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Provided by the Commission for Conciliation, Mediation and Arbitration (CCMA)

By Sarah Modise 

 

Substance abuse in the workplace may, in many cases, be found to be a dismissible offence. Although this can be viewed to be an individual's problem, it can also affect an employee's performance at work resulting in absenteeism, accidents, illness and mortality – all of which could add to the employer's costs.


Substance abuse has been linked to negative occurrences in the workplace such as stress, monotonous work, shift work, work requiring relocation and the frequent changes in co-workers and supervisors (ILO). The aim of this article is to examine how substance abuse affects the workplace and what measures employers and employee representatives could implement in order to eliminate the problem.


HOW SUBSTANCE ABUSE AFFECT THE WORKPLACE

The issue of substance abuse in the workplace has always been met with a dismissive attitude and swept under the carpet. However, when all incidents at work are accessed collectively it becomes important for the company to see it as a great concern. According to studies conducted by the International Labour Organisation (ILO) on the abuse of alcohol and drugs in the workplace, the following was found:

• Absenteeism of employees with alcohol and drug problems was three times higher than for other employees,
• Employees with chemical dependence problems claimed sick benefits three times more than other employees and also made compensation claims five times more than other employees,
• 20% to 25% of injuries in the workplace involved employees under the influence of alcohol, and
• Drugs and alcohol supplied at work amounts to 15% to 30% of all accidents at work.

It is not only heavy drinking that might result in incidents at work, but even low quantities of alcohol consumption have resulted in incidents. A study conducted in the 1990's has shown that even though alcohol is consumed in small quantities the effects can be costly for the employer. The study was conducted amongst airline pilots performing routine tasks in a simulator under three alcohol conditions. The outcome was that, before the pilots could drink any alcohol, 10% of them could not perform all tasks correctly. After a blood alcohol concentration of 0.10/100ml, 89% could not perform all the operations correctly and after all the alcohol had left their system, 68% could not perform all the operations.

Clearly this reveals that substance abuse should not be seen as only affecting heavy users as incidents can result from the consumption of low quantities of alcohol as well. Thus, it becomes important for employers to implement preventative measures and management programmes rather than just concentrating on the identification and rehabilitation of heavy users.
  
MEASURES TO ASSIST IN THE PREVENTION AND CONTROL OF "SUBSTANCE ABUSE"

The workplace can play an important role in preventing and providing remedies for substance abusers. The ILO has a code of conduct on the management of alcohol and drug related issues in the workplace. This can serve as a guideline for employers wishing to implement appropriate measures to prevent, reduce and control alcohol and drug related problems in the workplace.

DEVELOPMENT OF AN ALCOHOL AND DRUG POLICY FOR THE WORKPLACE

According to the code employers, together with employee representatives, should develop, in writing, a policy on alcohol and drug abuse. If possible, the policy should be formulated with the help of medical personnel and other experts who have specialised knowledge regarding alcohol and drug related problems. The policy should include information and procedures on:

• Measures to control "substance abuse" in the workplace through good employment practices

The code advises that where it is shown that certain job situations may contribute to substance abuse the employer together with the employee representatives should identify and take appropriate preventative or remedial action. Workers and their representatives should also not formally or informally support behaviour, which incites, encourages or otherwise facilitates the harmful use of alcohol or the abuse of drugs on the premises. When an employee voluntarily discloses a previous history of substance abuse, the employer should take steps to ensure that the employee is not exposed to a working situation which might, in the past, have resulted in the employee's problem.

• Restriction on alcohol, legal and illegal drugs in the workplace

The employer together with consulting parties should consider restricting or prohibiting the possession, or consumption and the selling of alcohol in the workplace. The employer should, after consultation with employee representatives, consider withdrawing alcohol as an item for expense account reimbursement or restrict it to specific situations. Employers should also be prevented from paying any wages in the form of alcohol or drugs. The above should apply to both management and workers. In those instances were medication might result in significant impairment, the employee should consult a health professional and inform his/her senior in accordance to normal procedures for absence for health reasons.

