Hr-go-To-guide 2022 Final 31 May 2022

HRTorQue
Managers HR and Payroll

Pocket Guide
May 2022
1
Disclaimer:
The information contained in this guide is of a general nature and
is not intended as legal advice. The reader is advised to consult a
professional advisor for further assistance and information, and
for guidance on new and existing legislation which may affect the
business owner, directors and officers of companies.
All references to masculine gender shall include the feminine (and

vice versa).
While every care has taken in the compilation of this guide, no

responsibility of any nature whatsoever shall be accepted for any
inaccuracies, errors or omissions.
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Index
1 EMPLOYMENT LAWS ................................................................ 6

2 STATUTORY REGISTRATIONS FOR EMPLOYMENT OF STAFF .. 6
3 ANNUAL DEADLINES FOR EMPLOYERS AND INDIVIDUALS ..... 7
4 SARS, PAYE AND YOUR EMPLOYEES......................................... 8
4.1 Rates of Tax and Rebates for Individuals ......................... 8
4.2 AA88: What is it and what to do? .................................... 9
4.3 Tax Directives .................................................................. 10
5 EMPLOYMENT TAX INCENTIVE (ETI) ...................................... 11
6 WORKMANS COMPENSATION ............................................... 13
6.1 Workman’s Compensation and Temp Employees ........ 13
6.2 Injured Employee – What to do? ................................... 14
6.3 What to Pay an Employee when on IOD ....................... 15
6.4 Wowkrmans Comp and COVID-19 ................................. 17
7 UNEMPLOYMENT INSURANCE FUND .................................... 19
7.1 Who is an Employee? ..................................................... 19
7.2 When can a person claim UIF?....................................... 20
8 EMPLOYMENT EQUITY............................................................ 21
8.1 Am I required to comply?............................................... 21
8.2 Requirements of an Employer ....................................... 22
8.3 Fines for Non-Compliance .............................................. 23
9 CODE OF GOOD PRACTICE ON EQUAL PAY/ REMUNERATION
FOR WORK OF EQUAL VALUE ............................................................... 25
10 SKILLS DEVELOPMENT ............................................................ 26
10.1 What is it and must I pay? .............................................. 26
10.2 How can I claim back? .................................................... 27
11 DEPARTMENT OF LABOUR INSPECTIONS .............................. 28
12 EMPLOYEE DOCUMENTATION ............................................... 31
12.1 Contracts of Employment .............................................. 31
3
12.2 Keeping of Records ......................................................... 31
12.3 Information about remuneration .................................. 32
12.4 Disciplinary Rules ............................................................ 32
12.5 What documents to provide on Termination? ............. 33
13 FIXED TERM CONTRACTS – DO’S AND DON’TS ..................... 33
13.1 Does Section 189B Apply?.............................................. 33
13.2 Length of a Fixed Term Contract.................................... 34
13.3 Renewal of a Fixed Term Contract................................. 35
13.4 Nature of an Employee’s Work ...................................... 36
13.5 Fixed Term Contracts Exceeding 24 months ................. 36
14 LEAVE ....................................................................................... 37
14.1 Annual Leave ................................................................... 37
14.2 Sick Leave ........................................................................ 38
14.3 Family Responsibility Leave............................................ 40
14.4 Parental Leave................................................................. 40
14.5 COVID-19 Leave .............................................................. 42
15 DISCIPLINE ............................................................................... 43
15.1 Misconduct vs Incapacity ............................................... 43
15.2 Levels of Discipline.......................................................... 44
15.3 How long is a warning valid for? .................................... 44
15.4 Progressive and Punitive Discipline ............................... 45
15.5 Suspension from Duty .................................................... 45
16 TERMINATIONS ....................................................................... 46
16.1 Notice periods ................................................................. 46
16.2 Termination within Probationary Period ....................... 46
16.3 Operational terminations (Retrenchments).................. 48
17 PRE-EMPLOYMENT CLEARANCES........................................... 51
18 HARASSMENT IN THE WORKPLACE........................................ 55
19 MARIJUANA IN THE WORKPLACE........................................... 56
20 GROSS SALARY VS NET SALARY .............................................. 57
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21 BROAD BASED BLACK ECONOMIC EMPOWERMENT ............ 59
22 CCMA ....................................................................................... 61
22.1 Referring Disputes .......................................................... 61
22.2 CON/ARB Process............................................................ 62
22.3 Conciliation ..................................................................... 63
22.4 Arbitration ....................................................................... 63
23 USEFUL WEBSITES ................................................................... 64
24 ABOUT HRTORQUE OUTSOURCING ....................................... 65
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1 EMPLOYMENT LAWS
Employment in South Africa is regulated by common law, statute and

contract.
Below is a list of some of the common South African laws that apply
to employees and the businesses they work for: -
Basic Conditions of Employment Act

