1000 firms in hot water

Equity report shows white males still basking in the sun

ATHOUSAND companies face prosecution in the Labour Court next month for breaking employment equity laws.

Labour Department spokesman Sithembele Tshwete would not name the companies listed in the latest report from the commission for employment equity, but said some were JSE-listed.

“It’s the big ones, though not all the 1 000. But soon we will be able to [name them],” said Tshwete.

The companies will be charged with failing to comply with the Employment Equity Act by not submitting staff equity reports.

East London executives Johnny Goldberg and Les Holbrook urged businesses not to panic and go with the process.

But black business leader Zwelitsha Vava said the state was not going far enough.

Free Market Foundation economist Loane Sharp sounded a fiery warning against official use of racial terms to define transformation and linked amended labour legislation to President Jacob Zuma pushing ahead with a plan to create 100 black industrialists before the end of his term.

Acting chairman of the employment equity commission Tabea Magodielo said their finding was that whites continued to dominate top management structures.

Nationally, whites made up 70% of all top managers. Recruitment of whites males outstripped recruitment of any other race group at about 40% of the total. Recruitment for African males is 14.7%.

The commission called for tougher action, including docking a percentage of a firm’s annual turnover depending on its size.

Goldberg, a labour attorney and CEO of Global Business Solutions, said this could be 2% of annual turnover, or a fine of R1.5-million.

The report says “the picture painted by the statistics leaves the commission with no option but . . . rigorous enforcement”.

Labour Department chief director Thembinkosi Mkalipi said the number of employers reporting had increased.

Magodielo said: “We are moving at a snail’s pace. It’s 20 years into our democracy and if you look at the African population, we’re currently sitting on 13.6% [in top management].

“If we continue at this pace, it says to you that 40 years into our democracy we will possibly be sitting at about 25%.

“This is quite disheartening and it requires quite a strong review in the way employee organisations are looking at transformation.

“People are not moving to the top. What happens to them in the process? It is quite clear that come time for promotion, come time for recruitment, we see that white individuals are the ones being recruited more and they’re the ones being promoted,” said Magodielo.

Magodielo also noted foreign nationals had grown in numbers in top management over the last three years.

He said this was attributed to a lack of skills in the country.

Goldberg said he has been in close discussion with the Labour Department, and he felt confident government was motivated by legal compliance and not vengeance.

“They just want to see progress. They do not want to kill business. But the game has changed.”

Speaking in his personal capacity Vava, Nafcoc’s Eastern Cape deputy chair, said: “The government is passing the buck.

“They should spend time developing black businesses. Previous regimes have developed or assisted their people in businesses.

“Whites are where they are because of that assistance. Even the homelands produced theirs.

“South Africa is ruled by a majority but passes laws that require the minority to help the majority instead of laws that should assist the majority access funding.”

Sharp, however, said business was being “strong-armed” by the Department of Trade and Industry to accept codes that would “sabotage any business South Africa’s best companies would seek to do with government”. He said it was a “further crisis for service delivery and a major crisis in undermining economic incentives to perform.”

Prosecution of business would undermine economic performance, he said, adding: “This is is the biggest single attack on private incentives since democracy.”

Border-Kei Chamber of Business executive director Les Holbrook said there had been a “lackadaisical” attitude towards equity.

“Investors need to comply, but don’t make it difficult for them to create jobs.”