A number of JSE-listed companies could face punitive measures if found not to be complying with the EE Act. Photo: Timothy Bernard
Cape Town - The department of Labour has taken aim at 72 JSE-listed companies for not complying with the country’s employment equity (EE) policy and gave the local bourse 60 days to remedy the situation. Non-compliant companies face R1.5million fines and criminal charges.

The department’s Inspection and Enforcement Services unit said on Thursday that it had initiated a director-general (DG) review to inspect 72 JSE-listed companies to ensure EE compliance and found them wanting.

The department could not be drawn on the names of the companies but said all listed companies would be asked to share their EE policies and be checked to see whether they complied with the EE Act.

Fikiswa Mncanca, the department’s chief director statutory and advocacy services, said: “The national director-general review team started with the inspections in July and these will continue until December. The review involves a process of interrogating company’s EE plans to assess whether they comply with legislation”

In June, the department released its seventh Employment Equity Report, which found 68.5percent of the top management positions were occupied by whites, 14.4percent Africans 14.4percent, 8.9percent Indians, 4.9percent coloureds and 3.4 percent foreign nationals.

The department further said JSE-listed companies alone accounted for more than 50percent of the companies that had been issued with fines for non-compliance by the government.

Mncanca said the DG review found the JSE Securities plan was not complying in terms of Section 20 (2) of the Employment Equity Act, and DG recommendations were issued.

The JSE’s chief executive and her team signed the recommendations and agreed to address the shortcomings.

“It is our responsibility to educate our stakeholders on the expectations, conduct inspections to check compliance and for those employers not willing to comply, refer them for prosecutions and enforce compliance.”

In May, Business Report reported more than 21 companies had been fined for not complying with the EE Act and several others were on the verge of being fined.

The department also said it would be embarking on a national campaign to advocate EE compliance in workplaces.

The Department of Labour is the second national department this week to take aim at both listed and unlisted companies for their alleged slow progress in transforming.

On Monday, the Department of Trade and Industry’s broad-based black economic empowerment (B-BBEE) commission said it had initiated an investigation against specific entities for possible violation of the B-BBEE Act.

The commission warned if found to have violated the legislation, the entities may be referred for prosecution and exposed to a fine of up to 10percent of their annual turnover, and the individuals involved could be fined or imprisoned for up to 10 years.

The entities could also be excluded from doing business with the government for a period of up to 10 years, and the contracts they have with any state-owned entity or government department could be cancelled.

The commission may also approach a court of law to restrain any breach or for any appropriate remedial relief, which may include setting aside the transaction or initiative.

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Among the companies called to account was MTN, to determine whether the cellphone provider's Zakhele and the MTN Zakhele Futhi B-BBEE schemes met the requirements for black ownership elements and complied with the B-BBEE Act. Netcare’s B-BBEE ownership initiative facilitated through Health Partners for Life, comprising four trusts, was also flagged by the commission for investigation.

Earlier this year, the JSE said it had amended its listing requirements to promote racial diversity at board level.

It had not responded to questions on the moves by the Department of Labour at the time of going to print.