The department of labour and employment is threatening to haul three of the country’s top four banks to court for non-compliance with employment equity laws.
Standard Bank, FNB and Absa are in the crosshairs for failure to ensure their employees, especially at senior management level, mirror the country’s demographics.
A verdict of non-compliance was passed after the department conducted a desktop study in the first quarter of this year to determine if publicly-listed companies were complying with employment equity plans tabled in 2018. It found that almost 99% of private sector employers were noncompliant.
Fikiswa Mncanca-Bede, chief director for statutory and advocacy services, told Business Times the department was going to court to ask that either it impose a fine of R1.5m or 2% of turnover — whichever is greater — on the banks.
She said JSE-listed companies generally did not have an appetite to transform.
“It is bad. It is still a man’s world. I do not think they see a need to transform. Either they do not have confidence in women, or they do not have confidence in black people, because when you check the disparities, you find that even if it is males at the top management, it is still white males, especially in the private sector.”
“Even the 1% that are complying, you find that it is because they have a plan that is administrative compliance. But in terms of substantive compliance, in terms of ensuring there are equal opportunities given to designated groups, you do not find that,” said Mncanca-Bede.
I do not think they see a need to transform. Either they do not have confidence in women, or they do not have confidence in black people
— Fikiswa Mncanca-Bede, department of labour
She said 29 years into democracy little had changed in the top management of banks.
“It was a shock to us. You find that these companies do not have the appetite to comply because they wait for the department to come [and inspect]. If we do not go they just hide and wait for us to come. It is only [when we inspect] that you see there is some movement, and they even have a plan in place.”
FNB, Standard Bank and Absa are in talks with the department over the possible imposition of penalties.
To avoid imposing a fine, the department was in negotiations with the errant banks to offer more learnerships as a way of closing the skills gap.
“I think it is better than the R1.5m fine. That is what we did with Huawei. Huawei ended up taking 120 learners on internships and others for learnership and there is a deal that they will absorb those learners. So, we believe that will assist the government in dealing with the unemployment rate in the country,” she said.
The Chinese-owned telecommunications company was fingered by the department last year for failure to comply with employment equity laws.
Mncanca-Bede said the department was changing its monitoring and implementation strategy to focus more on big companies.
“It will be more of refocusing our capacity and strategy to ensure that we target the big companies more than anything. We have a team that is working on the big companies to ensure that at least there is some movement. We are not going to let them go in terms of plans that were already approved in the past; we are going to monitor them.”
Absa told Business Times it was fully compliant with the country’s employment equity laws.
“Absa has made reasonable and significant progress in transforming our organisation in the past few years with a view to achieve employment equity and we will continue to drive these efforts in line with our ambition to be the undisputed leader in transformation in the financial services industry.
“We are pursuing this journey with speed, as demonstrated by 2022 changes in our top leadership structures, which resulted in the improved representation of blacks and women. We also focus on sustaining a culture of inclusion where our employees have a sense of belonging,” the bank said.
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