More ‘can do’ needed from SA

Busi­ness, labour and gov­ern­ment must be­come more ac­tive, and act in sync

Business Day - Business Law and Tax Review - - FRONT PAGE - EVAN PICK­WORTH

THE birth of new labour poli­cies in SA is not go­ing to hap­pen with­out a high de­gree of pain. Th­ese labour pains will be felt in equal mea­sure by those that fail to heed the call for change. It ap­pears the days of sim­ply tick­ing boxes or pay­ing lip ser­vice to change are truly over.

The shock­ing xeno­pho­bic at­tacks on for­eign­ers in the past month have played a role in high­light­ing just why this change is so im­por­tant. They have shown just how badly the so­cial and em­ploy­ment fab­ric in SA has been torn by a lack of op­por­tu­nity and eco­nomic in­clu­sion. Hard ques­tions have been raised, but the chal­lenge will be about how com­mit­ted all busi­nesses and in­di­vid­u­als are to change.

For­mer global chair­man of Nor­ton Rose Ful­bright and cur­rent chair­man of the South African prac­tice, Sbu Gule (his global chair­man­ship ex­pired at the end of last month), says one of the ma­jor lessons he learnt while oc­cu­py­ing the global top job was that utilisation of hu­man re­sources is the main dif­fer­en­tia­tor be­tween suc­cess­ful and un­suc­cess­ful coun­tries.

“A coun­try that is able to in­vest in its white col­lar work­ers has hu­man re­sources to grow, as it can lever­age on ed­u­cated peo­ple. For blue col­lar work­ers, how labour laws are dealt with be­comes im­por­tant,” he says.

While out­rage must be voiced at the xeno­pho­bic at­tacks, it also means far more must be done by all cit­i­zens and work­ers to con­trib­ute to­wards growth and devel­op­ment of this coun­try’s econ­omy.

“My in­cli­na­tion

is

all South Africans can do more and ac­cel­er­ate ev­ery­thing. Un­for­tu­nately there is a cul­ture of point­ing fin­gers and of the dif­fer­ent stake­hold­ers not com­ing to­gether to say ‘We are in this to­gether, let’s work to­gether’. There is also a cul­ture of com­pla­cency and think­ing ‘some­one else will do things for us’.”

Coun­tries that have been suc­cess­ful have had cit­i­zens with a “can do” at­ti­tude. They say: “We will do some­thing to change the living con­di­tions of peo­ple.” Mex­ico is an ex­am­ple of how the bal­ance can be struck and how a “can do” at­ti­tude can make a sig­nif­i­cant dif­fer­ence.

“It is now very at­trac­tive to in­vest in Mex­ico be­cause they had buy-in to the plan from all stake­hold­ers; and in par­tic­u­lar em­ploy­ees via unions were in­cluded within the vi­sion of the coun­try,” says Gule.

In Mex­ico, the op­po­si­tion and rul­ing party agreed on the fun­da­men­tal changes needed to en­sure its econ­omy suc­ceeded. As a re­sult, Mex­ico is be­com­ing an at­trac­tive des­ti­na­tion for the US. It is pos­si­ble this type of model could be repli­cated in Africa with the right com­mit­ment from all stake­hold­ers.

While the Na­tional Devel­op­ment Plan in SA is im­por­tant to put in place, its down­fall is that gov­ern­ment and busi­ness have not been “in sync”. And labour or­gan­i­sa­tions do not work of­ten enough with other stake­hold­ers to­wards at­tain­ing goals that will ad­vance devel­op­ment.

“There is no one party to blame — all of us are not work­ing in con­cert and then you find each party is still very much con­cerned about what they can get out of our econ­omy for them­selves,” says Gule.

And deal­ing with xeno­pho­bia by tight­en­ing bor­der con­trols would only be a short-term so­lu­tion.