Compensation for Occupational Injuries and Diseases Act
Employment Equity Act
Labour Relations Act
National Minimum Wage Act
Occupational Health & Safety Act
Skills Development Act and Skills Development Levies Act
Unemployment Insurance Act
Income Tax Act
Disaster Management Act: Regulations relating to COVID-19
2 STATUTORY REGISTRATIONS FOR EMPLOYMENT

OF STAFF
When a business begins to employ staff there are a few standard

registrations that are required to take place in order to maintain
compliance with South African Law.
Pay as you Earn (PAYE) Registration as an employer is

completed with SARS
6
Unemployment Registration as an employer is
Insurance Fund completed with SARS and the UIF
Department at the Department of
Labour
Workman’s Registration with the Commissioner
Compensation must be done within 7 days of
employing your 1st employee
Skills Development Registration with SARS - only when the
Levy annual remuneration paid by the
employer equals to or exceeds
R500 000
3 ANNUAL DEADLINES FOR EMPLOYERS AND

INDIVIDUALS
(I – individual; ER – Employer) (Deadlines exclude CIPC and Company
Income Tax deadlines)
31st January Tax Filing season closes for provisional

taxpayers (I)
Income Tax (type of tax)
28/29 Provisional Tax (2nd return of the tax year) (I)
February Income Tax
30th April Skills Development – WSP/ATR (ER)
Skills Development Act
31st May COID/WCA Annual Return of Earnings (ER)
COID / WCA (note: officially 31 March)
31st May Employer Filing EMP501 – Tax year-end (ER)
PAYE / UIF /SDL
1st July Individual Tax – Tax Filing season opens (I)
Income Tax
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31st August Provisional Tax (first return of the tax year) (I)
Income Tax
30th Prior Year Provisional Tax - Top-up payment (I)
September Income Tax
01 Oct/15 Jan Employment Equity (ER)
January deadline for online filing only
31st October Employer Filing EMP501 – (interim) (ER)
PAYE / UIF / SDL
4th Dec Tax filing season closes non-provisional
taxpayers (I)
Income Tax
7th of each EMP201 and payment due to SARS (ER)
month PAYE / UIF / SDL
4 SARS, PAYE AND YOUR EMPLOYEES

4.1 Rates of Tax and Rebates for Individuals
2023 Tax Year (1 March 2022 to 28 February 2023):
Taxable Income (R) Rates of Tax (R)

1 – 226 000 18% of taxable income
226 001 – 353 100 40 680 + 26% of taxable income
above 226 000
above 353 100
above 488 700
above 641 400
817 601 – 1 731 600 239 452 + 41% of taxable income
above 817 600
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1 731 601 and above 614 192 + 45% of taxable income
above 1 731 600
Tax Threshold
Age Tax Threshold
Below age 65 R 91 250
Age 65 to below 75 R 141 250
Age 75 and over R 157 900
Rebates
Primary R 16 425
Secondary (Persons 65 R 9 000
and older)
Tertiary (Persons 75 and R 2 997
older)
4.2 AA88: What is it and what to do?
The Tax Administration Act empowers the Commissioner for the

South African Revenue Service (SARS) to appoint a third party to hold
back and pay over to SARS any amounts due by a taxpayer. This third
party may be an employer of the taxpayer or any other person who
has the management, custody or control of any income, monies or
property of the taxpayer.
SARS will issue the Third-Party Appointment (AA88) Notice in the

following manner:
• Via the e@syFile™ Employer application.
• Via the post using the employer’s postal address.
On receipt of the AA88 Notice, the employer must do the following:
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• Review the list of impacted taxpayers (manage outcomes).
• Deduct the stipulated amount from the salary or wages of the
respective employees, as indicated on the AA88.
• Pay the amounts over to SARS by the due date, as indicated on
the AA88 Notice.
Where the employer is unable to perform the request, the employer

