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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Understanding statutory severance pay in SA

Understanding statutory severance pay in SA

Understanding statutory severance pay in SA

Statutory severance pay plays a crucial role in employment relations in South Africa, particularly when employment is terminated due to operational requirements.  It is essential for employers to be informed regarding the legal framework that governs severance pay, and specifically Section 41 of the Basic Conditions of Employment Act (BCEA), as it holds significant implications for both employers and employees.

Statutory framework

Statutory severance pay is not an arbitrary gesture by employers; instead, it is firmly grounded in the legal provisions of the BCEA. It is imperative to note that outside the statutory framework provided by the BCEA, there is no general right to severance pay. Section 41 of the BCEA delineates the circumstances under which severance pay becomes mandatory, primarily revolving around dismissals due to operational requirements.

Conditions for STATUTORY severance pay

According to Section 41 of the BCEA, employers are obligated to pay severance pay to employees dismissed for reasons based on operational requirements. The formula for calculating severance pay is stipulated in the section, requiring employers to provide at least one week’s remuneration for each completed continuous year of service.

Eligibility criteria

An important criterion for eligibility is that an employee must have completed at least one year of uninterrupted service with the employer. Once this condition is met, the employee becomes entitled to statutory severance pay, calculated at the rate of one week’s remuneration for each completed year of service. It is crucial to emphasise that an employee becomes eligible for statutory severance pay only after the retrenchment process has been concluded.

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Bargaining Council and main collective agreements

In cases where an employee is a member of a bargaining council, the severance package payable may be stipulated by the Bargaining Council and main collective agreements. This adds an additional layer of complexity, as the specific terms may vary based on the industry and agreements in place.

Operational requirements

Operational requirements leading to severance pay are defined broadly and encompass terminations resulting from the employer’s economic, technological, structural, or similar needs. These are often referred to as “no-fault” dismissals, indicating that they are unrelated to the employee’s performance but are a result of the business’s operational necessities.

Limitations on severance pay entitlements

While Section 41 of the BCEA outlines specific scenarios where severance pay is mandatory, it’s essential to understand that these provisions are not exhaustive. There may be other scenarios in which severance pay entitlements arise.

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In conclusion, statutory severance pay in South Africa is intricately linked to the legal framework provided by the BCEA, with Section 41 specifically addressing dismissals due to operational requirements. Employers must be well-informed about the eligibility criteria, calculation methods, and additional considerations such as Bargaining Council agreements. It is crucial for both employers and employees to navigate these legal differences to ensure fair and compliant practices in the termination of employment relationships. While the idea of receiving a “reward” for years of service is not broadly applicable in South African law, statutory severance pay serves as a protective measure, providing financial support to employees facing dismissal due to operational requirements.

 

Taking proactive steps to ensure your business adheres to relevant legislation in your sector is paramount for sustained success and legal compliance.

 

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Importance and implementation of a disciplinary code and written policies

Importance and implementation of a disciplinary code and written policies

Importance and implementation of a disciplinary code and written policies

Business is conducted in a challenging environment where every workplace is unique. Employees form an integral part of the work environment and are diverse in terms of personality, frames of reference, value systems, culture, motivation, and so on.  Misconduct in the workplace is a common phenomenon and can have a negative influence on any business if it is not proactively managed and handled in line with labour legislation.

Ask the question

When it is necessary to take disciplinary action against an employee, the first and probably most important question to be asked, is whether the employer has implemented a disciplinary code or policy related to the employee’s misconduct. Without evidence of this, disciplinary action taken against such an employee may be considered unfair by the Commission for Conciliation, Mediation and Arbitration (CCMA) or Labour Court.

 

Section 3(1) of schedule 8 of the Labour Relations Act, which deals with dismissal, stipulates that all employers should have a disciplinary code that sets out the standard of behaviour expected of employees. This section further states that the standard of behaviour must be clearly set out in a way that is easily understandable and accessible to all employees.

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Applying discipline

A complete disciplinary code sets out the various offenses with appropriate sanctions. Keep the following in mind:

 

  • Discipline in the workplace aims to adjust and improve behaviour through correction, consultations, and warnings, rather than punishing or dismissing an employee. Dismissal should always be the last option.

 

  • There are different types of misconduct in the workplace ranging from less serious violations to very serious violations, which are influenced by the employee’s type of work and responsibility, the (possible) consequences of the misconduct, as well as the impact of the misconduct on the employee-employer relationship of trust.

