AMENDMENTS TO THE B-BBEE CODES OF GOOD PRACTICE

The outgoing Minister of the Department of Trade and Industry has snuck in a farewell gift to business. He signed Gazette 42496 on 9 April 2019, and they were gazetted on 31 May 2019. This gazette deals with:

  • Amendments to Schedule 1 to the B-BBEE codes which make several changes to definitions used
  • Replacement of Codes Series 000 statement 000 which is the general framework to measure B-BBEE compliance
  • Replacement of Codes Series 300 statement 300 which is the Skills Development Statement

The implementation date for all these changes is “within 6 Months from date of Gazette”. This implementation is unclear, as the implementation date could be any time between now and 31 November 2019, or it could be 30 November 2019. This impacts our planning.

Amendments to Schedule 1

The most significant change is the following change made to absorption of learners.

AMENDMENT COMMENT
Absorption” means a measure of the Measured Entity’s ability to successfully secure a long-term contract of employment for the Employee, Learner, Intern or Apprentice. Rolling a learner over onto a new learnership can no longer be treated as Absorption.   Companies must now offer permanent Employment to learners to qualify for the absorption bonus points.
Long-term contract of employment means a legal agreement between an individual and an entity that this individual would work for until his or her mandatory date of retirement;”

CODE SERIES 000 STATEMENT 000 – GENERAL FRAMEWORK

The following are significant changes to Statement 000, the general framework for B-BBEE:

  • The definition of Exempted Micro Enterprises (EME) now requires that Black Ownership be measured on the Flow Through Basis (paragraph 4)
  • The definition of Qualifying Small Enterprises or QSE, also requires that Black Ownership be measured on the Flow Through Basis (paragraph 5)
  • The scoring of unincorporated Joint Ventures is now included in the Generic codes and not taken out of the Construction Sector codes (paragraph 7)
  • The table in paragraph 9 summarises the Generic Scorecard
ELEMENT AS AMENDED (PER STATEMENT 000) PER ACTUAL SCORECARD ORIGINAL AMENDED CODES
OWNERSHIP 25.00 25.00 25.00
MANAGEMENT CONTROL 19.00 19.00 19.00
SKILLS DEVELOPMENT 20.00 + 5 Bonus 20.00 + 5 Bonus 20.00 + 5 Bonus
ENTERPRISE AND SUPPLIER DEVELOPMENT 40.00 + 4 Bonus 42.00 + 4 Bonus 40.00 + 4 Bonus
SOCIO-ECONOMIC DEVELOPMENT 5.00 5.00 5.00
TOTAL 109.00 + 9 bonus 111.00 + 9 Bonus 109.00 + 9 Bonus

CODE SERIES 300 STATEMENT 300 – SKILLS DEVELOPMENT

The Skills development Scorecard has been changed as follows:

CATEGORY SKILLS DEVELOPMENT POINTS TARGET ORIGINAL POINTS ORIGINAL TARGET
Skills Development Expenditure on any programme specified in the Learning Programme Matrix for black people as a percentage of the Leviable Amount
Skills Development Expenditure on Learning Programmes specified in the Learning Programme Matrix for black people as a percentage of Leviable Amount. 6.00 3.5 % 8.00 6%
Skills Development Expenditure on Bursaries for Black Students at Higher Education Institutions (Leviable Amount) 4.00 2.5%
Skills Development Expenditure on Learning Programmes specified in the Learning Programme Matrix for black employees with disabilities as a percentage of Leviable Amount. 4.00 0.3% 4.00 0.3%
Learnerships, Apprenticeships, and Internships  
Number of black people participating in Learnerships, Apprenticeships and internships as a percentage of total employees. 6.00 5% 4.00 2.5%
Number of unemployed Black People participating in training programmes per the Skills Development Matrix. 4.00 2.5%
Bonus points:
Number of black people absorbed by the Measured and Industry Entity at the end of the Internship, Learnership and Apprenticeship programme 5.00 100% 5.00 100%
Total 20.00 + 5 Bonus 20.00 + 5 Bonus

Changes are shown in bold italics.

Other important changes are:

  • The same spend cannot be claimed for both learnership programmes and Bursaries.
  • The limitation of 15% of total skills development spend on categories F and G training has been increased to 25%.
  • The limitation of 15% of total skills development spend on non-core training does not apply to bursaries spend.
  • You can claim salaries and wages, or stipends paid to staff on Category B, C and D training and stipends paid under a bursary scheme.
  • There is a definition issue regarding Bursaries. In the table above it states, “Skills Development Expenditure on Bursaries for Black Students at Higher Education Institutions”, this covers University fees. However paragraph 5.6 states “A bursary or scholarship scheme is a grant made to or for students who are registered at educational institutions established by or registered with the Department of Basic Education or the Department of Higher Education & Training. Examples of legitimate training costs for a bursary or scholarship includes payment of school, college or university fees, or a portion thereof; funding for textbooks or other learning materials; funding for subsistence or accommodation during the period of study.”. This clearly covers both Basic (school) and Higher (Tertiary) bursaries. Until we receive clarity, I suggest we claim both School and University bursaries as Skills Development.

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