The employer’s guide to South Africa’s Employment Equity Amendment Act

The employer’s guide to South Africa’s Employment Equity Amendment Act

The employer’s guide to South Africa’s Employment Equity Amendment Act

President Cyril Ramaphosa signed the Employment Equity Amendment Act. This Amendment Act introduces several significant changes that will reshape the landscape of employment practices in South Africa.

Employment Equity Amendment Act – Prominent changes are as follows:

  • Revision of the definition of a ‘designated employer’:
    From 1 September 2023, only employers with 50 or more employees will be considered designated employers. The total annual turnover that was previously also taken into account will no longer be a consideration.

  • Numerical targets for each sector:
    The Minister of Employment and Labour was given the power to identify national economic sectors and establish numerical targets for each sector.

  • Certificate as a compliance requirement:
    The introduction of a certificate as a compliance requirement has significant implications for employers regarding agreements with the state. In order to enter into contracts with government entities, designated and non-designated employers must obtain a certificate of compliance issued by the Department of Employment and Labour.
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With the revised definition of a designated employer, smaller employers will be positively affected by a change in the definition of “designated employer”. Only businesses employing 50 or more employees will have a specific obligation to implement corrective action measures. This change aims to create more opportunities for historically disadvantaged individuals, including marginalised racial and gender groups, by promoting their representation in the workplace.
The Minister’s authority to set numerical targets for different economic sectors means that transformation objectives will be tailored for each industry. This targeted approach seeks to address specific challenges and historical imbalances within each sector. As a result, employees working in sectors such as agriculture, finance, insurance, education and others are likely to witness greater efforts by employers to promote diversity and inclusion, providing them with a more equitable work environment.
The introduction of the compliance certificate indicates a strengthened commitment to the enforcement of fair employment opportunities.
An amendment to section 21 of the Employment Equity Act, which deals with the reports as well as their annual submission by designated employers, omits a specific date for this annual submission. This amendment empowers the Minister to make regulations regarding the requirements for employers when submitting their employment equity reports.
The Amendment Act introduces robust compliance measures to promote meaningful change. Employers are required to submit detailed workforce profiles and statistics to the Department of Employment and Labour, enabling the government to monitor progress. Development of employment equity plans serve as road maps for employers to achieve their diversity and inclusion goals. The Amendment Act requires employers to develop and implement these plans, which set out specific measures to promote the representation and participation of designated groups at all levels of the business.

The big question is when what should happen at this point.

Although President Cyril Ramaphosa has signed the Amendment Act, the effective date has yet to be proclaimed by the President. The Employment Equity Act, as currently applicable, is therefore valid and employers must ensure that they comply and fulfill all existing obligations.
It is clear that being proactive plays a crucial role in taking the necessary steps to comply with this legislation. In a rapidly changing world, being proactive is not just a desirable trait, but a necessity.

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Earnings threshold 2023: Newly increased

Earnings threshold 2023: Newly increased

Earnings threshold 2023: Newly increased

Earnings threshold 2023: It is vital for every employer to determine which employees earn in excess of the earnings threshold and which employees earn below the threshold, as this has a huge impact on the terms and conditions of employment the employer and employee can agree on. The earnings threshold has seen yet another increase as from 1 March 2023 and is currently set at R241 110.59 (a monthly amount of R20 092.55). The previous threshold of R224 080.48 has been in effect since 1 March 2022.
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Earnings threshold 2023: What is earnings?

“Earnings” means an employee’s regular annual remuneration before deductions (e.g. income tax, pension fund contributions, medical aid contributions and similar payments), but excludes contributions made by the employer in respect of the employee. Subsistence and transport allowances received, achievement awards and payments for overtime worked will also be excluded within the scope of remuneration.
The earnings threshold 2023 has an impact on three pieces of legislation which includes the Basic Conditions of Employment Act, 1997, the Labour Relations Act, 1995 and the Employment Equity Act, 1998.
  • Basic Conditions of Employment Act (BCEA): Employees earning in excess of the earnings threshold are excluded from certain sections in the BCEA.  These exclusions refer to the provisions that regulate ordinary hours of work, overtime, compressed working weeks, averaging of hours of work, meal intervals, daily and weekly rest periods, pay for work done on Sundays, pay for night work and pay for work done on public holidays.
This means that if an employee earns above the earnings threshold, the regulation of the abovementioned should be by mutual agreement and will not be regulated by the BCEA as is the case with employees earning below the threshold.
  • Labour Relations Act (LRA): In terms of the LRA, employees employed by a temporary employment service/labour broker who are not performing a temporary service are deemed to be employees of the client.  The LRA furthermore states that employees on a fixed term are employed indefinitely and deemed to be permanent employees after three months in the absence of justifiable reasons for fixing the term of the contract.

