On 29 March 2018 the Minister of Trade and Industry, Dr Rob Davies, published a draft proposed amendment to the Broad-Based Black Economic Development (B-BBEE) Codes of Good Practice which could bring changes to the Ownership and Skills Development elements on the B-BBEE scorecard. We have already seen the introduction of the Youth Employment Service (YES) initiative in August. Final publication was expected during August 2018; save for the YES initiative, the proposed amendments have not been finally tabled.
In summary, the proposed Skills Development amendment envisages the following:
At present, the fact that the proposed amendments have not been finally tabled creates uncertainty amongst business owners. Companies planning to meet their targets on Skills Development do not know whether the current Skills Development scorecard will be in place during their next verification; whether the proposed Skills Development scorecard will be published with immediate effect; or whether the proposed Skills Development scorecard published will be subject to a transition period.
Historically, companies have been able to earn full points on the Skills Development scorecard, based on achieving their targeted spend and headcount target for Learnerships, Apprenticeships or Internships. Should the new proposed scorecard be tabled, the points for scholarship may be lost if companies had not prepared for the amendments.
Many companies are approaching their financial year-ends, which means there is an urgent need to ensure that the required spend and targets are met within their financial period.
It is possible to plan for adequate protection under both scorecards without spending much more to achieve the targets under both scenarios. Many companies exceed their headcount target on Learnerships and Apprenticeships due to the tax rebates that are available for registered learnership agreements. Diverting the excess spend to scholarships may be an effective way to ensure compliance under both scorecards without spending more money.
Companies that are B-BBEE level sensitive and cannot afford to miss out on Skills Development points are encouraged to contact our professional team for guidance on the possible scenarios and how to mitigate and manage the risks associated with the proposed Skills Development scorecard.
About the Author: Denise Coetsee joined SERR Synergy in February 2018 as a Project Manager within the Pretoria B-BBEE Department. She obtained her Bcom Law, LLB and LLM (Corporate Law) degrees from the University of Pretoria and is also a member of the Golden Key International Honour Society. Denise is an admitted Attorney of the High Court with 6 year’s legal experience.
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YES programme participation can assist qualifying businesses to enhance their overall B-BBEE status with up to 2 levels.