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Chapter 1 BS MTG Edited

The document discusses 8 Acts that regulate businesses and protect consumer and employee rights in South Africa: 1. The Skills Development Act develops workforce skills. 2. The Labour Relations Act establishes rules for resolving labor disputes. 3. The Employment Equity Act promotes equal opportunity and bans discrimination in the workplace. 4. The Basic Conditions of Employment Act sets minimum employment standards.

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0% found this document useful (0 votes)
95 views19 pages

Chapter 1 BS MTG Edited

The document discusses 8 Acts that regulate businesses and protect consumer and employee rights in South Africa: 1. The Skills Development Act develops workforce skills. 2. The Labour Relations Act establishes rules for resolving labor disputes. 3. The Employment Equity Act promotes equal opportunity and bans discrimination in the workplace. 4. The Basic Conditions of Employment Act sets minimum employment standards.

Uploaded by

faithmotsisi531
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Chapter 1

Impact of recent legislation on


businesses
INTRODUCTION

The government has introduced various Acts in response to demands for redress and equity,
in small and large businesses. This chapter covers the following Acts:

 Skills Development Act, 1998 (Act 97 of 1998)


 Labour Relation Act, 1995 (Act 66 of 1995)
 Employment Equity Act, 1998 (Act 55 of 1998)
 Basic Conditions of Employment Act, (Act 75 of 1997)
 Compensation for Occupational Injuries and Diseases Amendment Act, 1997
(Act 61 of 1997)
 Broad-Based Black Economic Empowerment Act, Act 2003, (Act 53 of 2003),
(amended in 2013)
 National Credit Act, 2005 (Act 34 of 2005) (NCA)
 Consumer Protection Act, 2008 (Act 68 of 28 April 2008) (CPA)

The above mentioned Acts regulate and protect the rights of consumers and businesses.
Effective implementation of the above-mentioned Acts will ensure a fair and orderly labour
and factor market.
TOPIC CONTENT CONTENT DETAILS FOR TEACHING,
LEARNING AND ASSESSMENT
PURPOSES
Impact of 8 Acts according to:  Explain/Outline the purpose of each Act
recent  Nature  Explain the National Skills Development
legislation  Aims/Purpose
Strategy and the Human Resource
on  Impact on businesses
Development Strategy (i.e. Sector
businesses  Compliance
Education and Training Authorities).
 Penalties/consequences for non-
compliance.  Outline/Explain the role of SETA’s
 Actions regarded as discriminatory  Explain how SETA’s are funded.
 Implications of BBBEE Pillars  Discuss the impact of each Act on
 NCA & CPA consumer rights businesses.
 Outline the BBBEE pillars
 Explain the implications of BBBEE pillars
on businesses.
 Explain penalties/consequences for non-
compliance with the Acts.
 Outline/Explain actions regarded as
discriminatory by the various Acts.
 Suggest/Recommend ways in which
businesses can comply with the Acts.
 Outline/Discuss consumer rights in terms of
the NCA and CPA.
Learn the meaning
of these basic
concepts

1.1 Key concepts


These definitions will help you understand the
meaning of key legislation concepts that are used in
this study chapter.
Term Definition

Skills Development The main aim of this Act is to improve the skill levels of people who are
Act/SDA already employed in the business.
Skills Development It was introduced to ensure that businesses contribute to the
Levy/SDL development of skills of employees.
PDI’s Previously Disadvantaged Individuals or designated group.

SETA’s SETA’s were established in order to implement and monitor the


implementation of the Skills Development Act.

Labour Relations This Act was introduced to promote simple procedures for the resolution of
Act/LRA labour disputes in the workplace.
Negotiations between employers’ association and trade unions on
Collective matters such as wages/conditions of employment.
bargaining
Collective Agreement between the employer organisations and trade unions.
agreement

Dispute A disagreement between the employer and the employee

Bargain councils It is formed by registered trade unions and employer organisations in order
to prevent/resolve labour disputes.

