BEE compliance can never be justification for dismissal

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While there is enormous pressure on South African businesses to transform, employers should be aware that BEE compliance can never be a justification for dismissal of non-black staff under the Labour Relations Act, says Kunyalala Maphisa, an attorney at law firm Jan S. de Villiers.

“This point has not been tested in our courts in relation to BEE, but if cases dealing with affirmative action are anything to go by, such as the Labour Court decision inMcInnes v Technikon Natal [2000] 6 BLLR 701 (LC), one cannot use BEE as a defence for dismissal. In this case, the court found that, an employer cannot dismiss an employee in order to make an affirmative action appointment. Such dismissal would be automatically unfair.”

Maphisa says many small and medium businesses face this situation in relation to BEE compliance. “They have no room for another manager and cannot afford one, but must comply in order to meet the procurement requirements of clients. The solution is not to get rid of your white manager, but rather to look to the other elements of the BEE scorecard such as skills development. An SMME in this situation could, for example, implement a skills training programme to sufficiently train their more inexperienced black manager with the skills and knowledge to perform his job adequately. You do get points for this.”

“The point of BEE is not to force the issue where it is not possible. While the legislation sets out a range of the elements that must be taken into account in order to be considered BEE compliant, it does not mean that an entity has to comply with every element. Transformation and empowerment is a process, and requires the setting of goals and targets. Compliance must be to the extent that it is possible, logical and it must make business sense. The intention of BEE is not to run businesses into the ground.”

Maphisa says the first step as an owner of an SMME is to acquaint yourself with the provisions of the Broad-Based Economic Empowerment Act and the balanced scorecard approach. “There are a host of options for smaller businesses to make them compliant with the BEE.”