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Click here to download the Government Notice
Increase in Basic Conditions of Employment Act Threshold Earnings
Andre Claassen / Jan du Toit
Section 6 of the Basic Conditions of Employment Act makes provision for the Minister of Labour to publish a determination on the advice of the Commission that will exclude employees earning above a certain amount per year from sections of chapter 2 of the Act. Chapter 2 primarily deals with the regulation of working hours of employees.
On the 13th of May 2011 Minister Mildred Oliphant increased the annual threshold earnings from R149736.00 (R12478 p/m) to R172 000 (R14333.33 p/m). For the purpose of defining the word "threshold", it means the following, which is a direct quote from the ministerial determination as published: (words in brackets were inserted by us)
"Earnings” means gross pay before deductions, i.e. (before deducting) income tax, pension, medical and similar payments, but excluding similar payments (contributions) made by the employer in respect of the employee.”
The sections from which such employees are excluded are:
9. Ordinary hours of work
10. Overtime
11. Compressed working week
12. Averaging of hours of work
13. Determination of hours of work by Minister
14. Meal intervals
15. Daily and weekly rest period
16. Pay for work on Sundays
17. Night work -17(2) that deals with transport and night shift allowances
18. Public holidays – 18(3) that deals with payment for work on a public holiday that falls on a day on which the employee would ordinarily not have worked.
Employees earning under the threshold amount:
These employees have the full protection of every section of the Basic Conditions of Employment Act (BCEA).
The Act entitles such persons to certain rights such as:
- Overtime may only be worked by agreement between employer and employee.
- The employee has the legal right and entitlement to demand payment for overtime worked at the rate of 1,5 times his normal wage rate, or at whatever rate is applicable (not less favourable than the minimum set in the Act).
- The employee can also enter into an agreement with the employer whereby he can be given time off work instead of payment for overtime worked.
- Generally, the employee can legally refuse to work more than 45 hours per week normal time and he can legally refuse to work more than 10 hours per week overtime and he can legally refuse to work more than 12 hours in any one day, consisting of nine hours normal time and three hours overtime. There are some circumstances where the employee may not be able to refuse, such as in emergency overtime, but that is not the issue under discussion.
There are some other conditions as well, but we are not going to go into all of them here - this article is not intended to be a training course in the BCEA.
From the above you will note that persons earning under the threshold have a legal right to “demand”.
Employees earning over the threshold amount
Persons earning over the threshold amount do not have a legal right to demand anything in respect of Sections 9, 10, 11, 12, 14, 15, 16, 17(2), and 18(3) of the Act with effect from 1 March 2008. The employer must however in determining the hours of work of the employee earning above the threshold take into consideration section 7 of the Act:
“7 Regulation of working time
Every employer must regulate the working time of each employee-
(a) in accordance with the provisions of any Act governing occupational health and
safety;
(b) with due regard to the health and safety of employees;
(c) with due regard to the Code of Good Practice on the Regulation of Working
Time issued under section 87 (1) (a); and
(d) with due regard to the family responsibilities of employees.”
Employees earning under the threshold have a legal right to demand in respect of the above-mentioned sections.
Employees earning over the threshold do not have a legal right to demand in respect of the above-mentioned sections.
The employee earning over the threshold amount, do however have a right to negotiate.
Thus, the employee earning over the threshold amount must approach the employer, negotiate and reach agreement on how many normal hours and overtime work will be required from the employee. Once this has been established the parties must agree on remuneration for the overtime worked. Such remuneration may be less than the minimum prescribed by the Act.
The same must be agreed upon for work on public holidays as per section 18(3) and work on Sundays. The employee earning over the threshold cannot demand and must therefore negotiate.
The employer is in a similar position; the employer also cannot demand that employees earning over the threshold must work overtime, standby duties, attend callouts etc, without limitation and without compensation.
The reason why the employer cannot make those demands is stipulated in section 48 of the BCEA, which reads as follows:
“1. Subject to the Constitution, all forced labour is prohibited.
2. No person may, before his or her own benefit or for the benefit of someone else, cause, demand, or impose forced labour in contravention of subsection (1).”
Therefore, for employees earning over the threshold, the employer is in the same situation in that he cannot demand but must instead also negotiate.
Employers are advised to carefully consider the employment conditions of employees earning above the threshold and to clearly stipulate such conditions in the contract of employment prior to the commencement of the employment relationship. It is extremely important to understand that employers may not, upon learning of the threshold earnings notice, make unilateral changes to the employment conditions of employees earning in excess of R172 000 per annum. The conditions agreed upon in the initial employment agreement are binding and must be honoured unless such changes are mutually agreed upon.
Click here to download the Government Notice
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