HRTorQue Reporter September 2018   HRTorQue Reporter Archive Table of Contents 1. Youth Employment Service Launch 2. The Importance of Payroll Reconciliations 3. Is your company whistleblowing compliant? 4. ConCourt Ruling that "Hit the Boer" is Not a Racist Song 5. Correction - Incorrect Government Gazette from Department of Labour 6. Contact HRTorQue Should you require any further detail on any of these topics, please feel free to contact us. Top of Page   1. Youth Employment Service Launch Author: Jonathan Aitken Earlier in 2018 the president announced the launch of the Youth Employment Service (YES) as a partnership between government and business to employ young people in the country. On the 28 August the YES scheme was gazetted by the Minister of Trade and Industry. The YES Scheme allows qualifying entities to move up a level or two on their BBEEE score if they meet specific employment targets either in their own company or by sponsoring employment in other companies. This article is intended to summarise the main points of the YES Scheme, but is not intended to be a definitive guide.     Generic QSE EME Entity Size >R50m turnover 10m to 50m turnover <R10m turnover Qualifying Criteria 40% minm for all 3 priority elements OR average of 50% across all 3 40% minm for 2 out of 3 priority elements (ownership must be one) OR average of 40% for 2 of 3 (of which ownership must be one) Nil   Maintain or improve BBEEE level since prior year Target Higher of: 1.  1.5% of prior year headcount; or 2. 1.5% of last 3 year's NPAT / R55,000 (to convert to a headcount number); or 3. A target per Table 1 (from gazette) As per table 2 (from gazette) e.g. a company with 100 employees would have a target of 6 new employees Eligible Employees •  Between 18 and 35 •  Meet the definition of "Black" people as defined in the BBEEE Act Employment Conditions •   Subject to existing legislation (BCOE) • Must sign fixed term or temporary employment contracts for min. term of 12 months full-time work experience • Must commit to a quality work experience • Clear communication if contract is not extended or made permanent • New jobs must be in addition (not replacement) to existing headcount • Targets can be met by sponsoring roles in an EME or QSE (as opposed to in the entity itself) Successful achievement of target will result in the following outcomes:     BBBEE Recognition Achieve Y.E.S Target and 1.5 % Absorption Move 1 B-BBEE Recognition Level up on the Scorecard Achieve 1.5 x Y.E.S Target and 5% Absorption Move 1 B-BBEE Recognition Level up on the Scorecard + 3 Bonus Points to the Overall Scorecard Double Y.E.S Target and 5 % Absorption Move 2 B-BBEE Recognition Levels up on the Scorecard In addition, informal skills development expenditure for these roles can be claimed as 50% of the skills development expenditure (Category F and G of the Skills Development Framework) (instead of the lower 15%). Top of Page   2. The Importance of Payroll Reconciliations Author: Jonathan Aitken Having processed payrolls for multiple clients over many years one of the things we have noticed is that often a reconciliation is not performed (or not performed well) between the processed payroll, the actual payments made to employees and third parties; and the general ledger recorded in an employer's books. This lack of a solid reconciliation occurs for a number of good reasons: •   Confidentiality - the finance team performing the recons are not privy to detailed employee information (and senior finance don't have the time to do the recons themselves); • Understanding - some of the issues that arise in payroll can be confusing/complex either from an HR/tax perspective or from an accounting perspective; • Communication - the payroll may be processed by HR, but nobody communicates with the person doing the recon to explain why specific transactions have taken place;   The downside to either no recon being performed or a recon being performed badly leads to a number of risks for the business from an accounting perspective: •   Leave and bonus provisions are not recorded accurately • The general ledger may balance, but employer contributions and fringe benefits (double sided entries) may not have been coded and do not appear on the general ledger • The general ledger may assume that all nett pay and third party payments have been made and reflect no liability whereas in reality some payments may not have gone through properly (e.g. garnishees) or where payments have been deliberately withheld until an issue is resolved • The balance sheet may not accurately reflect loan accounts, SARS liabilities (incl ETI) and employees with negative net pay (never recovered) We would highly recommend employers perform a reconciliation between their payroll, general ledger and EFT payments. This is a critical control. Our accounting team