The idiom: "The more you put in, the more you get
out" will mould a new dimension for all employees who earn
less than R149 736 per annum.
This sector of the South African workforce will, with effect
from 1 March 2008, being the date of implementation of the new
threshold of earnings issued in terms of the Basic Conditions
of Employment Act ("BCEA"), be entitled to regulated
ordinary working hours, overtime by consent only, and a
prescribed reward for overtime1. And employerswill
have to be aware of the potential impact on the payroll.
In March 2003 the threshold was set at R115 572 per annum.
The increase to the threshold of earnings to R149 736 will
dramatically increase the pool of the South African workforce
that will be eligible to invoke the protections of Chapter 2 of
the BCEA which regulates working times.
Those sections worth specific reference are the
employee's entitlement to:
a maximum of 45 ordinary hours of work per
a maximum of 10 hours overtime per week with the
a compulsory one hour meal interval, or by consent 30
minutes, or to be paid for working during a meal
a daily rest period of 12 hours and a weekly rest period
of 36 consecutive hours;5
payment for work on Sundays/public
Chapter Two does not, however, apply to senior managerial
employees, employees engaged as sales staff who travel to the
premises of customers and regulate their own hours of work, and
employees who work less than 24 hours a month. In addition,
certain provisions of Chapter Two do not apply to employees who
earn in excess of the prescribed threshold of
From 1 March 2008 the new determination defines earnings as
the regular, annual remuneration in money or kind, before
deductions (income tax, pension, medical), excluding similar
payments made by the employer. Subsistence and transport
allowances, achievement awards and intermittent payments for
occasional overtime are not regarded as remuneration.
The first quandary for employers applying and implementing
the latest determination is the interpretation of what
constitutes earnings. There are two specific challenges in this
regard, namely how to quantify "payments in kind",
and how to establish criteria, based on the unique operational
requirements of a business, for what constitutes occasional
overtime, in the absence of a guideline being issued.
Employers should immediately reduce their risks (such as the
risk of claims for back pay or overtime) by immediately
consulting with and reaching agreement with individuals who are
likely to be affected by the increased threshold, in regard to
what constitutes their earnings. The purpose of the exercise
would be to establish which part of the workforce the
determination applies to.
The second quandary is that the new determination does not
exclude earners in excess of R149 736 per annum from the
provisions relating to meal intervals and pay for work on
These two sections were previously included. It is an
anomaly to free such an earner from the shackles of the
limitations imposed by the BCEA in respect of ordinary working
hours and overtime and yet to retain a right for the same
employee to take designated breaks and claim payment for work
performed on a Sunday. Time will tell if this is an oversight.
Until an amendment is published, whether this category of
workers shall be entitled to meal intervals and Sunday pay,
remains a quandary.
In respect of all employees that earn less than R 149 736
per annum, employers must calculate the economic cost of claims
for Sunday pay, and avoid fines for a breach of the Basic
Conditions of Employment of R500 per employee per contravention
or 200% of the amount due, including interest.
Employers should therefore enter into agreements regulating
work on Sundays. An agreement that an employee will only
qualify for pay for work on a Sunday specifically designated to
be performed on a Sunday and which is authorised in advance to
be performed on a Sunday will serve as a measure to minimise
As this right was previously excluded in relation to this
category of workers it could be manipulated or overlooked with
significant consequences. Thus, a proactive approach tackling
the implementation of the new determination is imperative.
Failure to take steps to:
identify the portion of the workforce that the new
determination applies to; and
to make provision for the additional costs associated
with a much greater portion of the workforce being entitled
to rewards for overtime
could pose an imminent threat to the profitability, in some
cases survival of businesses, with more of the pie being gorged
by ever increasing employment costs.
1. GN 100, GG30720 dated 1 February 2008
2. Section 9
3. Section 10
4. Section 14
5. Section 15
6. Section 16
7. Section 6(3)
The content of this article is intended to provide a
general guide to the subject matter. Specialist advice should
be sought about your specific circumstances.
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