“What we should be do­ing is not only look­ing at grow­ing the South African econ­omy but also at more re­gional in­te­gra­tion — a strong trad­ing bloc will be more at­trac­tive to in­vestors and once all re­gions are in­te­grated you are less likely to have th­ese migration is­sues,” says Gule.

Re­vi­sions to em­pow­er­ment codes in SA take ef­fect this month and th­ese changes are also go­ing to be im­por­tant to set­ting us on the path to a more sus­tain­able eco­nomic fu­ture that in­cludes more peo­ple in the wealth gen­er­a­tion ca­pac­ity of the coun­try.

“It is un­for­tu­nate busi­ness in gen-

eral has not re­ally em­braced it. Gov­ern­ment has come up with some­thing to ac­cel­er­ate trans­for­ma­tion be­cause there is a re­al­i­sa­tion not much has hap­pened. It would be nice to have a sweet spot where even busi­ness takes up the fight on be­half of gov­ern­ment, sup­port­ing the codes in place and be­com­ing vo­cal about back­ing gov­ern­ment as well as en­sur­ing gov­ern­ment does not have to po­lice us to achieve them. It is in the in­ter­ests of our coun­try to have true trans­for­ma­tion and there is an op­por­tu­nity to work to­gether to do what is good for the coun­try,” says Gule.

But he says there is a con­cern that quite a few busi­nesses (hope­fully not too many) will just “fudge it”.

The fol­low­ing sec­tions of the Re­vised Codes are im­por­tant:

Qual­i­fy­ing small en­ter­prises (QSE) score­card;

The pro­ce­dures to de­velop and gazette sec­tor char­ters;

A score­card for en­ter­prises;

The recog­ni­tion in the sale of as­sets; and

Eq­uity na­tion­als.

The QSE score­card is of par­tic­u­lar sig­nif­i­cance be­cause QSEs will be mea­sured against all el­e­ments of the BEE score­card if the QSE is ver­i­fied af­ter May 1 2015 and not just the four el­e­ments of its choice as un­der the cur­rent codes. QSEs should have con­sid­ered and planned for the (fi­nal) QSE score­card be­fore May 1.

Other im­por­tant changes are that var­i­ous sec­tor coun­cils will be in­tro­duced to re­vise the ex­ist­ing sec­tor codes and over­see BEE in those sec­tors. En­ti­ties mea­sured against sec­tor codes will be re­quired to sub­mit their BEE cer­tifi­cates to the var­i­ous sec­tor coun­cils to be es­tab­lished.

Ex­empted mi­cro-en­ter­prises with 100% black own­er­ship or ben­e­fi­cia­ries will qual­ify for a level one con­trib­u­tor sta­tus and those with at least 51% black own­er­ship or ben­e­fi­cia­ries will qual­ify for level two sta­tus.

A su­perb ar­ti­cle on page 11 by Jonathan Goldberg and Grant Wilkin­son from Global Busi­ness So­lu­tions delves into labour law changes com­ing the way of busi­ness.

The is­sue of equal­ity in the work­place re­mains con­tentious, for ex­am­ple, but this is also be­com­ing crit­i­cal in light of the xeno­pho­bic at­tacks.

The ques­tion of equal treat­ment is not only a South African is­sue, as world­wide there is re­search be­ing con­ducted on the large wage gap be­tween CEO’s salaries and those of gen­eral work­ers.

The leg­is­la­ture has at­tempted to tackle this in­equal­ity through the Labour Re­la­tions Act and the Em­ploy­ment Eq­uity Act amend­ments re­cently im­ple­mented.

Busi­ness is cer­tainly fac­ing mount­ing pres­sure to trans­form. But many busi­nesses were scram­bling to get their cer­tifi­cates in or­der ahead of the May 1 dead­line. It was not a good start, but what is pal­pa­bly clear is that with­out sig­nif­i­cant change, the risk is more un­hap­pi­ness by an in­creas­ingly dis­grun­tled work­ing class. And that is in no-one’s in­ter­ests.

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