WHAT ACT SAYS ABOUT EARNING THRESHOLD
THE Basic Conditions of Employment Act (BCEA) commenced on December 1, 1998, and has been amended from time to time. In essence, the legislation gives effect to the right to fair labour practices referred to in the Constitution.
The country has to comply with the obligations of both the Republic and the International Labour Organisation. This piece of legislation is known as the “bible” of labour law and it stipulates a minimum term or condition of employment which includes any provisions under sectoral determinations.
It must be read with all the codes of good practice and any collective agreement that exists with trade unions or bargaining councils.
It must also be understood that the National Minimum Wage and the Labour Relations Act add to the structure of the BCEA. The legislation is applicable to employees only, meaning any person, excluding an independent contractor, who works for another person or for the state and who receives, or is entitled to receive, any remuneration, and any other person who in any manner assists in carrying on or conducting the business of the employer.
From time to time, the minister of Employment and Labour, under Section 6(3) of the BCEA, will set an earnings threshold for certain sections of the BCEA. As from March 1 this year, the earnings threshold has been raised by the minister. The threshold is at R17 633.03 a month (R211 596.30 per annum). The increase from last year is only 3% but that had been in effect since July 1, 2014.
Employees earning less than the threshold are covered by all the labour legislation such as the Labour Relations Act, BCEA and Employment Equity Act. The sections are intended to protect vulnerable employees and regulate, among other things, hours of work, overtime, work over weekends, lunch breaks and even where labour disputes need to be handled if they are paid under the threshold.
An employer does not have to follow Sections 9, 10, 11, 12, 14, 15, 16, 17(2) and 18(3) of the BCEA. The employer can, however, choose to remunerate the employees for these provisions if they earn more than the threshold. If, however, the employees earn in excess of the threshold they are excluded from the nine provisions. In other words, the employees are excluded from the automatic protections.
The clauses include ordinary hours of work where it states an employer may not require or permit an employee to work more than 45 hours in any week and nine hours in any day if the employee works for five days or fewer in a week. Should the employee earn above the threshold this protection does not exist. An employer may not ordinarily require or permit an employee to work overtime, except in accordance with an agreement, and may not permit more than 10 hours overtime a week. Once again, if earning above the threshold, the employer may do so.
In essence, employees above the threshold will not necessarily be paid overtime and may not necessarily be given time off in exchange, or even meal intervals which are normally compulsory. Under normal circumstances an employer must give an employee who works continuously for more than five hours a meal interval of at least one continuous hour. If the employee has to do some work during that meal interval or is required to be available, then the employee must be remunerated. If earning above the threshold, this is not applicable.
There is a daily and weekly rest period where an employer must allow an employee a daily rest period of at least 12 consecutive hours between ending and recommencing work and a weekly rest period of at least 36 hours which, unless otherwise agreed, must include Sunday. Once again, this is not applicable to those earning above the threshold. Likewise, an employer must pay an employee who works on a Sunday double that employee’s wage for each hour worked, unless the employee ordinarily works on a Sunday in which case the employer must pay the employee at one-and-a half times the employee’s wage for each hour worked. Once again, this is not applicable if the employee earns above the threshold.
There are many other differences between those below and above the threshold as set by the minister.
It might be useful for many employers to consider lifting employees’ wages to be in excess of the threshold, in order to relieve the employer of all the obligations as contained in the BCEA. Often, when doing the calculations of the payment, it is beneficial to give the employee the increase to place them beyond the threshold and, therefore, relieve the employer of all the other obligations as enumerated above.