What You need to know about UIF

On the 19th January 2017 the President assented to an amendment to the Unemployment Insurance Act that significantly improves the benefits that can be received from UIF and even better takes away some of the obstacles that existed in claiming these benefits. The improvement in benefits has been motivated by the surplus of R111 Billion that the Fund has in reserve at the moment. In 2015 the fund collected R16 Billion rand and paid R7 Billion in benefits.

There are essentially five benefits that can be claimed from UIF and over the next few weeks, we will explain these benefits and the changes that this amendment to the act introduces.

It is to be noted that although the act has been assented to, it has not yet been promulgated and there is no indication as to when the Minister of Labour will promulgate the act, but we anticipate that it will be within the next few weeks.

So, as a contributor to UIF employees can claim benefits in the event of:

  1. Becoming unemployed as a result of your dismissal. Dismissal may be for misconduct, incapacity, operational reasons (retrenchment) or retirement.
  2. Becoming too ill to work, either permanently or temporarily
  3. Having a baby (maternity leave)
  4. Adopting a baby
  5. And in addition their beneficiaries can claim a dependents benefit in the event of their death.

Legal Requirement

In the new amendment, all employees are required to contribute towards an Unemployment Insurance Fund administered through the Department of Labour. This includes everyone, from Executive Directors to Domestic Workers. It includes foreign nationals, even if they are working on work permits (or even illegal employees) and part-time employees. The only employees who do not contribute to Unemployment Insurance are those that work for less than 24 hours and independent contractors.

What this means is that if you employ a person for more than three days you have to deduct UIF from their pensionable earnings.

If you don’t’ (and please when you consider this put on your hat as the employee of a domestic worker even if she only works for you one day a week), you face a potential fine or a maximum of 12 months in prison. You also become liable to pay the benefits that the employee would have received if they had been contributing.

At the moment the maximum contribution level is capped at R148-72 per month which caps an employees benefit to a salary level of R14 872-00. This means that whatever their salary is their maximum benefit from UIF is 38% of R14 872-00, i.e. R5 617-16 per month. They can claim this for 34 weeks which works out to 7,85 months or until they start contributing to UIF again.

The good news is that when the amendment is promulgated, maternity leave will increase to a flat 66% of salary which means that during maternity leave if the employee’s salary is over the capped limit, they would be entitled to R9 815.52 per month for the four months that they are on maternity leave. Below that they would receive 66% of their actual salary.

In our next blog, we will discuss how to claim for unemployment benefits and the changes in applying that the new act has brought in.

If you are an employer of a domestic worker, please made sure that you register for UIF and pay the contribution across. This can be done by Ufiling and EFT and it can be done annually.

December 2015

What an interesting year it has been. The Economy has had some interesting ups and downs and the political environment remains interesting. For most of us it has been a year of interesting opportunities with many many challenges. We hope that 2016 will be a year that provides more stability.

EMPLOYMENT EQUITY

We are in the process of finalising the last of the Employment Equity Reports and submitting them to the Department of Labour. It is important that those designated employers who have to comply with the Employment Equity Act schedule the quarterly meetings that are a minimum requirement of the Act. We suggest that you get these meeting dates set up for the year and the timing of the meetings should coincide with the reporting that is required. We suggest the following:

MEETING MONTH PURPOSE
Meeting 1 February To review the training report and plan training for 2016
Meeting 2 April To finalise the training submission to SETA
Meeting 3 July To review the employment equity plan
Meeting 4 September To finalise the Employment Equity Reports

To meet the requirements of the Department of Labour we have developed a standardised agenda for the meetings. Please keep in touch with Tessa at the office for information on the Agenda’s

SKILLS DEVELOPMENT

A court judgement in August means that we may be entitled to refunds from the SETA’s that we submit reports to. In a judgment in favour of Business Unity SA (Busa) ‚ the Labour Court has set aside certain aspects of the 2012 Seta Grant Regulations‚ declaring them invalid. The case relates to a dispute regarding the new regulations that reduce a mandatory skills grant payable to employers from 50% to 20%.

In the court submission Busa claimed that its attempts to appeal to Higher Education Minister Blade Nzimande and prevent the implementation of these measures were unsuccessful‚ and that Busa had no option but to resort to the courts to review and set aside these regulations.
The Labour Court’s judgment on Friday declared both regulations which were effected in April 2012 to be invalid. The court found that Mr. Nzimande had failed to consult the National Skills Authority as required by law.
The court also ruled that the minister had acted irrationally by reducing the mandatory grant to employers as set out in the Skills Development Act. The minister had exceeded his powers by prescribing that surplus Seta funds be moved to the National Skills Fund.
The court recommended that this ruling with regard to the regulations be suspended until March 31 2016 to allow the Minister to correct the impugned regulations. The minister was ordered to pay all costs of the application.
The Minister has in the meantime published a white paper seeking to review the entire skills development landscape. This was Gazetted on 10 November 2015 and will require significant consultation. The current Skills Legislation requires that SETA’s be relicensed every 5 years. Their current terms expires in 2016 as does the current National Skills Strategy. The proposals put forward in the White Paper would take significant public consultations and it therefore proposes to extend the current SETA licenses for another two years to 2018. There after the SETA’s would become permanent Administrative Boards or SETAB’s responsible to Cluster Management within the Department of Higher Education. It is also proposed to have a representative from Government on the Board (Accounting Authority) of each SETAB
The proposed revision of the Skills Environment is to centralize control of the larger portion of the Skills Levy in the National Skills fund and to use this to fund PIVOTAL or Vocational Training and to encourage an environment where Companies are encouraged to provide work opportunities to graduates. The following funding model has been suggested:

SKILLS LEVY, 1% OF PAYROLL CURRENT LEVY / GRANT SYSTEM PROPOSED LEVY /GRANT SYSTEM
20% Goes to National Skills Fund Goes to National Skills Fund
10% Goes to SETA Administration To go to SETAB administration plus cluster management and shared services (% to be reviewed given changed functions)
20% Goes to Mandatory Grant paid to Employers who submit Training Reports and Plans SETAB Workplace Skills Plan Grant
0,5% SETA Allocation to QCTO National Skills Fund for QCTO
20% of 49,5% (9,9% of total levy paid) SETA Sector Discretionary Grant SETAB Sector Specific Grant
80% of 49,5% (39,6% of the Total levy paid) SETA PIVOTAL grants National Skills Fund (ring-fenced) – utilized for PIVOTAL programmes.
THE FOLLOWING NOTES ARE MADE IN THE PROPOSAL:

Note 1: the levy contribution to the QCTO (0.5%) allocation will henceforward be managed from the National Skills Fund and not from individual SETABS.

Note 2: At this stage it is envisaged that the primary applicants for the ring-fenced PIVOTAL grants will be the SETABs, however the final decision on ‘who gets how much’ will be taken after due consideration is taken of national priorities, informed by the National Development Plan. Under this new arrangement neither sectors nor individual employers will be restricted to claiming grants linked to their levy contribution. If they contribute to national targets they will be entitled to claim more than they contributed.

Note 3: The implications of these changes for government departments will be separately elaborated, however, and in broad terms, the full l percent of departmental training budgets should be subject to rules set nationally i.e. be committed to quality assured training. Note 4: These changes will require legislative changes.

Note 5: The percentages used signal the current and proposed subdivision of the sectoral levy. These may change after consultation and consideration of the advice received.

The interpretation of this prescription will need to be interrogated on a sector-by-sector basis, but no fewer than one senior government official (at the level of Chief Director or above) must be represented on each SETAB Board, drawn from sectorally relevant departments. Where such representation is already in place, the status quo can be confirmed.

The government representatives will have a veto right in relation to the adoption of the sectoral brief to be submitted to the DHET to ensure that the strategic priorities are addressed therein, provided that their respective Directors-General formally mandate such a veto. Where departments fail to execute this function, the plans will be deemed, after a specified period, to be approved and may be submitted without such approval but with an account of steps taken to achieve such approval and reasons for their failure.

It is clear that going forward the DHET wants a much more centralized control of the SETA structures and the money that is being paid over for the Skills Levy (about R12 Billion per year) by Companies and that application for grants will become more onerous. The White paper states:

The broad architecture of the new SETAB Boards will remain unchanged, with one important exception. The role of government departments will be strengthened on SETAB boards for three reasons:

  • Firstly, because government is the largest employer in the country and departments have a key role to play in providing workplace based learning opportunities;
  • Secondly, because the role of government, from the perspective of the National Development Plan (i.e. the role of government as the mouthpiece of the ‘developmental state’), is particularly important when sectoral briefs are developed. It is critical that the sectoral strategic plans of the different sectoral departments inform the sectoral briefs and priorities set; and
  • Thirdly, because the spending of government’s training funds should be steered to support national and sectoral priorities.

The strengthened role of government departments in SETABs comes with changes in the roles to be played by these departments – in particular it is proposed that they prepare training plans in line with methodologies and templates determined centrally (so that the NSF can ‘recognize’ their applications in terms of its standard funding categories) and secondly that their committed one percent of personnel budget dedicated to training should focus primarily (approximately 80 percent) on quality assured training. All time-based exposure programmes that are not quality assured, should be funded from other funding sources, or, in the case of the private sector, should be incentivized through tax incentives and broad-based black economic empowerment {BBBEE) points.
The paper is very comprehensive and requires much analysis, but it will most probably increase the bureaucracy and make it difficult for private businesses to access the PIVOTAL skills grants.
We await the consultations with interest.

 

DOMESTIC WORKERS

It is the time of the year when the Minister of Labour gazettes the new minimum salaries for Domestic Workers. According to the Department of Statistics CPI was set at 5,5%, and the determination is CPI +2,5%. This is was the determination that was gazetted last year.:

R 11,44 per hour – an increase of 8,02% over last year
R 514,82 per week – an increase of 8% over last year
R2 230,70 per month – an increase of 8% over last year.

The Gazette states that wages in Area A (Urban Areas) will be subjected to a CPI plus 2.5% increase for the period 1 December 2015 to 30 November 2016. The CPI***(for the lowest quintile) six weeks prior to 1 December 2015 is 5.5%. This means that wages for this period was calculated as follows: CPI plus 2.5% for Area A = 5.5% + 2.5% =8%.

We therefore have to give all domestic workers an increase of 8% this year.

We wish you a happy holiday and safe travelling if you are going away. We hope that 2016 will be a prosperous and happy year for everyone.

