Dis-Chem has withdrawn the wording of a letter by CEO Ivan Saltzman, but the transformation intention, which included a moratorium on the appointment of white people, remains.
On 19 September, Saltzman sent a letter to management, which placed a moratorium on the appointment of white individuals.
The moratorium prohibited external appointments and internal promotions of white people at Dis-Chem.
Saltzman explained that when no suitable black candidate is found and a white is appointed, they need several blacks to maintain the status quo.
“With Dis-Chem being a JSE-listed company, these are harsh measures and necessary if we are to remain profitable and to avoid a potential fine of 10% of turnover, which would cripple the business. This is a real threat at this stage,” the letter stated.
Solidarity CEO Dirk Hermann posted the letter on Twitter on 13 October, which caused a backlash from business leaders, politicians, and consumers.
ActionSA leader Herman Mashaba said the letter was racial and divisive, adding that racial quotas contributed to South Africa’s economic woes.
Michael Cardo, the DA’s shadow minister of employment and labour, said Dis-Chem’s plan normalises social engineering in the crudest, most craven way.
Threats of a Dis-Chem boycott followed, with many high-profile South Africans saying they would not support the company in future.
Dis-Chem told Daily Investor it was concerned about the backlash. “Customers are Dis-Chem’s priority, and the group is always concerned if consumers are unhappy,” it said.
It added that it was too early to comment on a potential fall in sales because of the unhappiness with the letter.
The company said Saltzman’s original letter to staff was withdrawn as it was poorly worded.
However, its intention remains, and Dis-Chem said it stands by the unequivocal imperative to continue its transformation journey.
On Monday, the Dis-Chem board released a statement saying it regrets the wording and tone of an internal memorandum.
The board reiterated that it stands by the “unequivocal imperative to continue our transformation journey”.
“We have always been cognisant of the imperative to comply with all legislation, including employment equity, on our journey to meet transformation targets,” it said.
The board said Dis-Chem has a priority of employment on merit based on its view of giving employment preference to previously disadvantaged communities.
“We apologise for the erroneous communication which caused offence to any South African community,” it said.
Following the Dis-Chem board statement, News24 reported that Dis-Chem had withdrawn its moratorium on hiring whites.
However, Dis-Chem told Daily Investor that the News24 report is not accurate. “The wording of the letter has been withdrawn, but the transformation intention remains,” it said.
Daily Investor asked Dis-Chem whether there is still a moratorium on the appointment of white individuals.
The company would not directly answer this “yes or no” question. Instead, it reiterated that the intention of the letter remains.
“All appointments at junior, middle and senior management level will require CEO approval,” the company said.
It added that appointments would be made based on merit and the necessity of giving employment preference to previously disadvantaged individuals.
Solidarity said it welcomed Dis-Chem’s decision to withdraw the memorandum prohibiting the appointment and promotion of white people.
However, Hermann said they would ensure that it is not only the memo that is retracted but the policy as a whole.
On Monday, Solidarity served a lawyer’s letter on Dis-Chem. It gave Dis-Chem until Friday to withdraw the moratorium placed on white people.
“If not withdrawn, Solidarity would continue with its legal action. Dis-Chem’s ban on the appointment and promotion of white people is in contravention of the Employment Equity Act,” it said.