Solidarity to launch legal action against Dis-Chem over ‘no whites’ policy – here’s why it thinks it has a case

Trade union Solidarity says it will move ahead with its litigation against Dis-Chem over its policy to not hire or promote any white South Africans in a bid to boost its transformation agenda.

The legal action follows Dis-Chem withdrawing a controversial memorandum that leaked to the public sphere this past month, stating in no uncertain terms that white South Africans would be blocked from appointments or promotions at the listed group.

The memo, penned by Dis-Chem CEO Ivan Saltzman, said that the policy was to achieve set employment equity targets and would be incorporated into management’s bonus structure.

While the memo was withdrawn by the Dis-Chem board, Solidarity demanded confirmation from the group that the policy itself was also no longer in effect. It gave Dis-Chem until Friday, 21 October, to confirm this or face legal action.

“Dis-Chem has ignored this deadline,” Solidarity said.

According to Solidarity, Dis-Chem’s apparently standing policy is in violation of South Africa’s Employment Equity Act, and its litigation strategy will be a mix of an application for disclosure of information and an application to the Labour Court to declare Dis-Chem’s racial policy unlawful.

The Employment Equity Act prohibits absolute ceilings and quotas and requires flexibility, it said. “The Act itself and case law in this regard are clear about this.”

“There are legal bounds to race legislation. Dis-Chem is now setting a new norm for the private sector. The law cannot be broken in an attempt to comply with an Act. Judicial decisions, too, have clearly shown that there are rights of white employees that must also be protected.

“Racial legislation and policy must not be a punishment but must focus on redress. Dis-Chem wants to establish a hard-line racial policy. The goal is simply racial representivity and it has nothing to do with redress,” the union said.

What the law says

Responding to the controversy around the Dis-Chem memo, the Department of Employment and Labour has expressed mixed feelings on the matter.

The department said that while the Dis-Chem CEO’s stance does not appear to be against the letter of the law, his position is against the spirit of employment equity and affirmative action and could amount to ‘malicious compliance’ with the laws.

It said that the Employment Equity Act (EEA) provides that every employer must take steps to promote equal opportunity in the workplace by eliminating unfair discrimination in any employment policy or practice – but preferential measures taken by a designated employer should exclude quotas.

“According to Section 15(1) (of the EEA), designated employers must adopt affirmative action measures that are designed to ensure that suitably qualified people from designated groups have equal employment opportunities and are equitably represented in all occupational levels in the workforce.

“To ensure that there is compliance with the spirit and ethos of employment equity, section 21 of the EEA places accountability and the responsibility to implement employment equity and transform the workplace in the hands of the chief executive officer and captains of industry. The CEO of Dis-Chem’s actions up to this point are compliant,” the department said.

However, the department said that this type of action could be deemed illegal or unlawful in the future.

“While (Saltzman) was dealing with compliance in terms of demographic representation – and has correctly applied the Sections mentioned above – we note that the memorandum does not position employment equity and transformation as a business imperative embedded in the business strategy.

“It, therefore, may be perceived to be malicious compliance. The memorandum dealt with EE as a subject for chasing numbers instead of fully embracing the spirit and the letter of law.

“Malicious compliance is one of the reasons for the tabling of the Amendment Bill of the EEA.”

The Employment Equity Amendment Bill, ironically, will allow for the labour minister to set sector-specific targets for transformation, which critics have deemed a racial quota system for businesses in South Africa.

The bill is currently with president Cyril Ramaphosa, waiting to be signed into law.

Read: Big change to South Africa’s strict new transformation laws that businesses need to know about