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| Editor's Note |
Greetings and a warm welcome to our November edition of the HRTorQue Reporter.
In this edition we look at the following:
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Ways to mitigate the impact of load shedding on lost employee productivity and employee costs; |
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Clarity on the treatment of public holidays falling on Sundays and Mondays; |
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Using bursaries to manage a long term employee skills and talent pipeline and earn B-BBEE points; |
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A discussion on the treatment of CCMA settlement awards and mutual termination arrangements; |
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Finally, we look at ways to improve employee performance and to prevent conflict by providing clear instructions to employees (alleviating uncertainty). |
Should you require any further detail on any of these topics, please feel free to contact us. |
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| Table of Contents |
1. Season's Greetings and Office Opening Times
2.
What is the impact of load shedding?
3. Public Holidays that fall on Sundays & Mondays
4. Bursaries and B-BBEE
5. CCMA Settlement Awards and Mutual Termination
6. Conflict Potential - Employees don't know what is expected of them.
7. Encouraging Employee Performance
8. Contact HRTorQue |
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| 1. Season's Greetings and Office Opening Times |
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HRTorQue will be closed from 23 December 2015 until 4 January 2016. For emergencies please call:
Payroll and 3rd Party queries:
Karen (Payroll): 082 8911 722; [email protected]
HR/Employee Relations:
Melany (email only): [email protected]
Nicky: 083 788 6999; [email protected]
We would like to take this opportunity to wish you and your loved ones a blessed Christmas, and health, happiness and success for 2016. Please drive carefully over the festive season! |
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| 2. What is the impact of load shedding? |
| Author: Melany Bydawell |
How do we manage load shedding and the effects on our businesses?
Are we obliged to pay employees during these interruptions?
Whilst we have a reprieve at present with load shedding, this continues to have severe implications for business and labour relations.
We encourage employees to give thought to practical management of their resources during these periods of interrupted power supply and, at the same time, complying with labour law requirements.
During the load shedding periods, some employers believe that they are not required to pay their employees. However, if an employee is contracted to be at work during specific days and times, the employer is obliged to remunerate for that time irrespective of whether the employee/s were able to carry out their duties or not.
To enable employers to minimise the effects of load shedding, employers can give thought to the following:
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Treating these stoppages as meal intervals although the period may exceed the break and in terms of section 14 of the Basic Conditions of Employment Act 75 of 1997 ("BCEA"), an employer must pay employees for any lunch break in excess of 75 minutes, unless the employee lives on the premises. |
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Implement changes to the hours of work after consultation with employees. |
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Flexitime arrangements (including shifts) to ensure that overtime costs are contained. |
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Agree on procedures that apply to interruptions of production. For example, The Metal and Engineering Industries Bargaining Council Main Agreement ("the Agreement") differentiates between planned and unplanned load shedding. In terms of section 7 of the Agreement, an employer may implement "short time" (i.e. reduced working time) "owing to a shortage of work and/or materials and any other justifiable contingencies, including planned load shedding and/or unforeseen contingencies and/or circumstances beyond the control of the employer." |
Where the circumstances are unforeseen or unplanned (such as unplanned load shedding) the employer may:
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Decide to send the employees home, provided they shall receive not less than four hours' work or pay in lieu thereof; or |
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Expressly instruct employees sent home to return, where the employer believes work can be resumed, provided the employees shall receive not less than four hours' work or pay in lieu thereof. |
In the event that employees refuse the proposed changes in hours of work, shifts etcetera during load shedding, the employer may be forced to implement retrenchment procedures in terms of sections 189 or 189A of the Labour Relations Act 66 of 1995 (as amended) ("LRA"). |
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| 3. Public Holidays that fall on Sundays & Mondays |
| Author: Nicky Hardwick |
With regards to the public holidays on a Sunday and the subsequent Monday public holiday, please see the legal opinion below.
Randfontein Estates Ltd v National Union of Mineworkers (2006) 27 ILJ 1200 (LC)
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In this matter, Randfontein Estates sought an order declaring that where a public holiday falls on a Sunday, then the following Monday shall be a public holiday in substitution for, or instead of, the public holiday on the Monday. |
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Firstly, the question of - is it one public holiday or two public holidays? - was addressed. |
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The court held that the provisions of the Public Holidays Act are quite clear. |
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The act states that "the days mentioned in schedule 1 shall be public holidays, and whenever any public holiday falls on a Sunday, the following Monday shall be a public holiday." |
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The judgement stated that a date determined to be a public holiday does not change its character merely because it falls on a Sunday. It remains a public holiday. |
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With regard to the question of payment - is an employee entitled to have both days off on full pay, thus getting a double benefit by being paid for two days off? |
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The judgement stated that the rationale behind section 2(1) of the Public Holidays Act (that both the Sunday and the Monday are public holidays) is to ensure that employees, who do not normally work on a Sunday, such as office staff, bank employees, or employees in any other organisation that is not open for trading on a Sunday, do not lose out on the benefit of having a day or for work on full pay - those employees have the Monday off on full pay as a public holiday. |
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Thus, those employees get paid only for one public holiday and not for two public holidays. |
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The reason is that these employees, who ordinarily work on Sundays, will get a double pay for working on the Sunday public holiday. Therefore, they have received the benefit. Similarly, such employees are entitled to the Sunday off on full pay, because it is a public holiday - they can therefore exercise that option, thus still receiving the benefit. |
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The judgement therefore ruled that employees are entitled to payment for only one public holiday. |
This therefore means that employees who work both Sunday and Monday are only entitled to the benefit of one public holiday. |
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| 4. Bursaries and B-BBEE |
| Author: Shirlee Caffyn-Parsons |
The Amended BEE Codes of Good Practice have companies gasping!! There are elements which are problematic and where compliance is difficult. People have questioned the rationale and many are floundering as they attempt to achieve compliance.
