Alcohol in the Workplace

The year is coming to an end and with this comes the celebrations and functions that are either held at the employer’s premises or off site. Either way the question often arises as to what, if any, the employer’s obligations are when providing alcohol at these functions.

In terms of the OHS Act General Safety Regulation 2A. Intoxication.

  1. An employer or a user, as the case may be, shall not permit any person who is or who appears to be under the influence of intoxicating liquor or drugs, to enter or remain at a workplace.
  2. No person at a workplace shall be under the influence of or have in his or her possession or partake of or offer any other person intoxicating liquor or drugs.

Employee ‘intoxication’ is a major concern and you will note that the OHS Act has placed upon employers the duty of prohibiting persons to enter or remain at a workplace who appear to be under the influence of intoxicating liquor or drugs.

These restrictions, together with COIDA and the implications of a possible injury on duty, have legal implications for employers and you should ensure that not only is it vital that these provisions be communicated to all employees, but that you keep a record of these communications. Employers should be in a position to demonstrate that they have made an effort to try and manage employees’ conduct around alcohol consumption, or preventing them from driving when over the legal limit or in an intoxicated state during these functions.

At social functions on the employer’s premises, the employer should ensure that employees have ‘signed off duty’ prior to commencement of the function. This will avoid any possible claims of ‘injuries on duty’, and consider the following steps to reduce possible liability:

  • Advise employees regarding the desired behaviour during work functions. This could include the employer limiting the number of drinks for the duration of the function.
  • Providing access to breathalyser tests.
  • Place a disclaimer in the area or pub.

Whilst year-end functions should be occasions to unwind and relax with colleagues outside of the normal working environment, both employers and employees still have certain responsibilities around their conduct, and would be expected to consider that both interests are not negatively affected.

Final Reminder – COIDA Annual Return of Earnings

The Compensation Commissioner has issued a final reminder for the submission of outstanding Return of Earnings for 2017.

An estimated return based on estimate earnings can now be submitted before the 31 October 2017.

On or before the 30th April 2017 (as extended by the recent notice) you are required to submit your Return of Earnings (ROE) submission to the Department of Labour, as is legislated under the Compensation For Occupational Injuries And Diseases Act (No. 30 of 1993). Each registered business must submit a separate return.

This Act replaces the Workmen’s Compensation Act and provides for compensation for disablement caused by occupational injuries or diseases sustained or contracted by employees in the course of their employment, and for death resulting from injuries and diseases. The benefits are paid from the Compensation Fund, which gets its money from compulsory contributions paid by employers. All employers carrying out business within the Republic of South Africa are required to register.

If you have not requested this service from us in the past and require us to complete and submit this return on your behalf, please contact us on If we have submitted for you in the past then we will complete your return and send you the figures before submission. The cost for this service is R702.00 per return (excl. VAT).

Metal & Engineering Industry Bargaining Council (MEIBC) – Notice

Metal & Engineering Industry Bargaining Council (MEIBC) – Notice by MEIBC on dispute resolution collective agreement.

This notice is replicated from a circular by the MEIBC dated 24 July 2017.

On 21 July 2017 a Special MANCO of the MEIBC resolved to amend and extend the period of operation of the Dispute Resolution Agreement which provides for the dispute resolution procedures in the industry as well as a dispute levy, for a further period ending 31 March 2020.

Parties have also resolved that an application be made to the Minister of Labour to extend this agreement to non-parties.


Per Week Per Fortnight Per Month
R0.71 R1.42 R3.07

The employer pays a matching contribution per employee – thus total contributions per month per employee:

Dispute Resolution Levy Total: R6.14 per month

Note that the dispute resolution levy is also payable by administration staff.

Temporary Workers Ruling – Assign Case – Impact of Appeal on Employers

In our July edition, we talked about the recent Assign Case in which the Labour Appeals Court concluded labour broker supplied temporary workers who worked for an employer (and earned below the BCEA threshold) were effectively employees of that employer and not dual employed with their labour broker.

The case has been appealed to the Constitutional Court.

The implication for employers is that the practical situation reverts back to the treatment of these temporary workers as being “dual” employees of the labour broker and the client until the Constitutional Court rules on the matter.

Labour Brokerage Workers to Become Full Employees after Three Months

In a big blow to labour brokers the Labour Court on appeal ruled on the 10 July that labour brokerage workers are entitled to become full employees after three months (NUMSA v Assign Services and Others (JA96/15) [2017] ZALAC 45 (10 July)). 

This ruling was contrary to a previous ruling which deemed the employees to be in dual employment between the labour broker and employer.

The net impact of the ruling is to place all of the risk on the employer in relation to engaging labour broker workers. While there should previously have been no practical cost advantage of engaging labour broker workers, the practice may have been justified on the basis the employer was not able to manage the workers effectively. This may still be the case but the employer is now running a massive risk that a third party is effectively in charge of their obligations without any recourse.

UIF System Error

It has been brought to our attention that the U-filing system has been updating the UIF limits on their end incorrectly.

The Department of Labour system specialist has apparently acknowledged this mistake and will be advising employers shortly.

Can sick leave be substituted for annual leave – after the fact?

An employee was on annual leave and has now produced a doctor’s certificate for that same period. If the employee is on annual leave and falls ill can you substitute one for the other?

The Basic Conditions states that you may not allow an employee to take annual leave during any other period of leave, which implies that if the employee is on annual leave and is required to take sick leave or family responsibility leave that the annual leave is cancelled and replaced with the other leave.

In practice, companies have different stand points on this:

  1. If you fell sick before going on annual leave then the company might convert the annual leave to sick leave; or
  2. If you fell sick during annual leave then you would not be granted sick leave

Are the new UIF limit and rules operational yet?