 

  • Rules in the workplace apply to all employees and the employer must consistently apply discipline in line with the disciplinary code’s provisions. Although the code serves as a guideline, it may not be lightly deviated from and a heavier or lighter sanction can only be applied in exceptional cases.

Case study

In the case of Mushi v Exxaro Coal (Pty) Ltd Grootegeluk Coal Mine, an employee was dismissed after being found guilty of misconduct. The employer’s disciplinary code stipulated that the sanction for this type of misconduct is the issuing of a final written warning. However, the employer dismissed the employee.

 

The Labour Appeal Court found that even though the employer’s disciplinary code was a guideline, its purpose is to create a degree of certainty and consistency in the application of discipline in the workplace. The court further argued that any deviation from a disciplinary code may not take place without good reason and that there must be a justifiable and fair reason why an imposed sanction differs from the prescribed sanction in terms of the disciplinary code.

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Implementing rules:  have proof

Rules are implemented through the disciplinary code, policies, and procedures. It is essential that the employer must be able to prove that employees are aware of the workplace’s rules (with appropriate sanctions) before the employer can consider any disciplinary action against an employee for violations.

 

To avoid a situation where an employee can claim that he/she was not aware of the employer’s rule(s), the disciplinary code and any policies or procedures must be in writing and the employer must have physical proof that these rules were communicated to all employees. The employer can do the following:

 

  • Implement an existing or new disciplinary code through a consultation with all employees. The employees may be required to complete an attendance register to confirm that the disciplinary code has been explained to them and that they are aware of its content.

 

  • Bring a new policy or procedure to the attention of employees by sending the policy or procedure to employees via email. The e-mail will then serve as written proof that employees have been informed and are aware of its content.

The vast majority of cases referred to the CCMA are following “unfair dismissal”, of which the majority of these cases are related to misconduct that led to dismissal. Generally, arbitration orders granted in the employee’s favour are directly linked to the employer failing to follow the correct procedure. The CCMA can grant orders of up to 12 months of an employee’s salary against the employer. It is important that employers correctly understand and apply the principles of discipline in order to avoid unnecessary CCMA headaches.

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Significance of Employment Equity Act compliance

Significance of Employment Equity Act compliance

Significance of Employment Equity Act compliance

South Africa’s Employment Equity Act, 55 of 1998 (“EEA”) stands as a pivotal legislative framework designed to enforce equality and fair treatment within the workplace. Compliance with this Act is of paramount importance for various reasons that extend beyond mere legal requirements.

 

At its core, the EEA seeks to eradicate unfair discrimination and to foster equal employment opportunities for all employees, irrespective of factors such as race, gender, disability, or other designated grounds. By aligning workplace practices with the principles of equality and fairness, businesses contribute to the creation of an inclusive environment that values diversity.

Penalties

Penalties await those who fail to comply with the requirements as set out in the Employment Equity Act, emphasising the necessity for employers to prioritise compliance with the Act to avoid penalties. Moreover, businesses that demonstrate a commitment to equality and diversity often build a positive reputation, enhancing their image as socially responsible and ethical employers.

Strategic business advantages and the Employment Equity Act

Compliance with the Employment Equity Act also holds strategic business advantages. It can open doors to various opportunities, as many government and private sector contracts require adherence to employment equity legislation. Embracing diversity and inclusion contributes to higher employee morale and satisfaction, fostering a positive working atmosphere that, in turn, boosts productivity.

 

Furthermore, organisations that actively promote diversity may gain a strategic edge in attracting top talent. Diverse workforces bring a range of perspectives and ideas, fostering innovation and creativity. In essence, compliance with the Employment Equity Act is not only about meeting legal obligations, it is a commitment to building a society that values and promotes equal opportunities for all.

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In conclusion, adherence to the Employment Equity Act goes beyond it’s legal requirements. It reflects a commitment to social responsibility and ethical business practices, contributing to a more equitable and inclusive society. By promoting equality and fair treatment, businesses can benefit from legal protection, a positive reputation, and improved employee satisfaction and productivity.

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Identifying labour inspectors

Identifying labour inspectors

Identifying labour inspectors

Ensuring compliance with labour law is crucial for both employers and employees to foster fair and equitable working conditions. In South Africa, the Department of Employment and Labour achieves this sentiment through their Inspection and Enforcement Service (IES). The Department’s inspectors play a pivotal role in monitoring and enforcing labour legislation and regulations.

