Exploring Employment Equity Regulations

Fikiswa Bede, Department of Employment and Labour Chief Director: Statutory & Advocacy Services emphasised the significance of the department’s interest in ensuring compliance with the Employment Equity Act. He warns all businesses that misrepresentation on the Employment Equity Act is a criminal act in his speech at the Department’s EE Dinner and Awards ceremony, held in Johannesburg on 9 May 2024.

He warns that employers risk facing criminal charges in addition to fines for the misrepresentation of their compliance with EE regulations. Businesses should remember that the Employment Equity Act allows the department to pursue legal action against non-compliant employers. Bede underscores the accountability of company chief executives for signing off on EE plans and stresses the responsibility of both executives and EE managers to ensure adherence to regulations. The Department will no longer accept EE reports at face value and will scrutinize them more rigorously. It was also highlighted that employers should adhere to EE regulations without external pressure and encourage employers to cooperate willingly.

Bede once again reiterated the importance of Section 61. Section 6 states that “no person may – obstruct or attempt to improperly influence any person who is exercising power or performing a function in terms of this Act; or knowingly give false information in any document or information provided to the Director-General or a labour inspector in terms of this Act.”

In conclusion, the Department’s commitment to enforcing EE regulations should not be understated, this includes the threat of criminal charges for non-compliance.

A Shift in Skills Development on the Horizon

The QCTO changes being implemented have the potential to not only significantly impact your skills development plan reporting to the SETA, but also your BEE scorecard. It is important to consider these changes carefully and take any necessary steps to ensure that your company remains compliant and achieves its desired outcomes.

Continue reading

Latest Update in Construction

A revised list has been published by the Construction Sector Charter Council announcing new Professional Registration bodies for the Construction Sector Code. This list is published in accordance with Statement CSC Code Series 200 and 300 of the Amended Construction Sector Code.

If your business falls within the scope of the Construction Sector Codes, additional BEE points can be earned on your Management Control and Skills Development elements on your BEE scorecard, if proof of membership is submitted.

This is an important notice for all South African businesses that operate in the Construction Sector.

Download the list here and contact BEE Analyst for more information at (012) 997 0037 or email us at consult@beeanalyst.co.za

Fronting and Misrepresentation in the BEE Industry

Let’s delve into a critical conversation to unlock genuine transformation and unravel the complexities within the B-BBEE landscape, shedding light on the challenges of fronting and misrepresentation. This article reflects the outcome of a session arranged by the ABP.

From a B-BBEE Act point of view, Fronting undermines the true spirit and objectives of B-BBEE and erodes the foundation of fairness and equity. As a general rule; you may not take any deliberate action to circumvent the B-BBEE Act and Codes. It’s a stark reminder that, as advocates for true empowerment, we must remain vigilant against deceptive practices that hinder progress. Misrepresentation dilutes the essence of B-BBEE, thwarting its intended outcomes.

 

It’s imperative to shed light on these crucial aspects of the B-BBEE landscape – fronting and misrepresentation. Some interesting focus points shared:

  • All B-BBEE Professionals need to understand the objective of the B-BBEE Act and the Definition of Fronting Practice in terms of the B-BBEE Act; and
  • All BEE Professionals have an obligation to report any Fronting Practice which can be done directly to the BEE Commission. It is important to note that reporting does not necessarily stay anonymous.

MAIN FRONTING PRACTICES:

  1. Splitting of Business Activities to remain under the turnover threshold to be measured as an EME or QSE;
  2. Fund Manager’s B-BBEE Status being used as the status of Mandated Investments;
  3. Share Options –In most cases, no transfer of shares has taken place and if the Share Option is not implemented correctly, this will be seen as Fronting Practice, especially if it is clear that the Share Option will never take effect;
  4. Decreasing Leviable Amount and Headcount, such as companies moving employees to non-operating companies;
  5. International Courses are claimed under Skills Development without Formal Recognition from SAQA. Verification Agencies may only recognise International Courses if they have confirmation from SAQA;
  6. Learnership Programmes that are implemented for a 2 -3 month period and then cancelled;
  7. Joint Ventures are entered into for B-BBEE Status Purposes, but after the JV has been done, there is no test to see whether both JV Partners contribute to the Project in terms of the JV Split.

