Schrier Labour Solutions

18/03/2021

This is a short article on suspension from work.

It is common practice for employers to suspend employees from work, as and when the need arises, for misconduct issues. There are though two types of suspension. The first type of suspension is the "holding operation" where the employee is suspended in order for the employer to investigate any misconduct alleged to be committed by the employee. The second type of suspension is a form of discipline, better known as a punitive suspension. This is a serious form of disciplinary action; generally sitting between a final warning and a dismissal on the disciplinary sanction scale.

In the Labour Court Review case: American Products Services (Pty) Ltd v CCMA & Others (JR2507/15) [2020] ZALCJHB 113; [2021] 1 BLLR 64 (LC) (15 July 2020) the employee had an accident with a company vehicle on 13 July 2015. The next day the employer suspended him from work, without pay. The employer instructed him on 15 July 2015 to obtain an ophthalmologist report concerning his eyesight. According to the employer’s letter the employee had to supply this report by 21 July 2015 or he faced “instant dismissal”. Nothing occurred thereafter and as a result the employee referred an unfair Labour practice dispute to the CCMA regarding his suspension from work without pay.

The CCMA found in the employee’s favour and awarded 6 month’s compensation against the employer for unfair suspension from work. The lesson from this case is that you cannot suspend an employee indefinitely, without pay and expect to get away with it. Unless the employee agrees to being suspended without pay, in writing as a disciplinary sanction the employer is stepping on very dangerous territory by suspending an employee without pay as a “holding operation”.

09/03/2021

I wrote the article below, for the WhatsUp East Coast Magazine:

DEDUCTIONS - HANDS OFF MY PAY!

This is a thorny topic, whichever way that you look at it, from employer or the employee perspective. For example:

Johnny finds a higher paying job as a sales rep. He gives his current employer “Bar-None Sales” 24 hours notice of resignation as his new employer “Quick & Easy Sales” wants him ASAP. Bar-none hits the roof. They deduct outstanding traffic fines (R1500) from his salary. They deduct the 4 weeks notice period owed by Johnny and also deduct a R2500 loan made to Johnny, due to him allowing his child to break the company cellphone. Johnny has 0 money paid out to him on termination.

Is the above the correct approach by the Bar-none or not? Deductions can only be made in two instances from an employee’s pay. The first is those deductions required by law e.g. Tax and UIF. This the employee has no say over. The second type of deductions to be made is if the employee agrees to them in writing.

So can “Bar-none” make these deductions from Johnny's last salary? The answer is ‘yes’, provided Johnny has agreed to the deductions, writing, such as in his contract of employment. This is why detailed and specific employment contracts are so important nowadays. Verbal agreements and/or handshakes mean nothing in these type of situations. If Bar-none cannot show that a) it was a statutory deduction or b) that the employee agreed to the deductions in writing, then the employee can take it up with the Department of Labour and now also the CCMA. Bar-none will then have to pay the money back to the employee and will have to sue the employee in civil court, which can be a costly and time-consuming exercise.

Employers and employees need to be fully aware of the correct procedure regarding deductions, that they must be in writing so the deductions are lawful. Otherwise the employer will not be able to retain the money deducted for any damages, losses, or any of breach of the employment relationship by Johnny.

Please get into contact to me if you would like your contracts audited, to have business specific employment contracts created to suit your needs.

23/04/2020

Schrier Labour Solutions: COVID 19 TERS Q&A Session

Question 1: Employees were forced or told to take compulsory paid annual leave for April 2020. The employees received their normal remuneration for April as “paid leave”. Can the employer apply for TERS and claim back the annual leave paid out?

Answer: Yes the employer can. In an amendment to the Directive establishing the Covid-19 TERS scheme, and to the directive issued on 8 April 2020, the TERS scheme now allows that:

“An employer who has required an employee to take annual leave during the period of the lockdown in terms of the Basic Conditions of Employment Act, 75 of 1997, may set off any amount received from the UIF in respect of that employee's Covid-19 benefit against the amount paid to the employee in respect of annual leave provided that the employee is credited with the proportionate entitlement to annual leave in the future."

Practically speaking if Johnny’s monthly salary is R10k and TERS pays out R5k for April 2020 the employer has to credit Johnny’s leave balance with R5k. He is credited with the number of days leave amounting to R5k.

