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AMENDMENTS TO LABOUR LEGISLATION DURING 2002: CAN EMPLOYERS STILL BE PRO-ACTIVE?
During 2002 several important amendments were made to South African labour legislation. There are some amendments we should take cognisance of but they do not require us to take any action unless something happens such as a retrenchment exercise or the dismissal of an employee. However, there are other changes where it is in an employer’s interest to take pro-active steps..
Consider the following –
Do you use independent contractors on a regular basis?
Many individuals providing a personal service and who were previously regarded as independent contractors are now presumed to be employees, notwithstanding the fact that they have signed contracts specifically stating that they are independent contractors. Where there is uncertainty as to whether a person is an independent contractor or an employee, it is advisable to clarify the nature of the relationship before a dispute arises. There are several ways to do this, but these are not discussed in this article.
Do your standard contracts of employment take the changes in the minimum notice period into account?
The minimum contractual notice period for termination of employment has been changed to 1 week for the first six months of employment, 2 weeks for up to one year of employment, and 4 weeks thereafter. Whilst you may not unilaterally change the notice period in existing contracts of employment and whilst you may agree to a longer period than the minimum period prescribed, you should amend the standard employment contracts for new employees if you think it is in your own interest to do so.
Do your standard contracts of employment contain a provision regarding probation?
Until recently there seemed to be no difference between determining the fairness of the dismissal of a probationer and the dismissal of any other employee. Many employers have therefore not included a clause specifying a probationary period. Since the amendments, less compelling reasons are required to prove the fairness of a dismissal during probation. It is therefore advisable to agree upon a probationary period when employing someone.
How is your remuneration package structured for the purposes of unemployment insurance deductions?
An innovation of the new Unemployment Insurance Act, is that high earners, including company directors earning directors’ fees, must contribute to the unemployment insurance fund. However, if the earnings are based on commission no contribution has to be made to the fund. It is therefore worth the while revisiting the basis of earnings.
What is your business policy regarding maternity benefits?
Although not obligatory, some organisations pay employees on maternity leave a percentage of their normal earnings. The new Unemployment Insurance Act has created a special category for maternity benefits. The fund will pay a woman on maternity leave the difference between what the employer pays and the benefits that are prescribed in the benefit schedule. This means that some employers may be paying employees what the unemployment insurance fund would otherwise have paid.
The above are examples of areas where employers should be well informed and on their toes to save trouble and costs. It is still not too late to pay attention to these matters.