must provide feedback on reasons for his/her inability to execute the
request using one of the following channels:
• Log on to e@syFile™ Employer to view the AA88 Notice and
provide a response to SARS by selecting one of the outcomes
from the drop-down list.
• Contact the SARS Contact Centre or visit a SARS branch where
an agent will assist the employer with capturing the outcomes in
relation to the taxpayers listed on the AA88 Notice.
Possible third parties who can be appointed for individual taxpayers

include:
• Employers
• Any debtor who owes the taxpayer money
• Financial institutions, such as banks
• Attorneys
• Medical aid schemes (in case of members of the medical
fraternity)
• Investment managers
• Insurance companies
4.3 Tax Directives
The purpose of a tax directive is to allow SARS to instruct an Employer,

Fund Administrator or Insurer how to deduct employees' tax from
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certain payments to a taxpayer or for a fixed tax rate for an individual
who earns commission income.
Employers, Fund Administrators and Insurers can request a tax

directive from SARS via the following channels:
• At a SARS branch – complete the required form & submit it at
your nearest SARS branch with the relevant supporting
documents.
• eFiling – Employers and Fund Administrators who have an
organisation profile can log in and request a directive online.
• Register as an Interface agent.
• Use the email address on the SARS website
Tax calculations according to the tax directive should be regarded
merely as an estimation according to the information on SARS tax
directive system. As a result, some employees may find that they must
still pay in or reclaim tax once the final liability has been determined
on assessment.
The Employer / Fund Administrator / Insurer must ensure that the

correct application form is used according to the reason for the exit
from the fund / employer’s service and the nature of the amount
payable to the employee / member of the fund.
IMPORTANT NOTE: EMPLOYERS ARE RESPONSIBLE FOR APPLYING

FOR TAX DIRECTIVES ON BEHALF OF THEIR EMPLOYEES IN THE EVENT
OF A RETRENCHMENT
5 EMPLOYMENT TAX INCENTIVE (ETI)

ETI is an incentive aimed at encouraging employers to hire young work
seekers. It was implemented with effect from 1 January 2014.
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The benefits of ETI are:
• It will decrease the employer’s cost of hiring young people
through a cost-sharing mechanism with government, by
allowing them to reduce the amount of Pay-As-You-Earn
(PAYE) they pay while leaving the wage received by the
employee unaffected.
• The incentive amount differs based on the salary paid to each
qualifying employee and whether the qualifying employee was
employed after the inception of the ETI programme on 1
October 2013. ETI may only be claimed for a total of 24 qualifying
months.
• This incentive will complement existing government
programmes with similar objectives e.g. learnership agreements
and the Youth Employment Scheme.
The employer is eligible to claim ETI if the employer–

• Is registered for Employees’ Tax (PAYE), or must be eligible
to register for PAYE
• Is not in the national, provincial or local sphere of government
• Is not a public entity listed in Schedule 2 or 3 of the Public
Finance Management Act (other than those public entities
designated by the Minister of Finance by Notice in the Gazette)
• Is not a municipal entity
• Is not disqualified by the Minister of Finance due to the
displacement of an employee or by not meeting the conditions
as may be prescribed by the Minister by regulation
Top Tip: There is no limit to the number of qualifying employees that

an employer can hire.
An individual is a qualifying employee if he/she–
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• Has a valid South African ID, Asylum Seeker permit or an ID
issued in terms of the Refugee Act
• Is 18 to 29 years old (please note that the age limit is not
applicable if the employee renders services mainly inside a
special economic zone (SEZ) to an employer that is operating
inside the SEZ).
• Is not a domestic worker
• Is not a “connected person” to the employer
• Was employed by the employer or an associated person to the
employer on or after 1 October 2013
• Is paid the minimum wage applicable to that employer or if a
minimum wage doesn't apply, is paid a wage of at least R2 000
(where the qualifying employee was employed for 160 hours in
a month) and not more than R6 500
With effect from 1 March 2022, employers will be able to claim the
maximum value of R 1 500 per month for employees earning up to R
4 500 monthly with the incentive tapering to zero at the maximum
monthly income of R 6 500.
Example of claim in first month (of their first twelve month period)
where employee earns R5,000 and works at least 160 hours:
ETI Claim = 1,500 – (75% * (5,000 – 4,500)) = R1 125
6 WORKMANS COMPENSATION
6.1 Workman’s Compensation and Temp Employees
It is important to understand which employees must be included for

