Employers Duties

Employers Duties

Employers Duties

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.

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2. To pay the employee’s remuneration and provide a payslip:
Employers are required to pay their employees at least the National Minimum Wage or as directed by their bargaining council if applicable. Hours of work, leave, sick days, overtime and deductions need to be calculated meticulously. The employer should provide the employee with a payslip that includes the following details:
  •  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.

3. To ensure that working conditions are safe and healthy:
The Occupational Health and Safety Act clearly stipulates that every employer will provide and maintain, as far as reasonably possible, a working environment that is safe and without risk to the health of employees. All employees must be aware of and understand the Occupational Health and Safety Act.

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

4. To ensure that the Employment Equity Act is complied with:
The Employment Equity Act applies to all employers and employees in regards to the prohibition of unfair discrimination.

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

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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

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Monopoly: Labour Law Edition (South Africa)

Monopoly: Labour Law Edition (South Africa)

Monopoly: Labour Law Edition (South Africa)

In this version of Monopoly, players not only build their business empires but also navigate the complex world of labour laws.

1. REGISTRATION:

Before players can start, they must register with the Compensation Commissioner and the Unemployment Insurance Fund.
  • 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:

It’s easy to hit the ground running and start rolling the dice with your business, sometimes we don’t have other options, but this will come to haunt you later. What do we need to do to start then?
2.1. Employment Contracts:
  • 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.)
2.2. Documentation:
Players need to ensure they always have certain documents on hand, to be ready for a visit from the inspector and risk receiving a fine, or worse, being sent to jail. These documents include:
  • attendance registers;
  • compliant salary slips;
  • leave forms;
  • disciplinary codes.
Players must also keep copies of relevant legislation like the Basic Conditions of Employment Act, Employment Equity Act, Occupational Health and Safety Act, and personnel files.

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3. PROCEDURES:

Okay, we have everything we need to get started, but there are still rules to follow during gameplay. Players must follow correct procedures for disciplinary hearings, appeals, grievances, appointments, dismissals and on-duty injuries.

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:

To ensure a fair and safe game, it’s important to keep the following in mind, as failure to do so may result in fines, jail time, or both.
  • 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.
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Use the handy checklist below to see if you’re set up for success:

Requirement:

Yes / No:

Registration:

Are you registered for UIF and COIDA?

 

Start:

Does your employees have valid and signed contracts?

 

Do you have a disciplinary code with policies in place?  

 

Do you keep attendance registers, payslips and related personnel files?

 

Do you have posters up for all the relevant legislation?

 

Procedures:

Do you have procedures in place for disciplinary hearings, injuries on duty and grievances?

 

Are they executed properly?

 

Compliance:

Do you pay minimum wage applicable to your sector?

 

Do you comply with EEA, COIDA and OSHA?

 

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Disciplinary hearings:  thorough investigation and expeditious process

Disciplinary hearings: thorough investigation and expeditious process

Disciplinary hearings: thorough investigation and expeditious process

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.

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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.

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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.

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Final payments due upon termination of employment

Final payments due upon termination of employment

Final payments due upon termination of employment

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.

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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.

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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.

 

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Desertion:  follow the correct procedure

Desertion: follow the correct procedure

Desertion: follow the correct procedure

Employers are often faced with employees who simply stay away from work. The question then, is how to deal with it. If an employee does not report for work, the employer has an obligation to take all reasonable steps to determine why the employee is absent.

THE FIRST STEP

The employer’s first step is to contact the employee on all numbers available. If the employee does not answer, attempt to contact the employee again at a later stage.  If this remains unsuccessful, send the employee a message informing him that he is absent without permission, and if his absence is due to an illness, he must confirm this as soon as possible.

The second step

The second step is to inform the employee that he must report back for work as he is absent without permission and/or a valid reason. Provide the employee with a specific date and time when he must report back. Generally, the date will be the next business day.

 

If the employee still does not report for work, and no communication is received regarding his absence, contact the employee again to warn him that he is still absent without permission and/or a valid reason.

