There are two pieces of legislation that employers of large labour forces need to be familiar with, and which set out the basic entitlements of employees: The Basic Conditions of Employment Act (the BCEA) and the Labour Relations Act.
Most considerations listed below are regulated by these two Acts, particularly the BCEA.
Let’s explore five of the most important considerations when it comes to employment agreements.
1Confidentiality & restraint of trade
Protecting the confidential information of your business is extremely important and you should secure customised provisions relevant to your business and industry to ensure that you are appropriately protected.
To protect confidential information and unlawful competition, include a confidentiality and restraint of trade clause in an employment agreement.
This seeks to prevent employees from using your confidential information for their own gain, or prevent them from working with certain of your customers, or in a competitive field of trade for a certain period and within a defined geographic area, after the employee leaves your company.
2Termination of employment
The BCEA sets out the following:
- If an employee is employed for four weeks or less, at least one weeks’ notice of resignation is required
- If an employee is employed for more than four weeks but less than one year, at least two weeks’ notice of resignation is required
- If an employee is employed for one year or more, at least four weeks’ notice of resignation is required.
For employees whose position in the company is crucial to its success, or requires a lot of expertise to fulfil, employment agreements may allow for three months’ notice.
3Employee duties & responsibilities
This is real nuts and bolts stuff, and differs vastly from employee to employee — why did you employ this person? What do you expect them to do daily, monthly and annually?
These duties and responsibilities need to be recorded in an employment agreement so that both the employer and employee understand exactly what is expected of them and there is an agreed upon foundation for the relationship between the employee, the company and its structures.
4Hours of work per week
The BCEA prescribes a maximum of 45 working hours per week for normal time work. Where an employee meets certain exemptions, this will not apply, and must be negotiated with the employee and included in the agreement.
The BCEA has set the maximum allowed overtime at ten hours weekly. Employees are generally entitled to meal and tea breaks, but these are not included in the 45 hour work week, and are generally unpaid.
The annual leave granted to an employee may not be less than 21 consecutive days for full-time workers, or by agreement, one day for every 17 days worked, or one hour for every 17 hours worked.
Annual leave must be granted not later than six months after completion of twelve months of employment, and must be on full pay.
During every sick leave cycle of 36 months, an employee is entitled to an amount of paid sick leave equal to the number of days he or she would normally work during a six week period. For example, should an employee work five days per week, they will be entitled to 30 days’ sick leave over a three year period, or ten days per year.
During the first six months of employment, however, an employee is entitled to a single day’s paid sick leave for every 26 days worked.
A female employee is entitled to at least four consecutive months’ maternity leave.
The maternity leave commences four weeks before the expected birth, or when a medical practitioner certifies it as being necessary for the health of the employee or unborn baby. An employee is not allowed to work for at least six weeks after the birth, unless a medical practitioner certifies that she is fit to do so.
Protect your business and employees
Properly drafted employment agreements that protect your business and its assets are crucial in preventing costly litigation and CCMA hearings.
Keys To Simplify Payroll Compliance
Human resources departments across the country cite compliance as one of the top challenges they face. As an SME owner, it’s up to you to ensure that your company’s personnel business practices adhere to the current laws.
Keeping accurate records to document your company’s compliance is just the beginning, says Ania Strydom, Compliance Specialist at Sage.
1. Why is payroll compliance so important?
Payroll is the biggest expense for most employers. Employers must comply with all labour and tax laws that govern the payroll to avoid financial and legal risks and to protect the employees and the business. The risks of getting it wrong include:
- Interest or fines by authorities
- Imprisonment in cases of fraud or extreme negligence.
Payroll fraud is one of the most common white-collar crimes in the business world; what’s more, inaccurate payments and non-compliance can cost a business dearly.
2. What are the implications for staff if a company is non-compliant?
The payroll is one of the most crucial links in the employee-employer relationship. Late or inaccurate wage and salary payments, or inaccurate calculations of other earnings (such as overtime), deductions (such as PAYE and UIF), and contributions (such as retirement fund or UIF contributions) can be extremely damaging to the morale of the workforce.
By law, every employee is entitled to a payslip and tax certificate (IRP5/IT3(a)). Employees need payslips for purposes such as applying for personal or home loans. Accurate and easy to understand payslips will boost employee satisfaction and trust in the company, with a positive impact on business performance.
What’s more, employers must make sure UIF contributions are correct so that employees get the full amount they are entitled to if they need to claim.
3. How will the company’s growth prospects be affected if the company is non-compliant?
While an efficient payroll system enhances staff morale and boosts an organisation’s reputation, mistakes in record-keeping and compliance can result in punitive penalties and hurt the company’s brand. Compliance mistakes with payroll can be expensive and potentially catastrophic which subsequently results in business risks.
4. How can a business ensure it is payroll compliant?
South African tax regulations and labour laws are and continue to be more complex. Keeping track of all the payroll legislative requirements can be challenging, but the risks of non-compliance are high and businesses can no longer rely on spreadsheets and other manual methods to do their calculations, report and file returns.
