Sacci: turnover-based fines unfair

The business organisation says fines linked to companies' turnover make a scapegoat of business.

CEO of Sacci Neren Rau speaking in Johannesburg, 18 June 2010. Picture: WikiCommons/Marcello Casal Jr

JOHANNESBRUG - The South African Chamber of Commerce and Industry (Sacci) says it's unfair for firms to be fined on the basis of their turnover for breaking employment equity laws because government is failing at every step in the chain of producing people who can work.

The Labour Department told Parliament on Tuesday it wanted to link fines to turnover because some companies have a cavalier attitude towards diversifying their workforce.

But Sacci CEO Neren Rau says this proposal simply doesn't take reality into account.

"It's not the entire business that's failing - it's not the marketing operations of the business that's failing - it's the HR component, and we now find that there's an increasing trend towards levying fines on turnover just to make them more stringent, and we're against this."

He says penalising them at that level would reduce whatever small sums of profit they have.

"Many businesses have very high turnover but the profits that accrue to the company are very small."

He says business is being treated unfairly by government.

"Companies are being made the scapegoat for a failure of the entire skills development pipeline."

But the Labour Ministry says it's important to ensure companies comply with the law.