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Labour Law

Master The Ins And Outs Of South Africa’s Labour Laws

SMEs consider labour laws one of the top five most difficult obstacles in growing their businesses, according to the SAICA 2015 SME Insights Report.

Anastasia Vatalidis

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Labour laws form part of the regulatory framework that all businesses have to comply with. Some still perceive labour laws to be restrictive.

Interestingly, a close look at the SAICA 2015 SME survey is hugely instructive. In a break with tradition SMEs did not site labour laws as being particularly burdensome.

Though this might raise some eyebrows, I don’t consider it surprising that SMEs have bigger proverbial fish to fry when it comes to staying in business and ensuring healthy growth.

We-recommend-tickWe recommend: Walking the Labour Law Tightrope

South African labour laws are not as restrictive as they are often perceived to be. While I sympathise with employers, and understand why some laws may seem restrictive, it’s the case that these laws protect the most vulnerable individuals in our society.

Moreover, the effects of these laws are felt more keenly by SMEs. Larger employers are in a position to employ human resource practitioners whose sole focus is to understand the labour laws and to advise the employer on implementing such laws.

The same cannot be said for SMEs where the business is run by a small handful of individuals whose role is to focus on the success of the business while at the same time ensuring compliance with applicable laws.

Given that labour laws apply equally to larger and smaller organisations, SMEs feel the brunt of these laws more because of their size.

Act promptly

To mitigate any perceived restrictions that may be imposed, employers are advised to seek advice on employment issues as soon as they arise.

Employers often ignore problems in the workplace, for example poor work performance, or try to deal with these issues informally for too long.

By the time the employer seeks advice, the employment issues may have escalated to a point where the employer is no longer willing, or able, to tolerate the situation.

At the time of seeking advice the employer may be told that he/she has not done enough to justify a dismissal with immediate effect.

The employer is then left with no option but to follow the prescribed procedure (which will delay any termination of employment) or immediately dismiss the employee and run the risk of an unfair dismissal claim.

Therefore, my first recommendation is to seek advice timeously from a range of experts, including attorneys with experience in employment law matters as well as employer organisations.

In the event of a dispute

Business-meeting-dispute

In terms of our law, disputes can arise during the employment relationship and following the termination of employment.

These disputes can be referred to one of the tribunals and/or the courts established by our employment legislation (such as the CCMA, the Labour Court and Labour Appeal Court) by either the individual employee or by a trade union on behalf of employees who are members of the union.

The steps SMEs should take in the event of a dispute would be dependent on the nature of the dispute and the forum to which the dispute has been referred.

In almost every dispute, the first step would be for the employee to lodge a dispute with the CCMA or bargaining council with jurisdiction over the employer. The employer must receive a copy of the referral documentation completed by the employee.

Once the employer is made aware of the dispute the next step in the process would be for the CCMA/bargaining council to convene a meeting of the parties.

This meeting will take the form of either conciliation or a conciliation/arbitration. The employer must ensure that it attends this meeting failing which, the CCMA/bargaining council could proceed with the meeting in its absence.

The purpose of the conciliation is to establish whether the employer and the aggrieved employee can resolve the dispute amicably and by agreement.

If the dispute cannot be resolved by agreement the CCMA will either issue a certificate of non-resolution (in the case where the parties are only conciliating the dispute) or will proceed to arbitrate the dispute (in the case where the meeting convened is a conciliation/arbitration and where no objections has been lodged).

The high cost of inexpert advice

All employment disputes are ultimately determined either through arbitration (at the CCMA/bargaining council level) or by the Labour Court. Whether a dispute is determined by arbitration or by the Labour Court will be determined with reference to the legislation.

In the case of employees alleging that they have been unfairly dismissed, the CCMA/bargaining council and the Labour Court ultimately have the authority to reinstate an employee found to have been unfairly dismissed, alternatively to award that employee compensation up to a maximum of either twelve months or twenty-four months remuneration, depending on the circumstances giving rise to the dismissal.

We-recommend-tickWe recommend: What The Law Says About Employee Leave And Absence

Given the financially onerous consequences which may arise for an SME in circumstances where an employee has been dismissed, SMEs are advised to take advice from an expert on employment law if they lack the necessary experience to deal with employment related issues.

Here are some links to help business owners gain a better understanding of the laws, and the nature of labour disputes:

  • The National Employers’ Association of South Africa’s (NEASA) website contains a list of resources aimed at assisting employers. For more information, or to become a member visit www.neasa.co.za.
  • To see what the law says in terms of labour policies and procedures, visit: www.ccma.org.za/.

In a nutshell, my advice would be for employers to familiarise themselves with our laws as much as possible.

They also need to act promptly, make sure that they get the correct paperwork in the event of a dispute and be active during the conciliation process in order to find a mutually amicable solution that will allow the SMEs to focus their attention on the success of their business rather than on long protracted and costly employment disputes.

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Labour Law

Alternatives To Traditional Legal Services – What Options Do Entrepreneurs Have?