September 2015

The year is speeding past as usual, although this year does seem to be going past faster than usual.  The news seems to be relentlessly bad and it is almost better to live in ignorance rather than keep up to date with what is happening.  However, there have been more laws passed and it is important for us to be up to date with what is required of us in law, so time for another update.

 

EMPLOYMENT EQUITY

A general reminder to all Companies that it is time to report on Employment Equity again. We are seeing increased inspections from the Department of Labour so it is important to ensure that you are complying with the Act.

Remember, you can be fined R1 500 000 if:
  • You have not consulted with a representative committee
  • You do not have a designated Employment Equity manager
  • You have not displayed a copy of the Employment Equity Act on the wall of all workplaces
  • You have not conducted a qualitative analysis in the workplace
  • You have not kept records of Employment Equity activities over the last three years.
  • You have not displayed your Employment Equity report (public companies only)
  • You have not co-operated with the Department of Labour during a Director-General’s review
You can be fined R1 500 000 or 10% of turnover (whichever is the greater) if:
  • You have not submitted an Employment Equity report
  • You do not have an Employment Equity plan in the required format
  • You do not have successive Employment Equity plans
  • You have not complied with the recommendations of a Director-General’s review
Remember you have to comply with this legislation if you have 50 employees or more or if your Company turnover exceeds the following:
  • Agriculture – R6m
  • Construction, Catering, Social, Personal & Community services – R15m
  • Mining & quarrying – R22.5m
  • Manufacturing, Finance, Business Services – R30m
  • Storage, Communications, Transport &nsash; R30m
  • Retail, Motor Trade, Repair Services – R45m
  • Wholesale Trade, Commercial Agents &nsash; R75m

IF YOU ARE NOT SURE WHETHER YOU SHOULD BE COMPLYING PLEASE CONTACT TESSA AT OUR OFFICES. REMEMBER, Employment Equity is an Act belonging to the Department of Labour, Broad-Based Black Economic Empowerment is another Act belonging to the Department of Trade and Industry. They are not the same thing.

 

DIRECTOR GENERAL’S REVIEW

Every year the Department of Labour randomly selects 1000 companies from its Data Base for a review of their Employment Equity. They then make recommendations based on their findings. In doing the review, they request copies of documentation from the last three years. We have provided our clients with an Employment Equity Plan File which has a predetermined index and would contain all the information that the Department would require. If you would like us to audit your file to ensure that the documentation is correctly stored, please contact our office. Remember a failure to keep the required information is a finable offence.

 

NEW LEGAL DEVELOPMENTS

The Earnings Threshold

The Minister of Labour had decided not to adjust the earnings threshold this year so it remains at R205 433.16 per annum or R17 119.43 per month. When looking at this figure, we are instructed by the minister that we must include gross salary i.e. salary before deductions, but exclude company contributions to Pension/Provident Funds, Medical Aid and Overtime. Subsistence and Transport Allowances must also be excluded.

The purpose of the earnings threshold has been enhanced as both the amendments to the Labour Relations Act and the Employment Equity Act refer to the earnings threshold. The Acts provide more protection for employees who earn below the threshold, e.g. in terms of the ability to contract terms and conditions of employees which contradict the benefits of the Basic Conditions of Employment Act.

We are frequently asked if a person can enter into a contract with a Company as an Independent Contractor and forgo the right to leave, sick leave, maternity leave etc. The answer is complex, however it cannot be done if the person’s earnings are going to be less than the earnings threshold. Such a contract would be invalid. The question is how do you treat employees who are part time, but whose payment, should you extend the hours to normal working hours, would take the person well outside of the earnings threshold?

For example, you contract a Marketing Professional to work with your Company four hours per day. You negotiate an independent contractor agreement because the person has other clients. Her hourly rate is R175-00 which makes her monthly earnings R15 225. However if she worked for you for the normal hours of 40 per week, her salary would be R30 450-00 per month, well above the threshold. We are instructed by the Department of Labour to consider only the actual salary and this is below the threshold, so you cannot enter into a contract unless it is fully compliant with the Basic Conditions of Employment Act.

The Employment Services Act
  1. To provide for Public Employment Services
    This requirement means that the Department of Labour has a requirement to provide an employment service and in doing this they are responsible for:

    1. Matching work seekers with available work opportunities;
    2. registering work seekers;
    3. registering job vacancies and other work opportunities;
    4. facilitating the placing of work seekers with employers or in other work opportunities;
    5. advising work seekers on access to education and training;
    6. advising workers on access to social security benefits;
    7. providing specialised services to assist vulnerable work seekers;
    8. facilitating the exchange of information among labour market participants, including employers, workers and work seekers, private employment agencies, Sector Education and Training Authorities and training providers;
    9. facilitating the employment of foreign nationals in a manner that is consistent with the object of this Act and the Immigration Act; and
    10. generally, performing any other function in terms of employment law or prescribed in terms of this Act.

    We are awaiting regulations to determine who at the Department of Labour will be aware of vacancies in the private sector as well as the full services provided. We are informed that one of the specialised services that will be offered will be free Aptitude Testing.

  2. To Regulate the activities of Private Employment Services
    This provision in the Act requires that any person who wishes to operate as a Private Employment Service (Recruitment Agent) or as a Temporary Employment Service (Labour Broker), must apply to the Department of Labour for Registration and must display in a prominent place, the certificate of registration. The Act says:
    “A person may not operate a private employment agency except in accordance with the provisions of this Act and the terms of its registration”
    This means that if you are registered as a Private Employment Service you may not provide temporary staff unless your registration specifically provides for it. The act also legislates on prohibited acts by employment services.
  3. To provide for the Activities of Productivity South Africa
    Again, this is not a new institution. It was first established in 1969 as the National Productivity Institute and rebranded as Productivity South Africa in 2007 when the funding of the institution was taken over by the Department of Labour.
    The functions of Productivity South Africa are-

    1. to promote a culture of productivity in the workplace;
    2. to develop relevant productivity competencies;
    3. to facilitate and evaluate productivity improvement and competitiveness in workplaces;
    4. to measure and evaluate productivity in the workplace;
    5. to maintain a data-base of productivity and competitiveness systems and to publicise these systems;
    6. to undertake productivity-related research;
    7. to support initiatives aimed at preventing job losses; and
    8. to perform any other prescribed function.
  4. To establish the Supported Employment Enterprise to Promote the Support of work for Disabled persons.
    The functions of Supported Employment Enterprises are to

    1. facilitate supported employment;
    2. provide work opportunities for persons with disabilities;
    3. develop and implement programmes that promote the employability of persons with disabilities, including persons with permanent disablement as defined in the Compensation for Occupational Injuries and Diseases Act, 1993 (Act No. 130 of 1993), in the light of their evolving needs in a changing economy; and
    4. perform any other function as may be prescribed by the Minister.

    Many of these functions are already up and running as the initial amendment to the Act was proposed in 2010 and the Act was passed last year. We await the regulations with interest.

 

TRAINING

Companies are required to comply with the Employment Equity and Skills Development Acts and the code of good Practice suggests that all Training and Employment Equity Committee members are empowered with the latest knowledge and information relating to Employment Equity and Skills Development.

The Employment Equity committee training programme offers a guideline to both the Employment Equity and Skills Development legislation.
This training programme is aimed at those Training and Employment Equity committee members that are newly appointed or those who have not yet received the required training.

We will be running a public Employment Equity committee training course towards the end of October from 08h30 to 13h30 at a cost of R 920.00 per delegates (excl VAT) which includes the venue, training material, refreshments and a light lunch.

Please contact Tessa at our office 011 452 1707 to book your place on this programme

Our training brochure of other courses offered by Connold and Associates is displayed on our Web page or is available from the office.

 

PERFORMANCE MANAGEMENT

What are the principles that underpin employee performance within your Organisation?

  • Promotion of a high performance
  • Values based culture
  • Appropriate reward and recognition for high performance
  • Promotion of ownership and accountability
  • Definition of the individual’s role in the achievement of Company objectives
  • Pursuit of fair, valid and reliable measurement
  • Acknowledgement of the responsibility of the organisation to create an enabling environment

The illustration below provides you with a top line view of the Performance Management Process:
Performance Management Process

In alliance with Select Strategy Inc., the online evaluation system will provide you with a way to help manage this process.

If you are interested in seeing a demonstration of the system please contact Tammy Groenewald at our offices.

 

RECRUITMENT

With current labour legislation, finding the correct person who not only has the necessary skills, but also fits into the Company’s ethos and value system, is crucial. We at Connold and Associates realise this, and are pleased to be able to offer a comprehensive Recruiting solution to our clients. In addition to our Personality Profile Analysis, and ITC, Fraud and ID verification checks which are standard for all our placements, we also offer an extensive list of skills testing for your potential candidate. As the employer, you are able to select from the list which skills you would like tested and your selection is setup through an email link to the candidate, who accesses the test questionnaire online and the results are available immediately upon completion.

 

Should you have any enquiries regarding our Recruitment processes or should you have any vacancies that we can assist you with, please contact Kevin on 011-452 1707.

We hope this quarter sees a positive change in the exchange rate and improved prospects for employment growth. We really need it.

March 2015

Once again, the year is flying past. The end of the tax year was two weeks ago, we are nearing the end of the first quarter and yet we still have people wishing us a happy new year – time does march on! So far the year has got off to a hectic start with changes to legislature that will affect all of us.

 

LEGISLATIVE CHANGES

The Labour Relations Act was finally promulgated on the 1st of January 2015. The amendments to the Act are extensive and while many of them serve mainly to clarify areas that were not clear in the original Act or to close some loopholes, some of the changes are far reaching. The purpose of the legislation was to:

  • To amend the Labour Relations Act, 1995, so as to facilitate the granting of organisational rights to trade unions that are sufficiently representative;
  • to strengthen the status of picketing rules and agreements;
  • to amend the operation, functions and composition of the essential services committee and to provide for minimum service determinations;
  • to provide for the Labour Court to order that a suitable person be appointed to administer a trade union or employer’ organisation;
  • to enable judges of the Labour Court to serve as a judge on the Labour Appeal Court; to further regulate enquiries by arbitrators; to provide greater protection for workers placed in temporary employment services;
  • to regulate the employment of fixed term contracts and part-time employees earning below the earnings threshold determined by the Minister; to further specify the liability for employer’s obligations;

It is the greater protection for workers in temporary, fixed term or part time employment that the Act provides that requires our attention. The Act gives three months from promulgation, i.e. 1 April 2015 for letters of appointment and conditions of employment for these groups of employees to be brought in line with the legislation. As organisations, we need to consider those employees who are not permanent and ensure that their employment conditions and contracts are in line with the Act. Interestingly the provisions of the Act dealing with temporary, fixed term and part time employees do not cover employees who earn above the threshold. The threshold is currently R205 433-30 per annum (gross salary) or R17 119-44 per month.

