Absorption vs Advancement
October 15 2019 By Beth Cook
The long awaited Amended B-BBEE Codes of Good Practice are due to come into effect on 1 December 2019. Amongst the most noteworthy changes, from a Skills Development perspective, is the amendment to the previous definition of "Absorption". We spoke to Carina Esterhuyse, Verification Analyst at Authentic Rating Solutions, to clarify the implications of this particular change on your B-BBEE strategy and scorecard going forward.
Previous definition of 'Absorption' - "a measure of the measured entity's ability to successfully secure formal, permanent or long-term contract of employment for the learner, or to assist the Learner's proceed with further education and training."
Amended definition of 'Absorption' - "a measure of the Measured Entity's ability to successfully secure a long-term contract of employment for the Employee, Learner, Intern or Apprentice."
The amendments also go on to specifically define a 'long term contract of employment' as: "a legal agreement between an individual and an entity that this individual would work until his or her mandatory date of retirement."
Carina explains that In order to receive the 5 bonus points for absorption at the end of a learnership, the learners must be offered a full-time employment contract and therefore merely advancing the learners onto a further learning programme will no longer qualify. Where less than 100% of the learners are absorbed, a pro-rata percentage of the 5 points can be claimed. The absorption points are also no longer confined to learnerships, but now also apply to internships and apprenticeships.
Some employers have expressed concern as they have interpreted the above changes to mean that the new codes will no longer allow them to claim the Skills Development points when advancing learners onto further training. Carina clarifies, "When advancing learners onto further training, the employer can claim the normal Skills Development points for the spend and the headcount, they just cannot claim the absorption points."
The evidence required by the Measures Entity in order to prove absorption during the verification process would include a copy of the signed long term contract of employment as well as a copy of the employee's latest payslip and proof of payment made. In addition, copies of the employee's ID and EEA1 form would also be required.
The Codes further stipulate that a trainee tracking tool be developed in order to claim the absorption points. Carina confirms, "The trainee tracking tool is essentially a schedule of all training done during the measurement period and must include all trainees' names, ID numbers, race, gender, disability status, course/programme title, NQF level, start date and end date of programme."
Another significant change to the codes is that employed and unemployed learnership categories are now combined, however it is important to note that absorption points can only be claimed for learners, interns or apprentices who were unemployed before the start of the relevant training programme and were subsequently offered a long term employment contract upon completion.
The amendments to this area of the Codes are a positive development as they are likely to discourage training for the sake of training, resulting in the creation of "career learners" and hopefully promote more thorough skills development planning and career pathing in order to support sustainable job creation.