Workman’s Compensation. In terms of the “Code of Good Practice:
Who is an Employee” an employee is defined as:
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“a person who has entered into or works under a contract of service or
apprenticeship or learnership, with an employer, whether the contract
is express or implied, oral or in writing, and whether the remuneration
is calculated by time or work done, or is in cash or in kind, and includes
casual employees”
If a claim is made by a casual employee, the Compensation Fund will

verify their employment on the monthly UIF declaration submitted to
the Department of Labour. If the employee is not on the declaration,
the claim could be rejected, and the business could be civilly liable for
these injuries.
IMPORTANT NOTE: ENSURE YOUR PAYROLL DEPARTMENT IS

INCLUDING CASUAL EMPLOYEES ON THE MONTHLY UIF
DECLARATION
6.2 Injured Employee – What to do?
An injury at work can happen at any moment and as the Employer,

your primary priority is always the well-being of the injured person.
Never let the completion of the IOD (Injury on Duty) forms delay
medical attention.
When consulting a Medical Practitioner, always confirm first whether

he/she deals with I.O.D. incidents. The Employer must complete the
Employers Report of an Accident form (W.Cl.2).
The Compensation Commissioner (COID) requires the following three

documents to accept a claim.
• Duly completed Employer’s Report of an Accident – ASAP. Make

a copy of the employer’s report of an accident for the injured
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employee to take with him/her to the doctor, otherwise the
doctor will keep the original document and you have no copy to
send to COID
• A legible certified copy of the injured person’s ID – ASAP
• The First medical report – after the injured person consults a
doctor
If the employee has chosen the doctor, consults the doctor regularly
and it is his (the employee’s) case that must be finalised, the employee
has a responsibility to assist the employer in obtaining the medical
reports.
You must forward all documents to COID via email or fax. This will give
them the opportunity to act immediately. When COID receives the
documents, they will register the claim. If notice is not given to the
Compensation Commissioner within 12 months after the date of the
accident the employee forfeits his right to compensation, as the claim
cannot be considered in terms of the Act.
IMPORTANT NOTE: AS AN EMPLOYER YOU MUST BE REGISTERED

AT THE COMPENSATION FUND BEFORE A CLAIM CAN BE
SUBMITTED
6.3 What to Pay an Employee when on IOD
The purpose of the Compensation for Occupational Injuries and

Disease Act (COID Act) is to facilitate a process which provides for
payment of medical treatment and compensation for disablement
caused by occupational injuries and diseases sustained by employees
in the course of their employment, or for death resulting from such
injuries or diseases.
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If an employee is injured on duty and is sent to the medical
practitioner or hospital, one of the following three payment principles
comes into operation:
Payment principle one:

Section 22(2) stipulates that no ‘‘periodical payments’’ shall be made
in respect of temporary total disablement or temporary partial
disablement which lasts for 3 days or less. In other words when an
employee is booked off due to an IOD for 3 days or less, the
Compensation Fund does not pay compensation.
If the employee is booked off for 3 days or less the employer must
grant time off at the employer’s own cost and not from the
employee’s sick leave.
Payment principle two:

Section 47(1) stipulates that compensation for temporary total
disablement must be calculated on the basis set out in Item 1 of
Schedule 4.
If the employee is booked off due to an IOD for 4 days or longer, but
less than 3 months, the employer must pay the injured employee at a
rate of at least 75% of his earnings, from the first day, until the
employee returns to work. This amount can in theory be claimed by
the employer back from the Compensation Fund.
Please note that earnings are not only the basic salary of the worker.
The earnings of the worker must be the remuneration that he or she
receives from the employer including the following:
• the value of any food or quarters or both supplied by the
employer
• any overtime payment or other special remuneration in cash or
in kind of regular nature or for work ordinarily performed
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• any other remuneration in cash or in kind to an employee by
virtue of his/her contract of service, including any commission,
cost of living allowance, and incentive or other bonuses
It does however exclude:

• payment for intermittent overtime
• payment for non-recurrent, occasional services
• amounts paid by an employer to an employee to cover any
special expenses
• ex-gratia payments whether by the employer or any other
person
• travelling and subsistence allowances
Payment principle three:

