Black Management Forum, Disabled People SA and Business Unity SA on Employment Equity: briefings

Meeting report

LABOUR PORTFOLIO COMMITTEE
1 June 2005
BLACK MANAGEMENT FORUM, DISABLED PEOPLE SA AND BUSINESS UNITY SA ON EMPLOYMENT EQUITY: BRIEFINGS
 

Black Management Forum briefing
Disabled People of South Africa briefing
Business Unity South Africa PowerPoint presentation

SUMMARY
Members met to hear presentations from the Black Management Forum (BMF), Disabled People of South Africa (DPSA) and Business Unity South Africa (BUSA) on progress made and challenges encountered in the implementation of employment equity legislation. Respective successes and weaknesses were elucidated and recommendations for further action expressed. Numerous questions were asked by Members including the value of a middle way to promote change, the issues around empowerment and elitism, the rights of existing job holders to security, additional costs in establishing new monitoring mechanisms, the need for vigorous inspections and enforcement, recognition of demographics and the social context and the possibility of class action law suits in discrimination cases.

MINUTES
The Chairperson stated that the invited entities would provide progress reports on the implementation of employment equity within their respective areas of interest. Detail on challenges and limitations would be outlined to promote understanding by Members.

Black Management Forum briefing
Mr J Vilakazi (CEO) provided a background report on the status of corporate transformation during the past ten years. The role of the BMF in facilitating employment equity was explained including its participation within NEDLAC and interaction with the Department of Labour. A BMF resolution created the BEE Commission that informed much of government policy. The BMF recommended that Members contribute to re-igniting the Employment Equity process. Numerous concerns of the forum were expressed including the lack of numerical targets and benchmarks despite stipulations in the EE Act, the failure to advance equity and the lack of a pro-active approach to enforcement and the reduction of discrimination. Various recommendations were outlined including a renewed commitment to enforce compliance by the DOL, a link between DTI enforcement mechanisms and the EE inspectorate and the use of accredited rating agencies to conduct EE inspections. A Commission of Inquiry should be established to investigate racism and other forms of unfair discrimination in South Africa with particular focus on the work place. Statistics on the demographic profile within the economy should be accumulated to substantiate claims.

Discussion
The Chairperson acknowledged the depth of research behind the presentation and declared aspects thereof as a mandate for Members to drive the process forward. The Committee would maintain regular contact with the BMF to evaluate progress and propose solutions to obstacles.

Mr C Lowe (DA) remarked on the strong words within the presentation but welcomed the contribution to the debate. Employment equity as a remedy should not operate in isolation but as a part of the greater whole focused on economic growth. Numerous failures had arisen as a result of black economic empowerment initiatives that had to be borne in mind. A balanced approach should be advocated and a re-racialisation of the economy avoided at all costs. The DOL should not be used as a police force to intervene in the market and the free market should be allowed to provide solutions. Successes in employment equity existed and positive anecdotes should be highlighted. Certain professions had made significant strides in altering the demographic make-up and recent pronouncements directed at the judiciary had been unjustified. A middle way to address the clear deficiencies was recommended and increased enforcement and policing would be counter-productive.

Mr W Spies (FF+) asked for clarity on the BMF's attitude towards entrepreneurship as many managers had expressed frustration at perceived pressure to change established mindsets and grasp new modes of management directed at entrepreneurial activity. He asked whether the BMF would encourage black managers to establish new businesses. Inspections by rating agencies and other entities entailed significant cost implications that had to be considered. He alluded to a clash of interest between the Department of Minerals and Energy, Eskom and contractors as a result of the creation of new entities to facilitate electricity infrastructure development. He asked whether the creation of new rating agencies would be wise. The presentation expressed the views of a black elite without considering the implications for minority economic interests. The tone of views should be tempered by reference to social realities including job security, family concerns and economic priorities.

Mr R Henderson (DA) reminded Members of various cases involving discrimination by black managers towards employees and a balanced view of circumstances was needed. A one-sided denunciation was not ideal to address the issues. The distinction between individual enrichment and collective advancement within the economy had to be discussed. Black elitism would not create lasting solutions.