One of the provisions is that the letter of appointment for a fixed term contract should clearly state why the person is being offered a contract rather than permanent employment. The act states:

  • Without limiting the generality of subsection (3), the conclusion of a fixed term contract will be justified if the employee –
    1. Is replacing another employee who is temporarily absent from work;
    2. Is employed on account of a temporary increase in the volume of work which is not expected to endure beyond 12 months;
    3. Is a student or recent graduate who is employed for the purpose of being trained or gaining work experience in order to enter a job or profession;
    4. Is employed to work exclusively on a specific project that has a limited or defined duration;
    5. Is a non-citizen who has been granted a work permit for a defined period;
    6. Is employed to perform seasonal work;
    7. Is employed for the purpose of an official public works scheme or similar public job creation scheme;
    8. Is employed in a position which is funded by an external source for a limited period; or
    9. Has reached the normal or agreed retirement age applicable in the employer’s business.

If you are using a labour broker for any of your staff, please check if they are complying with legislation and most importantly if they are registered with the Department of Labour and SARS as a labour broker. The legislation gives any employee working through a temporary employment service the right to refer a dispute citing either the labour broker or the client or both. If they are not complying, it could become your problem.

Our next public Industrial Relations Training will take place on 5th, 6th, 7th May 2015 and will also cover the new legislation. Those interested in attending should please contact Tessa at the Connold offices Tel 011 452 1707 or email tessa@connold.co.za.

 

SKILLS DEVELOPMENT

Remember that the Skills Development Submissions are due before the 30th April 2015 if you are to be eligible for any grants. The training year for most SETA’s now runs from 1 January to 31 December although a few, namely FP&M, HW and W&R Seta, still run from 1 April to 31 March.

MICT Seta this year is running from 1 March 2014 to 31 March 2015 for the training report (ATR) which is a period of 13 months.

The Workplace Skills Plan (WSP) will run from 1 April 2015 to 31 March 2016 and is a period of 12 months.

For assistance in preparing the submission of your training report and training plan to Seta, please contact Tessa at the Connold offices Tel 011-452 1707 or email tessa@connold.co.za.

 

EMPLOYMENT EQUITY

The Department of Labour is very active with inspections currently. All Employment Equity Reports should have been submitted by 15 January 2015 and will become due again in October this year. However, the main concern should lie with whether or not your Employment Equity Plan is in the format required by the Employment Equity Regulations, Government Gazette No. 37873 which were promulgated on the 1st August 2015. Should you not have a current EE Plan or not have a plan in the correct format, you could be fined R1,5 Million or 2% of turnover, whichever is the highest.

For a copy of the regulations please contact our office and we will assist you in compiling your EE plan into the correct format.

 

PERFORMANCE EVALUATION VS. EMPLOYMENT EQUITY

Seeking practical guidance on how to apply the principle of equal remuneration for work of equal value in the workplace?

Through the implementation of Performance Evaluation systems, the Employment Equity Regulations make provision for differences in remuneration that are justifiable reasons but based on grounds that are fair and rational. In other words, any differences in pay must be tied to such business-related considerations as job responsibilities or performance.

This refers to an individual’s respective performance, based on quantity or quality of work which may be used to remunerate, reward or recognize the individual, provided that the employees are equally subject to the employer’s performance evaluation system and that the system is consistently applied.

For example:

  • Two employees who do the same job cannot be paid different salaries/wages because of gender, race, or age.
  • It would be illegal to pay these two employees differently because one is male and the other is female.
  • Only if there are differences in their experience, skills, seniority, or job performance are there legal reasons why their pay might be different.

Connold & Associates, in partnership with Select Strategy, provides for an online Performance Evaluation system that will assist organisations in managing the dynamics we face when it comes to the remuneration of individuals and retaining those exceptional performers without having been seen as unfair or discriminatory.

Employees may also begin to think of their pay relative to their inputs, outputs and efforts.

For assistance in implementing remuneration structures that are performance related, contact Tammy Groenewald at our offices on cell number 082 322 8138 or email tammy@connold.co.za

 

RECRUITMENT

At Connold and Associates we believe that companies need to focus on recruiting the right staff and the retention of these staff. We are well aware of the number of false CV’s, forged certificates and applicants with serious financial and personal issues. We are therefore gearing up to assist our clients in their recruitment process by offering the service of placing the advertisements for vacancies on the correct job site which will then ensure that the correct applicants apply. We are also able to assist further by carefully screening these applicants using different interviewing techniques and a wide range of skills measurement tests.

Please contact Kevin Pearson (kevin@connold.co.za) or Andrea Roberts (accounts@connold.co.za) at our offices on 011-452 1707 should you require further information on Personality Profile Analysis testing, Online Skills Testing and other skills measurement testing that we offer.

Once the initial screening has been concluded, we will present you with a shortlist of 2-3 candidates who will all be able to step into your environment comfortably. You will then be able to select the candidate who best fits your culture. Connold and Associates will also be able to assist you in advising a market related salary package in line with industry norm and comprehensive letters of appointment.

Our fees are calculated as follows:

Our full recruitment fee is 10% – 12% (depending on the position). The cost of all other individual services that form part of the recruitment process are available on request, or on our “Cost of Services” list; a copy of which can be obtained from our offices.

 

WORKMEN’S COMPENSATION

With effect from 1 March 2015 the Workmen’s Compensation Commissioner has extended the licence of Rand Mutual Association to manage the Workmen’s Compensation Claims for all Class 13 Employers. Class 13 includes the following:

  • Subclass 1300 – Iron and Steel production;
  • Subclass 1301 – Foundry products and stove manufacturing;
  • Subclass 1331 – Production of products containing iron and lead, venetian blinds, artificial limbs, number plates;
  • Subclass 1340 – Inter alia metal manufacturing and creation of products using metal (eg. Wire, cutlery etc.), repairs to ships, aluminium, welding, galvanizing;
  • Subclass 1350 – Electric cable manufacturing and manufacture of safety razor blades;
  • Subclass 1360 – Motor cars assembly as a business including all operations in connection therewith.
  • Subclass 1361 – Motor garages, automotive electricians, petrol and oil filling station; locksmithing; aircraft repairing and/or servicing as a separate business; employment of parking attendants; the business of a dealer in new/second hand motor vehicles; motor vehicle hiring if repairs are undertaken.
  • Subclass 1363 – Wagon, coach, carriage and/or motor body building as a separate business; panel beating and spraying as a separate business; motor car radiator manufacturing and repairing as a separate business.

You may therefore receive a letter from Rand Mutual Association advising you of the transfer and indicating that in future all payments must be made to them. This is not a hoax. According to their website:

“The Rand Mutual Assurance Company Limited (Rand Mutual) was founded in 1894 by three mining companies on the Witwatersrand as a non-profit mutual assurance company with the purpose of administering workers’ compensation for mining industry employees injured in the course and scope of their employment.”

They are operating under license to the Workmen’s Compensation Commissioner and hopefully the efficiency of claims for injuries on duty will improve under their management. They are not the only company who does operate under license; Federated Employers Association has been managing the Workmen’s compensation claims for the Building industry since 1936. The Government Gazette giving them the right to invoice, collect funds and process claims is no 37826 and can be found on RMA’s website at www.randmutual.co.za. They are a non-profit mutual association (remember those) and do have other insurance products. A list of affected companies can be found on their website.

Apparently this move will allow the Workmen’s Compensation Fund get their house in order and assist RMA who have additional capacity as a result of the shrinking number of employees in the mining industry.

As you are aware, we were very sad to have to inform you of the death of Jane Alevizos after a short illness. Jane was employed with us for 15 years and played a significant part in the growth and success of Connold and Associates. She will be missed.

The lesson we have learned is to live every day and listen to your body. Annual medicals by a specialist physician should be in all our calendars.

Hoping that your year is proving to be successful and happy, despite the constant doom and gloom that we seem to be surrounded by at the moment.

 

Regards,
Desrae & staff

December 2014

The festive season is upon us and those companies that close for an annual shutdown are looking forward to a long 31 day holiday. This has been a particularly difficult year with strikes which have had a profound effect on the mining and engineering sectors as well as the industries that support them. Many companies have had to carry out retrenchments and generally it has been tough. We really hope that next year will have less conflict and that we will see a turnaround in our economy. We can only be optimistic.

 

LEGISLATIVE CHANGES

The Employment Equity Act was finally promulgated on the 1st August 2014 together with regulations governing the format for Employment Equity Plans. All Companies must ensure that their Employment Equity Plan conforms to the new requirements and the Act has a significant fine for designated companies who do not comply. It starts at R1,5 Million and can be as much as 10% of Turnover. Remember that Employment Equity Reports must be submitted before 15 January 2015. Employment Equity Plans (a different document) are not submitted, but must be available should the Department of Labour require a copy.

The Amendment to the Basic Conditions of Employment Act was promulgated on the 1st September 2014. The amendments were largely administrative in terms of the powers of the Department of Labour to inspect and impose fines and prison sentences for non-compliance. No actual conditions of employment were changed. The amendment:

  • Prohibits employers from requiring employees to make payments to secure employment
  • Prohibits employers from requiring employees to purchase goods, services or products;
  • Prohibits anyone from requiring or permitting a child under the age of 15 years to work;
  • Makes it an offence for anyone to require or permit a child to perform any work or provide any services that place at risk the child’s well-being;
  • To provide for the Minister to publish a sectoral determination for employees and employers who are not covered by any other sectoral determination;
  • To provide for the Director-General to apply to the Labour Court for an employer to comply with a written undertaking by the employer; to provide for a compliance order, to delete certain obsolete provisions; to provide the labour court with exclusive jurisdiction in respect of certain matters;
  • To provide for certain offences and penalties and to increase the penalties for certain offences

Previously it was an offence to employ a child under the age of 15, now it is an offence to give them work.

At present the Department of Labour is considering Sectoral or Bargaining Council for the Construction Industry and is investigating the possibility of introducing a minimum wage.

The Amendment to the Labour Relations Act was assented to on the 17th August 2014, but has not yet been promulgated. It was expected that this Act would be promulgated before the end of November 2014.

