Employment equity is encouraging business transformation now more than ever

28 September 2017: Successful transformation in South Africa’s business sectors will increasingly depend on a combination of advisory skills in Broad-Based Black Economic Empowerment (B-BBEE) and Human Resources (HR) management.

Mohamed Khan, B-BBEE Manager at MAZARS

This according to Mohamed Khan, B-BBEE Manager at Mazars, who says that companies are under increased pressure to comply with the B-BBEE codes. “Employment equity (EE) is one of the five elements which measured entities need to comply with in order to achieve a desirable B-BBEE score. The Department of Labour recently confirmed that submission for EE Reports (EEA2 & EEA4) are now open.”

Khan states that employers with 50 or more employees and with specified annual turnover thresholds, should comply with the Employment Equity (EE) Act and implement affirmative action measures for people from designated groups in terms of the act. “Designated employers who fail to submit their EE report may be fined a minimum of R 1.5million with a further R 1.5million fine should they not have an EE plan.”

With this in mind, Anna Odendal, HR Advisory expert at Mazars, notes that effective HR management should form an essential part in creating and adhering to EE plans.

“Companies which need to comply with B-BBEE and EE legislation requirements may make use of the B-BBEE and HR experts to assist them in the compliance process. This involves creating awareness and sensitisation of employees on EE processes; establishing and training an EE forum; conducting a barrier analysis and audit; facilitating and designing an employment equity plan; compiling an EE report and submitting it to the Department of Labour; and B-BBEE certification,” she says.

Manual submissions of the EE plan needs to be submitted to the Department of Labour by the 1st of October and online submissions by the 15th of January 2018. No changes are allowed after submission and late submissions will not be accepted.

Khan adds that any company listed on the Johannesburg Stock Exchange (JSE) is also required to disclose a summary of the company’s employment equity report in its annual report.

He further adds that according to the amendments to the JSE listing requirements issued on the 22nd of May 2017, listed companies will also be required to publish their B-BBEE annual compliance certificate.

As a result of these requirements, Odendal encourages JSE-listed companies to employ a reputable firm that is able to assist with its EE process. “This firm must have the knowledge and capabilities of both B-BBEE and HR Advisory in order for the company to prepare and successfully submit its employment equity report to the Department of Labour.”

“The call to action for the submission of the EE Act report will not only encourage business transformation, but also elevate the importance of making sure that as an employer, your B-BBEE scorecard mirrors your EE Report,” concludes Khan.

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