Paul Janisch

Flying over water?

I think most of us would have received that hysterical email from Kulula.  Entitled "we can swim" (all in lower case) the airline takes a well timed (and deserved) dig at the "super-efficient" labour department.  Only Kulula and Nandos would turn this into something in their favour. 

If various governmental departments can slander private companies publicly, before they've gone to court - then they must expect the same treatment in return.

By the way, they are hiring.

if you ever though about joining the kulula cabin crew team, why not send us your CV, with a full length and head shot photo to [email protected]. We're looking for South Africans of all colours. We are pretty fussy though and qualifying criteria include not just a vibrant and bubbly personality but also a height prerequisite of between 1.58m and 1.83m (sorry, you need to be able to reach the overhead luggage compartments), a grade 12 qualification and a minimum of three years of customer service training or experience. The ability to swim is, of course, not a deal breaker!

Good for them for doing this - they are obviously confident that they will win.  Can you imagine how embarrassing it will be for the labour department if they do.

What's with Cyril?

" Moyo’s resignation presented me with a dilemma. On a personal level, I had to consider very carefully whether our continued involvement in Alexander Forbes was acceptable, not just for Shanduka Group as a business but also to me as an individual. My philosophy has always been that the transformation of our economy and the transformation of our political life must go hand in hand because neither can progress far without the other."

So wrote Cyril in the Business Day yesterday.  He has been very quiet about this up until now, afterall Cyril is a fantastic businessman who wants the best out of his investments.  Could it be that he has been offered a very good price for his shares, or is it that there is an ANC leader election coming up in a few weeks, or is Cyril genuinely interested in the transformation?

Tell me where you've BEEn?

The Financial Mail had a huge feature on BEE a few weeks ago.  The lead article, entitled spiritually bankrupt, is probably the best article Sibonelo Radebe has written so far.   The title is a pun on compliance vs the spirit of BEE and argues that we are heading more toward a culture of compliance as opposed to embracing the spirit of transformation etc.   Kevin Lester, quite correctly states in the article that "the level of detail in the codes is territory for smart people to find gaps and exploit them" . 

This is the crux of the entire concept: compliance and transformation.  Compliance does not always mean actual transformation - all it means is that your BEE score has improved because your ability to measure yourself has improved.  Cyril Ramaphosa made this same point in yesterday's Business Day (more on Cyril later).

Compliance with legislation and with scorecards is not enough.........  it is the bare minimum, the objective is to go beyond individual scorecards and narrow business interests

I was presenting to a prospect yesterday and I likened the whole BEE jol to the diet industry.  Compliance would be buying that abflex or the Atkins Diet book.  Transformation would be actually making use of these tools and following that calorie controlled diet and losing the weight - transforming.  Yet the weight loss industry makes billions of dollars each year from the same people because they are looking for the next quick fix. 

The reason why is not too hard to fathom.

We are a world that is interested in quick fixes - we want fast food and we want it fast so we use the drive through at McDonalds.  The world is more competitive, so we need skills and we need them now - we'll pay a premium for those skills.  We need black executives and we pay in telephone numbers to get them - and then try all sorts of schemes to retain them.  Similarly staff tend not to be as loyal as they used to be - they move around from one place to another for numerous different reasons.  It is difficult to develop them into management positions because there is no guarantee that they will stay.

And this reality is not only South Africa's - it's a global phenomenon.

Therefore compliance is the only way to go.  Companies make use of people like me because I am a compliance expert.  I am not hired to come in and set-up transformation teams and plans - I'll leave that to guys like Robin Woolley who are experts at this.  And as Kevin said earlier, I am one of those who will analyse the codes, run my schemes past experts like Obed de Swardt and see if his verification agency will accept them.  If he doesn't, then I look for other loop holes.   I can't say I am any different to any tax consultant.