 

Many employers are concerned about security due to people falsely posing as inspectors from the Department of Employment and Labour in order to gain access to the premises.  Insist on positive identification of the person who introduces him-/herself as an inspector and first verify the information before giving the person access to your premises.  Also remember that no inspector may charge a fee for the inspection, investigation, advice or any assistance.  The Department of Employment and Labour does not delegate any third party to conduct an inspection on behalf of the Department – none of the Department’s powers may therefore be delegated.  No inspector may sell posters, products, or information.

Key aspects of identification for labour inspectors

The Department of Employment and Labour inspectors will always carry official identification:

 

  • Official appointment certificate: In terms of Chapter 10 of the Basic Conditions of Employment Act, 75 of 1997 (BCEA), Section 63(3) provides that the Minister of Employment and Labour must provide each labour inspector with a signed appointment certificate stating the following: 
    • that the person has been appointed as a labour inspector,
    • the inspector’s name, serial number, identification number, signature, and the Department’s logo,
    • which legislation that labour inspector may monitor and enforce, and
    • which of the functions of a labour inspector that person may perform.

 

  • Obligation to produce identification: The BCEA creates a further obligation on labour inspectors to produce his/her official appointment certificate upon request. Section 66(3)(a) states that labour inspectors must produce the certificate when he/she is requested to do so.

 

  • Two forms of identification: The inspector’s appointment certificate can take two forms, the one being a certificate document (BCEA Annexure 14A) and the other being an inspector card (BCEA Annexure 14B).  It is noteworthy that in terms of Annexure 14A the inspector’s card (Annexure 14B) must contain the inspector’s photo and signature, as well as the signature of the provincial executive manager, for the office in which the inspector is based as well as the serial number which has been allocated to the inspector by the Department’s head office.

 

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Labour inspectors’ right to conduct inspections

In terms of BCEA Section 65(1) a labour inspector may, without warrant or notice, at any reasonable time, enter any workplace or any other place where an employer carries on business or keeps employment records, that is not a home, in order to enforce compliance with labour law.

 

Labour law further places a duty on persons to co-operate with and assist labour inspectors. Section 67(1) and 67(2) of the BCEA states that any person who is questioned by a labour inspector in terms of Section 66 must answer all relevant questions lawfully put to that person, truthfully and to the best of his/her ability.  Employers and employees must provide any facility and assistance at a workplace that is reasonably required by a labour inspector to perform the labour inspector’s functions effectively.

 

  • Scheduled inspections: Labour inspectors often conduct scheduled inspections, providing advance notice to employers. This allows businesses to prepare necessary documentation, such as employment contracts, payroll records, and health and safety protocols. Being aware of scheduled inspections helps in maintaining transparency and efficiency.

 

  • Random visits: In addition to scheduled inspections, inspectors may also conduct unannounced or random visits to workplaces. Employers should be prepared for such surprise visits and maintain ongoing compliance with labour laws to avoid potential penalties.

A labour inspector is empowered by legislation to arrive at a workplace with or without notice to conduct an inspection. The employer is similarly obligated to answer any questions put to him/her by the labour inspector and to provide the inspector with any assistance that he/she may require to perform his/her functions effectively.  South African labour legislation is extensive and non-negotiable.  Non-compliance can have a serious financial impact, putting your business at unnecessary risk.

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What is a policy?

A policy informs employees of the rule/s in respect of a certain topic. The employer puts these rules in place in order to ensure the smooth and efficient running of his/her business operations. Policies are not underwritten by labour legislation, but define the employer’s own rules, which must be reasonable, for the workplace. We strongly advise employers to implement the following policies in the workplace:

Code of conduct

A code of conduct states the employer’s own rules specific to his/her business and industry. These rules should refer to, for example, general rules in the workplace, hygiene, salary advances, safety regulations, use of company property, clothing, etc.

Smoking policy

A smoking policy firstly states whether smoking is allowed and secondly if so, the designated areas and specific times allocated for smoking. In the policy the employer can state the times allocated during the day that employees are allowed to smoke, as well as the duration of these breaks, e.g. 10h00, 12h00 and 14h00 for 10 minutes each.
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Sick leave policy

Leave matters are regulated by Labour Legislation and refer to annual, sick, family responsibility and maternity leave. It is a good idea to incorporate this into leave policies, but take care that the policy is not less favourable than the applicable legislation which should be adhered to. The aim of a sick leave policy is to regulate the amount of sick leave employees are legally entitled to, as well as the reasonable requirements set by the employer for sick leave to be approved. This can include timeous notice of intended sick leave to the relevant person (management), when a sick note must be presented and the disclosure of the period that the employee will be unfit for duty. This gives the employer time to make other arrangements to ensure sustainable productivity.

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