Section 34 of the Basic Conditions of Employment Act (BCEA) outlines the prerequisites that must be satisfied before any deductions can be made from an employee’s remuneration.

What are the consequences of deducting money from the employee’s remuneration without his/her consent?

The employee has the right to raise a dispute internally regarding the alleged unlawful deduction. If such a dispute is raised internally, it must be dealt with, and feedback must be provided to the employee. If the dispute is not resolved, the employee has the right to refer the dispute to an external dispute resolution.

Which external dispute resolution has the right to deal with a dispute regarding alleged unlawful deductions?

Section 77 of the BCEA provides that the Labour Court has exclusive jurisdiction over all disputes arising from the Act.  Therefore, in terms of Section 77, the Labour Court has jurisdiction to deal with disputes relating to unlawful deductions.

This principle was confirmed in the matter of O’Reilly v CCMA and Others JR 2395 19, where the Court held that “there is no provision in the BCEA that says that the CCMA has jurisdiction to determine a claim regarding an alleged breach of Section 34(1) of the BCEA”.

Does the CCMA have jurisdiction?

No, the Commission for Conciliation, Mediation and Arbitration (CCMA) does not have jurisdiction to adjudicate a dispute for unlawful deductions.  If a matter is referred to the CCMA where the employee is disputing the deductions made, a point in limine can be raised in which arguments are to be lead that the CCMA lacks jurisdiction and that the matter can only be entertained by the Labour Court.

The CCMA will only have jurisdiction to adjudicate matters that relates to monies owed to an Applicant in terms of Section 73A, which includes salaries, bonuses, amounts due in terms of the National Minimum Wage Act (NMWA), and any amounts that the employer is obligated to pay in terms of the BCEA, but excludes deduction disputes.

Tips to keep in mind:

• Employers may lawfully deduct specific amounts from an employee’s salary with their written consent and if required or permitted in terms of a law, collective agreement, court order or arbitration award.
• The amount deducted from an employee’s salary may not exceed one-quarter of the employee’s remuneration in money (per payment).
• The CCMA lacks jurisdiction to adjudicate disputes regarding Section 34 of the BCEA relating to deductions made, and the dispute should be referred to the Labour Court instead.

Labour legislation strictly regulates any deductions made from an employee’s remuneration, and employers must guard against deducting any money without following the correct procedure. 

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The evolution of the workplace has seen a significant shift in recent years, especially with the increasing acceptance of remote work. Initially born out of necessity during global crises such as the COVID-19 pandemic, working from home has transformed from a temporary solution to a permanent feature in many companies in South Africa. From an employer’s perspective, this shift not only challenged traditional business models, but also unlocked an abundance of opportunities and benefits for both employers and employees.

Advantages of remote work

• Productivity: One of the most significant advantages observed by employers with remote work is an increase in productivity. Contrary to initial apprehensions that employees might be less productive outside a traditional office setting, many companies have reported the opposite. With fewer office distractions and reduced commute times, employees are often able to focus better and complete tasks more efficiently.

• Cost savings: Transitioning to remote work can also lead to substantial cost savings for businesses. Reductions in office space requirements translate directly into decreased overhead expenses such as rent, utilities, and office supplies. Similarly, employees benefit by saving on commuting costs, parking fees, and daily meal expenses. For instance, many companies have adopted permanent remote or hybrid models, anticipating savings from reduced office space needs. These savings can then be redirected into other strategic areas such as technology upgrades, employee training, and development, or even increasing profitability.

• Employee satisfaction and retention: Offering remote work can significantly enhance employee satisfaction and retention. It allows employees to maintain a better work-life balance, reducing stress and burnout. Employers have noted that remote work policies have become a key factor in attracting and retaining top talent. Moreover, flexible working conditions are particularly attractive to the millennial and Gen Z workforce, who prioritise flexibility and personal well-being over more traditional workplace benefits.

Navigating challenges

Despite these benefits, remote work does present certain challenges from an employer’s perspective.

• Communication and collaboration: Ensuring communication and collaboration in a remote setting requires the right technology and a shift in management practices. Employers must invest in secure and efficient communication tools and platforms to facilitate seamless teamwork. Additionally, maintaining company culture and employee engagement without physical interaction demands an innovative approach, such as virtual team-building activities and regular check-ins.

• Leadership skills: It is essential to equip managers with the skills needed to effectively lead remote teams. They must excel in managing team dynamics and performance, even in the absence of traditional, in-person interactions. This requires placing a greater emphasis on results over procedures and cultivating a culture of trust and accountability.

Moving forward

As we move forward, the future of work appears to be hybrid – a blend of remote and in-office arrangements. This model promises to combine the best of both worlds, providing flexibility while retaining the benefits of physical office space for collaboration and social interaction. For employers, the key to successful integration of remote work lies in adapting leadership styles, investing in technology, and maintaining ongoing communication with employees.