Automated solutions are becoming more essential for keeping reliable records, reporting and performing accurate payroll calculations.
The package you choose should:
- Be tailored for the local tax law, labour law and regulatory environment
- Manage all the complex calculations and regulatory reporting the business must do timeously
- Feature automated updates to ensure the company always processes on the latest software and legislative version.
This will ensure it avoids censure, fines, penalties, interest and/or imprisonment as a result of non-compliance.
Why Your Employees’ Health Is Your SME’s Wealth
Absenteeism costs R16 billion annually, according to Stats SA. That’s a lot more than it costs to sign up for a group offering that is specifically designed for small to medium enterprises.
- Visit: www.fedhealth.co.za
- Call: 0860 002 153
Fedhealth’s Commercial Executive, Michelle Morton explains the importance of group health cover to keep your SME’s pulse strong.
1. Why is it important for a SME to care about the health of its employees?
First, when an employee in a critical role within the SME falls ill, there’s often nobody else to fill the skills void created by his or her absence. This can have a detrimental effect on the daily operations and business output.
Second, offering sound medical aid may attract and retain the right talent to the business.
Third, choosing a medical aid like Fedhealth, which places a big emphasis on preventative health and wellness, can also assist the SME owner in cultivating a healthy culture in the workplace.
2. What should business owners consider when looking for a group medical plan?
Apart from factors like affordability, a good reputation, and ability to pay claims, look for schemes that offer value-added services, such as wellness days where staff can undergo crucial health screenings, and programmes to address specific health issues.
3. What are the top health concerns for today’s workforce?
Back and neck pain are second to headaches when it comes to painful conditions affecting humans — especially office workers, who are often desk-bound for hours on end. Fedhealth offers qualifying members a 12-week Conservative Back and Neck Rehabilitation programme to help correct the problem through exercise and behaviour.
Diabetes and hypertension are also on the rise, while some employees face HIV/Aids, weight issues or struggle to quit smoking. Fedhealth provides assistance for all these diseases and health concerns.
4. How will the employees benefit from working for a company with a great group medical plan?
I believe it makes the business a more attractive place of work for employees, as medical aid is a much-needed benefit and costly if one has to pay for it out of one’s own pocket.
5. Please explain the importance of the SOS Corporate Wellness benefit
The Sisters-on-Site service (SOS Corporate Wellness) is a value-add as it brings basic healthcare to the office. This means that staff can regularly see a qualified nursing sister at their place of work for minor health issues, instead of having to take time off work to visit the doctor or clinic.
Employees build a rapport with the sister, as they see her on a frequent basis. Through the SOS Corporate Wellness benefit, they can also conduct important health screenings that might flag serious health issues of which the employees might be unaware. Sisters-on-Site can also facilitate monthly health themes to raise employee awareness on issues like breast cancer.
Why HR Legislation Compliance Can Curb Business Failure
Don’t let your business reputation get dented due to non-compliance.
Millennium Support Services is designed to afford all business enterprises the opportunity to have Human Capital Management for their business.
“It is just unfortunate that non-compliance is exactly that “non-compliance” and most small businesses reputation gets dented or even fully destroyed, in the event that they are being accused of non-compliance by employees and statutory bodies” says Sharon Tshabalala CEO of MSS.
“Small businesses have no resources yet at the same time are not exempted from compliance. So, through the use of technology we are able to provide easily accessible HR services across the board.”
Millennium Support Services provides businesses with exclusive distinctions of its service, so that you can ensure that your business remains compliant.
Human Resource Policies
The advantage it has over other online HRM systems is that it offers online access to Human Resource policies based on approved legislative framework.
In cases where disciplinary proceedings have to be under taken, an independent chairperson will be made available. When disputes have been escalated to the CCMA, a Labour Relations Expert will represent the employer.
The primary purpose of discipline is to encourage employees to correct their conduct and/or discourage employees from breaching standards of conduct. Depending on the nature of the breach, there are five forms of disciplinary sanctions taken against employees – either formal or informal.
Namely: Verbal Warning, Written Warning, Final Written Warning, Suspension of Salary and finally Dismissal.
The purpose of this policy is to give guidance and to provide a framework on how to raise and deal with grievances effectively at the earliest possible stage. There are three types of Grievance which have an informal/formal procedure.
Namely: Mild Grievance, Serious Grievance and Sensitive Grievance.
4Occupational Help Policy
The purpose of this policy is to establish minimum standards and requirements of occupational health and safety for the corporation in order to reduce the risk by:
- Identifying hazards and possible risks causing incidents and accidents,
- Setting standards of practice, procedures and accountability,
- Measuring performance against standards, Evaluating compliance with standards,
- Correcting deficiencies, deviations, and set standards of procedures to be followed,
- Creating and maintaining a healthy and a safe work environment.
HR management is a specialist field, with many laws and regulations to navigate. If you don’t have a background in this field and can’t afford to hire a full-time HR specialist, consider outsourcing this function.
Millennium Support Services – Human Capital Management made easy.
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