B-BBEE: Black or White: The B-BBEE status of your foreign employees

The definition of “Black People” in the B-BBEE legislation is limited to African, Coloured and Indian natural persons who are citizens of South Africa by birth or descent or by naturalisation either before 1994 or after 1994, but who would have qualified for naturalisation before 1994 but for Apartheid.

What this means for employers is that any employee who does not fall within the abovementioned definition does not qualify as “black” for B-BBEE purposes and therefore does not contribute towards the employer’s B-BBEE credentials, such as employment equity. This could have a significant impact in the credentials of employers who employ a large number of foreign employees. Unfortunately, in some instances, it may also significantly impact a business that employs only one such individual.

We recently dealt with a matter where our client employed an individual of foreign descent, but who had grown up in South Africa in the 1980’s. Under Apartheid, he was classified as “coloured”. Until this year, he has always been classified as “black” for B-BBEE purposes. However, this year our client’s verification agency changed its mind and are now classifying him as “foreign”. The impact of this is that our client’s total score on its B-BBEE scorecard is one level lower than it should be, which could result in it losing substantial business because of the procurement policies of some of its clients. Furthermore, the verification agency is clearly incorrect. If one reads the definition set out above, it is clear that the employee does in fact qualify as “black”. Any view to the contrary is not only unlawful, but also a slap in the face of many who suffered under Apartheid. To make matters worse, this issue is not open for debate. Rather, the employee in question is requested to “prove” in a court of law that he is “black!” Given this unfortunate stance, employers are well advise to closely scrutinise their employees’ nationality status and to seek professional assistance with their employment equity preparations well in advance of rating time.