|
| Editor's Note |
In this edition we continue with our series of articles on guiding an employer through the retrenchment process. We remind employers of the upcoming COID Return on Earnings deadline and the SDL ATR and WSP reporting deadlines at the end of April.
We also include an article on employer's obligations when employing foreigners and highlight for clients who claim ETI some of the recent challenges experienced with SARS E@syfile software and ETI validation checks.
As usual, should you require any further detail on any of these topics, please feel free to contact us. |
| Top of Page |
| |
| Table of Contents |
1. Retrenchment Guide Part 2: Notification Procedures
2. Employment Tax Incentive: The Struggle Continues
3. Employing Foreigners: Not a way to avoid your employer obligations.
4. Compensation for Occupational Injury & Disease (COID) Return of Earnings Deadline
5. Skills Development Levy Annual Training Report and Workplace Skills Plan Deadline
6. Contact HRTorQue |
| Top of Page |
| |
| 1. Retrenchment Part 2: Notification Procedure |
| Author: Nicky Hardwick |
In last month's article we dealt with your payment obligations in a retrenchment process and we looked at part one of the guidelines seen as good practice by the Labour Court in a fair retrenchment process i.e. avoidance and reduction of the effects of retrenchment. This month we look at step 2, the notification procedure.
Good Practice Step 2. Notification Procedure
The requirement in this step is to notify employees (or their union) in writing that management is considering retrenchment allowings them to take part in proper consultations. The notice should give as many details as possible in order to allow employees to make suggestions and representations to management. If there is a "representative" union, they must attend the consultations.
It should include at the very least:
| • |
The specific reasons why the retrenchment is being considered, including any pertinent facts and figures and where possible financial and production statistics. |
| • |
Measures already taken by management to avoid or limit the retrenchment. |
| • |
The proposed number of employees who may be affected. |
| • |
The categories of employees who may be affected (foremen, drivers, operators, general workers, anyone over 55, on a final written warning, etc.) |
| • |
The proposed date of the retrenchment. |
| • |
The proposed dates and times when employees will meet to consult with management. |
| • |
The proposed selection criteria e.g. Skill Retention, Apprentice Contracts, LIFO, early / voluntary retirement, temporary workers, employees on short time, etc. |
If you do not notify correctly you risk derailing your entire process. |
| Top of Page |
| |
| 2. Employment Tax Incentive: The Struggle Continues |
| Author: Jonathan Aitken |
In 2016 when submitting ETI claims significant challenges were experienced with the SARS e@syfiling system. The SARS e@syfiling system reported validation errors on fields where validation checks were not required. SARS subsequently acknowledged the issue with the validation checks and outlined a process where the specific validation checks would be resolved if no other validation errors were identified.
However, in practice, despite the appropriate validation checks being met, we have received evidence of companies receiving notification from SARS that their ETI claims are not valid and that they owe the full ETI claim - in most instances these relate to substantial sums which these companies have not budgeted for. When SARS local branches have been contacted to try and resolve the problem they are unable to help and refer it to e@syfile who in turn are unable to help as they see it as a process issue.
The issue is very material not only given the sums involved, but also because it impacts companies' ability to obtain a tax clearance certificate.
The Payroll Authors Group of South Africa (PAGSA) and other groups are campaigning on behalf of employers to resolve this issue. It is interesting given the sums involved that the issue has not been reported on in the press. |
| Top of Page |
| |
| 3. Recruiting Foreigners: Not a way to avoid your employer obligations. |
| Authors: Neil Coetzer and Shahnaaz Bismilla |
The employment of foreigners in South Africa is regulated by the Immigration Act 13 of 2002, as amended ("the Immigration Act"). The Immigration Act provides for the admission of foreigners to, their residence in and departure from South Africa and matters connected therewith including the ability of foreigners to work in South Africa. The Immigration Act is supplemented by the Immigration Regulations which underwent significant changes in May 2014, specifically in relation to work visas.
The Employment Services Act 4 of 2014 ("ESA"), which came into effect in August 2015, further regulates the employment of foreigners. ESA has been introduced to promote employment, encourage productivity, decrease levels of unemployment and provide training for unskilled workers. One of the specific aims of ESA is to facilitate the employment of foreign nationals in a manner that is consistent with the objects of the Immigration Act. Importantly, the ESA accords jurisdiction to the Labour Court to deal with issues relating to the employment of foreigners and also confirms the sanctions for non-compliance as set out in the Immigration Act.
In addition the Labour Relations Act 66 of 1995, as amended ("the LRA") is applicable regardless of the legal status of the employee. The LRA governs disputes relating to unfair dismissal and unfair practices in employment and regulates the resolution of these disputes.
The Immigration Act and Regulations Section 38 of the Immigration Act provides that no person shall employ:
| • |
an illegal foreigner; |
| • |
a foreigner whose status does not authorise him or her to be employed by such person; or |
| • |
a foreigner on terms, conditions or in a capacity different from those contemplated in such foreigner's status. |
In terms of section 38(2) of the Immigration Act, a duty is placed on an employer to make an effort, in good faith, to ensure that no illegal foreigner is employed by it and to ascertain the status or citizenship of the persons it employs.
Furthermore, section 49(3) of the Immigration Act provides that anyone who knowingly employs an illegal foreigner or a foreigner in violation of the Immigration Act shall be guilty of an offence and liable to a fine or a period of imprisonment not exceeding one year for a first offence.
