White business to feel the whip

24 July 2015 - 08:21 By BABALO NDENZE

The government is to haul more than 1000 companies to the Labour Court for failing to transform and meet employment-equity targets. The Department of Labour Court issued the threat after receiving the Commission for Employment Equity's latest report into transformation in the workplace.The "alarmed" acting chairman of the commission, Tabea Magodielo, said it found that white people continued to dominate top management structures, particularly in the economic hub of Gauteng. Nationally, 70% of all top managers are white.Even more alarming to the commission was the continued recruitment of white men in numbers that outstrip the recruitment of any other race group - at about 40% of the total, compared with African men at just 14.7%.The commission has now called for tougher action, including the docking of annual turnover, depending on a company's size.Businesses fear the possible arrest of directors as part of the Department of Labour's drive to punish insufficient transformation.Labour Department spokesman Sithembele Tshwete said it was not in a position to name the companies at this stage, but he confirmed that some were listed on the Johannesburg Stock Exchange."It's the big ones, but not all 1000. But soon we will be able to deal with that [naming them]," he said.The commission said "the picture painted by the statistics leaves the commission with no option but to opt for rigorous enforcement mechanisms".The chief director at the Department of Labour, Thembinkosi Mkalipi, said regulations required that racial representivity be stated in reports about training and the number of employers reporting had increased.Magodielo said her commission had changed the theme for this year's report to "transformation makes business sense"."We are moving at a snail's pace. It's 20 years into our democracy and if you look at the African population, we're currently sitting on 13.6% [at top management]. If we continue at this pace, 40 years into our democracy we will possibly be sitting at about 25%."This is disheartening and it requires quite a strong review of the way in which employer organisations are looking at transformation," said Magodielo.Another worrying trend was how black employees continued to be overlooked for promotions and recruitment into the top echelons of companies, she said."We see that people are not moving to the top . it is quite clear that, come time for promotion, come time for recruitment, we see white individuals are the ones being recruited more often and they're the ones being promoted."Magodielo noted the number of foreigners in top management had increased in the last three years.Loane Sharp, an economist at the Free Market Foundation, said the government had become more and more "aggressive" about economic equity."All that this will do is increase further the cost and risk of employment," said Sharp. Companies operating in "good faith" might abandon commitments."The danger with employment equity is that for poor performers, performance is unnecessary and for good performers, performance is futile. Employment equity undermines the system of incentive that drives economic growth and employment," Sharp said

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