Two of the banks have expressed their intention to settle out of court. The third insists it is not in the wrong. Picture: iStock/Rich Townsend
The three South African big-league banks cited for non-compliance with employment equity laws were found to be lacking mostly in terms of affirmative action at executive level.
That’s according to the Department of Labour’s chief director of statutory and advocacy services, Fikisawa Mncanca-Bede, speaking to Moneyweb this week. Her comments come after the department issued verdicts of non-compliance recently against the three banks.
At least one of them, Absa, insists it is compliant with the regulations.
The trio of banks were found wanting in relation to hiring people from ‘designated groups’. SA laws define the country’s designated groups as including black people, women, and people with disabilities.
“The most important thing is the issue of affirmative action measures,” according to Mncanca-Bede.
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She said this means that if the banks said ‘We are going to appoint African females at top management’, they have not done that “even though there were opportunities”.
“They decided to give those opportunities to those groups that were already over-represented.”
Mncanca-Bede confirmed to Moneyweb that the implicated banks have approached the department and requested roundtable discussions to address the areas of non-compliance.
“All three banks that we have identified for non-compliance have approached us for roundtable discussions,” she said.
The cited banks could be slapped with penalties of R1.5 million each or 2% of turnover for failing to comply with the country’s employment equity laws.
According to the department, the trio have not been fully complying with the latest employment equity rules, introduced in 2018. As a result, they are not compliant with Section 20 (subsection 2) of SA’s Employment Equity Act.
Mncanca-Bede said the department has already engaged with Standard Bank and FNB specifically, with the discussions ending in the two lenders expressing their intentions to settle out of court.
The department is due to meet with Absa soon, she added.
Absa however insists it is fully compliant in terms of employment equity.
“Absa states categorically that it is fully compliant with South Africa’s employment equity laws, in keeping with our commitment to advancing transformation, diversity and inclusion meaningfully and sustainably,” it said in response to a Moneyweb media query.
“No verdict, court order, or other finding of non-compliance has been issued against Absa, and no action, application or other proceedings have been instituted against Absa in any court or other forum, in this regard,” it declared.
“Absa has made reasonable and significant progress in transforming our organisation in the past few years with a view to achieve employment equity and we will continue to drive these efforts in line with our ambition to be the undisputed leader in transformation in the financial services industry.
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“We are pursuing this journey with speed, as demonstrated by the 2022 changes in our top leadership structures, which resulted in the improved representation of black and women employees.”
According to Absa, the group has made substantial progress in gender diversity, with women accounting for more than 60% of its total number of employees.
“African, Indian and Coloured employees account for the majority of our employee base in South Africa, at 79% of the total,” it said.
Standard Bank told Moneyweb that while it has had constructive engagements with the department, it has not reached any settlement relating to the matter.
“The bank has regular engagements with the authorities. While we have met or exceeded some of our targets, there are other targets that we have committed to focus more on in order to improve,” the bank said in a statement.
FNB’s parent company FirstRand said the bank continues to engage with the department and supports the country’s transformation agenda.
“As part of its efforts, FirstRand aims to comply with reporting requirements for employment equity, with demonstrable progress, although there remain areas [in need] of improvement,” it told Moneyweb.
The group noted that 80% of its nearly 40 000-strong workforce in SA is represented by African, Coloured, and Indian employees.
“Approximately 60% of employees are women, and people with disabilities account for 1.9% which is close to target,” said FirstRand.
According to the labour department, if the discussions are unsuccessful, the banks will face court action and the relevant fines.
Court action could be eschewed if the department and the banks arrive at a settlement agreement, which Mncanca-Bede said must be decided by the end of May.
“We’re going to give them timelines to say if they don’t respond by this time, then we can proceed and go to court,” she said.
This article originally appeared on Moneyweb and was republished with permission. Read the original article here.
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