August 2011

Skills Development reports have been submitted and the annual drive to meet the tight deadlines set by the SETA’s has been met. It is now up to all of us to ensure that all the training planned actually happens between now and the end of March 2012.

The year is proving that we continue to live in interesting times. The Metal Industry Strike and Chemical Industry Strikes have resulted in settlements that are almost double the official inflation rates. The support for the strike has been unprecedented as the level of intimidation has caused even non-Unionised members to stay away.



Salary Surveys indicate that salary increases this year will be between 6% and 7% (Unionised employees were expected to settle at about 7.1%). This despite the official Consumer Price Index indicating that inflation is currently 4.6% and the Producer Price Index is currently 6.6%.

What is interesting is that increases are expected to be higher at Managerial level than at the semi-skilled and unskilled levels. This is a trend that has been increasing over the last few years and appears to be a function of the skills crises that the country has had and continues to experience. Companies are being forced to look after their skilled staff, where unskilled staff are seen as easy to replace. This means several challenges for Companies recruiting staff. Are the candidates as skilled as their CV’s indicate that they are? Can the Company afford those skills in a competing market? What are the probabilities that the candidate’s current employer is going to counter-offer and that the job offer will fall through?

These are questions many Companies are facing and tools are available to assist with both evaluation of the candidates and ensuring that the job offer is in line with market related salaries. For more information contact Debby Becker at our offices.



The Determination

With effect from 1 July 2011 the Department of Labour has increased the determination to R172 000-00 per annum. This is a figure determined by the Minister of Labour which has significance for a number of aspects in the Basic Conditions of Employment. The Department of Labour will not assist anyone who earns more than this and would like to refer a complaint. This is because they have determined that a person who earns above this level is able to fight his own battles and does not require their assistance.

In the Basic Conditions of Employment:

Chapter 2 states that “The minister must, on the advice of the Commission, make a determination that excludes the application of this Chapter, or any provision of it to any category of employees earning in excess of an amount stated in that determination.

Chapter 2 deals with the regulation of working time. This means that any employee who earns in excess of the determination is not entitled to:

  1. Ordinary hours of work
  2. Overtime
  3. Fixed meal intervals
  4. Daily and weekly rest periods
  5. Night work compensation
  6. Pay for work on Sundays or Public holidays

The employee is therefore required to do whatever needs to be done to meet the required targets.

The determination is also used in Section 83A of the act which deals with the “presumption of who is employee”. The act says that subsection 1 does not apply to any person who earns in excess of the determination. Subsection 1 defines who is regarded as an employee.

The determination is normally linked to the contribution cap for Unemployment Insurance Fund Contributions. We await advice on an increase in the contribution levels.



The National Treasury has finally amended the Preferential Procurement Policy Frameworks regulations so that with effect from 7th December 2011 the BBBEE Codes will form part of the regulations. The Government has been strangely reluctant to include the BBBEE codes into their calculation and it is only this year (4 years after the codes were gazetted) that a Company’s BBBEE score will be taken into account when evaluating a Government tender.

In terms of the regulations, price will still be a major part of the points scored, however, for tenders above R30 000 but below R1 000 000 the tendering Company’s BBBEE level will determine the additional points which will be added to the evaluation criteria used by government. The points will be awarded as below:

BBBEE Status Level of the Contributor Number of points for tenders below R1 Million Number of points for tenders above R1 million
1 20 10
18 9
3 16 8
4 12 5
5 8 4
6 6 3
7 5 2
8 2 1
Non-Compliant Contributor 0 0

Although the points are low, and the main evaluation criteria remain price, there are further restrictions to prevent fronting. If a person is awarded a tender, he may not sub-contract more than 25% of the tender unless the entity that he is subcontracting to has the same or a higher BBBEE score.

Copies of the regulation are available from the office.



The Department of Labour has increased their inspection activities and have said that they intend to target safety and Employment Equity. They have dedicated inspection teams who will be visiting Companies to ensure compliance. For compliant Companies, please ensure that your Employment Equity Plan file has been updated and is ready for inspection. If you require assistance please contact Tessa.

Remember, the fine for non-compliance is between R500 000-00 and R900 000-00.

In order to ensure compliance with the Basic Conditions of Employment we have put together a basic Policy and Procedure manual for small Companies.

The manual has 15 basic policies:

  1. Annual Leave
  2. Disciplinary Procedures
  3. Family Responsibility Leave
  4. Long Service Awards
  5. Recruitment Policy
  6. Smoking Policy
  7. Unemployment Insurance Policy
  8. Workmen’s Compensation Policy
  9. Conditions of Employment
  10. Electronic Media Policy
  11. Grievance Procedure
  12. Maternity Leave
  13. Sick Leave
  14. Termination Policy
  15. Usage of Company Facilities

These policies are customised to the Company’s conditions of employment and other policies can be added. For details of the manual and the costs please contact Tessa at the office



Leadership Development Training

The Leadership Development Training for this year will be starting this month. The Course will be running until March next year.

Industrial Relations Training:

For those people who feel that they need a refresher with regard to legislation and Industrial Relations processing we will be holding a public course next month. The Course will run over three days and will cover counselling and disciplinary processes as well as preparation for CCMA cases.

If anyone would like to know more about the Training programmes available please contact Tessa at the office.


We are very pleased to announce the completion of our conference facilities at our offices in Edenvale. Building began in March of this year and we now have a venue which can accommodate up to 15 delegates. These facilities are available for anyone who would like to have an offsite workshop or meeting. Details of the cost of hiring the venue are available from Andrea at our office.


We are becoming more and more concerned about the number of people who are being retired by their companies and who are not able to support themselves. It is estimated that only 6% of South African’s can afford to retire and many are currently supporting their parents (and adult children). In addition retiring staff often face significant health challenges. Even where we do provide Pension or Provident Funds for our employees, most employees withdrawing from the fund do not invest the money and new tax legislation is allowing employees who are retrenched to withdraw R315 000-00 from the Retirement Funds tax free.

In order to address this we are planning seminars in conjunction with Chartered Wealth Solutions. The seminars will be aimed at employees between the ages of 40 and 55 (although younger employees are encouraged to attend) and will address both retirement planning and the financial aspects of preparing for retirement. Anyone who would be interested in finding out more about the seminars can contact Tessa at the office.


We hope this quarter will be a truly productive and profitable one for everyone.

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