SECTORS WITH MOST INSTANCES OF FRONTING:

  • Construction
  • Transport
  • MAC

 

Lastly, the panel recommended that we all keep our eyes open, changes in the B-BEE codes are looming, across all Sector Codes in 2024.  

Together, we can build an inclusive B-BBEE landscape that truly uplifts communities and fosters economic growth. As 2023 draws to a close, let’s reflect on how we can collectively combat fronting and misrepresentation and furthermore, ensure that B-BBEE becomes a beacon of true transformation. Join the conversation – share your insights and let’s drive change together!

 

Contact BEE Analyst for more information at (012) 997 0037 or email marizaan@beeanalyst.co.za

New Integrated Transport BEE Sector

History about the Transport Sector

Across all economic policy trajectories transportation has been identified as a key demand-driven input industry and is therefore responsible for economic growth in South-Africa. The Transport Sector is one of the fastest growing industries in the country with sub-sectors like the Bus Commuter and Coach Services, Road Freight, Maritime, Rail, Domestic Aviation and Forwarding & Clearing. The Transport Sector has an important knock-on effect that impacts the entire economy of South-Africa.

 

The Integrated Transport Sector Codes was first published in 2009 and currently is the only Sector Code that has not yet been aligned to the B-BBEE Codes of Good Practice as envisaged by the Department of Trade and Industry. The Minister of Transport has appointed a new Transport Sector Charter Council in May 2023 with the mandate to oversee the implementation of the Integrated Transport Sector Codes and the alignment thereof to the Codes of Good Practice.

Changes to the Bill

The new Director of the Transport Council confirmed that the integrated Transport Sector Codes will be aligned with the Codes of Good Practice and published by the end of December 2023 and further confirmed that it is planned that these Amendments will come into effect from the 1st of March 2024, with no transitional period.

 

The following principles will be applied throughout the development of the Amended Integrated Transport Sector Codes:

ü  Addressing all elements per the Codes of Good Practice.

ü  Application of the same definitions, principles, and calculation methodologies to measure compliance as those used in the Codes of Good Practice.

ü  Deviation from targets, weighting and thresholds used in the Codes of Good Practice only deviations are justifiable based on sound economic principles, sectorial characteristics, or empirical research.

ü  Introduction of a new additional Elements for the measurement where such addition is justifiable based on sound economic principle, sectorial characteristics, or empirical research; and

ü  Scope of Application should be clearly defined.

 

The Department of Transport held an Integrated Transport Sector B-BBEE Alignment Process during the week of the 4th of September 2023, and put the following strategies in place:

ü  Working Groups have been selected to comment, give input, and engage in the finalisation of the Amendments and the alignment process, which includes Planning and Focus Groups, as well as Round Table Sessions.  

ü  Welcoming and encouraging comments and inputs from all relevant Stakeholders.

Entities falling within the Scope of the Integrated Transport Sector Codes are not subject to the stringent requirements, such as Priority Elements and Discounting Principles and therefore, going forward, companies will need to align their planning in accordance with the new proposed Integrated Transport Sector Codes or they will run the risk of not receiving a compliant B-BBEE Certificate.

At BEE Analyst, we are committed to assisting you in understanding and effectively adapting to these changes. We understand that change can be challenging, but it also presents unparalleled possibilities. Our team of experts is here to provide you with the guidance and support you need to thrive in this new era of transformation. 

 

Contact us for further information on the proposed Amendments. 

Adriana Kasselman

(012) 997 0037

adriana@beeanalyst.co.za

Fill in the form to receive the key changes of the New Integrated Transport Sector Codes.

Contact Us

This field is for validation purposes and should be left unchanged.

Compulsory to submit B-BBEE certificates to Sector Councils

SANAS formally announced that, in future, all BEE certificates should be submitted to Sector Councils, by the client. Verifications Agencies must receive proof of submission during a verification process. In the Financial Sector, failing to submit could lead to a 1 Level penalty.

Read more below about these new changes.

BEEA_BBEE CERTIFICATES TO SECTOR COUNCIL

Contact us today to assist you with these changes.

Contact: Jaco Jacobs

Office: 012 997 0037

E-mail: consult@beeanalyst.co.za