when explaining the 40% sub-minimum applicable on the net value of ownership in the hands of black people. Only investments regulated and based in South Africa will qualify as a “mandated investment”.

On Sector Codes, it was confirmed that ten sectors had been given extensions since 2013 but the final, final date was now October 2015 for all sectors. To date tourism, property, agriBEE, forestry, the media, advertising and communication were in line for approval. The process of aligning the mining charter with the liquid fuel charter had begun.

Split must come

Rumour has it “in the corridor” that these will eventually be split but the whole issue of the implementation of the Minerals and Petroleum Resources Development amendments have to be resolved before such an event can even be considered, resulting in this be an issue way into the future.
Questioning from MPs was limited, a concern being expressed by parliamentarians that the whole issue of verification agencies had to be speeded up by DTI and re-clarified. Lionel October said this was a priority.
MPs also complained that the threshold increase for BEE exempt micro enterprises, now being introduced, from R5m to R10m seemed a strange move if the idea was to develop more small manufacturing businesses but DTI responded that their view was different and the necessity to reduce red tape in the SMME world was essential.

Other articles in this category or as background
25.1% is maximum BEE control, says DTI – ParlyReportSA
DTI does flip flop on B-BBEE codes – ParlyReportSA
Equity quotas court ruling affects BEE legislation – ParlyReportSA
B-BBEE Codes of Good Practice far more onerous – ParlyReportSA
One year to implement B-BBEE Codes – ParlyReportSA
Liquid fuels industry short on BEE charter – ParlyReportSA

Posted in BEE, Finance, economic, Fuel,oil,renewables, LinkedIn, Special Recent Posts, Trade & Industry0 Comments

New Employment Equity Act gives shock

Employment Equity regulations published…

menfolk  The reality of the Employment Equity Amendment Bill passed in Parliament last October, now an Act, is beginning   to kick in with the enforcement of  regulations which, of course, are extra-parliamentary. The recently published regulations are not what were expected on the race issue, insofar as equity returns are concerned.

Oddly enough there were few objections or queries on the Employment Equity Bill when the draft Bill was presented for public comment by the department of labour (DoL) over eighteen months ago and the legislation looked destined for an easy passage through Parliament.

1994 critical date

In an unusual turn of events, the Employment Equity Bill, when introduced into Parliament, allowed for foreigners whose applications for citizenship were turned down before 1994 on the basis of their skin colour and such persons can be included in employment equity (EE) returns in future. This occupied much of the discussion in Parliament.

Fines were proposed as related to turnover of the entity in question, which could fall into eleven categories varying from agriculture to manufacturing, quarrying and mining to catering and transport and from wholesale, trade and commercial agencies to finance and business services.  Electricity, gas and water were mentioned, as was construction and community and personal services – all with total annual turnover thresholds given.

Worry was criminalisation

Most public comment in the parliamentary public hearings warned of the Employment Equity Bill criminalising business and strong objections were voiced on this issue.

Furthermore, the provisions of the Bill allowed for all white, Indian and coloured women who had been gender disadvantaged in terms of statutory law at any stage will also qualify for inclusion in terms of equity reporting. The Employment Equity Bill was the third in a raft of four new labour bills presented to Parliament last year.

In its briefing to Parliament before the parliamentary public hearings, DoL suggested to parliamentarians that “business and industry has been riding roughshod over the law which had been unrevised for nearly 15 years and it was time now that provision was made in their budgets for considerably more than the negligible fines of the past.”

National demographics the decider

At the time of the Bill, it was assumed by most in the public hearings that the reference to “equity in terms of national or regional demographics” would mean that employers could set equity targets or make plans as called for in what could be interpreted as reasonable and according to the geographic area each company or entity was located.

The Bill said that “guidance would be given” on this provision by the DoL. The Bill was passed and became an Act with, as always happens, the regulations awaited – a matter then purely between DoL and the employer.

It appears from press reports that the regulations “giving guidance” on the issue of race demographics are a far more contentious item than the issue of the fines objected in the public hearings in Parliament.

Still applies to min of 150 employed

The employment equity plan that each company must draw up, it is reported, now call in terms of the regulations issued for the targets to represent national demographics, not regional demographics as was expected, but still wherever the entity is of 150 employees or more wherever that entity is located.
It is unlikely that this matter will be debated in Parliament again, since a legal challenge might only result in that particular regulation being revised – unless of course the whole Bill is overturned constitutionally, which would seem most unlikely.
Previous articles in this subject
http://parlyreportsa.co.za//bee/employment-equity-amendment-bill-looks-set-easy-passage/
http://parlyreportsa.co.za//labour/employment-equity-bill-criminalises-offenders/
http://parlyreportsa.co.za//bee/turnover-fines-employment-equity-breaches/
http://parlyreportsa.co.za//bee/court-ruling-equity-quotas-affects-bee/

Posted in BEE, Labour, Trade & Industry0 Comments

Turnover fines for employment equity breaches

Getting tough…

Ntsoaki+MamashelaFines that have been unrevised for a number of years for breaches in employment equity in terms of the Employment Equity Act are now proposed as being implemented on the basis of a direct link to balance sheet turnover, meaning a major increase in the size of penalty for medium and big business. The department of labour (DOL) have now briefed Parliament on the Employment Equity Act (EEA) Amendment Bill which was tabled during the last session of Parliament.

Hearings before Parliament from business are expected to be vociferous in their response. Business and industry have been facing a raft of new and more radical amendments to existing labour laws indicating a move from the voluntary nature of BEE participation through charters, to a legislative background of enforcement.

DOL suggested business and industry has been riding roughshod over the law which had been unrevised for nearly 15 years and it was  time now that provision was made in their budgets for considerably more than the “negligible fines” of the past.

New power to labour

The fourth of four of new labour laws, the EEA Amendment Bill, was presented to Parliament in a briefing to the portfolio committee on labour by the department’s equity director, Ntsoaki Mamashela (see picture).   The Labour Relations Amendment Bill, the Employment Services Bill and the Basic Conditions of Employment Amendment Bill have all be endorsed by the Nedlac process, following approval by cabinet; the Labour Relations Act changes failing to pass in the last parliamentary session due to lack of a quorum.

Ms Mamashela assured business that they had “nothing to fear” if they followed the basic rules which were now well-known throughout the country. The proposed amendments demand that the proportions of demographics on an employer’s staff role reflect the demographics of the territory in which the business or industry operates.

The proposed EEA changes apply to companies with 150 employees or more and the Bill makes it quite clear that the proposals refer to “black” people only.

Wording specific about racial categories

The wording of the new Bill states unambiguously “where under representation of people from designated groups has been identified by the analysis, the numerical goals to achieve the equitable representation of suitably qualified people from designated groups within each occupational [category and] level in the workforce, the timetable within which this is to be achieved, and the strategies intended to achieve those goals are not met”, the Bill states, then the minister may apply to the labour court for a fine to be imposed.

The fines are extensive, particularly where previous convictions are concerned, and reach nearly R3m. The department of labour  is also, the proposals state, given the right to refer those cases who have not made returns, or made false returns in respect of their employment equity registers, directly to the labour courts.

Public hearings before the portfolio committee continue.

Refer previous articles in this category
http://parlyreportsa.co.za//uncategorized/business-and-government-miles-apart-on-labour-laws/
http://parlyreportsa.co.za//cabinetpresidential/labour-nobody-at-top-biting-the-bullet/
http://parlyreportsa.co.za//cabinetpresidential/parliament-delays-process-on-labour-relations-bill/

Posted in BEE, Facebook and Twitter, Labour, LinkedIn, Trade & Industry0 Comments


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