BCEA - A New Earnings Threshold

 A new earnings threshold has been published under Basic Conditions of Employment Act (BCEA) 75 of 1997.

From 1 July 2012, all employees earning in excess of R183 008, 00 per annum will be excluded from certain sections of the act. See Government notice below:

GOVERNMENT NOTICE, DEPARTMENT OF LABOUR, BASIC CONDITIONS OF EMPLOYMENT ACT, 1997, DETERMINATION: EARNINGS THRESHOLD,

No.35404, 1 June 2012

I, Nelisiwe Mildred Oliphant, Minister of Labour, in terms of Section 6(3) of the Basic Conditions of Employment Act, No. 75 of 1997, (the Act), determine that all employees earning in excess of R183 008.00 (one hundred and eighty three thousand and eight rand) per annum be excluded from sections 9, 10, 11, 12, 14, 15, 16, 17(2), 18(3) of the Act with effect from 1 July 2012.

For the purposes of this notice:

"Earnings" means the regular annual remuneration before deductions, i.e. income tax, pension, medical and similar payments but excluding similar payments (contributions) made by the employer in respect of the employee: Provided that subsistence and transport allowances received, achievement awards and payments for overtime worked shall not be regarded as remuneration for the purpose of this notice.

N M OLIPHANT, MP

MINISTER OF LABOUR

Follow this link to download Government Notice No. R. 429...

The earnings threshold:  discussion document (explanatory notes)

André Claassen & Jan du Toit

The threshold earnings figure is R183 008-00 per annum. 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 things 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 July 2012.

• 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:

• Subject to the Constitution, all forced labour is prohibited.
• 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.

Follow this link for a comprehensive explanation on the earnings threshold amount...

Neil Enslin | Health & Safety Advisor