Employment Equity The main aim of this Act is to ensure that equal job opportunities are given
Act/EEA to all people regardless of race/culture/language/age/religion/disability etc.
Affirmative Action It was designed to ensure that suitable and qualified previously
disadvantaged individuals are given equal job opportunities.
Affirmative action forms part of the Employment Equity Act.

Basic Conditions This Act sets the minimum standard for employment in order to promote
of Employment fair labour practice.
Act/BCEA
Compensation for The Act gives employees who are injured or contract diseases while on duty the
Occupational Injuries right to claim compensation.
and Diseases
Act/COIDA
Broad-Based Black The Act was introduced in order to ensure full economic participation of
Economic previously disadvantaged individuals.
Empowerment
Act/BBBEE
National Credit Act This Act was introduced to protect consumers against unfair and reckless credit
granting by businesses.

Credit providers All businesses that offer goods and services on credit

National credit The NCR is responsible for the regulation of the South African credit industry. This
Regulator/NCR means that all businesses that offer good and services on credit must be registered
with the NCR.

Debt review/ Debt This is a debt solution targeted at South African consumers who are over indebted
counselling and struggling to manage their finances.

Consumer Protection The main aim of this Act is to promote/protect the economic interests of
Act consumers by providing them information so that they make informed
choices.
Compliance Acting according to a set of rules

Penalties Punishment for doing something that is against a law.

Discriminatory actions Treating a person/people differently, from the way in which you treat other people.
1.2 The purpose of the Acts
Study this section
well
Ensure that you understand the purpose
of each Act before you study the impact of
the Acts on businesses.

PURPOSE OF THE ACTS


Skills Labour Relations Act Employment Equity Basic Conditions of
Development Act Act Employment Act
 Develops the  Provides a  This Act states that  Provides clear
skills of people framework/struct employees who do terms and
in South Africa ure for labour the same work conditions of
in order to relations (work of equal employment for
improve between value) must be paid employers and
productivity. employers and equally (equal pay). employees.
 Invests in employees.  No discrimination  Set minimum
education and  Promotes on grounds of requirements/stand
training of collective gender in the ards for the
workers. bargaining at the workplace. employment
 Improves the workplace.  Promotes equal contract.
chances of  Establishes opportunity and  Regulates the right
getting a job for Labour Courts fair treatment in to fair labour
previously and Labour the workplace. practices as set out
disadvantaged Appeal Courts  Provides for in the Constitution.
people  Promotes simple employees to  Adheres to the
 Encourages procedures for refer unresolved rules and
workers to the registration disputes to the regulations set out
participate in of trade unions CCMA. by the International
learning and employer  Protects Labour
programmes. organisations. employees from Organisation.
 Redresses  Provides for the victimisation if  Regulates the
imbalances of right to lock-out they exercise the variations of basic
the past by the employer rights given to conditions of
through as a reaction to them by the EEA. employment.
education and lengthy strikes.  Advance economic
training development and
social justice.
PURPOSE OF THE ACTS
Compensation for Broad Based Black National Credit Act Consumer Protection
Occupational Economic Act.
Injuries & Empowerment Act.
Diseases Act
 Provides a  Enable wealth Promotes the social  Promote and protect
comprehensiv to be spread and financial the economic
e protection to more broadly interest of interests of
employees across all consumers. consumers by
who injured in population Promote a fair but providing access to
the course of groups. competitive credit information.
performing  Outline areas market.  Provides consumer
their duties. that would give Ensure that education on social
 Makes the government consumers know and economic
provision for a platform for what is included in effects of consumer
the bringing their credit choice.
establishment equitable contracts.  Establishes national
of a spread of Prevent discrimination standards to protect
compensation wealth. and ensure credit consumers.
board.  Allows for the is available to all  Provides guidelines
development of consumers. for better consumer
Codes of Good Makes provision for information.
Practice. the establishment  Promote responsible
 It aims at of the NCR. consumer
targeting Ensure registrations behaviour.
inequality in the of credit bureau  Establish a National
South African and debt Consumer
economy. counselling Commission (NCC)
services.
Activity 1

