Dis-chem expects drop in profit as Solidarity prepares for court

As Dis-chem continues to feel the pinch from South Africans about a letter from the CEO placing a moratorium on employing white people, trade union Solidarity said it would take the pharmacy chain to court after it missed a deadline to respond to a question about race-based hiring practices.

Dis-Chem had to respond on Friday and confirm whether they had lifted the moratorium on the hiring and promotion of white people.

Dis-chem versus Solidarity

Dis-chem ignores process

Solidarity believed Dis-chem went further than the Employment Equity Act allowed in its original memorandum to staff.

Solidarity CEO Dirk Hermann said Dis-chem ignored the legal process and did not respond at all.

“The whole country is waiting to hear what the truth is, but they are silent. I wonder if they think the thing is just going to go away?

“However, we are fit and have endurance. Their problem is not going to go away by keeping South Africa in the dark. This week we continue with formal legal proceedings.”

ALSO READ: Dis-Chem apologises for ‘wording’ and ‘tone’ of letter on ‘no whites’ rule

Illegality

Herman said Dis-Chem’s memorandum prohibiting the hiring and promotion of white people is illegal in South Africa.

“South Africa is the most racially regulated country in the world. Dis-Chem does not simply apply the Act. They go even further than our draconian race laws demand.

“Our courts determine in their rulings regarding affirmative action that it can only be applied in order to correct past occurrences, that it must not be punitive nor must it establish silos of race.”

Dis-chem responds

However, Dis-Chem insists it has not placed a moratorium on hiring and promoting white people.

In a statement on Monday evening, the company said it was aware of Solidarity’s intended legal action, and then “any action instituted will be strenuously defended”.

Dis-chem’s woes come after an internal message to staff signed by CEO Ivan Saltzman was leaked on social media almost two weeks ago.

The memo banned the hiring of white people. Following criticism from some quarters, however, the retailer later withdrew the wording of the memo, standing by its “intention”.

“We reiterate that while the wording of the internal memo was withdrawn, its intention remains.”

“All appointments at junior, middle and senior management level will require CEO approval, and appointments will be made based on merit and the necessity of giving employment preference to previously disadvantaged individuals,” the company said in a statement.

Bump in profit

According to Moneyweb, the company – valued at R27.2bn on the JSE – said in a trading statement it expects its headline earnings per share (Heps), a widely used measure of profit that strips out impairments and one-off items, to increase 43.1%-45.4% to 69.7c — 70.8c in its results end-August.

Dis-Chem will release its results for the six months ended 31 August 2022 on 2 November 2022.

ALSO READ: Dis-Chem sorry, but only preparing itself for new BEE laws