• Prevention through information, education and training programmes

The code advocates that employers should promote safety and health in the workplace through information, education and training programmes on the physical and psychological effects of alcohol and drug use. These programmes should be directed at all employees. The information, education and training programmes should also include the following information:


- General and specific to the workplace laws and regulations on alcohol and drugs,
- Suggested steps to prevent such problems from occurring, and
- Services available to assist the employees both within and outside the workplace. This will include information on assessment and referral services, counselling, treatment and rehabilitation.

It is recommended that managerial staff should be provided with additional training in order to assist them in identifying changes in the individual's performance and behaviour. The training will also equip managers with the necessary skills to respond to questions regarding the company policy on alcohol and drugs. After the training, they will also be able to support a recovering worker's needs and monitor that individual's performance when he/she returns to work.

Additional training should also be provided to employee representatives In order to enable them to assist employees who require help and to identify working methods or conditions that need to be changed or improved to prevent, reduce or better the management of alcohol and drug related problems. Training would further assist them in explaining and responding to questions related to company policies regarding alcohol and drugs.


• Identification

Identification of employees with problems could be conducted at different levels, including, self-assessment, and informal identification through a friend, family member or fellow employee and formal identification. Formal identification may include testing and should be done in accordance to the applicable laws and practices.


• Assistance, treatment and rehabilitation programmes

The code further suggests that employees with alcohol or drug related problems should be treated in the same manner as workers with other health problems. Therefore, workers who seek rehabilitation should not be discriminated against and should enjoy the normal benefits that are offered by an employer including the opportunity for transfer and promotion. The exceptions are in those cases where it has been identified that the employee is no longer fit to do their work. In such instances, the employer should assist the employee to obtain access to counselling, treatment and rehabilitation.

Assistance to employees with problems could vary according to the size of the company. Small companies could assist by providing employees with the names of identified professionals and services that specialise in counselling, treatment and the rehabilitation of employees, for example, self help groups such as Alcoholic Anonymous (AA). Big companies, on the other hand, might consider the establishment of an Employee Assistance Programmes (EAP). In other instances, employees might consider establishing their own programme.

• Intervention and disciplinary procedure

The code additionally recommends that employers should be aware that an employee who suffers from an alcohol and/or drug problem might also be suffering from a health problem and should consider offering counselling, treatment or rehabilitation as an alternative before deciding to discipline the employee. Disciplinary rules regarding substance abuse should be communicated to employees so that they are clear in terms of what is prohibited and the type of sanctions for the violation of such rules.

CONCLUSION

More and more employers have established substance abuse programmes in order to respond to the problems that are created by drugs and alcohol in the workplace. These programmes save money and in some cases, they save careers, families and lives. In an effort to raise awareness about the impact of substance abuse in the workplace, the ILO implemented its code in 1995. Although dated, the code is still relevant and can assist employers develop and maintain an alcohol and drug free workplace. It is in the interest of each employer to implement such a policy, if it has not done so already. The failure to do so will continue to adversely affect one's workplace and have a serious impact upon productivity.

REFERENCES

Mukhi, Niloufer. (undated) How decent is your workplace? ILO publication. www.ilo.org.za - accessed in January 2004. International Labour Organisation. Drug and alcohol-abuse- an important workplace issue. ILO publication, Geneva. www.ilo.org.za - accessed in January 2004. International Labour Organisation. Code of conduct on the management of alcohol-and drug-related issues in the workplace. ILO publication, Geneva. www.ilo.org.za - accessed in January 2004.

 

Is commission included in the calculation of minimum wage?

 

In terms of the National Minimum Wage Act 9 of 2018, an employer may not pay any employee less than the prescribed minimum wage for time worked. The aforementioned is unambiguous, but can an employer pay an employee a basic salary which is less than the minimum wage, or even no guaranteed basic salary, provided that the commission earned by the employee exceeds the minimum wage as prescribed by the Act? This is what had to be determined in Atlas Finance (Pty) Ltd v CCMA & 2 others, 2022 JR57/21.

