Labour laws are there to protect all workers. Senior managerial employees and high earners do not, however, enjoy the same degree of protection as other employees. In this article we briefly investigate the extent of protection for these senior managerial employees.
It is fair for an employer to expect employees with a certain level of responsibility not to be clock-watchers. They are appointed to be concerned not only with their own interests, but also with those of the business. Normally such individuals are highly skilled, sought after and quite capable of negotiating an appropriate reward and other conditions of employment with the employer. The law recognizes this reality. So who are these employees and what can the employer expect of them?
New earnings threshold
As from 23 March 2003 several provisions pertaining to working time are not applicable if an employee earns a gross income of more than R115572,00 per year (previous threshold was R89455,00). The employer can for example expect the relevant person to work more than the usual ordinary working hours, not take meal intervals and work overtime as required, without having to pay overtime rates. Such employees may have to abandon their weekly rest period, work on Sundays at the normal rate of pay, be required to work on public holidays and generally make themselves available as and when their services are required. . The limitations and rewards regarding these matters are subject to negotiation between the parties.
Employers would be well advised to revisit the situation of employees who now, since the recent increase of the earnings threshold, enjoy rights and protections that they have - not enjoyed before. . Such employees may, however, be senior managerial employees in whose case the protection provided by law has been similarly reduced. The question is, who are these so-called senior managerial employees?
Senior managerial employee
The law recognizes that a senior managerial employee also enjoys a lesser degree of protection, even if that employee earns R115572, 00 or less per year. A senior managerial employee is one who has the authority to hire, discipline and dismiss employees and to represent the employer internally and externally. If any of these components are absent, the employee will not be regarded as a senior managerial employee and enjoy the same protections and rights as any other employee.
Notwithstanding the foregoing, the employer does not have free reign to abuse either of the above employee categories. The employer still has a duty to regulate the employee’s working time with due regard to the health and safety of the employee, the occupational health and safety laws, the code of good practice regarding the regulation of working time and the employee's domestic responsibilities.
The threshold of R115572,00 per year that has been mentioned above is also relevant in determining whether or not a person is an independent contractor. Since 1 August 2002, there has been a presumption that a person is an employee if any of a number of indicators are present. This presumption applies notwithstanding the agreement signed between the parties. The presumption does not, however, apply where a person earns more than the amount mentioned. It would appear that the law recognizes the fact that higher earners are more in demand, have more bargaining power and are less likely to be abused.
Protection against dismissal
There have been indications in our case law that employees with higher levels of responsibility enjoy less protection than others regarding dismissal for poor work performance.. Depending on the level, they are often qualified to judge for themselves whether they are meeting the standards set by the employer. Owing to their responsibilities, the consequences of their failure to meet such standards could have a severe impact on the business. Although the courts have been more flexible under these circumstances to apply the guidelines for unfair dismissal, it has become quite clear that standards of fairness may not be compromised. A chief executive officer who knows full well what is expected of him/her, but who has failed dismally, has the right to be heard before a decision is made regarding dismissal.
From the above it is clear that our labour laws mainly protect vulnerable employees, hence the flexibility in respect of senior managerial employees. However, where the latter are subject to abuse, the law is there to protect them as well.
Author: Jan Truter of Labourwise.
Labourwise is an on-line labour relations service aimed at SMMEs to assist entrepreneurs to implement effective labour relations in small businesses. They can be contacted via www.labourwise.co.za or firstname.lastname@example.org