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HRTorQue Reporter
January 2017
 
HRTorQue Reporter Archive
Editor's Note
In January 2016, we predicted a tough year ahead. In many respects we were right, although the economy remained more resilient than expected. Instead the country was focused on a series of political events. Moving into 2017 the only thing we can say for certain is that the political shocks will continue. Funding is also becoming very tight for government and we can say with a fair amount of comfort that government departments will be ramping up the audits and collections to collect as much revenue as they can.

A great example of this is the Department of Labour's recent announcement on the increase in the maximum earnings for COID purposes. The latest increase reflects a 13% per annum increase over the past two years, well above any inflationary measure.

In this edition we start a series of articles on guiding an employer through the retrenchment process. We remind employers of the upcoming COID Return on Earnings deadline at the end of April. We provide a link to the recent 2016 SARS statistics and we have two pieces dealing with questions we often get. The first on the Skills Development Levy and the latter on a more unusual question for the HR purists on how to classify the type of leave when an employee takes three days or less off for an IoD.

As usual, should you require any further detail on any of these topics, please contact us.
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Table of Contents
1. Retrenchment Guide - Part 1 in Series
2. Compensation for Occupational Injury and Disease (COID) Return of Earnings Deadline
3. COID Maximum Earnings Increase - Effective 1 April 2017
4. Common Questions Answered - Skills Development Levy
5. SARS Statistics 2016
6. What form of leave - IoD for three days?
7. Contact HRTorQue
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1. Retrenchment Guide - Part 1 in Series
Author: Nicky Hardwick
In this newsletter we start on our series about retrenchment and your obligations as an employer. In our first article we deal with your payment obligations in a retrenchment process and we look 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.

Note that you have to follow the retrenchment procedure stipulated by the Labour Relations Act, or potentially pay penalties of up to 24 months' salary as compensation. However, even if you are unable to reach full agreement with your employees or their union, where applicable, you can still go ahead and retrench once you have completed proper consultations with them - and continue consultations even after the employee has left your services! Obviously, if you can achieve a signed agreement, this would be first prize.

Employer Responsibilities - Payment

Your responsibilities when retrenching include the following payments:
1.   Any leave pay; and
2. 1 month's notice (depending on what their contract says and how long they have been with you) (the staff can be asked to work their notice or you can pay them out for this); and
3. 1 week severance pay for every completed year they have worked for you

If you do mutual retrenchments that means you or your adviser will sit with each person one by one and try to get them to accept the retrenchment without having to go through the formal process that the law asks for which is more time consuming. To do this you would need to offer more in terms of payment (e.g. 1 week pay or more) to encourage them to accept.

Good Practice Step 1. Avoidance and Reduction of the Effects of Retrenchment

Management is obliged to implement all or certain of the following before implementing any retrenchment measures in order to avoid or reduce the effect of such action:
•  Reduction of the workforce through natural attrition
•  Restriction of new hires by means of recruiting and promoting from within
•  Elimination of all casual labour
•  Non-renewal of short-term contracts of employment
•  Cessation of all overtime work
•  Voluntary retrenchments
•  Retirement of all employees over retirement age
•  Implementation of layoffs
•  Placing employees on short-time
•  Demotion / offering alternative jobs at lower pay or status
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2. 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.
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3. COID Maximum Earnings Increase
Author: Jonathan Aitken
The Department of Labour published Government Gazette notice no. 1577 on 29 November 2016 in respect of an increase in the maximum amount of earnings. The effective date is 1 April 2017. The prescribed amount under Section 83(8) of the Compensation for Occupational Injuries and Diseases Act No 130 of 1993 (COIDA) has been increased to R403 500 from R377 097 per annum.
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4. Skills Development Levy - Q&A
Author: Nicky Hardwick
In this article we explore some of the common questions we get around the Skills Development Levy and interacting with your SETA.

Who can be my company's Skills Development Facilitator and what do they do?

Your company's skills development facilitator (SDF) can be either:
One of your employees;
An external person who you have formally contracted to take on this position; or
A person who you, together with a number of other employers, employ to assess the group's skills development needs.

Your SDF will act as a liaison between your company and your Seta.

Your SDF must:
1. Liaise with your Seta;
2. Develop quality-assurance systems in your company;
3. Develop, submit and implement your company's workplace skills plan;
4. Draft an implementation report against a workplace skills plan; and
5. Tell you what your Seta's quality assurance requirements are.

Can in-house training be considered a pivotal program?

Pivotal Programs are defined as professional, vocational, technical and academic learning programmes that result in qualifications or part qualifications registered on the National Qualifications Framework (NQF) that address critical and scarce skills needs. Internal programs would need to be registered in terms of NQF to be classified as pivotal and allow you to claim accordingly.

Must out-house training be accredited with an ETQA (Education and Training Quality Assurance Bodies) or is a certificate of completion enough?

Any course that is not accredited can be claimed for under the mandatory grant whereas training that is accredited with an ETQA can be claimed for under Pivotal and Discretionary grants.

How do unit standards work and how do we find out which unit standards are needed and likely to be granted discretionary funding?

A unit standard is:
A registered statement of desired education and training outcomes and its associated assessment criteria, together with administrative and other information as specified in the regulations.

Each unit standard has a credit value which is equivalent to 10 hours of notional learning. Notional learning time is:
•   The learning time that it would take an average learner to meet the outcomes defined.
It includes concepts such as contact time, time spent in structured learning in the workplace and individual learning.

Each unit standard has to be registered on the National Qualifications Framework (NQF) - at a particular level, with a prescribed number of credits.

In terms of finding out what discretionary funding you will be granted; the best thing to do is to find out what the scarce and critical skills are as listed by your Seta.

Can you claim back your SDL for training non-employees (eg. teaching matriculants basic computer skills)?

Yes, this would be listed under Non-Employees.

How can you increase your BBBEE score with SDL claims?

This is based on your percentage of spend on BLACK employees and non-employees training and provided the criteria are met, can be credited against various part of the your scorecard (including Skills and Socio Economic Development).
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5. SARS Statistics
Author: Jonathan Aitken
SARS have released their 2016 statistics, available here.

Of significance again, 36% of all tax collections in 2015/16 flowed from personal income tax with the majority collected through PAYE. With a tough economic climate in 2017 unlikely to support employment, SARS is going to be under pressure in 2016/17 to match 2015/16 revenue collections.
 
Pundits expect the Finance Minister to look at ways to collect more tax with some expecting an increase in the top rate of tax (albeit this has been expected in the past and never materialised).
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6. What form of leave - IOD for less than 3 days?
Author: Tsepo Mkhwanazi
If an employee has an IOD for only 3 days, what form of leave should be recorded?

Section 24 of the Basic Conditions of Employment Act states that sick leave does "not apply to an inability to work caused by an accident or occupational disease". However, Section 24 goes further to state that the above mentioned applies to all cases of sick leave except for cases where "no compensation is payable in terms of the COID and the Occupational Disease in Mines and Works Acts".

The COID act stipulates payment rates for leave periods that are four days and beyond but does not stipulate payment rates to be paid when employees are placed on leave due to an IOD for a period of three days or less. Section 22 (2) of the COID act further states that "no periodical payments shall be made in respect to temporary total disablement or temporary partial disablement which lasts for three days or less".

The sum of the above is that because no compensation is set out in the COID Act, leave taken due to an IOD for a period of less than three days should to be taken as sick leave.
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7. 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
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