 

2022/05

By Jan du Toit

 

During 2020, I assisted one of our longstanding clients with arbitration under Section 73A of the Basic Conditions of Employment Act 75 of 1997 (the BCEA). The dispute related to an alleged underpayment in terms of the National Minimum Wage Act 9 of 2018 (the NMWA). In terms of the NMWA, an employer may not pay any employee less than the prescribed minimum wage for time worked.

 

The nature of the employer’s business was that of microlending, with sales representatives employed and responsible for securing new business. During 2018, the employer by agreement amended the commission structure of most of its sales representatives employed throughout South Africa, except for those employed in Rustenburg. The employees in Rustenburg refused to accept amended employment conditions and threatened the employer with industrial action.

 

The changes to the remuneration structure of the sale representatives, which included the earning of commission, were deemed necessary to ensure compliance in anticipation of the announcement of an effective date for the commencement of the National Minimum Wage Act 9 of 2018.

 

Facing possible industrial action, the employer abandoned its attempt to amend the remuneration structure of the Rustenburg sales representatives. The employees withdrew their dispute lodged with the Commission for Conciliation, Mediation and Arbitration (the CCMA) at the time and continued to accept, as demanded, remuneration in terms of the originally agreed remuneration structure.

 

In terms of the originally agreed remuneration structure, which was applicable to the employees by choice, their basic remuneration was below the prescribed minimum wage for the 40.5 hours that they were required to work weekly. However, in addition to their basic remuneration, the employees also earned commission for work performed during their working hours. The commission was calculated as a percentage of the value of successful new business secured per month. The basic remuneration of the employees combined with the commission they earned by far exceeded the requirements of the NMWA. To ensure full compliance with the NMWA, the employer also committed to top up employees’ remuneration to be at least equal to the minimum wage if an employee failed to generate sufficient commission.

 

During the period of January 2019 to October 2020, after the NMWA became effective, the employees were paid remuneration consisting of their basic agreed salaries as well as commission. Their basic salaries combined with their commission exceeded the minimum wage prescribed by the NMWA for 40.5 hours of work per week. Despite the aforementioned, a dispute was lodged with the CCMA in terms of Section 73A of the BCEA. The employees were advised and assisted by Mr Isaac Mokgatle from Workers Against Regression, a registered trade union. Mr Mokgatle was of the view that the employees’ basic salaries had to be increased to be equal to the minimum wage for 40.5 hours of work per week. This was despite the fact that their basic salaries and commission combined by far exceeded the minimum wage for the time worked.

 

Currently, there is no uniform stipulation of which earning components should be included in the calculation of national minimum wages. The BCEA defines remuneration as “any payment in money or in kind, or both in money and in kind, made or owing to any person in return for that person working for any other person, including the State”. “Wages” is a component of remuneration paid to an employee “in respect of ordinary hours of work, or if they are shorter, the hours an employee ordinarily works in a day or week”.

 

The specification of “ordinary hours” is important because it excludes, for example, productivity or overtime pay. In South Africa, wages are calculated based on the ordinary hours of work, which ensures that workers receive premium payments for work done outside of ordinary hours.

 

Internationally, regarding productivity and performance pay, there is no standard definition of the components of a National Minimum Wage (NMW), however, if one has regards to international standards, productivity and performance pay are considered supplemental forms of remuneration. They specifically include commission work, piecework and tipped work. Commission work refers to any system under which an employee receives supplemental pay based on the value or volume of sales.

 

At arbitration, Mr Mokgatle submitted that commission earned by an employee cannot be considered for the purpose of determining whether such individual is paid less, equal to or more than the prescribed NMW. It was further submitted that the employees were paid a basic salary less than the NMW, and that despite them earning a basic salary combined with commission for work done during normal working hours, such commission must, in terms of the definition of “wage” and as per Sections 4(4) to 4(7) of the NMWA, be excluded for the purposes of the dispute before the Commission.