Mr B Mkongi (ANC) acknowledged the relevance of the presentation and reminded Members of the growing tensions within townships and rural areas towards black advancement and the reduction of poverty levels. The entrenchment of black capital was necessary to challenge the continued dominance of white capital and promote a counter-balance. Commissions should be well-endowed with investigative attributes and corrective measures to implement meaningful changes. Genuine transformation of the economic sphere would require legal capacity and resource allocation for responsible entities. Inspections were part of the DOL mandate to ensure compliance and such activity should not be downgraded.

Mr S Mashudulu (ANC) stated that issues and comments should be located within the constitutional framework and related legislation and any practice or recommendation that contradicted established law or regulation would be invalid. The work environment required substantial alteration to address legacies and entrench socio-economic justice. The calls for a balanced approach to transformation did not grasp the demographic reality. An audit of all private sector companies was needed to assess progress. A 50:50 split in personnel within a company was contrary to the make-up of the labour force. The power relations within companies and the nature of capitalism had to be considered. DOL should institute sound training programmes to empower black managers and address overall attitudes within the business environment including the commitment to transformation. Prevailing attitudes should also be addressed within formal tertiary institutions to transform the business mindset. Mobility within specific companies had to be encouraged to discourage the movement between companies. Private sector companies should be instructed to report on employment equity progress on a regular basis and any contract negotiation should contain clear reference to compliance requirements. Few cases had been reported to the Commission for Conciliation, Mediation and Arbitration (CCMA) that made the level of non-compliance difficult to determine. He recommended that DOL establish a desk to investigate compliance and deal with complaints.

Mr M Mzondeki (ANC) noted the "nuanced" approach from certain Members towards the subject matter and advocated a re-think by the Committee at a later stage to acquire a consensus view. Insufficient progress had been achieved regarding employment equity and Members had to recognise this. The Committee should avoid disparate positions and regard the BMF recommendations as a challenge.

Prince N Zulu (IFP) asked whether the BMF retained a seat in NEDLAC and whether the concept of affirmative action had a timeframe for implementation. He recommended that discrimination cases before the CCMA be dealt with on a group-by-group basis as opposed to an individual bias.

Mr Vilakazi responded that the BMF was present in all provinces and no submissions had been received from members claiming that the process was failing. The reference to black elitism was denounced as mischievous from certain quarters intent on derailing transformation. The BEE process had challenges but would prove to be effective in the long-term. Focus should be directed towards small business creation to foster black participation in the economy. The accusations of elitism would reduce as the number of entrants increased. The access to funding for small and medium businesses remained a challenge. Approximately 488 African accountants were in practice as opposed to 20 877 white accountants. The lack of significant numbers of previously disadvantaged accountants and in other professions was a cause for concern.

Mr Ntuli (Gauteng Regional President-BMF) stated that the organisation sought to highlight issues in the public interest and to contribute to a more just and equitable future. A growing economy would require more managers in the future to meet demand and realistic proposals should be offered to advance this objective. The economy had to reflect the demographics and encourage black start-up businesses. BMF would continue to conduct research and advocacy to achieve the stated goals.

Mr Vilakazi stated that current legislation allowed for an increase in class action suits as opposed to individual-based litigation to address racism and discrimination in the job market. Affirmative action had far to travel and calls for reduction was premature. Investigation should center on the distinction between qualitative and quantitative advancement to avoid overlooking the phenomenon of newly created positions for blacks that lacked substance and influence. Reference was made to the proliferation of public relations positions.

Mr Henderson concurred that weaknesses existed within the CCMA that created the opportunity for employer legal representation but did not ensure similar privileges for employees. Confidence should be restored in the CCMA by removing flaws in representation.

Mr Lowe reminded Members of the bigger economic picture characterised by 40% unemployment with low success rates in employment creation and poverty alleviation. The recommended solution hinged on extensive investigation and punitive actions would not prove effective. A balanced approach was needed to create employment and achieve economic growth. He asked whether members of BMF recognised the reality of employment equity initiatives that resulted in problematic elitism. Much of the blame should be directed at the education system that produced poor results in maths and science. The private sector had made great strides in providing numerous bursary opportunities for tertiary-level education. Black managers should not be set up for failure by placement in arbitrary or too demanding positions. Businesses had to remain competitive in order to survive and a middle-way was necessary to attain long-term development.