1.1 Identify the Act implemented by Dinaledi LTD in each statement below.
1.1.1 People from different race were given the opportunity to apply for a vacant
post.
1.1.2 Costumers were educated about the company’s products.
1.1.3 New employees were given the opportunity to attend in-service training
courses.
1.1.4 Themba was advised to claim for injuries sustained while performing his
duties.
1.1.5 The company is registered with the National Credit Regulator. (10)

ANSWERS TO ACTIVITY 1.1


1.1.1 Employment Equity Act/EEA√√
1.1.2 Consumer Protection Act /CPA√√
1.1.3 Skills Development Act/SDA√√
1.1.4 Compensation for Occupational Injuries and Diseases Act/
COIDA√√
1.1.5 National Credit Act/NCA√√
(5x 2) (10)

1.2 Explain the differences between NCA and CPA (8)

ANSWERS TO ACTIVITY 1.2


NCA CPA
-Protects consumer√ from unfair -Protects the economic interest√ of
credit granting√ consumers by improving access to
information. √
-Applicable to businesses that -Applicable to all businesses√ that
offer√ good/services on credit√ sell goods and services. √
-Consumers may complain√ to the Consumers may complain √to an
National consumer Tribunal. √ industry ombudsman/National
Consumer Forum /Consumer
Court. √

Max (8)
Impact means advantages AND/OR disadvantages

1.3 Impact of the Acts on businesses


Skills Development Labour Relations Act Employment Equity Act Basic Conditions of
Act Employment Act
Advantages Advantages Advantages Advantages
 Increases the  Protects the  Promotes equal Creates a framework of
number of rights of opportunity and fair acceptable
skilled businesses in treatment in the employment practices
employees in labour related workplace e.g., work hours,
areas where issues  Ensures the leave, etc.
these skills are  Labour disputes implementation of Promotes fair treatment
scarce. are settled affirmative action of employees in
 Improves quicker and are measures to redress business.
productivity in less expensive. the imbalances in Encourages
the workplace.  Prevents unfair employment. consultation between
 Increases discrimination in  Encourages employers and
global the workplace as diversity in business employees.
competitiveness it promotes equal by employing Outlines minimum
 Increases opportunities for people from various requirements that
investment in all employees. racial backgrounds. forms the basis of
education and  Protect  Encourages employment
training in the employers who consultation contracts.
labour market embark on lawful between employer Work hours are
 Encourages on- lock-outs when and employees. specified so that the
going skills negotiations  Prevents unfair employer cannot
development between parties discrimination exploit employees.
and learning fail.√ against employees.
Disadvantages
Disadvantages Disadvantages Disadvantages Developing/Drafting a
 Increases cost  Productivity may  Increased formal/legal
as the process decrease if administration employment contract
requires a large employees are burden, as may be time-
amount of allowed to businesses must consuming/costly.
paper work. participate in the compile/submit Businesses may regard
 Implementation activities of trade employment equity employment
of the SDA can unions during reports every two contracts negative
be difficult to work time. years. and may not
monitor and  Costs of labour  Expensive to implement it, which
control increases train/employ result in non-
 Skills because of legal someone who compliance/penalties.
programmes strikes knows little about No employer may force
may not always  Reduced global the Act. an employee to work
address training competitiveness  Fines/Penalties for more than 45 hours
needs of due to lower non-compliant in a week. This may
employees productivity businesses may be result in reduced
expensive for the productivity.
business.
Impact of the Acts on businesses
Compensation for Broad Based Black National Credit Act Consumer Protection
Occupational Injuries Economic Act.
& Diseases Act Empowerment Act.
Advantages Advantages Advantages Advantages
 Promotes safety in  Encourages  The whole credit Businesses may
the workplace. businesses to process is build a good image
 Creates a address the transparent e.g. if they ensure that
framework for demands for both businesses they do not violate
acceptable redress/equity and customers consumer rights.
employment directly. know their May gain consumer
practices and  Provides a variety of responsibilities. loyalty, if they
safety regulations. business codes to  Lower bad debts comply with CPA.
 Supply improve resulting in Businesses may be
administrative employment equity. better cash flow. safeguarded from
guidelines/mechani  A good BEE rating  Increases cash dishonest
sms for dealing improves the image sales as credit competitors.
with/processing of the business. can only be Prevents larger
claims.  Promotes enterprise granted to businesses from
 Eliminates time and development, by qualifying undermining
costs spent on developing customers. smaller ones.
lengthy civil court entrepreneurial skills
proceedings. of PDI’s. Disadvantages Disadvantages
 Businesses can  Businesses have
Disadvantages no longer carry to replace/repair
Disadvantages  Businesses that out credit faulty items/refund
 Claiming processes want to do business marketing. money if the fault
can be time with the government  Leads to loss of occurs within six
consuming. must have their BEE sales as many months after
 Procedures status assessed consumers may purchase.
required by this Act annually. no longer  They have to
may be costly as  Processes may lead qualify to buy disclose more
paperwork places to on credit. information about
an extra corruption/nepotism  The paperwork their products and
administrative if not monitored and processes/service
burden on properly. administrative s.
businesses.  Investment/ processes  Confidential
 Implementation Ownership issues required by the business
processes/procedu can cause Act are costly. information may
res required by the unhappiness become available
Act may be amongst existing to competitors.
expensive. share-holders/owner
s.
Activity 2

