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SA businesses are about to feel the real cost of not being BEE compliant: expert

Business Tech / 7 November 2017 / Staff Writer

In July this year, 72 JSE-listed companies were identified as the subject of employment equity reviews by the department of labour’s Inspection and Enforcement Services (IES).

As a result of this process, the IES found that 50 JSE-listed companies, including the JSE itself, have been found to be non-compliant with the Employment Equity Act (EEA) – 41 employers were given 60 days to comply with their recommendations and the IES said that nine would be prosecuted for failing to prepare employment equity plans.

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The IES noted that areas of non-compliance with the EEA included a lack of properly constituted consultative forums; EE plans that were not properly audited and analysed; assigned senior EE managers who did not have the necessary authority or resources to execute their mandate; and prepared employment equity plans that did not comply with legislation.

According to Lauren Salt, senior associate at Baker McKenzie in Johannesburg, there is now little wriggle-room for these companies that are being prosecuted for their non-compliance, as this will relate to past non-compliance which cannot be retrospectively rectified.

Where this is the case, there is a high likelihood that a fine will be issued, she said.

“These fines can be up to 10% of the companies’ annual turnover depending on the nature and frequency of the contravention,” said Salt.

“To date, there have not been any hefty fines issued for non-compliance with employment equity obligations and so businesses have been fairly lackadaisical in their approach to compliance with the EEA.”

This is because putting in place proper employment equity structures and plans is also no simple task and takes time, she said.

However, this is likely to change quickly, as the department of labour has a clear point to prove when it comes to compliance.

“Clearly, the department of labour is seriously clamping down on enforcement and I think in the near future, will see a number of fines imposed on ‘big ticket’ JSE listed companies to ensure compliance going forward,” she said.


LINK - https://businesstech.co.za/news/business/209423/sa-businesses-are-about-to-feel-the-real-cost-of-not-being-bee-compliant-expert/

Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER

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