If the employee is booked off due to an IOD for a period longer than 3
months, the employer pays the injured employee at a rate of at least
75% of the employee’s earnings, for the first 3 months. This amount
in theory can be claimed by the employer back from the
Compensation Fund.
Once the 3-month period expires, the injured employee must claim
his money from the Compensation Fund.
Note: If there is any uncertainty relating to an IOD, complete and

submit the forms to the Commissioner and let them decide. COID
practically operates on the proviso of “at the discretion of the
Compensation Commissioner”.
6.4 Workman’s Comp and COVID-19
It is important that any person wishing to make a claim with the

Compensation Fund for Occupational Acquired COVID-19 review the
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“Compensation for Occupational Injuries and Diseases Act:
Compensation for occupationally acquired Novel Coronavirus Disease
(COVID-19)” before embarking on the process.
The legislation in this regard is subject to change as new information

is uncovered about the Corona Virus.
As at March 2020 the documentation required for claim, as per above

Act included the following
a) Employer’s Report of an Occupational Disease (W.CL.1)
b) Notice of an Occupational Disease and Claim for
Compensation (W.CL.14)
c) Exposure and Medical Questionnaire
d) First Medical Report in respect of an Occupational Disease
(W.CL.22) indicating U07.1 as the ICD-10 code for Covid-
19.
e) Exposure History (W.CL.110) and/or any other appropriate
employment history which may include any information
that may be helpful to the Compensation Commissioner.
f) A medical report on the employee’s symptoms that details
the history, establishes a diagnosis of COVID-19 and
laboratory results and chest radiographs where
appropriate or any other information relevant to the claim.
g) For each consultation, a Progress Medical Report
(W.CL.26).
h) Final Medical Report in respect of an Occupational Disease
(W.CL.26) when the employee’s condition has reached
Maximum Medical Improvement (MMI).
i) An affidavit by the employee if employer cannot be traced
or will not timeously supply a W.CL.1, where applicable.
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7 UNEMPLOYMENT INSURANCE FUND
7.1 Who is an Employee?
An employee is defined for UIF as “any natural person who receives

remuneration or to whom remuneration accrues in respect of services
rendered or to be rendered by that person but excludes any
independent contractor”. In the following cases employees are
however excluded from contributing to UIF:
• Is employed by the employer for less than 24 hours a month

• Receives remuneration under a contract of employment as
contemplated in section 18(2) of the Skills Development Act,
1998 (Act No.97 of 1998)
• Is employed as an officer or employee in the national or
provincial sphere of Government
• Entered the Republic for the purpose of carrying out a contract
of service, apprenticeship or learnership within the Republic. If
upon termination, the employer is required by law or by the
contract of service, apprenticeship or learnership, or by any
other agreement or undertaking, to send home that person, or
if that person needs to leave the Republic
• Is the President, Deputy President, a Minister, Deputy Minister,
a member of the National Assembly, a permanent delegate to
the National Council of Provinces, a Premier, a member of an
Executive Council or a member of a provincial legislature or
• Is a member of a municipal council, a traditional leader, a
member of a provincial House of Traditional Leaders and a
member of the Council of Traditional Leaders
How much do you as the employer need to pay?

• The employer must pay a total contribution of 2% of the
remuneration paid by the employer to the employee (1%
19
contributed by the employee and 1% contributed by the
employer) within the prescribed period.
7.2 When can a person claim UIF?
All employees who contributed to UIF can claim provided that the
reason for their termination of employment was not their choice. You
cannot claim UIF it you decide to leave your job of your own free will.
It is also important to note that foreigners who are employed
permanently in SA also qualify for UIF.
UIF can be claimed for eight months, if you have the full number of
credit days (238). Credits are accrued as follows – for every six days
that you work as a contributor, you receive one day's credit, subject
to a maximum of 238 days.
There are four types you can claim for:
Unemployment Benefits: Where your employment has been

terminated by the Employer you will be eligible to claim from UIF
Illness benefits: If you cannot work because you are sick and you have
been booked off for two weeks, you could be eligible. The benefits will
be paid from the start date of when you stopped working.
Parental Benefits: These include Maternity; Parental (Paternity);

Adoption and Commissioning Parents. It is important to note that as
at time of publication of this booklet the UIF system is not yet
operational for the claiming of all the Parental Benefits.
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Death benefits: The spouse or child under 18 of an individual who has
passed away can claim for death benefits, provided that the deceased
contributed to the UIF fund.
8 EMPLOYMENT EQUITY
8.1 Am I required to comply?
The following information is correct at time of printing. Amendments

to the Employment Equity Act are pending and are expected to be
implemented in 2022
In terms of the Employment Equity Act a company may be deemed a