2.1 Study the picture below and answer the questions that follow:

2.1.1 Quote FIVE provision of the BCEA from the picture above. (5)
2.1.2 Explain the provision of the BCEA quoted in QUESTION 2.1.1 (10)

ANSWERS TO ACTIVITY 2.1.1


Provisions of the BECA from the picture above
 Hours of work √
 Family responsibility leave/sick pay√
 Notice for termination of employment√
 Overtime/Sunday work √
 Rest periods√
(5X1) (5)

 You will only be awarded a maximum of two


marks for writing all types of leaves under the
provisions of the BCEA.
ANSWERS TO ACTIVITY 2.1.2

Hours of work
 Workers may not work for more than√ 45 hours in any week.√
 Workers may work nine hours a day√ if they work five days or less per
week√/eight hours a day√ if they work more than five days a week.√

Family responsibility leave


 Three to five (3 to 5) days paid leave per year on request√ in the event of
the death of the employee's spouse/life partner/parent/ adoptive parent/
grandparent/child/adoptive child/grandchild/sibling.√
 An employer may require reasonable proof√, before granting this leave.√
 Male employees are entitled to a maximum of three/five day’s paternity
leave√ when his child is born.

Sick leave
Workers are entitled to:
 Six weeks paid sick leave√ in a period of 36 months√/1 day paid sick
leave√ for every 26 days worked during the first six months of
employment.√
 A medical certificate may be required before paying an employee who is
absent√ for more than two consecutive days/who is frequently absent.√

Notice for termination of employment


 A contract of employment may only be terminated following one week’s
notice√, if the worker has been employed for six months or less.√
 A minimum of four weeks’ notice must be given√, if the worker has been
employed for a year or longer.√
 The employee must be given notice√ in writing.√