While the transition to a remote or hybrid work environment poses challenges, the advantages, from increased productivity and cost savings to enhanced employee satisfaction, are compelling. Employers who embrace and adapt to these changes are likely to thrive in the evolving business landscape, marking a significant shift in how work is perceived and conducted in the modern era.

Contact the LWO for any advice or assistance!

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EMPLOYERS DUTIES:

1. Provide an employee with a contract:
An employer must supply an employee, when the employee commences employment, with the following particulars of employment in writing:

•  full name and address of employer;
• name and occupation (with a brief description of the work) of the employee;
• place of work;
•  commencement date;
• ordinary hours and days of work;
• remuneration – wages, overtime, other cash payment, any payment in kind, etc.;
•  deductions;
• frequency of payment;
•  leave;
• statutory notice periods;
•  a list of documents that form part of the employment contract;
• description of any council or sectoral determination applicable; and
•  period of employment with a previous employer that counts towards the current employment period.

Tip: Take care that the contract is not less favourable than the applicable legislation which should be adhered to.

•  employer’s name and address;
• employee’s name and occupation;
• period of payment;
•  employee’s remuneration in money and wage rate;
•  hours worked – ordinary hours, overtime, Sunday time and hours worked on a public holiday;
• deductions;
• actual amount paid to the employee.

Tip: Records must be kept for at least 3 years from date of last entry.

Risk: Any person that is found guilty of non-compliance with this act will be liable to a fine of up to R50 000.00 and/or imprisonment

The Act requires designated employers to:

• Consult with employees.
• Conduct an analysis.
• Prepare an employment equity plan.
•  Report to the Director-General on progress made in implementing its employment equity plan.

Risk: Any designated employer that is found guilty of non-compliance with this act will be liable to a fine of up to R2,7 million or 10% of the employer’s annual turnover, whichever is the greatest

5. Register for UIF:
Registration for UIF must be done as soon as employment of the employee commences. 1% of the salary is deducted from the employee’s salary as well as an equal contribution by the employer monthly, which is the employer’s responsibility to make the deductions and pay the monies over.

Risk: The UIF will be able to levy a fine of 10% on all unpaid contributions, and the financial committee will also calculate interest that is due should an employer not comply with the legal requirements

6. Report any injuries on duty, no matter how small:
COIDA applies to all employers and casual and full-time employees who, as a result of a workplace accident or work-related disease are injured, disabled, or killed or become ill. An employer carrying on business in South Africa, must register with the Compensation Commissioner. An employer must notify the Compensation Commissioner of an accident (personal injury, illness or death of an employee) within 7 days after having received notice of an accident or becoming aware of an accident that took place.

Tip: An employer only has to pay 75% of employee’s earnings for the first 3 months of injury or illness (temporary total/partial disablement), which can be claimed back from the Compensation Commissioner;

7. Pay your Skills Development levy:
If the employer has staff registered for PAYE and the annual payroll exceeds R500 000.00 per annum, the employer must register with SARS and pay a skills development levy of 1% of the monthly payroll.

Risk: SARS will impose both interest and penalties for late or non-payment of skills development levies. A labour inspector may order the company to stop work if the company is found guilty of illegal practices and/or a discretionary fine can be imposed by a court and/or 1 year imprisonment

1. REGISTRATION:

• Bonus tip, if by some miracle you’ve started but never registered, you still can and should but will face fines.
• Should you be in a specific industry, you may find yourself having to comply with a few extra compulsory registrations, contact us today to ensure where you would need to be registered according to your industry.

2. START:

• Each player must ensure that every employee has a signed employment contract.
• Employment contracts must comply with all applicable legislation.
• Just like with chess it’s the moves we make in the beginning that determine the game later. That why Players can gain advantages by using legislation to their benefit when drafting contracts, bonus points – no fines.
• Employment contracts must address various aspects like remuneration, leave types, overtime, retirement age, duties and the very important disciplinary code and procedures with policies (smoking, harassment, cell phone use etc.)

• attendance registers;
• compliant salary slips;
• leave forms;
• disciplinary codes.

3. PROCEDURES:

By following the correct procedures, benefit is obtained, while neglecting them leads to penalization. (Example – an employee stole from you and you fired him without a fair disciplinary hearing? Move straight to the KVBA and forfeit your next turn.)

4. COMPLIANCE:

• Players must ensure they pay at least the applicable minimum wage.
• Compliance with the Employment Equity Act, Occupational Health and Safety Act and the Skills Development Act is absolutely necessary.
• Players need to know their rights concerning trade unions and how to act when picking up a trade union negotiation card.

Use the handy checklist below to see if you’re set up for success:

When an employee’s alleged misconduct in the workplace comes to the employer’s attention, it is necessary to investigate.  This ensures that the employer makes an informed decision based on the facts.  The purpose of the investigation is to establish if there is enough evidence to prove the alleged misconduct, and if there are sufficient grounds for a dismissal.  However, employees are entitled to an expeditious finalisation of disciplinary proceedings.

