Dear Valued Client,
We have seen much drama in the week after the effective date of the 2013 code of good practice, that we thought it prudent to clarify the clarification note further, and provide additional resources for you, based on information at our disposal as of today.
From the Clarification Note: The Broad Based Schemes and Employee Share Ownership Schemes clarification has been withdrawn. The Minister will make a decision as to how to address the issues with these schemes once the task teams has tabled its recommendations. Current Schemes will not be affected, only future schemes – according to the media statement from the DTI.
From the Clarification Note: we've created a decision tree to assist you in determining which Code to be assessed against. Please refer to it should you be unsure of which CoGP to be rated on, next.
From the EE and ESD Amendment: The DTI also issued the corrected formula for calculating the Employment Equity section of the new Management and Control Code, which also affects the Skills Development calculations. We had already tested the formula with the DTI and so are confident it addresses some of the shortfalls in the previously gazetted formula. Please find attached, a spreadsheet where you need only insert your figures for Senior, Middle, and Junior Management, in order to get your score (please insert in the yellow sections). The formula attached uses national EAP targets, however, you can amend those if you have to apply the regional EAP stats instead.
From EE and ESD Amendment: With regards to the Empowering Supplier Provisions, more companies now have a chance of qualifying as Empowering Suppliers as the fifth criterion, applicable to service companies only, should be achievable. You are still required to choose three of the following options:
a) At least 25% of cost of sales excluding labour cost and depreciation must be procured from local producers or local supplier in SA, for the service industry labour cost are included but capped to 15%.
b) Job Creation - 50% of jobs created for Black people provided that the number of Black employees since the immediate prior verified B-BBEE Measurement is maintained.
c) At least 25% transformation of raw material/beneficiation which include local manufacturing , production and/or assembly, and/or packaging.
d) Skills Transfer – at least spend 12 days per annum of productivity deployed in assisting Black EMEs and QSEs beneficiaries to increase their operation or financial capacity.
e) At least 85% of labour costs should be paid to South African employees by services industry entities.
Also for your reading is the final code on QSE’s and some of the ownership elements that were not yet finalised. Of particular interest to South African Multinationals is their inclusion in the ability to apply the Exclusion Principle in determining South African Operations, as per clause 10.2 of Statement 102.
We understand that there has been heightened uncertainty in the past week, and we hope this note will provide some certainty – based on current information. If you need to discuss any of the points above, or you need assistance with you planning for the year ahead, please do not hesitate to contact your nearest Empowerdex office.
The Empowerdex Team