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.
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
- 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:
- Matching work seekers with available work opportunities;
- registering work seekers;
- registering job vacancies and other work opportunities;
- facilitating the placing of work seekers with employers or in other work opportunities;
- advising work seekers on access to education and training;
- advising workers on access to social security benefits;
- providing specialised services to assist vulnerable work seekers;
- 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;
- facilitating the employment of foreign nationals in a manner that is consistent with the object of this Act and the Immigration Act; and
- 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.
- 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.
- 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-
- to promote a culture of productivity in the workplace;
- to develop relevant productivity competencies;
- to facilitate and evaluate productivity improvement and competitiveness in workplaces;
- to measure and evaluate productivity in the workplace;
- to maintain a data-base of productivity and competitiveness systems and to publicise these systems;
- to undertake productivity-related research;
- to support initiatives aimed at preventing job losses; and
- to perform any other prescribed function.
- To establish the Supported Employment Enterprise to Promote the Support of work for Disabled persons.
The functions of Supported Employment Enterprises are to
- facilitate supported employment;
- provide work opportunities for persons with disabilities;
- 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
- 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.
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.
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:
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.
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.