The following acts are still in the process of being assented to and promulgated:

  • The Employment Services Bill
  • Broad-Based Black Economic Empowerment Act
  • The Protection of Personal Information Act
  • The Unemployment Insurance Amendment Act

The Department of Trade and Industry indicates that the New BB-BEE Codes will be effective from 1st May 2015; however they are still considering how to bring the Sector BBBEE Codes in line with the Generic Codes. Draft codes for Qualifying Small Enterprises, i.e. those Companies whose turnovers are more than R10 Million, but are less than R50 Million, were published for public comment on the 10th October 2014. The targets are very similar to the Generic Codes, but QSE’s must comply with four of the six measurement criteria. Scoring is as follows:

Measurement Criteria Maximum Points Targets
Management control 25 points 50%
Employment equity 25 points Executive Management : 60%
Senior Management : 60%
Middle Management : 75%
Junior Management : 88%
Disabled : 2%
Skills development 30 points 6% of payroll
Preferential procurement 25 points 80% of total procurement
Supplier Development 30 points 2% of NPAT
Enterprise Development 1% of NPAT
Socio-Economic Development 15 points 1% of NPAT

Comment for this closed on the 14th November 2014

The earnings threshold was increased on the 1st July 2014 and is now R205 433.30 (two hundred and five thousand, four hundred and thirty three rand, thirty cents) per annum. This figure is becoming more and more important as the Employment Equity Act and the proposed Labour Relations Amendment Act propose giving more protection to employees who earn below the threshold and exempting employees who earn above this from certain parts of the new legislation.

 

SKILLS DEVELOPMENT

We will be starting the process of finalising skills reports and collecting information for Skills Plans next month as the submission date for next year will be 30th April 2015. The new spreadsheets will be sent to you in the first week of January 2015 and approval of the reports by Training and Employment Equity Committees should be finalised by the end February 2015.

 

EMPLOYMENT EQUITY

The Employment Equity regulations have given us a format for Employment Equity Plans which the Department of Labour requires us to comply with. All the current Employment Equity Committees that we work with are in the process of aligning the Employment Equity Plans with the new requirements. If you would like more information in this regard, please contact Tessa at our offices.

 

DEFINING HIGH PERFORMANCE

Many of our clients would agree that having implemented a sound performance evaluation system provides the individual, team and Management with a set of tools to help meet or exceed performance standards.

This process involves:

  • Establishing behavioral expectations and core responsibilities
  • Ongoing coaching and monitoring progress
  • Measuring results via metric
  • Creating a personal growth plan for performance enhancement and future growth

Performance evaluation is becoming increasingly important when dealing with Employment Equity matters such as Equal Pay for Work of Equal Value, as outlined in the Amended Employment Equity Act of 2013. High performing employees are striving to be recognised and rewarded for their individual efforts and talents that contribute towards achieving profitability. Imbedding a process such as this, would enable your organisation to fairly measure, reward and retain those who earn it.

In alliance with Select Strategy Inc., an online evaluation system will provide you with:

  • Access – a transparent process where both management and employees have online access to their performance assessments. Access to graphic tools for diagnosing employee performance.
  • Consistency – Establish a consistent approach for managing and evaluating performance throughout your organisation
  • Accountability – Communicate and evaluate performance against clear qualitative and quantitative expectations
  • Involvement – Involve employees, managers in all aspects of performance management
  • Development – Develop a high-performance workforce
  • Pay For Performance – Recognize and reward high performance
  • Empowerment – Empower employees with the ability to exceed desired results and expectations

If you are interested in seeing a demonstration of the system please contact Tammy Groenewald at our offices.

 

TRAINING

Connold & Associates has a number of accredited training programmes which we will be running as public courses in the first quarter of next year.

  1. Leadership Development Programme

    We will be scheduling new Leadership Development Training Courses early in 2015.

    There are 3 different levels of the Leadership Development Programme:

    Supervisors: This programme is aimed at Supervisors whose highest qualification level is below a matric qualification. The Supervisors course is run over a 6 month period with delegates attending training one day per month
    Middle Management: This programme is aimed at Middle management who have Matric plus a further qualification. The Middle Management course is run over a 10 month period with delegates attending training one day per month.
    Senior Management: This programme will ideally be a Senior management level i.e. directors etc. The Senior Management Course is run over a 10 month period with delegates attending training one day per month.

    The programme covers 5 unit standards:

    • Demonstrate basic understanding of the Primary labour legislation
    • Describe the management functions in an organisation
    • Manage individual and team performance
    • Plan strategically to improve business performance
    • Recruit and select candidates to fill defined positions.
  2. Industrial Relations Training

    The Industrial Relations Training programme is a detailed yet simplistic guideline to the legislation and provides appropriate practices to operate within the law. It is ideal for staff in supervisory or people management positions and will include updates on the recent changes in legislation.The course will run over two days and will cover the following topics:

    • introduce managers to the eight acts that govern our management of staff
    • demonstrate how to conduct a counselling session
    • demonstrate how to deal with the poor performer
    • demonstrate how to conduct a disciplinary hearing
    • look at the workings of the CCMA
    • demonstrate how to prepare for an arbitration
  3. Life Skills Training

    The Life Skills programme covers a selection of the most essential skills and techniques that are designed to enhance motivation and personal effectiveness.The Life Skills Programme will cover the following topics:

    • Emotional intelligence
    • Goal orientation and setting
    • Personal finance management
    • Business Etiquette
    • Career development
    • Financial management

    As these courses are all very popular programmes, I would suggest that you let Tessa know as soon as possible if you have any delegates who would like to attend and who would benefit from any of these programmes. As soon as we have established the numbers of delegates who would be interested, we will then advise you of the respective dates per course.

 

HR Business Partnering Workshop

The purpose of this Workshop is to provide HR Practitioners with the necessary skills and action plan to effectively transition into a trusted HR Business Partner.

The Workshop will cover:

  • HR Functions in Relation to other Functions and the Operating Environment
  • What is Leadership and Management vs. Leadership.
  • Understanding Styles of Leadership as an HR Partner
  • Importance of a Professional Persona, Placing the HR Function at the Forefront
    • Branding HR in Your Environment
    • SWOT Analysis
    • Enhancing Personal Image
    • Critical Skills for a Successful HR Profession
  • Strategic Thinking and Decision Making
    • HR Strategy
    • Case Study in Strategic Decision Making
  • Analysing Data to Understand Trends and Make Accurate Forecasts
    • HR Analytics and Benefits
    • Case Study in HR Planning
    • Turning Data into Insights
    • HR Information & Reporting

Please contact Tessa at our offices on 011 452 1707 or Tessa@connold.co.za if you require any additional information on any of the above courses.

 

RECRUITPROTECT

Candidates hired from recruitment companies who “fall off” shortly after being hired have a significant financial impact on the employer and can cause debilitating business interruption. The current solution of a “free” replacement or credit note currently offered by the Agency is unsatisfactory in many respects.

RecruitProtect is a unique and innovative solution that pays cash back to the employer and releases the recruitment Agency from its guarantee obligation.

In the event of a candidate leaving the employer within 6 months of employment, RecruitProtect will pay back cash to the employer (T’s and C’s apply).

Recruitment agencies can take comfort in the fact that they are no longer obligated to their agency guarantee. Clients can take comfort that they are not out of pocket should the candidate they hire not see out the 6 month period, and the recruitment industry gains substantial credibility.

For more information, please click through to their website: http://www.recruitprotect.co.za/

 

DOMESTIC WORKERS

It is the time of the year when the Minister of Labour gazettes the new minimum salaries for Domestic Workers. According to the Department of Statistics CPI was set at 5,9%, and the determination is CPI +1%, HOWEVER this year the minister has set a new minimum wage which is in fact a 10% increase over last year. The new minimum rates for Domestic workers (based on a 45 hours week) are as follows:

  • R 10,59 per : hour an increase of 9,96% over last year
  • R 476,68 per week : an increase of 10% over last year
  • R2 065,47 per month : an increase of 10% over last year

The regulation indicates that next year the increase will be determined by CPI as at 1 November 2015 +2,5%. This may be a good indication of what the government intends to do with the suggested national minimum wage.

 

We wish you a happy holiday and safe travelling if you are going away. We hope that 2015 will be a prosperous and happy year for everyone.

Desrae & staff

May 2014

So far this year has been a year of change. Not only are we integrating new legislation into the work place, but we have had to deal with the interminable elections and the additional public holidays that have been declared. Although we have all been very busy in the first quarter of 2014, one gets the impression that no major decisions on infrastructure spending are going to be taken by Government until after the new cabinet has been formed.

We do live in interesting times!

 

ANNUAL LEAVE

Many of our clients have asked if it is possible to have an annual leave policy which allows that employees who do not take their leave within the annual leave cycle, can be made to forfeit their leave. The Basic Conditions of Employment Act is not clear on this and over the years there have been conflicting rulings from the Labour Court with regard to annual leave; however a recent judgment appears to have decided the matter.

In this recent court judgment how the BCEA should be interpreted was clarified. It was found that an employee is entitled to utilise his annual leave for a period of six months after the end of the annual leave cycle. Therefore annual leave not taken in the year that it accrues or in the six months after this period shall be forfeited. This means that an employee who is entitled to statutory leave should never have a leave balance of more than 22.5 days; being the 15 days accrued during the annual leave period and the 7.5 days that have accrued in the six months after the leave cycle. Any leave accrued during the annual leave period which has not been taken in the subsequent six months should be forfeited.

It would be a good idea to review letters of appointment to align them with this judgement (Ludick vs Rural Maintenance (Pty) Ltd. (2014).

 

LEGISLATIVE CHANGES

A number of the Acts passed last year have been assented to and are in the process of being implemented. The Basic Conditions of Employment Act was assented to on the 9 December 2013. The changes are relatively minor and focus on three main areas:

  1. To prohibit employers from requiring employees to make payments to secure employment and to prohibit employers from requiring employees to purchase goods, services or products;
  2. To prohibit anyone from requiring or permitting a child under the age of 15 years to work and to make it an offence for anyone to require or to permit a child to perform any work or provide any services that place at risk the child’s well-being
  3. To provide for the Director-General to apply to the Labour Court for an employer to comply with a written undertaking by the employer and to provide for certain offences and penalties, increasing the penalties for these offences

Employers found guilty of Clause 1 can face up to three years imprisonment and employers found guilty of Clause 2 can face up to six years imprisonment.