How do you then marry compliance with transformation?  I don't think I know the answer to that question.  Perhaps BEE should move away from a stick inducement  to a carrot reward system.  The only logical way to do this is for Trevor to start providing tax breaks to those companies that are objectively complying on certain elements, like skills development, employment equity and enterprise development.   I choose these three because they will all have a positive impact on the economy and the fisc.  A skilled employee has a better chance of climbing the ladder and therefore earns more - Trevor can then take more tax money from them.  A properly implemented enterprise development strategy will create more companies and employ more people - and Trevor gets more money.

By the way take a look at this table.  School boy errors abound - even the FM is fallible.

Who's been a busy bEE then?

I am now settling into the task of parenthood.  In spite of the lack of sleep Kath and I cannot imagine life without Oliver (never thought I'd say this). 

Many thanks to those people who have sent us their best wishes.  I have been inundated with calls and messages from friends, associates, clients (who I now count as friends) and suppliers.

Seeing that I am now a parent I have taken on a new perspective when it comes to the future of my son in this country.  I suppose the most topical issue at the moment is the Employment Equity commission and their naming and shaming.  Comair is apparently off to court to defend a claim by the labour department that they have breached provisions of the Employment Equity Act.

The department alleges that Comair has breached the following:

• Section 20 of Employment Equity Act by failing to prepare and implement an Employment Equity Plan which would achieve reasonable progress towards employment equity in the respondent's workplace between the periods 2000 to September 2007 (my emphasis);
• Section 21 (2) (3) (4) and (5) by submitting reports which were not based on any existing Employment Equity Plan of the respondent and/or submitting falsified reports;
• Section 21 (3) of Employment Equity Act  by failing to submit a report to the Director General on the first working day of October 2007;
• Section 24 of Employment Equity Act, in that Comair failed to assign one or more senior managers to take responsibility for monitoring and implementing an Employment Equity Plan from 2000 to 26 March 2007;
• Section 26 of Employment Equity Act  by failing to keep records in respect of its workforce, its Employment Equity Plan and other records relevant for purposes of compliance with the Employment Equity Act.

If you read the relevant sections in the act you'll notice that they are procedural.  In other words if you do not follow the PRESCRIBED regulations you are in breach of the legislation.  But when you have a look here you'll find that sections 24 and 26 do not carry a fine (I suppose this means that a breach of these results in some form of criminal liability).  The fine that the labour department is requesting is the maximum that the act prescribes (although jungle jim would like to see this increased).  There is a suggestion here that Comair have not been paying too much attention to their EE for the last three years or more.

Whilst the facts of the case have not been argued I really hope that Comair (and the other companies - including jungle jim's own Tiger Brands) have not been messing around with this procedure because it really does give the largely incompetent labour department some teeth around this time of year.  If they have then they have been decidedly dof!!! 

I have said this before - you can have a company that employs only white males (without discriminating against any other designated groups) and still follow the procedure prescribed by the act and not be in breach of any of its provisions.  It all comes back to our constitution - specifically section 9.4 which states

No person may unfairly discriminate directly or indirectly against anyone on one or more grounds in terms of subsection (3). National legislation must be enacted to prevent or prohibit unfair discrimination.

(incidentally subsection 3 says

The state may not unfairly discriminate directly or indirectly against anyone on one or more grounds, including race, gender, sex, pregnancy, marital status, ethnic or social origin, colour, sexual orientation, age, disability, religion, conscience, belief, culture, language and birth.

This would this add more weight to Tshwane municipality's  proposed set-asides being unconstitutional).

What about the Employment Equity Act and B-BBEE's employment equity?

To my mind, these are two completely separate concepts.  Paragraph 3.3.1 of code 300 explains that wherever possible the EE data filed with the department of labour must be used in calculating the score under the employment equity scorecard.  There is no mention here that if the labour department decides to declare a dispute with your company that you should be penalised from completing the EE scorecard.

I have italicised the words "wherever possible" because it might mean that you don't have to use the EE reports.  I have a client who have used the scales contained in the EEA9 and these don't actually work in their business - so we used the logical structures they have in that business.