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
|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 turnover|
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
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.
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 –
- Is replacing another employee who is temporarily absent from work;
- Is employed on account of a temporary increase in the volume of work which is not expected to endure beyond 12 months;
- 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;
- Is employed to work exclusively on a specific project that has a limited or defined duration;
- Is a non-citizen who has been granted a work permit for a defined period;
- Is employed to perform seasonal work;
- Is employed for the purpose of an official public works scheme or similar public job creation scheme;
- Is employed in a position which is funded by an external source for a limited period; or
- 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.
Please contact our offices for assistance on any of the following:
- Contingency plans for work stoppages
- Labour employee relations strategy
- Application of disciplinary and counselling Processes
- Progress to Company Vision for the future Workplace
- Training on labour relations
- Negotiation of contracts
- Counsel supervisors
- Assistance with CCMA matters
Remember that the Skills Development Submissions are due before the 30th April of every year 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 April 2016 to 31 March 2017 which is a period of 12 months.
For assistance in planning your training and recording your training report, please contact Tessa in the office.
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%||R 253.73||R 1,098.65|
|121 – 240||69%||R 507.43||R 2,197.17|
|NQF 3||0 – 120||17%||R 253.73||R 1,098.65|
|121 – 240||40%||R 477.88||R 2,069.22|
|241 – 360||53%||R 782.33||R 3,387.49|
|NQF 4||0 – 120||13%||R 253.73||R 1,098.65|
|121 – 240||25%||R 507.49||R 2,197.43|
|241 – 360||53%||R 782.33||R 3,387.49|
|361 – 480||56%||R 1,141.75||R 4,943.78|
|NQF 5 to 8||0 – 120||8%||R 253.73||R 1,098.65|
|121 – 240||18%||R 549.72||R 2,380.29|
|241 – 360||38%||R 822.49||R 3,561.38|
|361 – 480||38%||R 1,158.70||R 5,017.17|
|481 – 600||49%||R 1,480.05||R 6,408.62|
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 Tessa at our office.
- Provision of HR administration and project services to companies who require a professional service, but do not have the need for a full time Human Resource Employee.
- Availability of skilled personnel to meet the needs of your company
- Access to professional advice at senior HR Levels
- Completion of day to day Human Resources administration
Payroll Management Services:
- Outsourced Executive Payroll
- Small to medium sized company Remuneration Management, including electronic payment of benefits, levies and tax
- Human Resources Reporting, to facilitate:-
- Employment Equity Management
- Skills Development Management
- IR Management
- Leave 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:
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.