In discussing these changes in Employment Equity meetings it has emerged that there is wide spread abuse which has made this level of protection necessary. There are HR staff out there who are requiring staff that they place to pay them an amount of money either as a once off payment or monthly to “thank” them for finding them a position. There are also recruitment agencies that are making the applicants as well as the client pay for a placement. Please make sure that any placement agency that you are using is registered with the Department of Labour and is not requesting any payment from the applicants that they place.

The Employment Tax Incentive Act was passed on 18 December 2013 and is intended to address the high levels of unemployment of youth in the country; eligible employees being anyone who is not less than 18 years of age, not older than 29 and includes asylum seekers. It can be claimed for any employee who was employed after the 1st October 2013.

The incentive is deducted from the Company’s PAYE return and the amount of the incentive depends on the wage paid. To be eligible the wage paid must be between R2000-00 and R6000-00, or more than the minimum wage applicable for the industry in which the employee works. The incentive is R1 000-00 per eligible employee per month for the first year of employment if the salary is more than R2 000-00, but less than R4 001-00. If the salary is more than R4001-00 then a formula becomes applicable. For example, if the employee is being paid R4 500-00 per month then the incentive would be calculated as follows:
R1000 – (0.5 x (R4 500 – R4 000)) = R750.

After the first year of employment the incentive drops to R500-00 for an employee earning less than R4 001-00 or is calculated on a pro-rata amount using the same formula. It is intended that this Act will fall away in January 2017. Most payrolls have incorporated the incentive into their parameters.

The Employment Equity Act amendment was assented to on the 16th January 2014 and is a major amendment to the original act, hugely increasing the fines applicable to Companies who do not comply with the legislation. The amendment does the following:

  • It further regulates the prohibition of unfair discrimination against employees by adding the clause “or any other arbitrary discrimination” to the list of possible discriminations.
  • Provides that certain disputes can be referred for arbitration instead of Labour Court (e.g. sexual harassment cases).
  • Provides that the fines payable are paid into the National Revenue Fund
  • Establishes revised annual turnover thresholds applicable to designated employers.

In order to be considered a designated employer (one who is required to report on affirmative action measures); the employer must employ more than 50 employees or have a turnover in excess of:

  • R6 Million – Agriculture
  • R15 Million – Construction, Catering, Accommodation and other Trade, Community, Social and Personal Services
  • R30 Million – Manufacturing, Electricity, Gas and Water, Transport, Storage and Communications, Finance and Business Services
  • R45 Million – Retail and Motor Trade and Repair Services
  • R75 Million – Wholesale Trade, Commercial Agents and Allied Services

Designated employers who do not comply with the legislation face fines as outlined below:

Previous Contravention Contravention of 16, (read with 17) 19, 22, 24, 25, 26 and 43(2) Contravention of section 20, 21, 23 and 44(b)
No previous Contravention R1 500 000 The greater of R1 500 000 or 2% of turnover
A previous Contraventions R1 800 000 The greater of R1 800 000 or 4% of turnover
Two previous contraventions R2 100 000 The greater of R2 100 000 or 6% of turnover
Three previous contraventions R2 400 000 The greater of R2 400 000 or 8% of turnover
Four previous contraventions R2 700 000 The greater of R2 700 000 or 10% of turnove

It is important to understand what these fines are for. The first category of fine is failure to comply with

  • Clause 16 – Consultation with employees, i.e. the Employment Equity Committee
  • Clause 17 – Matters for Consultation, i.e. conduct of the analysis, preparation of employment equity reports and plans
  • Clause 19 – Analysis, i.e. the conduct of a qualitative analysis
  • Clause 22 – Publication of report (applicable to public companies)
  • Clause 24 – Designated employer must assign a manager – to monitor and implement affirmative action, i.e. the Employment Equity Manager
  • Clause 25 – Duty to inform i.e. to display a summary of the act in the workplace.
  • Clause 26 – Duty to keep records, i.e. an employment equity file of documentation relating to the Committees activities.
  • Clause 43(2) – Review by Director-General

Failure to comply with the following clauses will attract a larger fine. These clauses are

  • Clause 20 – having an Employment Equity Plan
  • Clause 21 – submitting a Report i.e. EEA2 and EEA4
  • Clause 23 – having successive Employment Equity Plans
  • Clause 44(b) – failing to or refusing to implement the recommendations given by the Director-General after a review.

Companies who used to be classified as designated but who have turnovers below those specified above and are therefore no longer designated must deregister from the Department of Labour. There is a deregistration process that will need to be followed and should you need assistance, kindly contact our office.

The Broad-Based Black Economic Empowerment Act was assented to on the 27th January 2014. The main purpose of the amendment is:

  • to clarify the interpretation of fronting;
  • to provide for other remuneration of Council members;
  • to promote compliance by organs of state and public entities and to strengthen the evaluation and monitoring of compliance;
  • to include the creation of incentive schemes to support black owned and managed enterprises in the strategy for broad-based black economic empowerment to provide for the cancellation of a contract or authorisation;
  • to establish the Broad-Based Black Economic Empowerment Commission to deal with compliance of broad-based black economic empowerment;
  • to provide for offences and penalties and to provide for matters connected herewith.

The penalty for fronting can be imprisonment of not more than 10 years or a fine of up to 10% of turnover.

The DTI has announced that it is delaying the implementation of the new B-BBEE codes until April 2015. This is as a result of the need to consult with those industries that have Sector B-BBEE Charters. These Sector Charters are aligned to the current codes and it would be not be fair if new Generic Codes were to be implemented and these remain aligned to the old codes. We still believe the new codes are too onerous and understand that a separate code for SMME’s is currently being drafted by the DTI.

The following pieces of legislation have been passed by Parliament, but have not yet been assented to:
–   Labour Relations Act
–   Employment Services Act

The amendment to the Unemployment Insurance Act has been passed by Cabinet and should go through Parliament before the end of this year.

 

SKILLS DEVELOPMENT

The skills development work place skills plans (WSP) and annual training reports (ATR) have been submitted as required. Now we will be focusing on funding opportunities through the PIVOT Grants and the Discretionary Grants which will become available. It seems that the SETA’s are starting to organise themselves around the requirements of the new grant systems. Your Skills Development Facilitator will be in touch with regard to the funding opportunities.

 

EMPLOYMENT EQUITY

2014 is a reporting year for all designated Companies. In the next few weeks we will be sending out the spreadsheets requesting information required for the EEA2 and EEA4 reports. The Department of Labour have sent out draft Employment Equity regulations to support the amendments to the Employment Equity Act and these should be passed in June 2014 in order for us to amend our processes to comply with the new regulations.

One of our concerns with the draft regulations is the requirement to ensure that there is no discrimination regarding equal pay for equal work. The DoL outlines a methodology for assessing whether work is equal or of equal value. They will recognise factors justifying differences in salary based on differing qualifications or skills, quantity and quality of work, etc; however they are requiring that a designated employer must consult with the Employment Equity Committee on the elimination of unfair discrimination due to differences in terms and conditions of employment of employees who are performing work of equal value.

How this is to be done in small Companies where salaries are considered confidential is going to be interesting.

When setting numerical targets the regulations indicate that a Company should use the national demographics when planning their Top and Senior Management structures and Regional and National demographics for the levels below that. They have also given a proposed format for the Employment Equity Plan and for the conduction of a Qualitative Analysis.

Once the final regulations have been gazetted we will ensure that all our clients remain compliant.

 

PERFORMANCE MANAGEMENT

Our alliance with Select Strategy Inc., a Company based in Boston USA, is proving to be very successful. Their Performance Management system is computer based, can be adapted to any work place and allows Companies to control and drive their performance management measures more effectively. If you are interested in seeing a demonstration of the system please contact Tammy Groenewald at our offices.

 

LEARNERSHIPS

As our clients become more aware of the grants that the SETA’s are prepared to give, so more of us are becoming involved in Learnerships. There is a Sectoral Agreement with regard to Learnerships that defines their rights and the minimum allowance to be paid in terms of employment law – which is different from the Basic Conditions of Employment Act. It is important to note that Learners are not considered to be employees and therefore fall outside of some of the benefits offered to staff. The minimum allowances were revised with effect from 1 April 2014 and amounts to a 6% increase.

The allowances are set out in the table below:

Existing levels of Learnerships Credit already earned by learner Percentage of wage to be paid as allowance Minimum allowance per week Minimum allowance per month
NQF 1 to 2 0 – 120 35% R253.73 R1,098.65
121 – 240 69% R507.43 R2,197.17
NQF 3 0 – 120 17% R253.73 R1,098.65
121 – 240 40% R477.88 R2,069.22
241 – 360 53% R782.33 R3,387.49
NQF 4 0 – 120 13% R253.73 R1,098.65
121 – 240 25% R507.49 R2,197.43
241 – 360 53% R782.33 R3,387.49
361 – 480 56% R1,141.75 R4,943.78
NQF 5 to 8 0 – 120 8% R253.73 R1,098.65
121 – 240 18% R549.72 R2,380.29
241 – 360 38% R822.49 R3,561.38
361 – 480 38% R1,158.70 R5,017.17
481 – 600 49% R1,480.05 R6,408.62

 

If you are contemplating entering into a Learnership arrangement and require a contract which outlines the employee’s entitlements in terms of the Sectoral Agreement, please contact our office.

This has been a long update of the current circumstances – hopefully the next one will be less filled with legislation.

Kind regards,
Desrae & staff

November 2013

As we enter the last quarter of the year there seems to be a great deal of energy devoted to passing legislation which will have an enormous impact on the way in which we run our businesses. We await the implementation of E-tolls with interest. We also await the market’s reaction to how the additional expense will be treated, particularly where business travel for employees and the cost of delivery or courier charges are concerned.

 

LEGISLATIVE CHANGES

Parliament has been very busy passing legislation which was first introduced as bills in 2010 and then were referred back to NEDLAC for refinement. The Bills were approved by NEDLAC towards the end of 2012 and have now seemingly been rushed through parliament.