Employees earning in excess of the earnings threshold are not subject to either of these provisions and can be employed on a fixed term basis exceeding three months without a justifiable reason.

  • Employment Equity Act (EEA): If an employee earns above the threshold and has a dispute under Chapter II of the EEA relating to unfair discrimination, the matter may not be referred to the Commission for Conciliation, Mediation and Arbitration (CCMA) for arbitration and must be referred directly to the Labour Court for adjudication, unless:
    • the dispute relates to alleged unfair discrimination on the grounds of sexual harassment; or
    • the parties all agree for arbitration to be held at the CCMA.
The earnings threshold is increased more regularly than in the past and employers are urged to stay informed and adjust the terms and conditions of employment accordingly for employees earning above and below the earnings threshold respectively.

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Minimum wage 2023: what to expect

Minimum wage 2023: what to expect

Minimum wage 2023: what to expect

In terms of the National Minimum Wage Act (NMWA), the National Minimum Wage Commission (the Commission) annually assesses and reviews the national minimum wage.  The Commission then submits a recommendation to the Minister of Employment and Labour to adjust the minimum wage. The current national minimum wage came into effect on 1 March 2022, and the highly anticipated review of this wage for the 2023/2024 period is almost upon us. This will likely be released and published in the Government Gazette by the Minister and come into effect on 1 March 2023.

The criteria the Commission generally uses to determine the proposed increase is the consumer price index (CPI) plus 1.0%.  The CPI was 7.2% in December 2022, and the minimum wage increase is thus calculated at approximately 8.2%.  This means an increase in the current national minimum wage of R23.19 per hour to R25.09 per hour (based on December 2022’s CPI as released by Statistics South Africa on 18 January 2023 – available when this article was written).

However, the Department released a media statement on 22 December 2022, which indicated that the Commission, in its preliminary report, was looking at an annual increase in the national minimum wage in the range of CPI + 0.5% and CPI +1% for 2023.

However, the Department released a media statement on 22 December 2022, which indicated that the Commission, in its preliminary report, was looking at an annual increase in the national minimum wage in the range of CPI + 0.5% and CPI +1% for 2023.

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Are there options for businesses that cannot afford to pay minimum wages?

Companies operate in a challenging environment, and the national minimum wage and associated increases put additional pressure on employers, as there is no negotiating the wage payment. In addition, if an employer fails to comply with the NMWA, the employer can be fined, and further non-compliance will also lead to more considerable penalties.

However, section 15 of the NMWA stipulates that employers can apply online for exemption if they cannot afford the national minimum wage (http://nmw.labour.gov.za).  The employer will still have to pay at least 90% of the national minimum wage if the exemption is granted.  In addition, the exemption is only valid for a maximum period of 12 months.

As part of the exemption application, the employer must provide a good reason for the exemption and proof that there has been meaningful consultation with employees and representative union(s) where applicable. The regulations further stipulate that such an application will not be granted if the employer does not meet the affordability elements concerning profitability, liquidity and solvency. The calculations for these tests are included as part of the schedules to the law. Exemption will only be considered if the employer is up to date with all legal payments, including the Unemployment Insurance Fund, the Occupational Injuries and Compensation Fund (Compensation Commissioner) and any other applicable levies.
The outcome will confirm the commencement date of the exemption, the period for which it is granted, the wages that the employer is obliged to pay employees, and any other relevant conditions. If the exemption is granted, a copy of the exemption certificate must be displayed in the workplace and provided to the relevant employees and representative trade union(s) where applicable. If the application is unsuccessful, the employer will receive a notice with the reasons for the refusal.

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Why should you have an evacuation plan

Why should you have an evacuation plan

Why should you have an evacuation plan

by OH&S – Leo van der Walt

An evacuation plan for any organisation – whether large or small and wherever its operations are situated – forms part of the overall emergency planning that responsible management should have in place. Such plans ensure that every employee will know what to do in emergencies, and also that they will know how to assist others who need help.
Many aspects of emergency plans and evacuation procedures are regulated in terms of the requirements set by the Occupational Health and Safety Act No 85 of 1993 (OHASA) as well as bylaws and industry regulations. However, in addition to the legal responsibility, it makes sense to ensure that you plan for the worst – even while managing your business in such a way that the likelihood of emergencies is limited. Natural disasters can strike anywhere. Major events like accidents or dangerous substances escaping or being spilled through no fault of your own, can happen. They could occur purely due to your geographical situation or an unusual disaster. Although these are fortunately rare events, it still remains important to be prepared to keep people safe at all times.
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Not all emergencies will require evacuation procedures, but when such action is indicated and an alarm is sounded, evacuations are vital to ensure that the potential risk to life and health of all concerned (employees as well as visitors, clients, suppliers, service providers etc.) is limited. Even though a ‘safety drill’ or ‘evacuation plan drill’ may be time-consuming and irritating to some, especially when you are busy with urgent business, it is important to remember that emergencies do not wait for convenient times to occur – they come at any time of the day or night. Emergencies are, by definition, unexpected and unforeseen.