Overtime/Sunday work
 Workers must agree√ to work overtime.√
 Workers cannot work more than√ three hours overtime per day/10 hours
per week.√
 Overtime must be compensated as follows:
o One and half times the normal rate of pay√ for overtime worked on
week days and Saturdays.√
o Double the normal rate of pay for overtime√ worked on Sundays
and public holidays.√
Rest periods
 Workers must have a meal break of 60 minutes√ after five continuous
hours of work.√
 This can be reduced to 30 minutes by written agreement√, when working
less than 6 hours per day.√
 A worker must have a daily rest period√ of 12 continuous hours√/a weekly
rest period of 36 continuous hours√ which must include Sundays.
Max (10)
Skills Development Labour Relations Act Employment Equity Act Basic Conditions of
Act Employment Act
 Employers who  Businesses must  Businesses must  Workers should only
collect PAYE allow employees guard against work 9 hours per
should register to form trade discriminatory day in a 5 day work
with SETAs. unions/participate appointments. week./8 hours per
 One per cent of in union  Promote equal day in a 6 day work
an employer's activities/legal opportunities and week./Overtime
payroll has to strikes. fair treatment should not exceed
be paid over to  Allow/Support the  Reasonable 10 hours per week.
the SETA. establishment of accommodation of  They must have a
 Businesses workplace people from break of 60 minutes
should register forums. designated groups after five hours of
with SARS in  Employees  Ensure that there is work
the area in should not be equal representation  Workers can take up
which their unfairly/illegally of all racial groups to six weeks paid
business is dismissed in every level of sick leave during a
classified (in  Employers employment. 36-month cycle
terms of the should not  Submit the  Businesses should
SETA). breach/ignore employment equity not employ children
 Employers any collective plan to the under the age of 16.
should submit a agreement Department of  Workers must
workplace skills  Disclose all Labour receive double if
plan and relevant  Retain designated they work during
provide information groups, including public
evidence that it required by trade skills development holidays/Sunday
was union of such groups.
implemented. representatives
to do their jobs
effectively.

1.4 Ways in which businesses can comply with the Acts


Ways in which businesses can comply with the Acts
Compensation for Broad Based Black National Credit Consumer
Occupational Injuries & Economic Act Protection Act.
Diseases Act Empowerment Act.
 Provide a healthy/safe  Businesses  Businesses  Disclose prices
working environment. must appoint should of all products
 Register with the black people in register with on sale.
Compensation managerial the National  Ensure that
Commissioner and positions Credit goods/services
provide the particulars of  Businesses Regulator. offered are
the business. must sell shares  Submit an standardised/of
 Keep records of to black annual the same
employees' income and employees/peop compliance quality.
details of work for four le. report to the  Comply with the
years.  Send black National requirements
 Report all incidents people for black Credit regarding
causing for skill Regulator. promotional
death/injury/illness of development  Obtain credit competitions.
employees. training. records/chec  Display the
 Submit returns of earnings  Outsource their ks of clients name of the
by no later than 1 March services to BEE before business on all
annually. compliant granting business
 Levies must be paid to the suppliers. loans. documents, e.g.
Compensation Fund.  Implement  Conduct invoices/contract
 Ensure that the affirmative credit s.
premises/equipment/mach action when affordability  All agreements
inery is in good working making assessments must provide for
condition. appointments. to ensure a five-day
 Allow regular assessment  Develop small that clients cooling off
of the workplace by business are able to period.
inspectors in order to /SMME’s meet their  Comply with
determine the level of risk through ESD. obligations requirements
their employees are  Improve the on time. regarding the
exposed to. standard of  Offer display of
 Employers may not make living of the applicants information on
deductions for COIDA communities in pre- labels/
from employees' which they agreement packaging
remuneration packages. operate. statements.  Provide
 Businesses must ensure  Disclose all adequate
that claims are lodged costs of a training to staff
within twelve months of loan/No on the CPA.
the date of the accident. hidden costs
should be
charged/add
ed.
Skills Development Labour Relations Act Employment Equity Act Basic Conditions of
Act Employment Act
 Preventing  Unfair/Illegal  Not employing a  Forbidding
employees from dismissal of young woman workers to
signing for a employees. because she would discuss
learnership due  Cancellation of want to have wages/salaries
to their age or employees' children in future. with co-workers.
position in the contracts by a  Refusing to employ  Preventing
workplace. new employer a person because workers from
 Unfair when a he/she has strong having access to
promotion of business is sold religious beliefs/has employment
skills and  Refusing the a contracts.
development/tra establishment of disability  Refusing to
ining to certain workplace forums.  Doing HIV testing accept a valid
employees.  Refusing to give unless justified by medical
 Providing workplace forum the Labour Court. certificate of a
employment members paid  Denying people sick worker.
services for gain time off for access to the  Refusing to grant
without being attending workforce based on a worker family
registered as an meetings during gender/race/culture/ responsibility
employer. working hours. etc. and treating leave to support
 Forcing them unfairly. a sick family
employees to give member.
up trade union
membership.
 Preventing
employees from
joining trade
unions.
 Refusing leave to
trade union
representatives to
attend trade union
activities.
 Breaching of
collective
agreements/resol
ution mechanisms
by either
employer/employe
e.
 Not allowing
employees to take
part in legal
strikes

