Recently the 22nd CEE report was released by the Department of Labour, an annual report that covers progress made by the department and offers highlights from the previous 12 months. The report also details the demographic distribution of the Economically Active Population in the workforce across the country, making it a key document for the BEE industry. Reading through the report we noticed surprising movements in the race and gender distribution in some provinces
We decided to analyse these and have attached a small calculator that reports the changes over the past twelve months. Big swings like these have the potential to impact an organisation’s BEE Level and have amended BEE targets. We hope you find this simple calculator helpful.
Changes To How BBBEE Is Reported
This year there will be an increasing focus on employment equity and the demographic makeup of the workplace as the Employment Equity Amendment Bill (attached) is in its final stage of promulgation. This Bill will amend the Employment Equity Act 55 of 1998 with the objective of speeding up transformation in specific business sectors.
Major changes have been made.
The definition of “designated employer” has now been narrowed to organisations of more than 50 people regardless of turnover. The Business sector has generally welcomed this change as it takes smaller businesses out of burdensome employment equity compliance and reporting.
The Minister of Employment and Labour has been given the power to determine sectoral 3-5 year targets and to levy heavy fines for organisations that fail to comply with the numerical demographic targets. The targets will be set on a sector to sector basis.
A compliance certificate will be introduced which will be “systems/auto generated” by the department of Employment and Labour, if an organisation’s annual report meets sectoral targets. This ‘compliance certificate’ may become a factor in B-BBEE verification of Management control as mandatory evidence of compliance. We could see the Department of Employment and Labour will engage the Department of Trade Industry and Competition cooperation so that the future amendments to the codes enable this.
It is anticipated that the state will introduce the EE compliance certificate as part of the state procurement/tender criteria.
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Conclusion
A recent Sanlam Gauge Report on BEE performance found that, for the second consecutive year, management control only achieved an average of 56% of target.
The EEA and the amendments call for companies to have objective and consistent selection criteria that are non-discriminatory and forces companies to consider a combination of factors in determining if an applicant is suitably qualified for a job.
Nevertheless, growing the economy rapidly has to be the most effective means of tackling unsustainable levels of unemployment and whether this Act contributes or is an impediment to such growth remains to be seen!
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