Question 2: Employees receive no remuneration during April 2020. They were laid off by their employer as the employer is not an essential service. Can the employer apply for TERS and when the employer receives the benefit pay it to her employees?

Answer: Yes the employer can do so. However it is important to first ensure that the employer has received a payment schedule from UIF in respect of how much is to be be paid to each employee and for what period, before paying out any TERS benefits to your employees.

Question 3: Employees received partial payment during April 2020 i.e. 60% of their remuneration. Can the employer apply for TERS?

Answer: Yes he can. The employer must however indicate that he has paid 60% of the employees’ remuneration to them in his TERS application. UIF will then calculate how much TERS funding will be due to each employee.

Question 4: Employees received partial payment during April 2020 i.e. 60% of their remuneration the employer notifies every employee that this payment is a salary advance. Meaning that the employer requires the money to be paid back at some stage. Can the employer apply for TERS funding?

Answer: Yes the employer can apply for TERS. The employer would indicate on his TERS application that he paid “0” to his employees since the amount is to be recovered from TERS and also from the employees (if TERS does not cover the payment made).

Question 5: The Employer pays her employees full salary during April 2020. She does not force employees to take leave. She requires some employees to work from home and others in lower skilled positions are unable to work from their homes.

Answer: The Employer cannot claim for TERS funding.

Question 6: The employee has not paid his employees in April 2020 and applies for TERS. He also advises his employees that depending on what TERS pays out he may be able to assist them financially. Can he do this?

Answer: He can do this, provided the employer states that it is an “ex gratia” payment to employees, being out of the goodness of his heart. Otherwise the employer is creating a problematic situation if he says he will “top up” their salaries. Employees may demand/expect their normal monthly remuneration from him, at the end of April 2020. For example if Joe earns R15000 a month and UIF TERS pays out R6731, if the employer told Joe he will “top up” his salary Joe will be expecting the balance of R8269.44 to be paid by his employer. It is therefore very important to very carefully choose your words when dealing with this type of situation.

Question 7: I have a domestic worker. I have laid her off during the national lock down period as domestic work is not an essential service and she cannot travel to and from work. I have not applied for TERS as I do not contribute to UIF for her. I heard that only businesses need to contribute to UIF and that only businesses can claim from TERS?

Answer: This is incorrect.
Firstly domestic employers are required to register their domestic workers and deduct and pay UIF over for them. If a domestic worker works for longer than 24 hours in a month for the employer the employer must register his worker with UIF.

Secondly this assumption is also incorrect a Department of Labour UIF Covid-19 FAQ document clearly advises that TERS applications can be made for domestic workers. The employer will therefore be on the wrong side of the law and would be compelled to register for UIF and pay in the arrears contributions. The employer may also be compelled to make some form of payment to the employee, for the duration of the national lockdown period.
It is expected that the Department of Employment and Labour / CCMA will be flooded with cases after the lockdown regarding domestic workers who were not registered for UIF and therefore no TERS applications were lodged.

Question 8: Can I retrench my employees and then use the TERS payments towards covering the severance payments due to them? No, the TERS payments are meant to be used for employees that are in your employ. If you retrench your employees you cannot use that money to pay their severance pay or for other purposes such as paying your business’s bills. The employer in this case is committing a criminal offence as he is using the TERS money for purposes it was never intended for. The President said that law breakers during the national lock down period will face the full might of the law.

Question 9: I said to my employees they can work from home during April 2020 (I run an IT business) and that since they are working from home I will be paying them 70% of their normal remuneration for April 2020. I am not applying for TERS. I reduced their pay as they are working from home so I cannot expect them to work as they would, in the office.
Answer: This cannot be done, unless the employees agree in writing. Otherwise it amounts to a unilateral change to terms and conditions of employment. If the employer requires the employees to work from home, the employer must pay their normal monthly remuneration. Employees would be entitled to lodge a case at the CCMA if it is unilaterally imposed upon them.

Question 10: Are the public holidays during the lock down covered by TERS payments of must the employer still pay the employees for these days?

Answer: Section 18(2)(a) of the BCEA states that if a public holiday falls on a day on which an employee would ordinarily work, an employer must pay an employee who does not work on the public holiday, at least the wage that the employee would ordinarily have received for work on that day. Due to the national lock down these public holidays are not ordinary working days, except for those working in essential services. So the normal employee would not be paid by the employer.

