With the CCMA having successfully mediated the dispute referred by Solidarity to the International Labour Organisation (ILO) against the South African government on the new Employment Equity Act (55 of 1998) Amendments and Regulations, it is an opportune time to start looking at how your workplace Broad-Based Black Economic Empowerment (BBBEE) policy and the amended Employment Equity Act and applicable Regulations need to be adjusted or implemented to ensure a successful journey towards meaningful transformation within your business.

In my years of experience, I have found that many businesses seem to adopt a silo mentality when implementing transformation approaches through BBBEE strategies and the Employment Equity Act requirements.

Often BBBEE is left to the finance section (or compliance sections) of a business, and is seen as critical in relation to the bottom line, which it is, of course.

But then the employment equity implementation is not always treated as relevant (or financially significant), because it is usually overseen by human resources, or seen as only a minor part of the transformation and diversity portfolio in many businesses. Consequently, it is not necessarily integrated into the business strategy on these issues. Hence, the business may not develop a clear and interlinked transformation strategy. This is even more pronounced since the BBBEE criteria for employment equity have been reduced to focus only on senior levels in a business. The point of ensuring that your business is on a total transformation path is often missed, seeing as compliance, as opposed to substance, frequently prevails.

This is partly also because there is a lot of confusion about what is, and what is not, transformation. The issue is further compounded by the ever-changing or expanding laws and regulations on the matter from both the Department of Employment and Labour, as well as the Department of Trade, Industry and Competition.

One of the best things to do is to ensure that you, your management, employees and your overall workplace have a very good and thorough understanding of all the different pieces of transformation legislation in South Africa, how they all fit together, their constitutional links and why they matter in today’s society. A good example would be understanding how the Promotion of Equality and Prevention of Unfair Discrimination Act (better known as the Equality Act, 4 of 2000) would be relevant to you if you are, for example, in the retail sector and serving customers regularly, as opposed to being a mining operation where your daily interaction with members of the public is limited and, so, potential racial or discriminatory disputes are less likely with members of the public (as may potentially be the case in the retail sector), but may arise in your workplace between your employees.

The recent agreement reached by government and Solidarity demonstrates the importance of the transformation agenda across all avenues of society, and why Solidarity saw fit to pursue this agreement. What is particularly noteworthy, and nearly all of it is significant, is the agreed list of justifiable grounds for a failure to comply with employment equity targets, and that no business will be, or should be, forced to terminate employment in order to comply with those targets. Instead, the agreement highlights the importance of responsible behaviour when pursuing your transformation agenda, and not just one of compliance. This will certainly influence the processes applied in meeting operational requirements as well as dismissal processes, among other things, going forward.

This will also mean focusing on your own internal transformation strategy and scorecards (i.e., an internal measure of your own transformation progress across the board), the importance of balancing this with the sustainability of your business, its people skills, training and knowledge base as well as a broader focus on growing, enhancing the delivery of, and supporting your suppliers.

In this way, your transformation strategy and business approach will be one of real meaning and sustainability, as opposed to one of mere compliance, ensuring that there is genuine intentional meaning in your transformation journey.

Written by Nerine Kahn, Labour Guide

Nerine will be delivering a course on transformation on 18 August 2023 with the intention to provide theoretical and practical explanations of why transformation legislation is important to South Africa, how it links to the South African context, and why it is important for a business to have a transformation policy to pursue BBBEE targets. Understanding a scorecard at a high level, and some updates on current cases and regulations in relation to BBBEE will also be discussed.