1.5 Actions regarded as discriminatory by the Acts.


Actions regarded as discriminatory by the Acts
Compensation for Broad Based Black National Credit Act Consumer Protection
Occupational Economic Act.
Injuries & Diseases Empowerment Act.
Act
 Employers who  Failing to  Refusing credit to  Denying customers
bribe/prevent implement customers based proper information
employees from affirmative action on gender/race. about the
reporting the to meet BBBEE  Charging different product/services.
accident/injury. responsibilities. interest rates to  Varying the quality of
 Providing false  Promoting customers based goods when selling in
information about unsuitable on gender/race different areas.
previous, serious people into a  Blacklisting  Prioritising any
accidents/occupa management customers without consumer group over
tional diseases. positions at the making efforts to another when
 Employers who expense of recover the debt. marketing/selling
do not contribute qualified PDP’s.  Charging unfair prices
to the  Refusing to for the same goods
Compensation award tenders to and services.
fund. black suppliers  Treating customers
 Employers who who are BEE differently based on
do not allow compliant. gender/age/race.
claims for
injuries,
discriminates
against injured
employees.
 Employers that
take too long to
process
claims/delay the
claiming process.
 Compensation
that is set off
against any debt
of the person
entitled to the
compensation.
1.6 Penalties for non-compliance

All businesses who do not comply with the above mentioned


Acts will be subjected to the following penalties.

 Labour inspectors may serve a compliance order by writing to the Department of Labour
 The Director General may agree/change/cancel the compliance order.
 Labour inspectors may investigate/inspect/ask questions about complaints and remove
records as evidence.
 Businesses may be taken to the labour court for a ruling.
 Businesses that are found guilty of non-compliance may face heavy fines/ penalties.
 They can be ordered to pay compensation and damages to the employee

Activity 3

3.1 Read the scenario below and answer the questions that follow:
HARWICH MANUFACTURES (HM)
Harwich Manufactures specialises in the manufacturing of winter ladies clothes.
The management of HM employs fifty workers who are not allowed to join a trade
union. Credit is granted to customers without checking their financial status.

3.1.1 Identify TWO Acts that are applicable to the scenario above. Quote from the
scenario above to support your answers. (6)

3.1.2 Advise HM on how to comply with the Acts identified in QUESTION 3.1.1.
(12)

3.1.3 Mention TWO penalties that HM may face for not complying with the Acts
identified in QUESTION 3.1.1. (4)
ANSWERS TO ACTIVITY 3

3.1.1 Identification of Acts from the scenario


Labour Relations Act /LRA√√ (2)

Motivation
The management of HM has employed fifty workers who are not allowed to join a trade
union. √ (1)

National Credit Act/NCA√√ (2)

Motivation
Credit is granted to customers without checking their financial status. √ (1)

3.1.2 Ways to comply with the LRA and NCA.

Ways to comply with LRA.


 HM must allow employees to form trade unions.√√
 Allow/Support the establishment of workplace forums. √√
 Employees should not be unfairly/illegally dismissed√√
 HM should not breach/ignore any collective agreement √√
 Disclose all relevant information required by trade union representatives to do their jobs
effectively.√√ Sub max (6)

Ways to comply with NCA.