is available to assist with this to offer a confidential, professional service, should you wish to take this route. Top of Page   3. Is your company whistleblowing compliant? Protected Disclosures Act Author: Jonathan Aitken The employment relationship is governed by a large number of formal Acts of legislation. One of those less talked about and often forgotten by Employers is the Protected Disclosures Act. In essence this Act provides for protection for employees or workers who disclose information about wrongdoing (contravention of laws, health and safety or unfair employment practices) in the workplace. The Act sets out the obligations for Employers with respect to following up on any disclosures and the time period in which these procedures should be followed. The Act also provides for immunity of prosecution for employees or workers for the disclosure itself, but not if they themselves have been party to any illegal acts. From a practical perspective, employers should be aware of the Act and its implications and we would encourage employers to have an appropriate policy to deal with such matters and use publicly available technology/processes to manage any disclosures so that they do not create further risk for themselves.   Should you wish to discuss possible solutions please feel free to contact us by email at [email protected]. The objective of this article is to make employers aware of the Act and its consequences, but it is not intended to be a summary of all provisions of the Act. Protected Disclosures Act "The objects of this Act are - (a)   to protect an employee or worker, whether in the private or the public sector, from being subjected to an occupational detriment on account of having made a protected disclosure; (b) to provide for certain remedies in connection with any occupational detriment suffered on account of having made a protected disclosure; and (c) to provide for procedures in terms of which an employee or worker can, in a responsible manner, disclose information regarding improprieties by his or her employer." In the 2017 amendments, worker was expanded to include Temporary Employment Services workers creating an obligation for employers to also protect these individuals in specific circumstances. The amendments specifically allow for the TES worker to bring a claim against either their employer or the client. Protected Disclosure: Those activities covered by protected disclosure include: "'disclosure' means any disclosure of information regarding any conduct of an employer, or of an employee or of a worker of that employer, made by any employee or worker who has reason to believe that the information concerned shows or tends to show one or more of the following: a.   That a criminal offence has been committed, is being committed or is likely to be committed; b. that a person has failed, is failing or is likely to fail to comply with any legal obligation to which that person is subject; c. that a miscarriage of justice has occurred, is occurring or is likely to occur; d. that the health or safety of an individual has been, is being or is likely to be endangered; e. that the environment has been, is being or is likely to be damaged; f. unfair discrimination as contemplated in Chapter II of the Employment Equity Act, 1998 (Act No. 55 of 1998), or the Promotion of Equality and Prevention of Unfair Discrimination Act, 2000 (Act No. 4 of 2000); or g. that any matter referred to in paragraphs (a) to (f) has been, is being or is likely to be deliberately concealed;" Occupational Detriment: The Act goes on to describe what is considered as occupational detriment which includes: "'occupational detriment', in relation to [the working environment of] an employee or a worker, means - a.   being subjected to any disciplinary action; b. being dismissed, suspended, demoted, harassed or intimidated; c. being transferred against his or her will; d. being refused transfer or promotion; e. being subjected to a term or condition of employment or retirement which is altered or kept altered to his or her disadvantage; f. being refused a reference, or being provided with an adverse reference, from his or her employer; g. being denied appointment to any employment, profession or office; h. being subjected to any civil claim for the alleged breach of a duty of confidentiality or a confidentiality agreement arising out of the disclosure of - a. a criminal offence; or b. information which shows or tends to show that a substantial contravention of,     or failure to comply with i. the law has occurred, is occurring or is likely to occur; j. being threatened with any of the actions referred to in paragraphs (a) to (h) above; or k. being otherwise adversely affected in respect of his or her employment, profession or office, including employment opportunities, work security