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CAPE TOWN - The Department of Labour’s Inspection and Enforcement Services (IES) branch has announced it is taking six companies to court for prosecution for failure to prepare employment equity plans as per the provisions of s20 (1) of the (EEA) and reporting to the Director-General on plans that do not exist which amounts to misrepresentation.

The six companies affected are Gooderson, Clientele Legal, Clientele Life, Mazor Aluminium, Mazor Steel, and Spanjaard Limited. 

According to the Department of Labour, the companies referred for prosecution are in breach of Section 20 of Employment Equity (EE) legislation.

The proceeding of the prosecution will follow with the companies being taken to the Labour Court for prosecution, says Department of Labour Chief Director Statutory & Advocacy Services, Advocate Fikiswa Mncanca. The companies will then be taken to Magistrates Court for misrepresentation, said Mncanca.

It is noted that the six companies have been sent letters of intention to prosecute.

According to Mncanca, out of the 12 companies who were scheduled for visits, only six were visited and they were also found not to be complying with the provisions of the EE Act.

The remaining six companies: JSE Limited, Safic Pty Ltd, Phumelela Gaming, Cullinan Holdings, Reubex Pty Ltd and EOH were issued with recommendations and given 60 days to comply to contraventions.

Among the six remaining companies, they have breached Sections 16, 19, 20 and 24 of the EE Act. The referrals follow the announcement by National Director-General (DG) Review last week that 72 JSE Securities-listed companies to ensure compliance with employment equity.

The current initiative is part of achieving the department’s objective to promote equity in the labour market. The inspections by The National Director-General Review team started in July and these will continue until December 2017. 

The process followed by the National DG Review involves interrogating company’s EE plans to assess whether the plan complies with legislation and is able to transform when put to test.

"We have been talking about transformation and nothing seems to be happening. Transformation should not just end in paper. Also, transformation should not happen just because the Department of Labour is conducting national DG Reviews", said Mncanca. 

“The department ‘has arrived’ to enforce compliance with EE legislation”.

The consequence companies that do not have a EE plan will face is a fine of R1.5 million. Likewise, those who fail to prepare EE plans will be subjected to a R1.5 million penalty. 

However, repeat offenders will face harsher penalties.