Question 11: Must my payments be up to date with UIF to claim?

Answer: Yes you must be, otherwise your application will be declined. There are more deserving employers who pay UIF contributions to the Fund.

Question 12: If we need to retrench. Can we put this off and lodge a claim for the UIF TERS benefit?

Answer: Yes, this is the aim of the TERS programme to allow employers to keep employees employed for as along as possible during the lock down. Once the lock down is lifted the employer may consider retrenchments however it is is meant to be the last option for an employer, in times of crisis. If the employer does not follow a fair retrenchment process. For example having insufficient grounds to actually retrench or does not follow a fair process when consulting with its employees the employer may receive a hiding at the CCMA or Labour Court (depending on the number of employees retrenched) and end up having to pay up to a maximum of 12 months compensation per employee and potentially reinstating the employee/s. Employers should speak to a labour expert before retrenching staff.

Question 13: I cannot afford to keep my domestic worker after the lock down is lifted. Can I retrench her?

Answer: Yes, you can but the answer to the above question 12 still applies. You have to retrench your domestic in a procedurally and substantively fair manner. Otherwise you face a hiding at the CCMA. Unfortunately it is a misconception that as long as you pay the employee what is due to her everything is in order. No it is not. Even if you pay the employee the correct severance package you can still receive a hiding for not following the correct procedures or for not having valid or insufficient reasons for retrenching the employee.

Question 14: Can I pay my employees in full for April 2020 and then claim it back from TERS?

Answer: No. You can only claim from TERS if if you did not pay your staff in April 2020, or you made them take annual leave or you clearly notified your staff that this payment is an “advance” of their salary. If you pay your employees for April and do not attach any conditions to that payment, you cannot claim from UIF TERS.

20/04/2020

This is the second in a series of articles about the UIF COVID19TERS Relief funding.

There have been numerous queries regarding what is paid to employees during the national lockdown. There are four scenarios I would like to unpack.

Firstly the employer pays the employee during the national lockdown period. Can the employer then also claim from TERS? No, since the employer is paying the employee his or her normal remuneration. TERS is meant to deal with any shortfall in paying employees' remuneration during the lockdown whether partial or total non-payment by the employer.
There seems to be some employers who have said to their employees that they will pay them for April 2020 (since the lock down was extended) and then claim the money back over the next 4 to 6 months. I advise employers to exercise extreme caution with such arrangements. Employees would need to agree to this in writing otherwise it amounts to illegal deductions from an employee’s salary, when the employer tries to recover the April 2020 salary. Advice from a labour expert should be sought first, before utilising this option.

Secondly the employer requires the employee to take paid annual leave during the national lockdown period. Legally speaking an employer is entitled to do this section 20(10) of the Basic Conditions of Employment Act of 1997 (as amended) states:
Annual leave must be taken-
a)in accordance with an agreement between the employer and employee; or
b)if there is no agreement in terms of paragraph (a), at a time determined by the employer in accordance with this section.

However morally speaking there is an argument that in terms of fairness, not the law (as it currently stands) that the employer should apply for TERS and not use the employee’s annual leave payment during the lockdown period. Furthermore the general annual leave entitlement for employees is 3 weeks paid leave per year. If the lockdown is lifted on 30 April 2020 it would leave shortfall of 2 weeks. TERS can therefore be used to “top up” employees’ income at the rates specified by UIF.

Thirdly the employer does not require the employee to take annual leave during the national lockdown but applies for TERS funding. The TERS funding will be paid to the employer, if:
a)The TERS application is submitted to UIF and the documentation meets UIF requirements. It now appears that UIF want all TERS applications to be done online the the Department of Employment and Labour website and not manually as this speeds up the application and payment processes.
b)The employer is up to date with UIF contributions. If the employer is not up to date with UIF, then TERS will not be paid out. The employer would receive an email rejecting the application and providing reasons for such a decision.
c)If the employer’s application is approved UIF will send an application approval email.
d)10 business days after approving the employer’s application UIF will pay the TERS funds into the employer’s bank account. Thereafter the employer has 2 days to pay it into the employee’s bank account. The employer must thereafter within 5 business days of making the payment to employees submit the proof of payment to UIF.