The following pieces of legislation have been passed by parliament in the last six months:

  1. An Amendment to the Labour Relations Act was passed by the House of Assemblies on the 20th August 2013 and the Basic Conditions of Employment Act was passed on 21st June 2013 and have been sent to the National Council of Provinces for concurrence. Final public comment was closed on the 25h September 2013. These amendments are now in the last phase before being passed into law.
  2. he Amendment to the Employment Equity Act was passed on the 24 October 2013 and was approved by the National Council of Provinces on 21st November 2013. This Act which has also been in process since 2010 should be promulgated in the next few weeks. Concern has been raised with regard to the method of calculating the proposed fine for Companies that do not comply. The proposed fine is R1.5 million or a percentage of turnover up to a maximum of 10% of turnover, depending on the offence. Once the Act is gazetted we will give a detailed outline of the changes.
  3. A new Act, the Employment Services Bill was passed on 31st October 2013. This is actually not new legislation as it originally formed part of the Skills Development Act, however the provisions for the registration of Private Employment Agencies and the operation of the Productivity Institute have not been transferred to the Department of Higher Education and Training and remain the responsibility of the Department of Labour. Hence the requirement to publish an Act separate from the Skills Development Act. The Employment Services Act will establish employment offices controlled by the Department of Labour which will be required to assist unemployed people to find positions. The problem with the Act is that it proposes a fine of R50 000-00 to any company who has a vacancy and does not report the vacancy to the Department of Labour. The bill is being considered by the National Council of Provinces currently.
  4. Amendments to the Broad-Based Black Economic Empowerment Act were gazetted in October 2013 and are expected to be gazetted in mid-2014. This amendment seeks to clearly define fronting and proposes severe fines and possible prison sentences for people found guilty of fronting.
  5. A new Bill, the Employment Tax Incentive Bill which is aimed at reducing the high youth unemployment rate. The bill which was introduced into parliament on 31st October 2013 and will allow employers in designated areas or designated industries (these have not yet been clarified) who employ South African people between the ages of 19 and 29 and who earn less than R6 000-00 per month to deduct money for every such employee from the PAYE which is owed to SARS. Unfortunately it is proposed that only employees employed after 31 October 2013 will be eligible for this incentive and the incentive will run to January 2017. Employers who terminate the employment of an older person to make way for a young person will be disqualified from claiming the incentive.
  6. The Protection of Personal Information Act was passed on the 26th November 2013. This act is designed to introduce certain conditions so as to establish minimum requirements for the processing of personal information and to provide for the rights of persons regarding unsolicited electronic communications. Once the Act is promulgated it is suggested that Letters of Appointment be amended granting permission to the company to pass on personal information if it is legally required, i.e. to SARS, UIF etc. We will advise of a suitable clause in due course.
  7. New BB-BEE Codes were published on the 11th October 2013 and the gazette indicates that they will be effective from 11 October 2014. The intention is that Company’s will have twelve months to transition to the new codes. A breakdown of the new codes is attached. Particular points to note are:
    1. Companies with turnovers of less than R10 Million will qualify as Exempted Micro Enterprises (previously EME’s had to have turnovers of less than R5 Million).
    2. Qualifying Small Enterprises are companies with turnovers of between R10 Million and R50 Million (previously R5 Million to R35 Million)
    3. Black owned companies (100% Black Owned) who have turnovers of less than R50 million will not be required to be measured. An affidavit confirming level of ownership and that revenue is below R50 Million will qualify the Company for a Level 1 B-BBEE recognition. If the ownership level is less than 51% – 99%) the Company will qualify for a Level 2 B-BBEE recognition.
    4. The scores required for the various levels have been adjusted as follows:
      Level BEE Score Current BEE Score 2014 BEE Recognition Level
      1 > 100 > 100 135% (e.g. R1-00 = R1.35)
      2 85 – 100 95 – 100 125% (e.g. R1-00 = R1.25)
      3 75 – 85 90 – 95 110% (e.g. R1-00 = R1.10)
      4 65 – 75 80 – 90 100% (e.g. R1-00 = R1.00)
      5 55 – 65 75 – 80 80% (e.g. R1-00 = R0.80)
      6 45 – 55 70 – 75 60% (e.g. R1-00 = R0.60)
      7 40 – 45 55 – 70 50% (e.g. R1-00 = R0.50)
      8 30 – 40 40 – 55 10% (e.g. R1-00 = R0.10)
      Not Compliant < 30 < 40 0% (e.g. R1-00 = R0)
    5. Management Control and Employment Equity have been merged into one Element.
    6. When measuring the score for Employment Equity and Skills Development, the Annual Economically Active Population targets will be taken into account. This means that if for example in your Senior Management Category you only have Indian or Coloured Males or Females, the score will be less than if they were African Males or African Females. The gender bias remains
    7. The Skills Development Element has increased the Compliance Target for Skills Development Expenditure to 6% of payroll and has introduced a target for Learnerships, Apprenticeships and Internships.
    8. Procurement has been combined with Enterprise Development and a new category, Supplier Development has been introduced. There are also requirements with regard to recognising companies who procure from local suppliers.
    9. QSE’s who are not black owned now have the same targets as Generic Companies.
    10. Ownership, Skills Development and Enterprise and Supplier Development have been identified as Priority Elements. A large Enterprise is required to comply with all these elements and compliance is defined as a score of more than 40%. A QSE must comply with Ownership and either Skills Development or Enterprise and Supplier Development. If the Company does not comply with more than 40% in the Priority Elements, the BBBEE status level will be discounted by one level. For example, this means that if the Company scores 72%, but did not score more than 40% on Skills Development, they will only be awarded a level 7.

The cost of compliance to the new scorecard is high and the requirement for QSE’s to have Black Ownership is going to be a challenge for many smaller Companies. Rating agencies will be using the old codes for ratings which need to be done prior to October 2014. The Industry Charters remain unchanged at this stage.

If you have any questions with regard to the new codes, please contact Jane Alevizos.

Next year is going to be challenging as we adapt to the new legislation that is going to be promulgated. We will be holding a series of workshops with regard to the new legislation once they have been promulgated.

 

SKILLS DEVELOPMENT

We will be starting the process of finalising skills reports and collecting information for skills plans next month as the submission date for next year will be 30 April 2014 and not the usual 30 June deadline. The new spreadsheets will be sent to you in the first week of December 2013 and approval of the reports by Training and Employment Equity Committees should be finalised by the end February 2014. Some SETA’s have informed us that they will be amending their training year to run from 1 January to 31 December in future. The SETA’s that have confirmed a change in the training year are:

Merseta, FPM, W&R Seta, Inseta, Services, HW Seta, CETA, Bankseta, MICT , Cathsseta, Fasset

Their explanation for this is that it makes training easier as it then falls in line with the academic year. The SETA’s do seem to be adjusting to the changes in grants and the criteria for applying for additional grants appears to be resolved in most of the SETA’s

 

EMPLOYMENT EQUITY

2014 will be a reporting year for all Companies. Although the legislation is changing and all designated companies will be required to comply with the new legislation, we are not aware of any proposed change to the reporting format. There are concerns with the format for reporting of earnings and given that there will be a fine if a company is proven to be failing to pay equal pay for equal work in the new act, we do anticipate that the Department of Labour will be revising the format to obtain more relevant information.

In order to plan for the early reporting required on skills development and the need to prepare EE Reports, we suggest that Employment Equity meetings be scheduled as follows:

  • Mid January to Mid-February: Approval of Annual Training Reports and preparation of Workplace Skills Plans
  • March: Finalizing of Skills Submissions
  • July: Review of Employment Equity Reports and Employment Equity Plans
  • September: Finalizing Employment Equity Report Submissions and Finalization of Employment Equity Plans.

Please contact Tessa or your Connold Consultant to schedule dates for the meetings.

 

PERFORMANCE MANAGEMENT

Our alliance with Select Strategy Inc., a company based in Boston USA is growing. Their Performance Management system is Computer Based and can be adapted to any work place and allows companies to control and drive their performance management measures more effectively. If you are interested in seeing a demonstration of the system please contact Desrae or Kevin.

 

DOMESTIC WORKERS

It is the time of the year when the Minister of Labour gazettes the new minimum salaries for Domestic Workers. According to the Department of Statistics CPI was set at 6.6%, and the determination is CPI +1% so the increase has been set at 7.6% for the year. The new minimum rates for Domestic workers (based on a 45 hours week) are as follows:

R 9.35 per hour an increase of 7.60% over last year
R 433.35 per week an increase of 7.52% over last year
R1877.79 per month an increase of 7.54% over

 

We wish you a happy holiday and safe travelling if you are going away. We hope that 2014 will be a prosperous and happy year for everyone.
Desrae & staff

August 2013

2013 is proving to be an interesting year with mixed fortunes for most companies and seems to have been a very busy year with continual challenges.

 

SKILLS DEVELOPMENT

Submission dates for skills plans and reports have come and gone and we are currently liaising with the SETA’s to determine the opportunities that are available for discretionary and PIVOTAL grants (PIVOTAL being an acronym which means professional, vocational, technical and academic learning programmes in qualifications or part qualifications on the National Qualifications Framework). Kindly contact your SDF for full details.

There seems to be some confusion with regard to the information that will be required for the next submission and some SETA’s are indicating that they will change the skills year to accommodate the earlier reporting period required by the Minister of Higher Education and Training. As indicated in the last Update, the regulations state that the WSP and ATR would need to be submitted by 30 April annually. We will keep you informed of the requirements as well as any funding opportunities in the form of discretionary and mandatory grants.

 

LEGISLATIVE CHANGES

Amendments to the Labour Relations Act and the Basic Conditions of Employment Act were published in 2010 and have not yet been passed. The Acts were referred back to NEDLAC where they spent two years being refined and then were referred back to Parliament. In the last session of Parliament the Labour Relations Act was presented and some changes were made by the ANC Parliamentarians. These had to do with the length of time that an employee can be employed in a core function through a Labour Broker before becoming a permanent employee and the issue of a strike ballot. The act failed to be passed as the number of parliamentarians present did not reach the quorum required in parliament to pass it. Presumably it will be passed in the next session.

The Amendment to the Employment Equity Act which has also been in process since 2010 is currently being debated in parliament.

 

Determination: Earning Threshold

The Earnings threshold was increased to R193 805-00 per annum. In the gazette the definition of earnings is defined as “salary before deductions i.e. income tax, pension, medical aid, and similar payments, but excluding similar payments (contributions) made by the employer in respect of the employee”.

This represents an amount of R16 150-00 per month.

What this means is that any person earning below this threshold is entitled to:

  • Overtime,
  • Meal Intervals
  • Ordinary working hours,
  • Daily and weekly rest periods,
  • Pay for work on Sundays and
  • Compliance with the Basic Conditions of Employment’s Act with regard to compressed working weeks, averaging of hours, maximum working hours and night work.

More importantly, employees earning below the threshold who sign contracts of employment which are not in line with the Basic Conditions of Employment can have their contracts declared invalid by the CCMA or Labour Court.

The earnings threshold has increased significantly over the last two years and it may be necessary for Companies to review their overtime policies for employees who are now below the earnings threshold, but may be in a position where their hours of work are not really controlled, e.g. an administrative position.

