January 2010

2009 has been a difficult year for most of our clients. Some have really felt the recession and have experienced retrenchments, short time and other cost saving exercises such as increase freezes and decisions not to pay bonuses. Other Companies have not felt any difference in their trading operations, but somehow we have all had to work harder and overcome many more obstacles.

Of major concern to us is the increase of theft and fraud that our clients have experienced, both in terms of external break-in’s (which we also experienced) as well as internal fraud, often by trusted staff. Disappointingly, the police do not seem to be particularly interested in investigating these incidents. Putting in place water-tight systems and controls to uncover fraud as soon as it takes place has to be a focus for all of us.



We have been developing our services into other areas and now have a significant presence in Pretoria, Klerksdorp and through an association with Siyavuma Consulting, in Cape Town. For more information please consult our website at www.connold.co.za



We will be focusing on ensuring that Workplace Skills Plans have been achieved and planning for training for the 2010/11 training year in the first quarter of next year is to be an area of focus. There will be major changes to the SETA landscape which is expected to be effective from March 2011. From 1st November 2009 the Department of Higher Education and Training assumed responsibility for Skills Development and Training. This means that the Minister is now responsible for all the Skills Development Functions which previously were managed by the Department of Labour. THETA (Tourism, Hospitality Education and Training Authority) in their newsletter announced that in their meeting with Minister Blade Nzimande they were informed of the following:

The National Skills Development Strategy (NSDS) will be extended for a year, from 1 April 2010 until 31 March 2011, and the term of all SETAs will also be extended for the same period. Publication of both the Government Notice extending the current Strategy targets to March 2011 and the Gazette under the Regulations Regarding the Establishment of the SETAs in terms of the Skills Development Act, 1998 (Act No. 97 of 1998) to extend the term of the SETAs, are scheduled to take place in December 2009. The reason for the extension of the Strategy and the SETA term for an additional year is because:

  1. The Minister aims to conduct an in-depth analysis and review of the objectives and targets of the current National Skills Development Strategy and in doing so engage widely with various stakeholders. This is to ensure that the objectives and targets of the next National Skills Development Strategy are not only aligned to the strategic goals of government for 2009 – 2013 but also to the needs of industry.
  2. The Minister would like to use the extension to strengthen the partnerships between SETAs and Further Education & Training (FET) Colleges. Stronger partnerships between SETAs and FETs will ensure that both occupational and vocational qualifications and training interventions are aligned to both the country’s and industry’s needs. Stronger partnerships between SETAs and FETs will ensure that the National Skills Development Strategy is implemented effectively and its’ objective and targets are efficiently achieved and exceeded.
  3. The Minister would like to make use of the one year extension to ensure that adequate planning is done, where needed capacity building takes place and the foundations are laid for the smooth integration of Training and Higher Education. The merger of the SETA Environment with Higher Education needs to be done effectively and cause as little disruption as possible to the provision of education and training in South Africa.

This means that the SETA’s will continue to exist in their current form until 31st March 2011. Hopefully the plans for Skills Development will be made clear during the course of next year. In the meantime we need to continue to use the systems currently in place to claim grants.



In order to address the loss of jobs in South Africa, a Training Layoff Scheme has been put in place and is aimed at employers that are in distress due to the economic situation and their workers who may as a consequence be at risk of retrenchment. Employers that are in distress are those who experience financial difficulty due to the downturn and who are considering retrenchments and possible closure.

In its guideline on the Scheme, the CCMA has announced that a National Jobs Fund, with an initial allocation of R2.4 billion, has been set up to finance the training layoff scheme. The funds for the National Jobs Fund have been made available by the National Skills Fund (NSF) and the Unemployment Insurance Fund (UIF). The key design elements of the scheme that have been agreed to by the social partners and as announced by the President on 5th August, are as follows:

  • A temporary suspension of work used for training;
  • Retention of the employment contract;
  • Training to be flexible, but linked to the skills needs of the employer;
  • A training allowance paid to the worker;
  • Employer carries cost of a basic package of social benefits.

A training layoff scheme is based on the principle that it will be available to vulnerable workers and employers who are affected by the economic recession. In order to ensure its successful implementation, it will rely on the collective efforts of the following entities:

  • Commission for Conciliation, Mediation and Arbitration (CCMA) – responsible for facilitating, overseeing or verifying all training layoff consultations and agreements. The CCMA will ensure that training layoff agreements comply with the general rules and procedures of the scheme;
  • SETAs will be responsible for facilitating the provision of training, funding training costs, applying to the NSF for training allowances and disbursing funds to employers;
  • The NSF (with financial support of the UIF) will be responsible for processing applications for training allowances and, in certain cases, training costs;
  • The Department of Trade and Industry (“the DTI”) will be responsible for ensuring that distressed sector support is coordinated with the training layoff scheme;

Employers stand to gain from a training layoff by reducing payroll costs for a period so as to ensure that the employer remains afloat and has an opportunity to strengthen itself and therefore be in a position to reabsorb workers. Employers also have an opportunity to build the skills of their workers at little cost. The training layoff scheme should not be used opportunistically by employers to reduce costs irrespective of their financial situation.

Workers under threat of retrenchment should consider a training layoff as a serious alternative to retrenchment, rather than opting for a severance package. Workers gain further skills through a training programme and their access to basic social benefit package is maintained at no cost to them. In addition, they retain their contract of employment for longer.
Anyone who feels that they would like to access this scheme and believe that their company will qualify should contact Desrae.