In May 2017, the UIF Amendments Bill was signed into Law. This amendment improved the benefits available to those on maternity, for dependents of those deceased and for those not working due to illness. In addition, the UIF limit increase was published by the Minister of Labour in Government Gazette No. 40691 dated 17 March 2017, which relates to unemployment benefits in terms of the Unemployment Insurance Act, 2001 (Act No. 63 of 2001).

However, the above amendments only applied to changes in benefits and there were no official changes under the UIF Contributions Act and as such the payroll limit should not be increased. Further, those responsible for making payments under UIF do not believe the amendments are implemented.

From a practical perspective therefore until further notice, the limit on payroll should be set to the legislated value of R178 464.00 per annum or R14 872.00 per month (maximum deduction R 148.72 per month). In addition, those expecting to receive the enhanced benefits are unlikely to find much joy when trying to claim (one should also remember that UIF benefits are only available to those who contribute to UIF so where no contributions have been made no benefits are claimable).

Retrenchment (Part 4-6): Notification, Assistance and Re-employment

In last month’s article, we dealt with the consultation process. This month we finish off by looking at notification, assistance to employees and recalling/re-employment where this final stage is applicable.

Good Practice Step 4. Notification Procedure

Following the conclusion of consultations, management should, as soon as possible, notify those employees to be retrenched of the decision. Discussions should be held with ALL employees to be retrenched, including those to be relocated in new positions, put onto early retirement, transferred, etc., and letter should be sent to them containing details of notice, retrenchment pay, forwarding address, etc.

If you have agreed on the retrenchment details, put all the details into writing and sign the retrenchment agreement. This will be your only fall back in the event of the employees \ union reneging upon your settlement!

Good Practice Step 5. Assistance to Retrenched Employees

There is an onus upon management, given the no fault nature of a retrenchment exercise, to assist employees wherever possible in applying for UIF payments, Pension Refunds, and Tax Directives (1st R30,000 tax free), for Retrenchment payouts, and in seeking new employment, etc.

Adequate time is also needed to calculate individual’s packages, arrange for pension or provident fund withdrawals, or transfer to retirement annuities, etc.

Note: Again, that Sec. 196 of the Labour Relations Act provides for payment of a statutory minimum severance payment of one week per completed year of service with no upper limit. Employers may apply for exemption in case of intense financial distress.

Good Practice Step 6. Recall and Re-Employment

Should business improve and justify an increase in staff subsequent to a retrenchment exercise, first refusal of new positions should be given to retrenched employees (although there is no legal obligation to do so).

The following records of retrenched employees should therefore be maintained:

  • Name of employee
  • Postal and home address
  • Telephone number, or number of a close friend
  • Address of close relatives
  • Details of dependants
  • Any other essential information

Retrenchment Part Three – Consultation Procedure

Editor’s Note: an important part of any retrenchment process. This is the area many employers fail and get into trouble.

In last month’s article, we dealt with notification procedures. This month we look at step 3, the consultation procedure.

Good Practice Step 3. Consultation Procedure

This is the most difficult and complex stage in the retrenchment process and most often leads to Unfair Labour Practices and labour unrest unless adroitly handled. It is also the stage where I recommend that you keep written notes, and contact me for assistance in the consultation process if you encounter problems with individuals. (Read LRA Sec 189)

Management is required to “consult in good faith and “to attempt” to reach agreement (consensus)” with the employees affected. If the duty to consult went no further than giving employees or a trade union an opportunity to make representations or to advise the employer, there would be no need for s189 (2), which states that the consulting parties “must attempt to reach consensus”.

“The consultation process should constitute a real and serious attempt by Management to hear and seriously consider any views and proposals put forward by the employees. This may, for instance, include the need for the retrenchment, ways and means of alleviating the retrenchment, and proposals and suggestions relating to severance packages, etc.”

“To consult means to take counsel or advice from someone and does not imply any kind of agreement. Having consulted in good faith, Management has the right to implement the retrenchment even if no agreement is reached.”

Management should not rush through this stage, and if necessary must hold four or five meetings to ensure that every opportunity is given to employees to consult. If there is a union that has sufficient representation and/or a recognition agreement, they must be allowed to represent their members, and be given notice, etc.

A proposed agenda should be prepared in writing and would include:

1. Confirmation that prior notice of the proposed retrenchment has been given

2. A repeat of why retrenchment is being considered:
a. Information on why retrenchment has become necessary
b. Financial or operational disclosure to support the above
c. Alternatives to retrenchment which were considered, and reasons why rejected where applicable
d. Opportunity for employees to put forward any views and proposals, or alternatives to retrenchment
e. Discussion on how the retrenchment will affect the business

3. Discussion of the proposed time frame of the exercise
a. Arrangement of further opportunities to meet with individuals – dates and times
b. Proposed date of the retrenchment

4. Selection criteria (LIFO, retention of essential skills, downgrading, apprentice contracts, voluntary retirement, temporary workers, employees on short time, poor disciplinary record (only if properly documented!), selection process and notification of redundancy. In a small operation, names of those who may potentially be affected.

5. Details of proposed severance package, UIF cards, PAYE, Tax Directives, etc. Sec 196 of the LRA states that an employer must pay severance pay of at least one week’s pay for each year of completed service. Note that if you have an alternative position, e.g. driver instead of foreman, then there is no entitlement to a severance package if the employee “unreasonably” refuses to accept the offer of the alternative position. (Sec 196 (3) of the LRA).

6. Opportunity to discuss any “other” issues, counselling, etc.

NOTE: Proper minutes and a recording, if possible, should be kept of every meeting. Particular note should be made of all, and any, proposals, queries, alternatives, etc., made by the employees / union.