In reality, small businesses that see legal compliance as a priority are often not in the position to hire attorneys.

Nicolene Schoeman-Louw

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Legal Services

Times are tough, especially for entrepreneurs. In order to succeed in the business world, you need “grit” as the Americans say. In addition, to you need access to markets and access to funding.

The problem with accessing sustainable markets, is that it often is a David versus Goliath situation. As a result, long and complex contracts or requirements are set. What is more, because most smaller businesses are more concerned about making sales or simply making ends meet, getting to the legal side of things – well that simply does not happen. This leads to businesses being non-complaint and thus viewed as a risk – as a result cannot access funding.

In reality, small businesses that see legal compliance as a priority are often not in the position to hire attorneys. As a result, their options are:

1. Purchase a template from a news agency

Although very cost effective, the problem with this is that templates are often outdated and the instructions on completion are unclear. If outdated and incorrectly compiled, businesses are, in my view, simply better off without.

Many businesses do not buy templates but actually download it from the internet. The problem with this is that the sources of these are often unclear – so in reality, you really don’t know what you are getting.

Related: SchoemanLaw Shakes Up The Legal Industry To The Benefits Of SMEs

2. Subscribe to legal insurance or legal consultancy

Subscriptions for in case you require legal representation are usually insurance policies. The problem herewith is that often some disputes are excluded, or some advisory needs are not included. Resulting in the business being left without access to these services, in some cases when they need it the most.

In terms of consultancies, these are businesses that are not law firms. In many instances, their service delivery and prices are much more competitive than law firms are. However, should a client be dissatisfied, they have limited recourse. All professionals belong to professional bodies that set and enforce standards. So, contracting with a consultant bears the risk of no specific quality standard guarantee and, in case of dissatisfaction, recourse lies in ombud structures or courts and often cost money.

3. A different way of thinking

It seems that small businesses are really left out in the dark. However, technology and developments in the legal industry may hold the answer. A select few consultancies, and now a law firm, have embarked on automating the documentary needs of small businesses and start-ups. SchoemanLaw Inc. in Cape Town is one of those firms.[1] In essence, this development is addressing a challenge faced by every other purported solution to date. Some benefits of this mind shift include:

  1. Users have access to up to date documents;
  2. It’s instantly accessible and the source is clear;
  3. Some systems include sophisticated help functions so as to ensure correct completion and implementation;
  4. The prices cannot complete with the traditional way of obtaining legal advice;
  5. Those supported by a law firm, are guaranteed the standards and quality associated with a law firm;
  6. Advisory support is often included or can be accessed additionally.

Related: Master The Ins And Outs Of South Africa’s Labour Laws

In addition, relying on more efficient ways of accessing these crucial services also standardises, manages and organises the legal and contractual needs of any businesses. Something that will serve them well whenever they wish to pitch to that large company for that contract that will really change things or access to funding when needing to expand.


[1] For more information: https://www.schoemanlaw.co.za/online-legal-services/

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Unlegislated ‘Other’ Leave Not A Right Says CRS Technologies

Employers are free to offer staff various types of leave, not covered by legislation, but recognised and governed by company policy and contracts – however, as HCM experts explain, this ‘other leave’ is not a right and ought to be seen as a privilege.

CRS HR And Payroll Solutions

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Employers are free to offer staff various types of leave, not covered by legislation, but recognised and governed by company policy and contracts – however, as HCM experts explain, this ‘other leave’ is not a right and ought to be seen as a privilege.

Nicol Myburgh, Head of HR Business Unit at HR and HCM solutions specialist CRS Technologies, distinguishes leave covered by the Basic Conditions of Employment Act (BCEA) – including annual leave, sick leave, family responsibility and maternity leave – from ‘other leave’ including study leave, paternity leave and cultural leave, for example.

For employers, there are a host of issues that need to be kept in mind when regulating ‘other leave’.

As Myburgh explains, leave that falls into this category is not governed by legislation and therefore is at the discretion of the employer in terms of how it is structured and applied.

Related: Poor Sick Leave Management Is Affecting The Health Of Businesses – CRS Technologies

Additionally, HR and HCM experts agree that these types of leave must be regulated by company policy, particularly the reasons why it is approved and when it is approved, all of which must be substantiated to prevent any feeling of discrimination or bias treatment among staff.  It is also possible that these forms of leave may be viewed as benefits, and that the refusal of an application may give rise to claims of unfair labour practises, and or breach of contract.

“Another important factor to consider is that some of these leave types – especially study leave – are offered by so many companies, that many employers have come to believe this is a statutory type of leave, and employers are obliged to provide it. This is not the case, study leave is not compulsory and even if an employer provides for it, they can make their own determination thereon,” says Myburgh.

CRS Technologies advocates that before additional leave types are approved, companies conduct an in-depth analysis to identify business risk with reference to operational requirement and the amount of staff members necessary to achieve operational goals.

“For instance if an employee takes leave that keeps him/her away from the office for a long period of time, like sabbatical leave, would the employer still be able to meet its operational requirements,” Myburgh adds.

