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Ramaphosa says more needs to be done to transform private businesses


President Cyril Ramaphosa has released his weekly open letter to the public, focusing on the transformation initiatives of government.

Ramaphosa said that while significant progress on transformation has been made in the public sector, not enough was being done in the private sector.

“The report released by the Commission for Employment Equity in August points, at best, to poor adherence to employment equity legislation, and, at worst, outright disregard for the law,” he said.

“The upper echelons of management in private companies are still dominated by white men, although they make up just 5% of the economically active population. Africans only make up 15% of top management, despite accounting for 79% of the economically active population.”

Ramaphosa said that poor labour relations is in part fuelled by perceptions that black employees are ‘relegated to the factory floor while white employees occupy management roles’.

The president said more needs to be done to transform the private sector.

“Advancing black and female employees must be a cornerstone of any company’s operations. This must move beyond merely ensuring compliance, and towards succession planning, mentoring, training and skills transfer, and towards giving employees a meaningful stake in the companies they work for.”

“Black economic empowerment and affirmative action are important tools to further non-racial transformation.

“As we intensify the work we must do to address the injustices of the past – especially in correcting the skewed race and gender composition of our public companies – we must ensure that all South Africans, regardless of colour, have an opportunity to contribute to building a better, fairer and more prosperous nation.”

The Employment Equity report referenced by Ramaphosa showed that government’s transformation strategy through BEE has been largely unsuccessful – however, plans are in place to push these laws harder in the country.

Harsh measures to force transformation

Minister of Employment and Labour, Thulas Nxesi, says that his department plans to introduce harsh measures against employers who do not meet employment equity targets.

In August, Nxesi expressed concern at the slow pace of workplace transformation and promised that government will now introduce new legislation to remedy these issues.

Answering in a recent parliamentary Q&A session, Nxesi said that the incoming Employment Equity Amendment Bill will expedite the pace of transformation and address non-compliance with the requirements of the Employment Equity Act (EEA).

He added that this new bill will likely be tabled in parliament for deliberation before the end of this year.

Nxesi said that these changes will serve as punishments to non-compliant businesses in two main ways:

  • All organisations that are deemed non-compliant will no longer be able to reap the financial benefits of doing business with the state;

  • Even non-compliant organisations that do not necessarily depend on state contracts for their business will still have to face consequences by being referred to the Labour Court for a penalty to be levied against them.

“The amendments will empower myself as the minister of Employment and Labour to regulate sector-specific numerical EE targets, which must be complied with in order to accelerate transformation in various economic sectors because the current self-regulated EE targets did not yield positive results over the 21 years of the EEA,” he said.

“They will also enable the promulgation of Section 53 of the EEA that deals with the issuing of an EE Certificate of Compliance as a prerequisite for accessing state contracts and to do business with the state.”



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

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