Mr G Anthony (ANC) agreed with the recommendations emanating from the BMF and proposed that the Committee deal with the detail at a subsequent meeting. Racism remained a real obstacle and an integrated report of all commissions should be compiled to assess the extent. Reconciliation required a common end point in order to be achievable and present initiatives were handicapped by contradictory views on implementation. Reports from various statutory bodies designed to address shortcomings were not being translated into legislation. Cases of fraud and corruption that involved self-enrichment should be investigated but a commission of enquiry was needed to investigate discrimination.

The Chairperson asked whether the BMF assisted black managers and entrepreneurs to rescue collapsing businesses and restore sound economic practices. She asked whether the presence of foreign businesses that could impact negatively on local initiatives was monitored to prevent unfair practices.

Mr Vilakazi acknowledged that SMME development was key to overall success and plans to stimulate increased entrepreneurial activity were being formulated. Unfair business practices were being monitored and related discussions had been held with DOL. Racism in the workplace had to be tackled and career mobility encouraged. Prevailing mindsets that regarded black employees as limited and incapable of management would have to be changed. Employment equity initiatives should be judged on the level of black control and not restricted to ownership criteria.

Ms N Kahn (Senior Executive Manager: Labour Relations, DOL) concurred with some of the recommendations and agreed that the relationship between DOL and the Gender Commission could be enhanced. A renewed campaign to promote economic empowerment would be considered including interaction within NEDLAC and other departments. Recommended changes to the enforcement system would be contemplated.

Disabled People of SA briefing
Mr M ka Toni (Secretary-General) provided an overview of the organisation's history and legislative background. A Code of Good Practice had been created in partnership with DOL to promote the increased intake of disabled people into the job market. The Code had not been well received by employers initially and points of resistance had been studied to devise reactions. A Disability Code had been drawn up and attempts made to increase representation within the public sector. Current legislation allowed employers to set their own targets with marked variances in practice. Figures on disabled participation within different management levels were provided and proposals to alleviate the plight of the disabled were posited. A major problem lay within the 18-35 age group in terms of access to employment. Quality data should be acquired to support claims for assistance and additional resources. DPSA would have to operate in collaboration with related entities such as DOL, COSATU and the private sector. Sound statistics would result in informed decisions and vigilant enforcement strategies were needed to ensure compliance. Current models of recruitment would have to be re-assessed and a cohesive response generated.

Discussion
Mr Mzondeki recounted the example of a disabled blind youth who contemplated suicide at one stage but recovered to pursue a law degree at university and became a practicing attorney. The negative perception of disabled people held by the majority of employers had to change and could be construed as a form of resistance to transformation. An agency should be established to promote the placement of the disabled in learnerships. The youth should be encouraged to participate in the National Skills Development strategy. Training initiatives could be improved by partnerships with the public sector and Members could assist in spreading the DPSA message within their respective constituencies.

Mr Mashudulu asked for evidence on how employers defined disability as offensive practices could arise from inappropriate definitions. The right to economic activity should not be infringed by discrimination. Sufficient data was available on the extent of the problem but further research would enhance knowledge. The recruitment campaign should be more practical and departments should set an example by regular placement of advertisements directed at the disabled. Monitoring mechanisms should be instituted to check compliance.

Mr ka Toni stated that, despite difficulties, progress had been made and certain large retailers had instituted significant disabled employment. DPSA sought to highlight the positive developments to counter weaknesses. The notion of learnerships would be considered and a resume of current definitions on disability would be forwarded to Members. A campaign to advance increased recruitment was a necessity and partnerships with affiliated bodies would be fostered. Training within the public sector would be pursued vigorously.

BUSA briefing
Detail was provided on BUSA's contribution to employment equity with particular reference to the proliferation of sector charters guiding the transformation of the economy. The rationale behind employment equity and attempts to promote equity were explained. Equity was focused on ownership and skills development and an alignment of requirements was needed to formulate a collective effort. A case study focused on Woolworths’ programme to employ disabled people was presented outlining successes and lessons learnt.

The Chairperson stated that insufficient time remained for questions and answers and a follow-up meeting with BUSA would occur on 24 June 2005. She asked Members to reserve questions until then.

The meeting was adjourned.