It is also advisable to keep abreast of legislative changes that impact on leave management.

Although ‘other leave’ is not covered by legislation, Myburgh reminds the market that there may be some changes on the horizon.

On 25 November 2015, a draft bill was published in the government gazette which proposes to amend the BCEA, and the Unemployment Insurance Act, 2001.

Significant proposed changes include:

  • 10 consecutive days parental leave when a child is born or adopted.
  • The right to claim payment of parental benefits.
  • 10 consecutive weeks adoption leave if the child adopted is below the age of two.
  • If there are 2 adoptive parents, one of the parents may apply for parental leave and the other adoption leave.
  • The right to claim payment of adoption benefits.
  • 10 weeks of ‘commissioning parental leave’ for employees in a surrogate motherhood agreement.
  • If there are 2 commissioning parents, one of the parents may apply for parental leave and the other parent may apply for commissioning parental leave.

Related: Family Responsibility Leave – Know The Law Says CRS Technologies

Myburgh emphasises that employers familiarise themselves with the differences between BCEA and Bargaining Council or Sectoral Determination regulations, particularly where it applies to the governance of other leave.

This can only lead to improved operational efficiency and a more focused, productive and balanced work environment.

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Labour Law

Will Minimum Wage Increase Boost Economic Growth In South Africa?

The increase in minimum wage comes as good news since it raises the amount of disposable income for the domestic workers.

Jeff Broth

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The South African government announced on Monday that it is going to raise the minimum wage for domestic workers in the country starting from December 1st 2016. Labour Minister Mildred Oliphant said that the new wage increase will be applicable until November 30th 2017. The increase in minimum wage comes as good news since it raises the amount of disposable income for the domestic workers.

With the higher levels of disposable income, the domestic workers can decide to spend it all in improving their living standards or save the surplus income. However, for the financially prudent domestic workers, they will find ways to invest the surplus income through easy to use channels such as Stern Options and other trading platforms.

In his statement, the Labour Minister added that “The minimum wage adjustment is in line with the Basic Conditions of Employment Act which is regulated through the Sectoral Determination. Domestic workers are by law classified as vulnerable‚ hence the Sectoral Determination governing minimum wage and conditions of employment.” According to the labor laws in South Africa, domestic workers include nannies, gardeners, domestic drivers, housekeepers among others.

Related: Increase For Hospitality Wages

The minimum wage increase will however not be applied uniformly in all places. The government has divided different locations into Area A and Area B. Area A consists of major cities, towns and metropolitan municipalities. For domestic workers in Area A working for more than 27 hours per week, their hourly rate will be increased from R11.44 to R12.42. This will translate to weekly earnings of R559.09 from R514.82; and a monthly increase in wages from R2230.70 to R2422.54.

Domestic workers working for less than 27 hours a week in Area A, their hourly wage rate was raised to R14.54, which adds up to a weekly wage rate of R392.58 and cumulatively sums up to a monthly wage rate of R1 701.06. On average, the change in minimum wage for the metropolitan areas represents an increase of about 8.2% in the net pay for domestic workers from the previous year.

Area B consists of non-metropolitan areas in South Africa. For domestic workers in Area B working for more than 27 hours in a week, their new hourly rates stand at R11.31, which translates to a weekly rate of R508.93 and cumulatively add up to a monthly rate of R2205.17. Those domestic workers working less than 27 hours in Area B will start receiving a new hourly wage rate of R13.53, a weekly rate of R360.54 and cumulatively receive a monthly wage rate of R1 562.21. Compared to the financial year 2015/2016, on average this represents a 10% increase the wages for the domestic workers in Area B.

cyril-ramaphosa

These changes are the first among several others that are expected to be introduced in the coming months by the government of South Africa. Early on in August this year the Deputy President of South Africa Cyril Ramaphosa launched the process of reviewing the national minimum wage for South Africa by appointing a seven member panel to initiate the deliberations on the same. The debate about minimum national wage has been in the media for quite some time now going back to first quarter of 2016.

Related: How To Structure A Fair Salary That Will Motivate Your Sales Team

One school of thought believes that the minimum wage is not the solution to economic development in South Africa. In their argument, they believe that setting a minimum wage will increase the cost of production for goods and services and leave employers with two options.

The employers will either reduce their headcount in order to curb the rising costs or increase their product prices and face the danger of reduced demand and falling sales. Both alternatives are detrimental to economic growth.

Another school of thought argues that with increased minimum wages, spending power for the consumers will be increased and they will buy more goods and services that they could not afford before.

This would then push demand up and translate to higher production to meet the increasing demand and hence result to an increase in GDP. Eventually South Africa would experience higher economic growth rates as higher revenues for businesses result to further increase in wages by the employers which sparks another round of increased production and the cycle continues.

The debate is still raging on whether the increase in minimum wage is the solution to South Africa’s economic development and the final judgment is yet to be arrived at. However, with the panel constituted to deliberate the matter being made up of the best brains in the discipline of economics, we can expect prudent results to emerge from their discussions soon.

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