Disciplinary hearings:  balance is key

Balance is key between conducting a thorough investigation in pursuit of relevant facts, and finalising the disciplinary process in a timely manner and avoiding unreasonable delays.  Failure to do so may result in both substantive and procedural unfairness towards an employee.  Preferably, an investigation must be without any delay and not unnecessarily dragged out. An investigation depends on the nature and complexity of the case, the amount of evidence, and the availability of witnesses and other evidence.

Don’t rush disciplinary hearings

Employers should be careful of rushing the proceedings to schedule and conduct a disciplinary hearing, as it can lead to:

• Incorrectly or poorly drafted charges – the charge sheet is very important, and all charges listed must be factually correct. Once all the information is obtained and the employer is satisfied that there is sufficient evidence to charge the employee with, it is time to formulate the charges.  Ensure that each charged misconduct contains enough detail of the actual offence, including the time, place and a brief description. An employee must be able to prepare for the disciplinary hearing based on these charges.
• Witnesses required to prove the misconduct being unavailable or insufficiently prepared to give evidence.

• Insufficient evidence presented at the hearing – take note that the chairperson can only make a finding based on the facts and evidence presented during the disciplinary hearing and cannot rely on speculation or make inferences in the absence of sufficient facts and evidence relating to the misconduct.

Avoid unreasonable delays

Unreasonable delays in the process should be avoided and whilst investigations into misconduct must be thorough, the employee’s right to have the matter finalised in a timely manner, must be borne in mind.  The Labour Court considers the following factors (to be applied holistically) in determining whether a delay in disciplinary hearings renders the process unfair:

• The delay in finalising the proceedings must be unreasonable. The longer a delay, the more likely it is to be found to be unreasonable;
• The employer must provide a reasonable explanation for the delay. An inexcusable delay will lead to a finding that the process was unfair;
• Any steps taken by an employee, or the failure to take steps during the disciplinary process, to assert the right of the employee to a fair and speedy process;
• Whether or not the delay caused material prejudice to the employee by considering the impact of the delay on the employee’s ability to present a proper case;
• The nature of the offence.

Suspension

If the employee’s conduct is of a very serious nature, the employer is entitled to suspend an employee on a precautionary basis pending an investigation, especially if there is a possibility that the employee can interfere with the investigation in any way, disrupt the employer’s operations, or intimidate possible witnesses.  Take note that precautionary suspension is with full pay and benefits and that the employee is not being punished.

Take note

Discipline is a vital aspect to ensure a workplace functions effectively.  An employer cannot dismiss an employee under any circumstances, even with valid reason, without first holding a disciplinary hearing. This will ensure that a fair procedure is followed and that there is substantive reason (proof) for the employee to be dismissed.

Contact the LWO for any advice or assistance!

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There are different ways in which an employment contract may terminate. It can either be by way of the employee resigning, reaching the retirement age set in the workplace, the employee being dismissed for misconduct or retrenched due to operational reasons. There are certain requirements for the employer under each of these circumstances and it is important for an employer to understand what payments should be made to an employee upon termination to avoid non-compliance with legislation.

Resignation by the employee

If an employee resigns, it should preferably be in writing. If the employee resigns with immediate effect, the employer may institute civil action for any damages suffered as a result of the employee not working a notice period. The employer does not have to remunerate the employee for the notice period when an employee resigns with immediate effect, but the employer cannot withhold the employee’s final salary under these circumstances.  Payment for days worked and accumulated leave will be due to the employee.

Employee reaching retirement age

It is of paramount importance for an employment contract to be clear on the retirement age within the business. If there is no retirement age, the employer should institute a retirement policy. The statutory notice period is still applicable when an employee retires. The employee is paid for the notice period that they work. Accumulated leave will also be due to the employee. An employee is not paid for years of service. Any ex gratia (out of goodwill) payment is solely at the discretion of the employer and is not a legal requirement.

Dismissal of an employee

Firstly, before any form of dismissal may take place, a disciplinary hearing must be held. Once the employee has been found guilty and there are sufficient grounds to proceed with a dismissal, an employer may proceed with a sanction of this nature. When an employee is dismissed, the employee should receive his/her salary up to the last working day, including the finalisation of the disciplinary hearing. Accumulated leave will also be due to the employee. No notice period is applicable when an employee is dismissed for misconduct.

Retrenchment of an employee

Correct procedures have to be followed before an employee may be retrenched. A retrenched employee is entitled to accumulated leave, notice pay (if applicable) and severance pay. If an employee is not required to work a notice period, the employee should be paid for this period. An employer must pay an employee severance pay equal to at least one week’s remuneration for every completed year of service. Only when an employee is retrenched, is it a legal requirement for the employer to pay for years of service.

The employer has an obligation to provide an employee with a certificate of service and final salary advice upon termination of employment. A UI19 document has to be completed and submitted to the Department of Employment and Labour.

Contact the LWO for any advice or assistance!

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