Don’t forget that major changes to the way that car allowances are taxed will be implemented in March 2010. We remind you of the note from Treasury which stated:

Travel (car) allowances: Repeal of the deemed kilometre method: The deemed kilometer method for deducting travel expenses will be repealed with effect from 1 March 2010. The repeal of this method will eliminate an unintended subsidy for commuting by car (a personal expense). Individuals who use their private vehicles for businesses purposes and who receive a travel (car) allowance will still be able to claim such expense by maintaining a logbook of business kilometres travelled. The PAYE system for travel (car) allowances will be adjusted so that 80 per cent of this allowance will be subject to PAYE. The 80 per cent rule will prevent under-withholding from taxpayers once the deemed kilometre method is repealed.

Please ensure that all the affected employees are made aware of this provision and the effect that it will have on their packages and on the tax liability if they do not keep a log book.



The Tobacco Control Amendment Act was promulgated in August this year. This amendment further restricts where tobacco products can be sold and who to, but also lays out stricter smoking regulations in the workplace and in public places and also has a more onerous fine structure.

The new Act requires that all employers ensure that:

No person may smoke in a “public place”, which is defined to include a “workplace”. A “workplace” includes “any indoor, enclosed or partially enclosed area in which employees perform the duties of their employment” and further includes “any corridor, lobby, stairwell, elevator, cafeteria, washroom or other common area frequented by such employees during the course and scope of their employment.”

The definition still excludes any area specifically designated by the employer as a smoking area. Such an area may not exceed 25 percent of the total floor area of the public place and must be separated from the rest of the public place by a solid partition and an entrance door on which the sign “SMOKING AREA” is displayed, written in black letters (at least 2cm high and 1.5cm in breadth) on a white background. The ventilation of such area must be directly exhausted to the outside.

An employer has an obligation to ensure that:

  • employees may object to smoking in the workplace in contravention of the Act without retaliation of any kind;
  • employees who do not want to be exposed to tobacco smoke in the workplace are not so exposed;
  • it is not a condition of employment, expressly or implied, that any employee is required to work in any portion of the workplace where smoking is permitted;
  • employees are not required to sign any indemnity for working in any portion of the workplace where smoking is permitted;
  • no person under the age of 18 years is present in any portion of the workplace where smoking is permitted;
  • prescribed signs are displayed and shall make the prescribed public announcements in order to inform any person who enters or is in such place or area of any prohibition on smoking. The prescribed messages designating the smoking and non-smoking areas must include the message, “SMOKING OF TOBACCO PRODUCTS IS HARMFUL TO YOUR HEALTH AND TO THE HEALTH OF CHILDREN, PREGNANT OR BREASTFEEDING WOMEN AND NON-SMOKERS. FOR HELP TO QUIT PHONE (011) 720 3145” and the warning, “ANY PERSON WHO FAILS TO COMPLY WITH THIS NOTICE SHALL BE PROSECUTED AND MAY BE LIABLE TO A FINE.”;
  • employers must have a written policy on smoking in the workplace and are also free to totally prohibit smoking in the workplace; and
    any employee convicted of failing to comply with the obligations imposed by the Act or its regulations may be liable to a fine not exceeding R500. Similarly, any employer so convicted is liable to a fine not exceeding R50 000.

Employers are encouraged to take note of, and ensure compliance with, these provisions in order to avoid prosecution. Section 2(7) of the Act incorporates, into Section 2 of the Act, Sections 80 to 89 of the National Health Act, 2003 (“the NHA”). These sections provide for the appointment of health officers whose duty it is to monitor and enforce compliance with the NHA and, by its incorporation, the Act. This gives inspectors wide-ranging powers to inspect premises, question any person that may have information relevant to the inspection and request documentation. They are, accordingly, entitled to request a copy of any employer’s smoking policy. Any person who unlawfully prevents entry into a premises, obstructs or hinders the health officer, refuses to provide a health officer with information, knowingly gives false or misleading information to the health officer or fails to comply with a compliance notice issued to him or her, commits an offence and is liable, on conviction, to a fine and/or to imprisonment not exceeding 5 years.

It is advisable that any existing Smoking policies are revised to ensure compliance with the new regulations.



The number of accredited rating agencies are increasing as SANAS completes their registration processes. However, it is useful to note that although compliance with the BBBEE Scorecards is voluntary, a number of Industry Charters have been gazetted and that these fall into two categories:

Section 9 Charters are compulsory on any employees in these industries. The gazetted charters are for:

  • Tourism Sector Code – Gazetted on 22 May 2009
  • Construction Sector Code – Gazetted on 5 June 2009
  • Forest Sector Code – Gazetted on 12 June 2009
  • Integrated Transport Sector Code – Gazetted on 21 August 2009.12.23

Anyone in these industries must be measured in terms of the code for the Industry.

The Draft Code for the Chartered Accounting Industry was gazetted on 30 October 2009 and should be finalised within 60 days.

Section 12 Charters are published for information purposes only and used as a statement of intent by industry players. These are:

  • Tourism Sector Code – Gazetted on 22 May 2009
  • Construction Sector Code – Gazetted on 5 June 2009
  • Forest Sector Code – Gazetted on 12 June 2009
  • Integrated Transport Sector Code – Gazetted on 21 August 2009.12.23

When developing a strategy with regard to your BBBEE targets you should take into account the requirements recommended by your sector.

NOTE: Connold and Associates have listed a number of Community Social Investment projects and Enterprise Development projects that we are involved with on our website. If anyone would like to add to this list or contribute to these projects, please contact Andrea at our office.

Leave a Reply