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Repeal of Sector Codes Not Aligned to the Amended Codes – EconoBEE Newsletter – 3 November 2015

EconoBEE - BEE Points = Business

We are definitely starting to see the impact of the Amended Codes. Recently a large corporate released their first Amended Codes scorecard. They dropped from a level 4 to a level 8. Particularly interesting to note was that they were discounted 1 level for not achieving their sub-minimum on Enterprise and Supplier Development.

The impact is certainly going to be dramatic for every business who requires a good BEE scorecard. Contact us to help you manage your transition to the Amended Codes.

Repeal of Sector Codes Not Aligned to the Amended Codes

2 November 2015 – Sidwell Medupe-Departmental Spokesperson – The DTI
Sector Charter Councils have until the 15 November 2015 to submit aligned Sector Codes for approval to Minister of Trade and Industry, Dr Rob Davies.

All existing Sector Codes that have not submitted application for approval to the Minister to be aligned with Broad-Based Black Economic Empowerment Codes of Good Practice will be repealed.

Once sector codes are repealed, entities operating in the affected sectors will use the Amended B-BBEE Codes of Good Practice for measurement.

The background to this action by Minister Davies is that on 15 May 2015, all the existing Sector Codes which were not aligned to the Amended Broad Based Black Economic Empowerment (B-BBEE) Codes of Good Practice were given further extension to complete the alignment process by 30 October 2015. The extension was given through a Notice, Government Gazette Number 38799, which further stated that a consideration shall be made to repealing those sector codes that are not aligned and ready for gazetting by 30 October 2015.

What does this mean?
Background: A sector code must first be gazetted in terms of section 9(5) of the act. This gives the public 60 days to comment. Thereafter the minister can gazette the sector code in terms of section 9(1) of the act. A section 9(1) implies that the sector code is now in effect and must be followed from date of gazetting.

What the minister is asking is the sector codes to be submitted to him for approval so he can soon after issue the sector code in terms of 9(5). Approval would apply that the line minister, eg public works, communication etc has signed it off as well. The dti then examines each sector code and decides if it meets the requirements of the act. At that point the minister issues the 9(5) notice. The time from submission for approval to 9(5) gazette can be from 1 month to more than 6 months, but most likely shorter in this instance.

There are still seven sector codes due to be released, all with a deadline of 15 November for submission, ie 2 weeks time.

The outstanding sector codes are:

Sector codeProgressOur Estimate: Will it be ready for approval by 15 November?
AccountancyDraft issued to industryMaybe
FSCSome sticking points, ie disagreements amongst stakeholdersNo
ICTICT Council only appointed in October 2015No
TransportHas many sub-sectors to updateNo
TourismAlready issued as per 9(5)Done
PropertyAlready issued as per 9(5)Done
MAC CharterNB. The MAC Charter is a new charter that has also been gazetted for public comment.N/A

What will happen after gazetting?
The public will be given 60 days on which to comment. Thereafter the dti and councils will re-evaluate and submit a final code to the minister for final gazetting. This can take from 2 months to a year. The minister is most likely to want to finalise the approved sector codes by March 2016. Once that happens, and with no further notice the sector code will now be in effect and must be followed from that day onwards.
What will happen to those that are not ready?
The minister will issue a notice in terms of section 9(5) of the act stating his intention to repeal the sector codes. There will also be a 60 day period to comment, after which the minister can issue a notice repealing the sector code. At that point, with no further notice, all in that industry will follow the amended codes.

This means that some if not most sector codes will be gone by about the end of January 2016. Until that happens they must continue to be followed.

Automatically unfair dismissals

The Employment Equity Act as well as the Labour Relations Act refer to a list of areas that a company may not discriminate against its employees. The basis for a dismissal based on discrimination is virtually the most toxic thing a company can do, which could land them at the CCMA and in the Labour Courts with them potentially paying 24 months salary.

What is unfair discrimination?
The acts above prohibit unfair discrimination on one or more of the following grounds:

  • Race
  • Disability
  • Gender
  • Religion
  • Sex
  • HIV status
  • Pregnancy
  • Conscience
  • Marital Status
  • Belief
  • Family responsibility
  • Political Opinion
  • Ethnic or social origin
  • Culture
  • Colour
  • Language
  • Sexual Orientation
  • Birth
  • Age
  • Or any other arbitrary ground

A dismissal based on any of the above grounds is classed as an automatically unfair dismissal.

For example, dismissing an employee based on the fact that maternity leave is to be taken or not guaranteeing her job on return of maternity leave or dismissing someone who supports a different political party to you, is automatically considered an unfair dismissal.

The ramifications of this is that if the company is found to have dismissed an employee unfairly the employee will have a direct line to the CCMA and will have a strong case against the employer. The employer will have to prove that discrimination did not take place as the reason for the dismissal, which may be a very difficult task.  If the commissioner sides with the employee during conciliation, then arbitration will take place and the employer may be liable for 12 months salary.

Should the employer want to escalate the case to the Labour Court then the employer is required to furnish 24 months of salary prior to launching a review application in the Labour Court.



Employment Equity and BEE Course

BEE/EE half day workshop
This course will cover the amended BEE codes, but will focus on employment equity in terms of the points calculation and all the reports that need to be submitted to the Department of Labour by 15 January 2016.

Venue: 435 Rugby Avenue, Ferndale
Date: 17th November 2015
Time: 8 30am for 9am until 1pm
Cost: R1 500 excl vat

How to win with dismissals and arbitration – 2 Days
Overview to the Labour Relations Act, with specific case studies of the dismissal and enquiry process, including CCMA cases. This course will prepare you to ensure that you do not have procedurally incorrect or substantively unfair dismissals as they could be hugely costly if referred to the CCMA.

Venue: 435 Rugby Avenue, Ferndale
Date: 19th and 20th November 2015
Time: 8 30am for 9am until 5pm
Cost: R5 000 excl vat





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EconoBEE Newsletter
03 November 2015

In this issue

    • Repeal of Sector Codes Not Aligned to the Amended Codes
    • Automatically unfair dismissals

In other news

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