The difference between emergency plans and evacuation plans is mainly the following:

  • Emergency plans are broader and include not only immediate physical threats, but wider issues relating to the organisation’s operations and the ways that the business will deal with those major threats.
  • An emergency plan covers the overall policy and procedures in the event of any number of emergencies such as a fire, structural damage, threats (including bomb threats or other threats), or natural disasters.
  • An evacuation plan is the specific plan or set of instructions on how to evacuate a building and/or an area.
Effective evacuation procedures are planned to ensure smooth and safe action and are intended to ensure that normal operations can continue as quickly as possible after ensuring the safety of people, buildings and equipment. One of the main aims of an effective plan is that it helps to avoid panic, while protecting people and property.

The ‘unforeseen’ part of emergencies can be mitigated by having evacuation plans that have the following characteristics:

  • They are well planned by an interdisciplinary team that can give inputs about a range of potential dangers, as well as about possible solutions to specific problems.
  • They enjoy the full support of owners and top management.
  • Accountability and responsibilities for action during an evacuation is clear, and it is also made clear that their instructions have to be followed.  The person directing or leading people out of a building is possibly – and even likely – not to be the top manager.
  • They address all relevant legal requirements and regulations.
  • They are regularly tested via drills – and all employees (from the most senior to the most junior) and other people present at the time of the drill(s) are required to participate. 
  • They are detailed enough to cover all possible events.
  • They include all relevant important details:  evacuation floor plans, clear and simple evacuation procedures and clear indications and clothing or other indications to mark responsible personnel.
  • They also take care of the ‘small’ things. Plans account for anything that ‘could’ happen and ways to ensure that, for instance, evacuation routes are kept clear of furniture and other obstacles that could impede progress.  They ensure that plans will work in the dark.  They also ensure that, among others, people with physical disabilities or the elderly or small children can be helped. They also include consideration to actions such as specific machinery and vehicles to be switched off, or emergency alternatives for key operations requiring human interaction, etc. The latter could, for instance become very important in farming operations.
  • The location of relevant siren switches, as well as keys and safety equipment is widely known, not only to a few individuals.  It cannot always be accurately predicted who will be present at the time of an emergency. Therefore 24-hour awareness and alert individuals and deputies can make the difference between chaos and ordered procedures being followed.
  • They are regularly updated to account for any changes in working procedures, renovations/changes to buildings etc.
  • Relevant materials (including sirens or other sounding equipment), implements and exit doors are regularly tested and these tests are formally noted and signed off as part of specific individuals’ accountabilities. Employees are informed in advance about relevant tests (e.g. testing sirens) to avoid panic.
  • The importance of evacuation plans is made clear to new employees. They are alerted about relevant procedures as part of their introduction to their new workplace.
  • They are supported with relevant signage that takes into consideration e.g. evacuation at night or alternative routes, should ‘normal’ evacuation routes be blocked.  Text should be clear, short and easy to read.
  • They are clearly communicated to all staff as well as service providers such as security organisations, building contractors and others.
  • Implementation of evacuation plans are included in health and safety plans.  Equipment such as firefighting equipment and first-aid kits should be situated in areas where it makes sense in the case of evacuations.
  • All responsible staff are appropriately trained.
  • Any changes in the procedures are clearly communicated to the entire workforce and regular service providers.  Reminders about safety and evacuation in case of emergencies appear from time to time in relevant communication (using among other e-mails, newsletters, meeting agendas).
  • Responsibility for the implementation of an evacuation plan is transferred during holiday periods, weekends or other absence(s) of those primarily responsible for leadership during evacuations. The names of deputised staff is communicated to all staff – especially receptionists, safety, security and maintenance staff.
  • Drills take place regularly – ideally at least twice a year. Designated routes for evacuation should be permanently and clearly marked.
Very often the individuals responsible for occupational health and safety will also be tasked with responsibility for evacuation procedures. Where relevant, it may be useful to ask professional occupational health and safety advisors to assist by reviewing the process of creating evacuation plans. They could also advise you on the inclusion of relevant actions, implements, materials and signage. For instance, simply by providing input in terms of the visibility of signage or the contents of first-aid kits, expert advisors could ensure that your evacuation plans are as good as they can get for your specific buildings and other structures as well as the people you employ. An organisation such as Beehive OH&S could also advise you on the best way to include evacuation procedures in your overall health and safety planning.