 

Proposed Amendment to the Unemployment Insurance Act

The Minister of Labour has published a bill proposing long awaited improvements in the Unemployment Insurance Benefits. Hopefully this bill will not take three years to move from bill to action. The proposed amendments are far reaching, but include the following:

  1. Extending the UIF fund to learners, civil servants and foreign workers
    This has been confusing for employers who typically pay for UIF for all their employees and then find that the foreign workers and learners are not entitled to benefits. The intention is that all employees will be covered.
  2. Allowing the UIF fund to finance the retention of employees in employment and the re-entry of contributors into the labour market.
    This amendment is not really explained. We understand this to refer to the current retrenchment lay-off fund which assists employees who are being retrenched to be retrained, either to work in another position in their current employment or to move to a new industry.
  3. Improvement in benefits
    The proposed improvement in benefits is outlined below:
BENEFIT CURRENT BENEFIT PROPOSED BENEFIT
Maternity Paid at 60% of salary to a maximum of R8 923.20 per month Paid at 66% of salary to a maximum of R9 815.52 per month
Accrual Rate for benefits Entitlement of 1 days UIF for every 6 days of contribution to a maximum benefit of 238 calendar days Entitlement of 1 days UIF for every 4 days of contribution to a maximum benefit of 365 calendar days
Benefit for Unemployment Sliding scale depending on income to a maximum of 60% of earnings for the 238 days Sliding scale depending on income to a maximum of 60% of earnings for the 238 days and then 20% of earning for the next 127 days
Unemployment benefits must be paid to the unemployed contributor regardless of whether the contributor has received benefits within that four year cycle or not if the contributor has credits.
The payment of maternity benefits may not affect the payment of unemployment benefits
The period of unemployment is calculated from date of unemployment unless the claims officer is satisfied that any delay in making the application was caused by circumstances beyond the control of the contributor The period of unemployment is deemed not to have commenced until the contributor has lodged an application for befits with the Fund and the date of unemployment is deemed to be the date of application for benefits.
Application for unemployment insurance must be made within six months of the termination of the contract of employment Application for unemployment insurance must be made within twelve months of the termination of the contract of employment
Illness benefit A contributor is not entitled to illness benefits if the period of illness is less than 14 days A contributor is not entitled to illness benefits if the period of illness is less than 7 days
Maternity An employee who has a miscarriage during the 3rd trimester of bears a still-born child is entitled to six weeks maternity benefit. An employee who has a miscarriage during the 3rd trimester of bears a still-born child is entitled to full maternity benefit of 17 to 32 weeks
An employee is not entitled to benefits unless she was in employment, whether as a contributor or not, for at least 13 weeks before the date of application for maternity benefits
Dependents Benefit Application for dependents benefit must be made within six months of the death of the contributor Application for dependents benefit must be made within eighteen months of the death of a contributor
Any dependent child of a deceased contributor is entitled to the dependents benefit Any nominated beneficiary of the deceased contributor may claim dependents benefits. A nominated beneficiary will qualify for benefits if there is no surviving spouse, life partner or dependent children of the deceased contributor

We welcome these changes which will make it much easier for claimants to access their benefits and will improve the benefits available. We do anticipate regular increases in the maximum contribution level so that employees who earn more than R14 872-00 per month are given a higher level of insurance by the fund. Given the UIF funds current reserves, they can afford to do this.

 

SECTORAL AGREEMENTS

The Sectoral Agreements are amended annually to define new minimum salaries and increases in those industries. There are currently 11 Determinations, the largest of which are for the Wholesale and Retail Industry, Hospitality Industry, Contract Cleaning and Security Sector. The Farm Workers agreement is drawing a great deal of attention currently. Recent amendments have given the following increases

 

INDUSTRY NEW MINIMUM RATE PREVIOUS MINIMUM RATE PERCENTAGE INCREASE MINIMUM INCREASE 2014
Contract Cleaning R14,45 per hour R13,51 per hour 6,95% CPI +2%
Farmworkers R11,66 per hour R7,71 per hour 51,23% CPI +1.5%
Hospitality Below 10 Employees
R12.39 per hour
Below 10 Employees
R11,49 per hour
7.83% CPI +1.5%
Above 10 Employees
R13,81 per hour
Above 10 Employees
R12.80 per hour
7.89% CPI +1.5%
Taxi Industry R12.71 R11,78 7,89%
Wholesale Industry Varies from R27,37 to R12,69 depending on position Varies from R25.68 to R11.79 depending on position 6,58% at the top and 7,46% at the bottom

 

EMPLOYMENT EQUITY COMMITTEE TRAINING

Companies are required to comply with the Employment Equity and Skills Development Acts. The Code of Good Practice suggests that all Employment Equity /Skills Development Committee members are empowered with the latest knowledge and information relating to Employment Equity and Skills Development.

The Employment Equity committee training programme offers a guideline to both the Employment Equity and Skills Development Legislation.

This training programme is aimed at those Employment Equity and Skills Development committee members who are newly appointed or those who have not received the required training.

By attending this programme, participants will gain an understanding in Employment Equity and Skills Development in the South African context. Participants will clearly understand their role as an EE committee member.

We will be running a public Employment Equity Committee Training course on 12 September 2013 from 08h30 to 13h30 at a cost of R550-00 (excl VAT) per delegate which includes the venue, training material, refreshments and a light lunch.

Please contact Tessa at our offices on 011-452 1707 to book your place.

 

TRAINING

We will be also be starting a new Leadership Development Training Course in October 2013 as well as public courses for our Life Skills Training.

The Leadership Development Training Course runs for 1 day per month for 10 months and is aimed at Line Managers. Content of the course includes Performance Management, Strategic Planning, Team Building, Coaching and Industrial Relations.

We have been asked to provide training for Senior Managers and are in the process of co-ordinating a programme which is aimed at this level.

Anyone who would be interested in attending or having staff attend please contact Tessa at our offices on 011-452 1707.

 

PERFORMANCE MANAGEMENT SYSTEM

Our alliance with Select Strategy Inc., a company based in Boston USA is growing. Their Performance Management system is computer based and can be adapted to any work place and allows companies to control and drive their performance management measures more effectively. If you are interested in seeing a demonstration of the system please contact Desrae or Kevin at our offices on 011-452 1707.

 

RECRUITMENT / PERSONALITY PROFILE ANALYSIS

In addition to our standard PPA Profile report, we are now able to offer the option of a Leadership Skills Analysis Report based on the candidate’s completed PPA.

This report highlights the candidate’s Personal Leadership Style and Training and Development Needs with specific focus on the following in relation to a Leadership Role:

  • Likely Leadership Strengths
  • Potential Leadership Limitations
  • General Communication
  • Presentation Style
  • Decision Making Style
  • Meeting Deadlines and Time Management
  • Goal Focus
  • Administration
  • Ensuring Quality and Accuracy
  • Planning and Problem Solving
  • Handling Criticism and Aggression
  • Achieving Effective Results and Innovating
  • Delegation

For further information and pricing, please contact Andrea at our offices on 011-452 1707

Please contact our offices on Tel: 011-452 1707 for any further information relating to the above.

Kind regards,
Desrae & staff

January 2013

We hope that everyone had a good break in December and that they have returned safely. This promises to be another very interesting year, but we hope a successful year for all our clients. The 15th January 2013 was D-day for the submission of Employment Equity Reports for all designated Companies. Hopefully the next submission will be in 2014; however we need to be prepared for all the legislative changes that are expected this year.

 

SKILLS DEVELOPMENT

Our next challenge is to meet the deadline for submission of our Workplace Skills Plans (WSP) and our Annual Training Reports (ATR). Although the deadline is 30 June 2013, we are targeting submission by 30 April 2013 this year. There is a very good reason for this. Much to everyone’s surprise and without any prior warning, new Skills Regulations were passed on the 3rd December 2012. The purpose of the new regulations is to:

  1. Regulate the proportion of funds available for skills development that is spent on administration:
    The regulation limits this to 10,5%. This is good news as it was previously 12,5%. To put this into context, the Skills Levy brought in R10 Billion rand in 2011. 10,5% means that the SETAs can use R1.1 Billion rand for their internal administration costs. That is R48 Million per SETA. Not a bad expense budget.
  2. Provide for SETAs to contribute to the cost of the work of the Quality Council for Trade and Occupations (QCTO).
    This contribution will come out of the administration cost of the SETA. They will contribute 0,5% of the administration cost to the QCTO, i.e. R5.5 Million per annum.
  3. Discourage the accumulation of surpluses and the carry-over of unspent funds at the end of each financial year.
    Should a SETA have unclaimed mandatory funds or administrative funds (and the interest earned on these funds) then these must be transferred to discretionary funding. 95% of this funding must be allocated or spent within that year. Should they fail to do this, unused funds must go to the National Skills Fund.
    80% of discretionary funding must be allocated to PIVOTAL programmes that address scarce and critical skills in the applicable industries. PIVOTAL means Professional, Vocational, Technical and Academic Learning Programmes that result in qualifications or part qualifications on the National Qualifications Framework. The SETAs are currently interpreting this requirement. It is indicated by some SETAs that if a Company submits a PIVOTAL Report they will be eligible for a further grant of 10% of their levy. This is not made clear in the regulations.
  4. Improve the quantity and quality of labour market information received by SETAs in the form of WSP and ATR and PIVOTAL training reports to inform planning.

Rather disappointingly, the regulations have this as an aim, but they have drastically reduced the incentive for Companies to submit this information by dropping the Mandatory Grant from 50% of the skills levy to 20%. This takes away the incentive to submit this information, particularly for small companies who may find it difficult to access the discretionary funding. However, Companies will not be eligible for discretionary funding if they do not submit the WSP or ATR. It may also affect their BBBEE score.

The regulations also change the timing of the submission of reports after 2013 from 30 June to 30 April of each year.

We understand that the SETAs are registering their unhappiness with this regulation and we are awaiting their guidelines.

A review of the Department of Higher Education and Training’s Annual Report supports Minister Blade Nizmande’s commitment to develop the Further Education Training (FET) Colleges. Considerable funding from the National Skills Fund has been set aside for this and it is evident that the SETAs will be encouraged to support the studies of staff through the “Public Education Training Providers” by encouraging the SETAs to allocate discretionary funding to them rather than to Private Training Providers.

