JSE-listed com­pa­nies fac­ing EE crack­down

The Star Early Edition - - LETTERS - Ka­belo Khu­malo

THE DEPART­MENT of Labour has taken aim at 72 JSE-listed com­pa­nies for not com­ply­ing with the coun­try’s em­ploy­ment eq­uity (EE) pol­icy and gave the lo­cal bourse 60 days to rem­edy the sit­u­a­tion. Non-com­pli­ant com­pa­nies face R1.5 mil­lion fines and crim­i­nal charges.

The depart­ment’s In­spec­tion and En­force­ment Ser­vices unit said yes­ter­day it had ini­ti­ated a di­rec­tor-gen­eral (DG) re­view to in­spect 72 JSE-listed com­pa­nies to en­sure EE com­pli­ance and found them want­ing.

The depart­ment could not be drawn on the names of the com­pa­nies but said all listed com­pa­nies would be asked to share their EE poli­cies and be checked to see whether they com­plied with the EE Act.

Fik­iswa Mn­canca, the depart­ment’s chief di­rec­tor statu­tory and ad­vo­cacy ser­vices, said: “The na­tional di­rec­tor-gen­eral re­view team started with the in­spec­tions in July and these will con­tinue un­til De­cem­ber. The re­view in­volves a process of in­ter­ro­gat­ing com­pany’s EE plans to as­sess whether they com­ply with leg­is­la­tion…”

In June, the depart­ment

Depart­ment of Labour’s In­spec­tion and En­force­ment Ser­vices re­view found poli­cies at 72 firms want­ing

re­leased its sev­enth Em­ploy­ment Eq­uity Re­port, which found 68.5 per­cent of the top man­age­ment po­si­tions were oc­cu­pied by whites, 14.4 per­cent Africans 14.4 per­cent, 8.9 per­cent In­di­ans, 4.9 per­cent coloureds and 3.4 per­cent for­eign na­tion­als.

The depart­ment fur­ther said JSE-listed com­pa­nies alone ac­counted for more than 50 per­cent of the com­pa­nies that had been is­sued with fines for non-com­pli­ance by the gov­ern­ment.

Mn­canca said the DG re­view found the JSE Se­cu­ri­ties plan was not com­ply­ing in terms of Sec­tion 20 (2) of the Em­ploy­ment Eq­uity Act, and DG rec­om­men­da­tions were is­sued.

The JSE’s chief ex­ec­u­tive and her team signed the rec­om­men­da­tions and agreed to ad­dress the short­com­ings.

“It is our re­spon­si­bil­ity to ed­u­cate our stake­hold­ers on the ex­pec­ta­tions, con­duct in­spec­tions to check com­pli­ance and for those em­ploy­ers not will­ing to com­ply, re­fer them for prose­cu­tions and en­force com­pli­ance.”

In May, Busi­ness Re­port re­ported more than 21 com­pa­nies had been fined for not com­ply­ing with the EE Act and sev­eral oth­ers were on the verge of be­ing fined.

The depart­ment also said it would be em­bark­ing on a na­tional cam­paign to ad­vo­cate EE com­pli­ance in work­places.

The Depart­ment of Labour is the sec­ond na­tional depart­ment this week to take aim at both listed and un­listed com­pa­nies for their al­leged slow progress in trans­form­ing.

On Mon­day, the Depart­ment of Trade and In­dus­try’s broad-based black eco­nomic em­pow­er­ment (B-BBEE) com­mis­sion said it had ini­ti­ated an in­ves­ti­ga­tion against spe­cific en­ti­ties for pos­si­ble vi­o­la­tion of the B-BBEE Act.

The com­mis­sion warned if found to have vi­o­lated the leg­is­la­tion, the en­ti­ties may be re­ferred for pros­e­cu­tion and ex­posed to a fine of up to 10 per­cent of their an­nual turnover, and the in­di­vid­u­als in­volved could be fined or im­pris­oned for up to 10 years.

The en­ti­ties could also be ex­cluded from do­ing busi­ness with the gov­ern­ment for a pe­riod of up to 10 years, and the con­tracts they have with any state-owned en­tity or gov­ern­ment depart­ment could be can­celled.

The com­mis­sion may also ap­proach a court of law to re­strain any breach or for any ap­pro­pri­ate re­me­dial re­lief, which may in­clude set­ting aside the trans­ac­tion or ini­tia­tive.

Among the com­pa­nies called to ac­count was MTN, to de­ter­mine whether the cell­phone provider’s Zakhele and the MTN Zakhele Futhi B-BBEE schemes met the re­quire­ments for black own­er­ship el­e­ments and com­plied with the B-BBEE Act. Net­care’s B-BBEE own­er­ship ini­tia­tive fa­cil­i­tated through Health Part­ners for Life, com­pris­ing four trusts, was also flagged by the com­mis­sion for in­ves­ti­ga­tion.

Ear­lier this year, the JSE said it had amended its list­ing re­quire­ments to pro­mote racial di­ver­sity at board level.

It had not re­sponded to ques­tions on the moves by the Depart­ment of Labour at the time of go­ing to print.


A num­ber of JSE-listed com­pa­nies could face puni­tive mea­sures if found not to be com­ply­ing with the EE Act.

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