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An ultimatum

If the employee is absent for five consecutive days/shifts, send the employee an ultimatum with the following information:

 

  • the date from when he is absent without permission and/or a valid reason;
  • that he is absent for five consecutive days/shifts, which is an indication of his desertion with no intention of returning to work;
  • that the employee is given an ultimatum to return to work;
  • specified date and time at which the employee must report back for work;
  • a warning that further disciplinary action may be taken, which includes a disciplinary hearing and possible dismissal.

NOTICE of hearing

If the employee does not comply with the ultimatum, and still does not report back for work, serve the employee with a notice of disciplinary hearing. The notice can be served by hand, email or electronic message (“SMS” or “WhatsApp”). The notice must also specifically warn the employee that the hearing may continue in his absence if he chooses not to attend.

 

The general rules regarding a disciplinary hearing are valid and must still be followed, even if an employee fails to attend the hearing. If the employee is found guilty of desertion during the disciplinary hearing, this can lead to his immediate dismissal.

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UI-19 certificate: Changing the reason for termination

UI-19 certificate: Changing the reason for termination

UI-19 certificate: Changing the reason for termination

It is a common occurrence for employers to alter the reason for termination on an employee’s UI-19 certificate in order for them to qualify to claim Unemployment Insurance Fund (UIF) benefits, but is it legal?

 

The UI-19 certificate is a crucial requirement for any unemployed person to enable them to claim benefits from the UIF. The reason for termination on the certificate assists the fund to identify and categorise an employee’s right to claim benefits. However, more and more employers are being requested (and complying) to change the reason for termination on former employees’ UI-19 certificates. The reasons for these requests are mainly due to the employees being refused to claim from the fund as the termination reason on their UI-19 certificates disqualifies them from claiming benefits.

Disqualification

Employees are generally disqualified to claim benefits from the fund if they have resigned, retired, are dismissed due to abscondment, or if they have been barred from claiming benefits in terms of the Unemployment Insurance Act 63 of 2001 (UIA). When employees are refused, they turn to employers to change the reason on the certificate to enable them to claim benefits.

Case study – UI-19 certificate changes

Changing the reason for termination on the UI-19 certificate has been discussed in the recent case of Swanepoel v KPMG Services (Pty) Ltd (J494/19) [2021] ZALCJHB 457 whereby the Applicant sought an order compelling the Respondent to change the reason for his termination from ‘involuntary resignation’ to ‘retrenchment’, in order for him to claim UIF benefits.

 

The court ruled as follows:

 

[13] There are two hurdles confronting the applicant. Firstly, the jurisdiction of the Labour Court is regulated by Section 66 of the UIA which provides that: ‘Unless this Act provides otherwise, the Labour Court has jurisdiction in respect of all matters in terms of this Act, except in respect of an offence in terms of this Act’.

 

While Section 64 of UIA provides that:

‘(1) No person may-

  • knowingly make a statement or cause a statement to be made which is materially false or which results in an incorrect payment of benefits in an application for benefits in terms of this Act;
  • wilfully make any false entry on a contributor’s record card or any other book, record or document relating to either a contributor’s employment history or to a contributor’s claim for benefits; or
  • contravene, or refuse or fail to fully comply with any provision of this Act or of any regulation or notice issued in terms of this Act.

(2) Any person who contravenes Subsection (l)(a), (b) or (c) is guilty of an offence.

 

[14] Given my finding that the applicant’s contract of employment terminated on mutual basis in terms of the settlement agreement, the recordal of ‘involuntary resignation’ in the UI-19 form obviously constitutes a false entry in terms of Section 64(1)(b) and a criminal offence in terms of section 64(2) of UIA. As mentioned above, this Court lacks jurisdiction to deal with criminal offences in terms UIA. 

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Fine and/or imprisonment

As seen from the court’s ruling, such false entries made by employers will not only constitute an offence in terms of the UIA but will also constitute a criminal offence. Section 65 of the UIA states that “Any person convicted of an offence in terms of this Act is liable to a fine or imprisonment, or to both a fine and imprisonment.”

 

Employers should thus be wary of the risks involved when changing the reason for termination in order to assist an employee to claim UIF benefits, as any such actions could lead to severe consequences.

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