The Labour Relations Act
There is a misguided view amongst employers that they can side-step labour regulations when it comes to employing foreigners. It is important to note that foreign employees, including those who do not have valid working visas, are afforded legal protection from unfair dismissal under the Labour Relations Act 66 of 1995, as amended ("the LRA").
Section 213 of the LRA defines an 'employee' as:
(a) any person, excluding an independent contractor, who works for another person or for the state and who receives, or is entitled to receive, any remuneration; and
(b) any other person who in any manner assists in carrying on or conducting the business of an employer.
It is also relevant to consider the provisions of the Constitution of the Republic of South Africa, Act 5 of 2005 ("the Constitution") which provides in section 23(1) that everyone has the right to fair labour practices and not only citizens.
The law does not declare that a contract of employment concluded without the required permit is void nor does it provide that a foreigner who accepts work without a valid permit is guilty of an offence. What is prohibited is the act of "employing" a foreign national in violation of the law. All of the liability is therefore attributed to the employer and the law does not penalise the action of the foreign person who accepts work or performs work without valid authorisation. It is the illegal employment of a foreigner that is prohibited.
Therefore a foreign national whose work permit expires whilst employed, or who is employed without a relevant work permit is still an 'employee' for the purposes of the LRA. This means that the employee would have recourse to compensation in the case of an unfair dismissal, through the CCMA. Such employees would not be entitled to reinstatement as such an order would be in contravention of the Immigration Act.
These principles were confirmed in the matter of Discovery Health Limited v CCMA & Others [2008] 7 BLLR 633 (LC) where the employee was dismissed after the expiry of his work permit. The employee referred an unfair dismissal dispute to the CCMA, where the question of the CCMA's jurisdiction to hear the case was considered. The CCMA ruled that it did have jurisdiction to determine whether the employee had been unfairly dismissed and found further that the employee's dismissal had been unfair.
In view of the CCMA's ruling, the employer took the matter on review to the Labour Court. The Court held that the contract of employment between the employee and employer was valid, and remained so until it was terminated by the employer. The Court also found that the employee, despite being a foreign national, fell within the definition of an employee for the purposes of section 213 of the LRA and as a consequence enjoyed the protection afforded by the LRA.
It is important to understand that employers must still act fairly towards foreign employees, regardless of the legality of the employment.
Conclusion
The law clearly places the onus on the employer to comply with the relevant legislation and holds the employer liable for non-compliance. It is therefore, necessary that prior to the employment of any foreign person, employers should take legal advice to ensure that they comply with the relevant statutory obligations, including the recently enacted ESA.
The employment of foreigners is designed to be a short-term measure to bridge the skills shortage within an employer's business and to facilitate the transfer of skills. Employers should, therefore, ensure that a skills transfer plan be prepared to ensure that the relevant skills are transferred to a South African citizen and that the necessary time and resources are invested in transferring and retaining the skills in South Africa. |
| Top of Page |
| |
| 4. Compensation for Occupational Injury & Disease Return of Earnings 2017 |
| Author: Kacey Chetty |
On or before the 30th April 2017 you are required to submit your Return of Earnings (ROE) submission to the Department of Labour, this 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 [email protected]. 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).
Please note the following important issues:
| • |
Permanent, temporary and casual employees are to be included in this return. |
| • |
You are required to report on the earnings to a maximum of R377,097.00 per employee per annum, for the tax year March 2016 to Feb 2017. |
| • |
You are also required to make an estimation of the remuneration and number of employees monthly for the next tax year that will begin shortly. This enables the Commissioner to budget for the following year, and to fix the new Occupational Injuries and Diseases (OID) limit. The prescribed amount in terms of section 83(8) of the Compensation for Occupational Injuries and Diseases Act, 1983 has increased from R377,097 to R403,500 per annum with effect from 1 April 2017. |
| • |
With effect from 1 April 2013, there will be no assessment revisions entertained as a result of the fault of the employer. |
| • |
In the event more than one return is furnished for the same assessment period, the first return submitted will be accepted as the final one. |
Criminal proceedings will be instituted for misrepresentation of facts. |
| Top of Page |
| |
| 5. Skills Development Levy: Reports and Deadline |
| Author: Jonathan Aitken |
Skills Development Levy Annual Training Report and Workplace Skills Plan Deadline
Payment towards the Skills Development Levy grant scheme is legislated in terms of the Skills Development Levies Act, 1999. Under this act every employer in South Africa who is registered with SARS (South African Revenue Services) for PAYE; and has an annual payroll in excess of R500,000 or more than 50 employees must register with SARS to pay the Skills Development Levy.
If an employer wishes to have access to recover either a mandatory or discretionary grant (to reclaim portion of their SDL levy to support their staff training), or they wish to claim BBEEE points by setting up an apprenticeship or learnership programme, they are required to register with their appropriate SETA (Sector Education and Training Authority) and submit an Annual Training Report and Workplace Skills Plan by the 30 April each year.
If you need assistance preparing either of these reports please feel free to contact one of our consultants at [email protected]. |
| Top of Page |
| |
| 6. Contact HRTorQue |
Head Office (Durban)
Phone: 031 564 1155 • Email: [email protected] • Website: www.hrtorque.co.za
Address: 163 Umhlanga Rocks Drive, Durban North, KwaZulu-Natal
Johannesburg Office
Ground Floor, West Wing, 6 Kikuyu Road, Sunninghill, 2191 |
 |
|
|
|
