Stay on right side of law
CLARITY: NEW EMPOWERMENT CODES EXPLAINED
Companies urged to appoint B-BBEE consultants to assist with the technical challenges they will encounter as amended Labour Act kicks in.
With the Labour Relations Amendment Act (No 6 of 2014) that took effect on January 1, as well as the amended broadbased black economic empowerment (B-BBEE) codes, businesses in the hospitality industry will have to make significant changes to the way they operate.
Some of the most crucial changes in the Labour Relations Act relate to the regulation of "atypical employment", which includes fi xed-term employees, employees employed by temporary employment services ( labour brokers) and part-time employees.
According to Dianne Robinson of Integrated Labour Solutions, companies should be clear about the risks associated with employing atypical employees, the financial implications, as well as steps they should take to ensure they maintain flexibility with as little risk as possible.
The amended codes, which came into effect on May 1, have caused confusion in the industry. According to Robin Matthews of Invasset B-BBEE Services, one area of confusion was the status of sector codes. Should companies which fall under a sector code be governed under that code until it is amended, or do all companies revert to the amended codes as from May 1?
Matthews said companies should be governed within their sector codes until the respective sector codes have been amended and, to date, no sector code has been amended.
Other changes include the reduction, from seven to five, of the number of elements on which a company’s status is assessed, the introduction of priority elements which can result in a “drop” in level if companies do not comply with this, as well as the emphasis of black ownership throughout the entire score card.
“One of the most significant changes is an exempted micro enterprise and qualifying small enterprise with 100% or 51% black ownership automatically qualifies as a level one and level two contributor," said Matthews. "The only proof they need is an affidavit indicating the turnover and level of black ownership, whereas all other entities need to go through a verification process and are evaluated on the five elements.”
Matthews also said planning, strategy formulation and preparation would be crucial for companies to achieve a B-BBEE certificate based on the amended legislation. He strongly recommended companies appoint a competent B-BBEE consultant to assist with the technical changes and elements that form part of these codes.
These were some of the legislation changes discussed at the Federated Hospitality Association of Southern Africa Cape Labour Update Seminar on April 23.