The drama at Dis-Chem shows that many firms are declining to transform because they can. (Dwayne Senior/Bloomberg via Getty Images)
After 24 years, the Employment Equity Act has failed to achieve workplace transformation. The time has come to impose equity quotas on large employers.
In 2008, the Commission for Employment Equity (CEE) published its first annual report that had separate statistics for the private and public sectors. Every year since then, it has published stats which show an effective moratorium on the employment of Africans in top and senior management in the private sector.
Each time, there was no media interest in the story. But after the leaking of a Dis-Chem memo that announced a moratorium on the appointment of white people, there was a media frenzy that resulted in the company saying it regretted the wording and tone of the memo.
From 2008 to last year, according to the CEE, black representation in top management increased by 7.4 percentage points to 30.7% from 23.3%. But the employment of South Africans of Indian descent accounted for 73% of this increase. African representation increased by 1.4 percentage points to 13.9% from 12.5%. They accounted for 17.2% of their share of the population.
The representation of African women, the most marginalised group, increased by 1.4 percentage points to 5.2% from 3.8%. They accounted for 12.6% of their share of the population. By comparison, white people accounted for 859.7% of their share of the population.
Black representation in senior management increased by 10.8 percentage points to 44% from 29.2%. South Africans of Indian descent accounted for 50.9% of this increase. African representation in senior management increased by 4.1 percentage points to 19.1% from 15%.
They accounted for 23.6% of their share of the population. The representation of African women increased by two percentage points to 7.2% from 5.2%. They accounted for 17.4% of their share of the population. By comparison, white people accounted for 736.4%.
Dis-Chem is one of the most untransformed companies in South Africa. It is a non-compliant contributor to broad-based black economic empowerment, according to its verification certificate. In August last year, it sold 10.05% of its shares to a black consortium — Royal Bafokeng Holdings and Black Panther.
Dis-Chem has 10 members on its board — four are black. But all four of its executive directors are white. The firm says 11% of people in top and senior management are historically disadvantaged South Africans, a category that includes white women. It has about 20 000 employees but only 1 011 workers were trained in the 2021 financial year.
Tabea Kabinde, CEE chairperson, says the Employment Equity Amendment Bill will speed up transformation. It empowers the minister to regulate sector targets and the issuing of the compliance certificates companies will have to produce if they do business with the government. But retailers do very little business with the government.
Ntsoaki Mamashela, the department of employment and labour’s director of employment equity, says: “Even if companies do not do business with the state, they are still required to implement their plan and achieve its targets. Failure to implement the plan results in a referral to the labour court for a penalty.”
The Dis-Chem memo said: “It’s the ratio between white and black that counts. So, when no suitable black candidate is found and a white is appointed, we need several blacks just to maintain the status quo, never mind moving forward.”
Other measures announced by chief executive Ivan Saltzman — centralising appointments in his office and incorporating transformation targets into the Dis-Chem bonus structure — are in line with best practices implemented by other companies.
There was nothing wrong with the wording and tone of Dis-Chem’s memo. Companies cannot achieve employment equity targets without having a moratorium on the appointment of white people. Such is the scale of their over-representation. If Africans had to endure a moratorium for 14 years, redress requires that there should be a freeze on the employment of white people for a few years. Dis-Chem’s board members should hang their heads in shame that they caved in to white supremacist lobby groups.
Tinkering with the law will not speed up transformation because, in most cases, we are dealing with institutional racism and companies that refuse to transform, and not a shortage of skills. There have been previous amendments to the law, which have not yielded results. Companies refuse to transform because they can.
In 2003 a right-wing government in Norway legislated a 40% quota for women on boards. Companies were given four years to meet the quota.
A Friedrich-Ebert-Stiftung report said: “The successful implementation of the quota was due mainly to sanctions, the toughest of which was the forced dissolution of non-compliant companies … When there were no sanctions in the initial phase, companies did not widely implement the policy on a voluntary basis. The Norwegian experience shows that, without quota legislation, there will be no change .”
Duma Gqubule is a financial journalist, analyst, researcher and adviser on issues of economic development and transformation.
The views expressed are those of the author and do not necessarily reflect the official policy or position of the Mail & Guardian.
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