 

I submitted on behalf of the employer that commission earned for work done during an employee’s normal working hours cannot be excluded for the purposes of determining whether an employee is paid less than, equal to or more than the NMW. The employees earned in excess of the prescribed NMW and Section 5(1) of the NMWA does not list commission as an exclusion for the purposes of calculating an employee’s wage. Furthermore, Section 5(3) of the NMWA also provides for the payment of an employee on a basis other than the number of hours worked, provided that such employee is not paid less than the NMW.

 

By virtue of his submissions at arbitration, Mr Mokgatle effectively introduced a mutual interest dispute pertaining to an increase in remuneration under the guise of a dispute related to the NMWA.

 

Commissioner Rakale from the CCMA in Rustenburg held that the employer was in contravention of the NMWA. He, furthermore, ordered that an amount in excess of one million rand be paid to the employees as backpay in addition to a fine as provided for in the BCEA.

 

We approached the Labour Court on review and submitted that Commissioner Rakale:

 

  1. committed a material error of law by excluding commission earned by the third respondents (the employees) in determining whether the applicant (the employer) complied with the NMWA.

 

  1. misdirected himself to such an extent that the outcome of the arbitration amounts to a gross irregularity, in that his conclusion was not objectively correct, and that a reasonable arbitrator would not have reached the same conclusion considering the evidence available at the hearing of the matter.

 

  1. misdirected himself by relying solely on the definition of “wage” as found in the NMWA, and by failing to properly consider the provisions of Sections 5(1) and 5(3) of the NMWA.

 

  1. misdirected himself by finding that the employer did not pay the employees according to the hours they worked, which is in stark contradiction to Section 5(3) of the NMWA.

 

  1. misdirected himself by failing to consider that employees whose basic salaries and commission payments were not sufficient to ensure compliance with the NMWA, were, as provided for in Section 5(3) of the Act, topped up to ensure compliance.

 

  1. misdirected himself by including in the calculation of the amounts underpaid the months of April, May and June 2020, during which the third respondents did not work due the lockdown imposed at the time.

 

  1. misdirected himself by applying an unknown calculation method in determining the value of alleged underpayments, resulting in amounts awarded that are inconsistent with the evidence placed before him by both the third respondents as well as the applicant.

 

  1. exceeded his powers by ordering the applicant to increase the agreed basic salaries of the third respondents.

 

Acting Judge Deane agreed and held that commission is not a discretionary payment, which is not related to an employee’s hours of work, but forms a part of the employee’s wages and that the intention was not to exclude commission from the NMW. However, commission workers must still be paid at least the NMW. Workers do not have to be paid the minimum wage for each hour worked, but they must be paid the minimum wage, on average, for the time worked in a pay reference period.

 

It was, furthermore, held that the Commissioner misdirected himself by failing to take into account the evidence placed before him showing that the employees were paid in excess of the NMW. He further misdirected himself by failing to consider that the employer acknowledged that employees whose basic salaries and commission payments were not sufficient to ensure compliance with the NMWA, were, as required per Section 5(3) of the NMWA, topped up to ensure compliance.

 

The Commissioner’s decision to exclude commission earned by the employees in determining whether the applicant indeed complied with the NMWA was not a reasonable decision and constituted a material error of law. The Commissioner misdirected himself to such an extent that the outcome of the arbitration award amounted to a gross irregularity. It was ordered that the employer was not in breach of the NMWA by virtue of including commission earned in calculating the minimum wages of employees.

 

Jan du Toit is a director at Labour Guide and can be contacted at [email protected].

 

This article does not constitute legal advice. For an informed opinion and/or assistance with a labour-related matter, you are encouraged to arrange a formal consultation with the author.

 

 

 

 

 

 

 

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