Fourthly the employer lays his or her employees off during the lockdown period but does not pay them or even make a TERS application on their behalf. In this case the employer might face legal implications, once the lockdown is lifted. The Department of Employment and Labour and CCMA could deal with such cases. If the employer is registered with UIF and does not apply for TERS the employer’s actions may amount to an unfair labour practice or an act of unfair discrimination. The employer may be forced to make payments for the period of the national lockdown period to its employees. What if the employer is not registered for UIF and therefore cannot apply for TERS? In this case the employer will be facing fines and penalties, as well for not registering with UIF. I will be talking more about this issue in the next article.

In closing according to a Moneyweb article posted on 16 April 2020 that UIF to date has received 39000 TERS applications of which only 136 were error free and paid out. We hope that the obstacles can be rectified ASAP and employees paid their TERS benefits. A lot of employees will be expecting to receive TERS payments from their employers as from this week.

14/04/2020

This is the first part of a series of articles regarding the UIF COVID19TERS Relief funding. The Unemployment Insurance Fund developed a Corona Virus Temporary Employer-Employee Relief Scheme called COVID19TERS to contribute to the containment of the Corona Virus and its impact on employers and employees. There is at least 30 Billion Rand made available by government for this funding.

What is the purpose of COVID19TERS? It is to provide emergency relief to enable employers to pay employees who are temporarily laid off due to the Covid-19 crisis, for 3 months or less. At present a substantial amount of employers are affected during the ongoing national lockdown. However once the lockdown is lifted employers may still apply for this funding: if they cannot operate at all or if they can only partially operate i.e. at 50% due to the effects of the Corona Virus on their business.

Who can qualify for this funding? Firstly the employer must be registered for UIF, secondly the employer must be up to date with UIF contributions or sign an undertaking to pay any arrears contributions to UIF and thirdly the employer must comply with the application process for COVID19TERS.

How much will be paid out to employees? The COVID19TERS benefits will be capped
at a maximum amount of R17,712.00 per month, per employee. Employees will be paid in terms of a sliding scale of 38%-60% of their monthly income as provided for in the UIF Act. For example if Michael earns R5000 a month 60% of his income would be R3000. If Jeremy earns R25000 a month Jeremy would be entitled, to R6730.56 per month from COVID funding. This is because the maximum salary is capped at R17712 per month and the percentage rate is worked out at 60% for lower income earners to 38% for higher income earners.

It is also important to note that the latest UIF regulations published last week Wednesday state that the minimum amount an employee can receive from COVID19TERS funding is R3500 a month. So in the the above case of Michael would be paid R3500 in terms of the UIF regulations.

The last part of this article concerns who applies for the COVID19TERS funding and then how to apply for it? The employer applies for the funding on behalf of its employees. The money is paid into a separate, dedicated bank account for the TERS funds. The employer must then pay it over to its employees. If the employer does not that amounts to theft and the employer would be prosecuted to the fullest extent of the law.

Secondly the Department of Employment and Labour has now gone online with the UIF-Covid 19 TERS National Disaster Application System. Employers that have not already applied can access it via the Department's home page at www.labour.gov.za. Employers are able to register and then login to register their applications and hopefully check up on applications that were already made before the Department went online.

There is a link on the Department's home page to the COVID19TERS section where employers can register and download relevant documentation. Hopefully payments will be processed speedily as we are already in the middle of April. Most employees will be expecting payments from their employers from the 22nd of April onwards. Employees unfortunately will be concerned about being able to put food on the table at the end of this month, depending on how fast the fund pays out.

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07/01/2020

Amendments to the BCEA are now effective!!!

President Cyril Ramaphosa, on 23 December 2018, proclaimed 1 January 2020 as the date which the amendments to the leave provisions in the Basic Conditions of Employment Act become effective.

Employees, as from 1 January 2020 are entitled to claim a number of new types of leave not previously provided for. The BCEA now provides for the following leave:

10 consecutive days parental leave - Any employee, whether male or female, who is a parent (including adoptive parents), will be entitled to 10 days consecutive, unpaid, parental leave that may commence on the day the child is born or an adoption, or pending adoption, takes effect. Therefore the entitlement in the BCEA regarding family responsibility leave for the birth of a child has been repealed. Employees can no longer claim 3 days paid family responsibility leave from the employer when their child is born. This one will affect businesses the most.