The introduction of Skills Development as a PRIORITY ELEMENT - where you have to achieve 40% of the target so as to avoid being discounted by one compliance level - and the increased spend requirement for this element, is also seen by many as problematic.
However, it's important to note that the required spend can be utilised for the upskilling of employees or non-employees, whereas previously it was only spend on employees that would be considered.
While the required spend is high - 6% of Skills Development Leviable Amount for generic organisations, and 3% for Qualifying Small Enterprises, the good news is that this money can be spent on non-employees.
Bursaries to black South Africans have previously been counted under the Socio-Economic Development element of the B-BBEE scorecard however, this spend can now be included in Skills Development.
So how do you maximise the benefit of this spend?
We all know that employees are the lifeblood of organisations and fostering loyalty and retention should be a focus for all organisations. Bursaries for the black children of staff members can now be included as skills spend - giving the company points and staff a feeling of being appreciated!
In many organisations, there are scarce skills that are required - either for immediate inclusion in the workforce or as part of a succession plan. Bursaries could be offered to deserving applicants who would then form a pool of suitable recruits in the future. Allowing these individuals to work within the organization during their holidays will mean that they become familiar with processes and the culture and will make for an easy transition post their studies.
For any of these bursaries to be considered as Skills Development, they would need to be awarded to Black South Africans, and the claimable amount is the ex VAT amount. Further, the training that is undertaken will qualify only if it meets the following criteria:
• Is offered by an accredited provider
• Is independently assessed
• Leads towards a degree, diploma or certificate
This means that secondary schools fees could be included. |
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| 5. CCMA Settlement Awards and Mutual Termination |
| Author: David Beattie |
Settlement Awards
As a company that processes payrolls on an outsourced basis, we regularly get requests to pay employees in terms of an instruction from the Commission for Conciliation, Mediation and Arbitration (CCMA).
Amounts received as a result of a CCMA or Labour Court award would be specifically included in 'gross income' in terms of Section 1 - definition of 'gross income', paragraph (d) or (f). With the payment, constituting 'gross income' there is an obligation to withhold employee's tax.
The amount of employee's tax that the employer is required to withhold must be ascertained by way of a tax directive application to SARS. SARS has published Interpretation Note 26 (March 2004), which provides clear guidelines as to the responsibility put on employers in this regard.
Mutual Termination
We have recently had to deal with large volumes of voluntary separation packages / mutual termination awards that are not related to retrenchment. Many tax practitioners and payroll administrators have struggled to identify how to deal with the taxation or reporting of a voluntary separation package. The SARS guides have also not been very clear on this matter, resulting in the reporting and taxation of such payments not being accurate.
When dealing with this matter it is important to understand the distinction between voluntary retrenchment, and voluntary termination of services, as their tax treatment and reporting differ.
Standard retrenchment procedures and reporting should be followed in the case of a voluntary retrenchment, where voluntary retrenchment was agreed upon as an alternative to forced retrenchment (agreed to in the context of a proper retrenchment exercise under section 189 of the Labour Relations Act). In the case of a retrenchment as discussed above, a tax directive must be applied for and the income reflected against code 3901 on the IRP 5 tax certificate.
When an employee is paid a voluntary separation package that is not related to a retrenchment, this income must be reflected under code 3907 ("Other Lump Sums") on the tax certificate. The employer is still required to apply for a tax directive using the normal application process but with the reason for the application listed as 'voluntary separation package'.
SARS has released a document on their website "Clarification of Source Codes", which explains the use of both of these codes. |
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| 6. Conflict Potential |
| Author: Melany Bydawell |
Conflict Potential - Employees don't know what's expected of them at work.
• There are no Job Profiles in place with clear expectations and measurements.
• Managers do not have the skills to assist employees set and achieve goals.
• Tip: Involve employees to assist you in formalising their Key Performance areas.
If you have been considering why you are experiencing conflict and non-performance on a daily basis, turn your thoughts to the possibility that employees may not know exactly what's expected of them.
Managers assess and implement individual work standards and timing according to what they believe is possible and reasonable. Naturally, these would differ between the Managers and conversations with employees inevitably end up in conflict, refusals to obey instructions, and decreased employee morale.
If a company makes an objective assessment of reasonable inputs and outputs based on work-study results or previous experience, and obtains the input and sign off from employees, they are more likely to enjoy stress free management, increased employee initiative, and reliance on employees meeting their KPAs responsibly and independently. |
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| 7. Encouraging Employee Performance |
| Author: Melany Bydawell |
In addition to Job Profiles and Key Performance areas, employees need to know when they're performing well and when they're not.
Effective managers assist in clarifying expectations and provide clear, timeous communication relating to the employee's work structure and priority of tasks.
They hold employees responsible and accountable for their input and output, and make themselves available to assist the employee with their questions. They also ensure ongoing support and regular feedback.
After setting expectations, effective managers do not walk away hoping that the task will 'just be done'. Regular measurement and feedback is essential. This 'employee engagement' plays a crucial role in supporting company growth.
What is responsibility and accountability?
The responsible person is the individual who actually complete the task and is the person responsible for action / implementation. Responsibility can be shared. The degree of responsibility is determined by the individual with the "accountability".
The accountable person is the individual who is ultimately answerable for the activity or decision.
The main difference between responsibility and accountability is that responsibility can be shared while accountability cannot. Being accountable not only means being responsible for something but also ultimately being answerable for your actions. Also, accountability is something you hold a person to only after a task is done or not done. Responsibility can be before and/or after a task. |
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| 8. 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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