B-BBEE and the Draft Legal Sector Code – part 3 – Management Control

Reference documents:
Legal Practice Act, 28 of 2014
Broad Based Black Economic Empowerment Act no 53 of 2003
B-BBEE Legal Sector Code (Draft)

This article provides detail of the Draft Legal Sector Code with respect to the element Management Control. Please refer to previous articles too concerning the Draft Legal Sector Code.

On 08 November 2020 the Legal Practice Council (LPC), issued an invitation to legal practitioners to participate in consultations for the development and drafting of the Legal Sector Code, as a Broad-Based Black Economic Empowerment (B-BBEE) charter for the legal profession in terms of s9 of the Broad-Based Black Economic Empowerment Act 53 of 2003 (the Act).

When reading this article be sure to read the draft sector code information contained in Statement Series 200 (Management Control) of the draft code.

As Advocate practices are of a unique nature, some of the provisions of this statement may not apply equally and/or similarly to Advocates as they may apply to Attorneys.

Due to the uniqueness of the legal sector and profession, the measurement of the measured entities will not take the usual form of categories of management as found in other commercial entities and/or business;

Management Control

Note: Advocates are exempt from this provision.

A Measured Entity will only receive points for its achievement towards the targets for participation of:

black people
black women on the board,
executive management,
senior/top management,
designated categories of employees and
other specialist professionals;

A Measured Entity measured in terms of the management control will receive points for making use of the following documentary information as evidence of spend:

The current payroll data and salary advices as at measurement date;
Employment contracts and/or letters of engagements;
EEA4 Employment Equity report;
Parity in remuneration between race groups and gender at all applicable management levels;
Any other acceptable evidence deemed suitable to support the existence of a management level role in the Legal Sector

The Measured Entity must strive for parity in remuneration between race groups and gender at all management levels;
The measured entity must provide full payroll access together with a copy of the payment parity report EEA4 to the verification agency during the verification. In the absence of such, the staff management levels will be declined by the verification agency;
In cases where measured entities are exempt from submitting the Department of Labour Employment Equity reports, then a remuneration parity statement, similar in form to the EEA4 report, must be signed by the authorised signatory of the measured entity as part of the verification process to ensure that the person’s responsibility and remuneration are in line with their job grade.

The formulae applicable in measuring the principles of the management control element will be aligned to the generic scorecard issued by the DTIC.

Author Craig Tonkin

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