10 consecutive weeks adoption leave - Any employee who is an adoptive parent of a child under the age of 2 years will be entitled to 10 consecutive weeks unpaid leave OR the parental leave referred to above. The adoption leave may commence on the day the adoption order is granted or the child is placed in the care of a prospective adoptive parent by a competent court. If an adoption order is granted to two adoptive parents, one of the adoptive parents may apply for adoption leave and the other adoptive parent may apply for the parental leave as set out above.

10 consecutive weeks commissioning parental leave - Any employee who is a commissioning parent in a surrogate motherhood agreement will be entitled to 10 consecutive weeks unpaid leave OR the parental leave referred to above. The adoption leave may commence on the day the child is born as a result of the surrogate motherhood agreement. If a surrogate motherhood agreement has two commissioning parents, one of the commissioning parents may apply for commissioning parental leave and the other commissioning parent may apply for the parental leave referred to above.

These new leave types are unpaid as employees must claim unemployment insurance benefits, as from now.

12/09/2019

Shoprite is in the news this week for the wrong reasons... According to news reports a Shoprite regional manager is attending a disciplinary hearing. The regional manager allegedly found workers who were doing stocktaking cracking jokes and laughing, and she shouted at them "You lazy k***s are not doing your jobs". This incident occurred last week Saturday and led to the closing of two stores earlier this week, Ridgeway and Southgate.

Shoprite said "it is committed to resolve matters through due processes in the interest of all parties involved and regrets that a number of stores have had to close due to associated protests and political interference,"

The question I have for Shoprite, is how on earth could they have a regional manager in their employ who could even think that she could make such a statement and get away with it? It appears some people are still living in the past and have not embraced a multicultural South Africa and the principles of Ubuntu. Shoprite have some work to do, based on this alleged incident, to find and retain the correct staff who build and motivate their employees and not lead to consumer boycotts.

07/08/2019

These are the new wage rates applicable for the Wholesale & Retail sector. The new rates from cashier level upwards is effective from 2 August 2019.

30/07/2019

The Department of Labour is currently conducting "blitz" inspections in East London, in both residential neighbourhoods and business areas. They are checking for compliance with the National Minimum Wage (R20 an hour for businesses and R15 an hour for domestic workers). They are also checking that employers are deducting UIF for any employee that works for more than 24 hours in a month.

I still hear some people say they don't comply with the national minimum wage because the employee is a casual or a temp. That is irrelevant! Whether permanent, temp or casual or mornings only, the minimum wage (per hour) does apply! The same with UIF. If the employee works longer than 24 hours in a month, for you, as an employee, domestic or casual/temp worker he or she must have UIF deducted from his/her earnings.

Non-compliance with the above can result in fines and backpay to the employee and to the Unemployment Insurance Fund!

If you are inspected, you are required to submit a number of documents to the Department. For a copy of the list of documents and for any assistance with Department of Labour inspections please contact me.

23/07/2019

Lately I have been receiving a lot of queries regarding the annual wage increases for the Wholesale and Retail Sectoral determination and the Hospitality Sectoral determination. Both sectoral determinations: SD9 (Wholesale and Retail) and SD 14 (Hospitality) have not been increased, in 2019 by the Department of Labour.

It is important to note that the following sectoral determinations have been superseded (in respect of the correct wage rates) by National Minimum Wage (NMW). The minimum wage rate in all sectors (apart from farming & domestic workers) is R20 an hour, as from 1 January 2019, regardless of any Sectoral Determination wage rates that were published in 2018.

In fact wage rates for the following sectoral determinations is now covered by the NMW:-

* Sectoral Determination 7 - Domestic Workers
* Sectoral Determination 13 - Farm Workers
* Sectoral Determination 12 - Forestry Sector
* Sectoral Determination 11 - Taxi Sector
* Sectoral Determination 14 - Hospitality Sector

Please note though, the conditions of service as specified in the sectoral determinations are still legally binding on both employees and employers. It is only the applicable wage rates that now fall under the NMW for the above-mentioned sectoral determinations, from SD7 to SD14.

I have been reliably informed that the focus of the Department of Labour in 2019 is to ensure that the NMW is enforced throughout all sectors. As a result increases for Sectoral Determinations which are not substantially affected by the NMW, i.e. Wholesale & Retail sector, will be given increases once again in 2020.

It is important to note that whilst the wage rates may fall under the NMW no sectoral determinations have been repealed, as yet. Therefore employers and employees need to study the NMW and the applicable sectoral determination, for their particular industry, in order to be comply with current labour legislation.