Higher Earnings Threshold for the Basic Conditions of Employment Act (BCEA)

 In accordance with Section 6(3) of the Basic Conditions of Employment Act (BCEA) of 1997, the Minister of Labour Ms Mildred Oliphant increased the earnings threshold to R149 736 a year or to R12 478 a month. This was by means of the publication of Notice No. R422 published in Government Gazette No. 34287 of 13 May 2011.

Earnings refers to an employee`s annual remuneration before deductions which includes income tax; retirement fund, medical aid and other benefit contributions and excludes employer contributions for retirement and medical aid made for the employee. Subsistence and travel allowances, achievement awards and payment for overtime are not regarded as remuneration.

The increase of the threshold comes into effect from 1 July 2011 and may cause employers who in the past had structured renumeration packages around the current threshold to revise this. Employees earning above the threshold are excluded from the statutory provisions for ordinary hours of work (Section 9), overtime (Section 10), compressed working week (Section 11), averaging of hours of work (Section 12), determination of hours of work by the Minister (Section 13), meal intervals (Section 14), daily and weekly rest periods (Section 15), pay for work on Sundays (Section 16), night work ( Section 17( 2)), and payment for work on Public Holidays ( Section 18(3)).

Accordingly, employees earning above the new threshold are required to negotiate their conditions of employment in respect of those conditions of the BCEA from which they are excluded.

Pieter Rautenbach