 

SALARY INCREASES

As we near the end of the Tax year, which many companies also see as the end of their Financial Year, we are frequently asked what we expect the average salary increases for the year to be. P-E Corporate, who are responsible for producing an annual salary survey which is available to participant companies, have provided information which they have said we can publish in our newsletter.

In the article they state that the South African labour market has been characterised by severe skills shortages for a considerable amount of time although increases have been above inflation, particularly at Executive and Professional levels. Their research indicates that the majority of organisations are budgeting increases between 6% and 8% depending on staff category and skills shortages. This is based on the above market trends as well as on wage settlements, public sector increases and general economic data, i.e., growth expectations, inflation, etc. Our predicted salary increases are reflected in the table below:

STAFF CATEGORIES INCREASES GRANTED AS AT JULY 2012 AVERAGE PREDICTED % INCREASE – Q4 2012 & Q1 2013
Executives 7.2% 6.5 – 8.0%
Management 7.3% 6.5 – 8.0%
Specialists 7.3% 7.0 – 8.5%
General Staff 6.8% 6.0 – 7.5%
Lower Skilled Employees 7.5% 7.5 – 10.0%

For more information you can access the full report you can contact Tessa at our offices on 011-452 1707 or Maria Romo at 011 442 4334 P-E Corporate

 

SECTORAL AGREEMENTS

The Sectoral Agreements are amended annually to define new minimum salaries and increases in those industries. There are currently 11 Determinations, the largest of which are for the Wholesale and Retail Industry, Hospitality Industry, Contract Cleaning and Security Sector. The Farm Workers agreement is drawing a great deal of attention currently.

An amendment to the Domestic Workers Agreement was passed in December 2012 indicating that the minimum salary for a Domestic Worker has been increased to:

 

Minimum rates for the period 1 December 2011 to 30 November 2012 Minimum rates for the period 1 December 2012 to 30 November 2013 Minimum rates for the period 1 December 2013 to 30 November 2014
Hourly Rate (R) –– 8.34 Hourly Rate (R) –– 8.95 Hourly Rate (R)
Weekly Rate (R) –– 375.19 Weekly Rate (R) –– 402.96 Weekly Rate (R)
Monthly Rate (R) –– 1625.70 Monthly Rate (R) –– 1746.00 Monthly Rate (R)
  Previous years minimum wage + CPI*** +1% Previous years minimum wage + CPI*** +1%
Wages in Area A will be subjected to a CPI plus 1% increase for the period 1 December 2012 to 30 November 2013. The CPI*** (for the lowest quintile) six weeks prior to 1 December 2012 has been 6,4%.This means that wages for this period was calculated as follows: CPI (for the lowest quintile) plus 1% for Area A = 6,4% + 1% =7.4%.
 

The rate is for Urban Areas (Area A)

 

EMPLOYMENT EQUITY

We will be running a public Employment Equity Committee Training course at our offices on Thursday the 7th February 2013 from 08h30 to 13h30 at a cost of R550-00 (excl VAT) per delegate which includes the venue, training material, refreshments and a light lunch.

This is a 5 hour programme which is applicable to any person who will be responsible for the implementation of Employment Equity processes or will be a committee member on the Employment Equity and Skills Development Committee. Please contact Tessa at our offices on 011-452 1707 for more information.

 

THE MONEY SKILLS GAME

As part of our Life Skills Training programme and Leadership Courses we have been asking our delegates to play the “Money Game”. The game is a South African simplification of the game “Cashflow” designed by Robert Kiyosaki who wrote the book “Rich Dad, Poor Dad”. The delegates have all indicated that the game teaches the lessons that it is designed to teach, i.e. that debt on liabilities is unwise and that investments which lead to the generation of passive income, whether through personal development, shares, investment in property or business opportunities should be part of everyone’s financial planning. We are using the game to encourage our delegates to become aware of the pitfalls of being indebted and to think about planning for retirement.

The debt trap is a growing problem in South Africa. Many people I speak to are not aware that a micro loan from any of our leading banks could attract an interest rate of more than 30%. The Banks do not disclose the interest rates on loans on their websites. We have seen garnishees that cost 60% of the loan amount per annum once legal and collection fees are added.

The game can be played by anyone who has the ability to add, subtract and workout a percentage, but is recommended to be played by anyone over the age of 14. We suggest that every teenager should be exposed to the game. The game is available for less than R100-00 and can be bought from Educational Toys. Their website is www.educationaltoycentre.com.

We wish you a successful year in 2013.
Desrae & staff

October 2012

We are entering the last quarter of the year, and we do live in interesting times. The strikes are relentless and becoming increasingly violent. Legislation is being challenged and in the HR space life continues to be very challenging.

 

NEW LEGAL DEVELOPMENTS
UNEMPLOYMENT INSURANCE FUND

The Minister of Labour has increased the UIF ceiling on the scale of benefits and contributions, from R149 736 per annum to R178 464 per annum.

This means that:

  • The maximum monthly contribution per employee will be become R148-72 per month.
  • The maximum employer contribution will be R148-72 per month, i.e. 1% of R14 872-00 per month

Employees earning below R14 872-00 will continue to contribute 1% of salary.

This is good news as it means that the maximum benefit from UIF will increase from R4 741-64 to R5 651-36 per month. This can be claimed for eight months. The fund maximum was last increased in February 2008.

 

BROAD BASED BLACK ECONOMIC EMPOWERMENT

The Department of Trade and Industry has announced that Cabinet has approved changes to the BBBEE codes. The revised codes will be open for public comment from 2 October 2012 for 60 days. The proposal is to reduce the measurement elements from 7 to 5. This will be achieved by:

ELEMENT CHANGE SCORE STATUS
Ownership No change to targets 25% Priority
Management Control Merging with employment equity with slightly different targets. Junior management excluded from measurement 15%
Skills Development Target increasing from 3% of payroll to 6% of payroll. New target for absorbing learners into the company as employees 20% Priority
Enterprise and Supplier Development Merging procurement with Enterprise Development. Procurement targets increased to 80%. More focus on Black owned suppliers 40% Priority
Community Social Investment Moving to recognise initiatives which facilitate capacity to work and creates sustainable access to the economy for its beneficiaries 5%
Total 105%

Bad news is that QSE’s will have to comply with ownership and one other of the priority elements. If a company does not comply with one of the priority elements they will be moved down one level (for QSE’s) two levels (for Generic Companies). Also, in order to qualify as a BBBEE Company you will have to score more than 40% on the scorecard,

The good news is that the threshold limits will change as follows:
Exempt Micro Enterprises: R0 – R10 Million
Qualifying Small Enterprises: R10 Million – R50 Million
Generic Enterprises: More than R50 Million.

Cabinet has also approved the amendment to the Broad-Based Black Economic Empowerment Bill which has now been referred back to parliament and together with the Amendments to the Basic Conditions of employment Act and the Labour Relations Act, are targeted to be passed before the end of the year.

 

SKILLS DEVELOPMENT

TThe skills development act was promulgated with effect from 11 May 2012. The Quality Council for Trades and Occupations is in the process of setting up policies and procedures and recruiting its management team.

 

EMPLOYMENT EQUITY AMENDMENT BILL

The proposed Amendment to the Employment Equity Bill was approved by cabinet on the 9th September 2012 and has been published on the Department of Labour Website. The purpose of the amendments is to further enforce the Act by expanding the reasons for which a penalty can be imposed on a company who fails to comply with the act and to increase the fine.

Currently a company can be fined if it is found to have not complied with the following clauses of the Act:

  • Clause 16: Consultation with Employees
  • Clause 19: Analysis
  • Clause 20: Employment Equity Plan
  • Clause 21: Report
  • Clause 22: Publication of Report
  • Clause 23: Successive Employment Equity Plans

In addition to the above clauses it is proposed that the fines be extended to the following additional clauses:

  • Clause 24: Designated Employer Must Assign Manager
  • Clause 25: Duty to inform
  • Clause 26: Duty to keep Records
  • Clause 27: Income Differentials
  • Clause 43 (2): the right of the Director General to review the Companies records and to request meetings with the employer and any employee or trade union consulted in terms of section 16
  • Clause 44 (b): the Director-Generals recommendation to an employer after conducting a review

The Department is suggesting a minimum fine of R1.5 Million and a maximum fine of 10% of Turnover for companies who do not comply with these clauses. The bad news is that the Act is suggesting that all companies report to the Department of Labour every year. The good news is that the turnover threshold for compliance is set to increase which means that some smaller companies will become exempt.

 

UNEMPLOYMENT INSURANCE FUND ANNUAL REPORT

The UIF Annual Report was recently published on the Department of Labour’s website and it makes interesting reading. In the 2011 financial year the fund received contributions of R12.44 Billion, up 10% on the contributions received the year before. The fund currently has total assets of R65.4 Billion. They are therefore far from being bankrupt, which is the perception of most employees.

In the last year they paid out the following benefits:
Unemployment Benefits:
(Paid to employees who are dismissed or retrenched)
R4.3 Billion
Illness Benefits:
(paid to employees who are ill and have exceeded sick leave entitlements)
R 234 Million
Maternity Benefits:
(Paid to mothers on maternity leave)
R 707 Million
Adoption Benefits:
(Paid to employees who adopt a child under the age of 2)
R 874 000-00
Dependants Benefits:
(Paid to the dependents of employees who die in service)
R 315 Million
Total R5.6 Billion

A total of 705 855 people lodged claims during the year compared with 732 158 last year. This is out of a total of 8 125 575 registered employees. This means that 8.7% of the working population claimed benefits last year, of which 6.84 claimed unemployment benefits.

As they have funds in excess of their requirements, the UIF fund has financed a number of initiatives to create jobs and contribute to the skills development requirements of the Country. So, in addition to paying UIF Benefits the UIF Fund has contributed:

  • R1.5 Billion to the IDC for the purpose of job creation
  • R327 Million to the Training-Lay-Off Scheme to assist retrenched employees to be retrained
  • R129 Million has been set aside to assist the Mining Qualifications Authority and Merseta to train 2 500 artisans. Of this R5.5 Million has already been withdrawn.

This does seem to be money going in the right direction and the dedication of the UIF staff to prevent fraudulent claims is to be congratulated.

 

PERFORMANCE MANAGEMENT

We have recently formed an alliance with Select Strategy Inc., a company based in Boston USA. We have entered an agreement to market their Computer Based Performance Management System to our clients. It is a system which can be adapted to any work place and allows companies to control and drive their performance management measures more effectively. If you are interested in seeing a demonstration of the system please contact Desrae or Kevin.

 

Kind regards,
Desrae & staff