 HM should register with the National Credit Regulator.√√
 Submit an annual compliance report to the National Credit Regulator.√√
 Obtain credit records/checks of clients before granting loans.√√
 Conduct credit affordability assessments to ensure that clients are able to meet their
obligations on time.√√
 Offer applicants pre-agreement statements.√√
 Disclose all costs of a loan/No hidden costs should be charged/added. √√
Sub max (6)
Max (12)

3.1.3 Penalties for non-compliance


 Labour inspectors may serve a compliance order by writing to the Department of
Labour√√
 The Director General may agree/change/cancel the compliance order. √√
 Labour inspectors may investigate/inspect/ask questions about complaints and remove
records as evidence. √√
 HM may be taken to the labour court for a ruling. √√
 Businesses that are found guilty of non-compliance may face heavy fines/ penalties.√√
 HM can be ordered to pay compensation and damages to the employee.√√
Max (6)
1.7 Role/functions of SETA’s
 Develop skills plans in line with the National Skills Development Strategy
 Draw up skills development plans for their specific economic sectors.
 Approve workplace skills plans and annual training reports.
 Allocate grants to employers, education and training providers.
 Monitor/Evaluate the actual training by service providers.
 Promote and establishes learnerships.
 Register learnership agreements/learning programmes.
 Provide training material/programmes for skills development facilitators.
 Provide accreditation for skills development facilitators.
 Oversee training in different sectors of the South African economy.
 Collect levies and pays out grants as required.

1.8 BBBEE PILLARS


OLD PILLARS REVISED PILLARS
Management Management control
Employment Equity
Skills development Skills development
Ownership Ownership
Preferential procurement/Supplier Enterprise and supplier development (ESD)
development
Enterprise development
Social responsibility Socio-economic development/social
responsibility

 Only two pillars have been revised e.g. employment


Equity and supplier development.
 Employment Equity is under management and control
 Supplier development and enterprise development have
been merged. They are now called Enterprise and
supplier development (ESD).
Activity 4

4.1 Explain how businesses could apply the following pillars of BBBEE:
4.1.1 Enterprise and supplier development
4.1.2 Management control
4.1.3 Skills development
4.1.4 Ownership (16)

ANSWERS TO ACTIVITY 4
4.1.1 Enterprise and supplier development
 Business must create jobs√ as ESD promotes local manufacturing.√
 Businesses are encouraged to invest/support√ black owned SMMEs.√
 Contribution can be monetary√, e.g. loans/investments/donations.√
 Contribution can be non-monetary√, e.g. consulting services/advice/ entrepreneurial
programmes√, etc.
 Outsource services√ to suppliers that are BBBEE compliant.√
 Identify black owned suppliers√ that are able to supply goods and services.√
 Develop the business skills of small/black owned suppliers√, e.g. sales techniques,
legal advice√, etc.
 Support the cash flow of small suppliers√ by offering them preferential terms of
payment.√ Sub max (4)

4.1.2 Management control


 Business must ensure that transformation√ is implemented at all levels.√
 Appoint black people√ in senior executive positions/to management.√
 Involve black people√ in the decision making processes.√
 Ensure that black females√ are represented in management.√
 Black people should be represented in positions√ that are key to the functioning of
companies√ Sub max (4)

4.1.3 Skills development


 Develop staff members√ by conducting training session.√
 Offer learnerships/scholarships/internships√ to unemployed citizens.√
 Make provision for the utilisation of unemployed black people√ in training programmes.

 Utilise the services of black people with disabilities√ and provide them with training.√
 Set out a timetable for training√ and measure progress on a monthly basis.√
Sub max (4)
4.1.4 Ownership
 Business should include black people√ in shareholding/partnerships/franchises.√
 Exempted Micro Enterprises (EMEs) with an ownership of 50% or more of black
people√ are promoted to level 3 of the BEE scorecard.√
 More opportunities are created for black people√ to become owners/ entrepreneurs.√
 Encourage small black investors√ to invest in big companies and share ownership.√
 Large businesses should form joint ventures with small black owned businesses√
and share business risks.√ Sub max (4)
Max (16)

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