and the retention or acquisition of contracts to perform work or render services;" Potential remedies for the employee or worker: The Act provides for the payment of compensation and/or damages and/or reinstatement for any impacted employees or workers. The Act further provides that any dismissal in the circumstances is deemed to be an unfair dismissal and any other occupational detriment is deemed to be an unfair labour practice. Top of Page   4. ConCourt Ruling - "Hit the Boer" Case Author: Jonathan Aitken (Duncanmec (Pty) Ltd vs Gaylard NO and Others) It made headlines on the 13 September that the Constitutional Court had ruled that use of the word "boer" is not racist or racially offensive. What is more interesting in this case however is some of the detail behind the ruling which once again emphasises that fairness is the critical component in labour law disputes. Background: Between 30 April and 2 May 2013, a number of Duncanmec employees participated in an unprotected strike. While some of them only protested by refusing to work, nine employees were filmed dancing and singing songs. One of these songs was a well-known struggle song with lyrics that translate to "climb on the rooftop and shout that my mother is rejoicing when we hit the boers". The employees were found guilty by the company of: (1) participating in unlawful strike action; and (2) singing a racially offensive song.   They were given final warnings for the first offence and dismissed for the second. Duncanmec considered the conduct of the nine employees to have been so severe that it had irreparably eroded the trust relationship between it as employer and the employees. In moving through the bargaining council and the Labour Court the following key points were given in relation to this specific case and the concept of fairness: •   The song was a well-known struggle song and the legacy of the country should not be ignored in the context of how such songs were utilised. • The strike was short lived and peaceful (acknowledged by all parties as such) and the song was not being used to promote violence. • The company's policies did not prohibit the singing of the song. The Constitutional Court did note in their ruling the following:   •   Persistent instances of racism in the workplace are becoming worrisome and although the new constitutional order can hold people accountable for racist conduct, it cannot by itself make people stop being racist. • The use of the word "boer" on its own is not a racist or racially offensive word (the context is important), but in this case the use of the word in a song by the employees was inappropriate. • The fundamental test was whether the arbitrator had been fair in her assessment that the employment relationship had not broken down irretrievably. Her reasoning was that the employees had shown remorse and that while the song could be offensive and cause hurt, there was a need to differentiate between singing the song and referring to someone in racist language. On this basis the ConCourt ruled that the arbitrator had acted reasonably. Conclusion: The lesson for employers in this case is that one cannot arbitrarily dismiss an employee(s) for using perceived racist language. A process must be followed and consideration given to the context and fairness of the particular circumstances as well as the workplace rules relating to such behaviour. Top of Page   5. Compensation Fund Earnings Threshold - Incorrect Notice Author: Jonathan Aitken On the 13 June 2018, the Minister of Labour gazetted a notice in relation to the Compensation for Occupational Injuries and Diseases Act that (sic) "the increase in the minimum earnings amount of R60,336 per annum and the maximum amount of R430,944 per annum with effect from the 1 April" would apply. The Payroll Authors Group of South Africa has contacted the Department of Labour to question this on the basis there is no minimum and that the announcement in January 2018 reflected a change from 1 March and not 1 April. The Department of Labour has confirmed PAGSA are correct and that the maximum earnings amount of R430,944 should apply form the 1 March 2018. Top of Page   6. Contact HRTorQue Durban Phone: 031 564 1155  •  Email: [email protected]  •  Website: www.hrtorque.co.za Address: 163 Umhlanga Rocks Drive, Durban North, KwaZulu-Natal   Johannesburg Ground Floor, West Wing, 6 Kikuyu Road, Sunninghill, 2191   Cape Town Office Ground Floor, Liesbeek House, River Park, Gloucester Road, Mowbray, Cape Town, 7700 Bloemfontein Office 62 Kellner Street, Westdene, Bloemfontein East London 24 Pearce and Tecoma Street, Berea, East London Port Elizabeth 280 Cape Road, Newton Park, Port Elizabeth Polokwane 125 Marshall Street, Polokwane Nelspruit Promenade Centre, First Floor, Suite 11A, Nelspruit

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