Contact Leo van der Walt of Beehive OH&S and his staff to discuss your specific requirements at 072 594 5989, info@beehiveohs.co.za  or www.beehiveohs.co.za.

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Short time and loadshedding

Short time and loadshedding

Short time and loadshedding

by Anneline Scriven

In the current economic climate, many employers are concerned about staying operationally viable. Consequently, various reasons can compel an employer to implement short time. What is important though, is that the employer’s reason is valid, and the correct procedure is followed. Short time is not regulated in terms of the Basic Conditions of Employment Act (BCEA), which means that the employer and employee should come to an agreement. We advise employers to be proactive and include a short time clause in the employment contract, as conditions that lead to implementing short time are often unforeseen – this can save the employer a lot of time and money.
During short time employees will work fewer hours and be compensated accordingly for hours worked, subject to a payment of a minimum of four hours in terms of Section 9A of the BCEA. When short time is worked, the work available must be evenly distributed among all employees as far as possible.
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Circumstances to consider

The employer can implement short time during instances that are out of his or her control when production cannot continue – e.g. continued power failures such as loadshedding, weather conditions that negatively affect the day-to-day operations of the business, a slackness of trade, shortage of raw materials, a general breakdown of plant or machinery caused by an accident, or any other unforeseen emergency. The employer can also implement short time as an alternative to retrenchment.

Follow the correct procedure

Working hours form part of the employment contract’s terms and conditions and the employer cannot make any changes unilaterally. This will constitute unfair labour practices and the employee can then refer a dispute to the Commission for Conciliation, Mediation and Arbitration. So, in order to implement short time, there must be an agreement in place between the employer and employee where the employee has given written permission and consent to do so. If there is no prior agreement in place between the employer and employee with regards to implementing short time, the parties must consult about the change in working hours. The consultation process is very important and the employer must be sure to consult with all parties involved. This means that if there is a trade union involved in the workplace, they must be included in the consultation process.

When implementing short time, make sure to discuss the following:

  • The reason for implementing short time;
  • When will short time be implemented;
  • For how long will short time be implemented;
  • How many employees will be affected/which divisions will be affected;
  • What form of short time will be implemented (for example, will there be a reduction in working hours, or will there be a reduction in the number of days an employee works per week);
  • How will the employee’s remuneration be adjusted.
Short time should not be implemented indefinitely but rather for a short period whereafter the employer’s position is re-evaluated. One of the advantages of short time, is that no dismissals take place and employees can return to working their normal working hours as soon as the employer’s circumstances stabilise and are successfully resolved, ending the short time period.
If short time was implemented as an alternative to retrenchment and after the re-evaluation the employer’s position did not change, the employer may need to consider retrenchment subject to following the correct procedure.
The Department of Employment and Labour requires employers to keep a detailed logbook of the hours worked by employees. The recording of these hours can be done manually or electronically by using a clocking system.

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Agricultural Sector Provident Fund (ASPF) – make provision

Agricultural Sector Provident Fund (ASPF) – make provision

Agricultural Sector Provident Fund (ASPF) – make provision

Recognition should rightly be given to employers in the agricultural sector regarding the way they continuously act in the interest of employees. Financial planning is an important aspect that every worker should pay attention to and therefore it is also important that an organisation such as the LWO Employers Organisation will participate in initiatives to provide affordable retirement, disability, death, funeral and withdrawal benefits for farm workers. The Agricultural Sector Provident Fund (ASPF) offers several affordable plans with unique benefits to employees.
The ASPF is supported and managed by a board of trustees with representation by the LWO, Agri SA, TLU SA and professional independent Trustees. The Board of Trustees looks after affordable contributions, as well as competitive benefits for participating farm workers.
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ASPF – New service provider

During 2022 the Trustees of the ASPF conducted an intensive market investigation to consider the appointment of an alternative administration company to administer the ASPF and appointed Verso Financial Services (Pty) Ltd as the new fund administrator with effect from 01 October 2022.
Members and employers will be able to register on the fund’s website with Verso. Members will also have the ability to download an application on their smartphones. In doing so they will have access to personal information such as nominated beneficiaries, contribution history, salary history, history of processed transactions, accumulated fund value as well as member benefit statements.
It is important to acknowledge that farmers have a social responsibility towards their workers when they become too old to work, or due to unforeseen circumstances become medically disabled either because of a medical condition or an accident, or die before they reach the normal retirement age.

Contact details

  • Employers who do not yet participate in the ASPF for their employees can contact Ben de Jager at ben@verso.co.za | 071 495 3333.
  • Employers who already participate in the ASPF can contact Desiree Morreira at desireem@verso.co.za | 021 943 5300 for administrative support.

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