“designated employer” when they employ 50 or more employees OR
have a total annual turnover equal to or above the applicable turnover
thresholds set out in Schedule 4 of the Act.
Schedule 4 – Annual Turnover Threshold – Revised January 2014
Industrial Sector Total Annual

Turnover
Agriculture R6,00 million
Construction R15,00 million
Catering, Accommodation and Other
R15,00 million
Trade
Community, Social and Personal Services R15,00 million
Mining and Quarrying R22,50 million
Manufacturing R30,00 million
Electricity, Gas and Water R30,00 million
Transport, Storage and Communications R30,00 million
Finance and Business Services R30,00 million
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Retail and Motor Trade and Repair
R45,00 million
Services
Wholesale Trade, Commercial Agents
R75,00 million
and Allied Services
8.2 Requirements of an Employer
All employers are required to ensure that unfair discrimination is

eliminated from their workplace/s.
The Employment Equity Act specifies five areas of unfair

discrimination.
1) Section 6 (1) states that no person may unfairly

discriminate, directly or indirectly, against an employee, in
any employment policy or practice, on one or more
grounds, including race, gender, sex, pregnancy, marital
status, family responsibility, ethnic or social origin, colour,
sexual orientation, age, disability, religion, HIV status,
conscience, belief, political opinion, culture, language,
birth or on any other arbitrary ground
2) Equal Pay for work of Equal Value: A difference in terms
and conditions of employment between employees of the
same employer performing the same or substantially the
same work or work of equal value that is directly or
indirectly based on one or more of the grounds listed in
section 1 is unfair discrimination.
3) Harassment of an employee is unfair discrimination and
must be eliminated. – Refer to Section in HR Booklet on
Harassment in the Workplace for more information
4) Medical testing is prohibited unless
22
a. Legislation permits or requires the testing; or
b. It is justifiable in the light of medical facts,
employment conditions, social policy, fair
distribution of benefits or the inherent
requirements of the job.
5) Psychometric Testing and other similar assessments are
prohibited unless the test or assessment being used -
a. Has been scientifically shown to be valid and
reliable;
b. Can be fairly applied to employees; and
c. Is not biased against any employee or group
A Designated Employer is required to implement Affirmative Action

Measures for designated groups to achieve Employment Equity. This
is done by
• Consulting with Employees
• Conducting and Analysis of the Workplace
• Preparing and Implementing an Employment Equity Plan
• Reporting Annually to the Department of Labour on the progress
• Assigning a Senior Manager/s to ensure implementation.
Designated groups are Africans, Coloureds, and Indians, woman of all

races, and people with disabilities.
8.3 Fines for Non-Compliance
The Department of Labour is cracking down on designated employers

who do not comply with the legislation. The table below shows a
breakdown of the fines for failing to comply.
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Previous Contravention of Contravention
Contravention any provision of of any
section 16 (read provision of
with 17), 19, 22, 24, section 20, 21,
25, 26 and 43 (2) 23, and 44 (b)
The greater of
R1 500 000 or
No previous
R1 500 000 2% of
contravention
employer’s
turnover
The greater of
A previous
R1 800 000 or
contravention in
R1 800 000 4% of
respect of the same
employer’s
provision
turnover
A previous
contravention within
The greater of
the previous 12
R2 100 000 or
months or two
R2 100 000 6% of
previous
employer’s
contraventions in
turnover
respect of the same
provision
Three previous The greater of
contraventions in R2 400 000 or
respect of the same R2 400 000 8% of
provision within three employer’s
years turnover
Four previous The greater of
contraventions in R2 700 000 R2 700 000 or
respect of the same 10% of
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provision within three employer’s
years turnover
9 CODE OF GOOD PRACTICE ON EQUAL PAY/

REMUNERATION FOR WORK OF EQUAL VALUE
This Code must be read in conjunction with the Employment Equity

Act and aims to promote the implementation of pay/remuneration
equity in the workplace.
An employer must, in order to eliminate unfair discrimination, take

steps to eliminate differences in terms and conditions of employment,
including pay /remuneration, of employees who perform the same or
substantially the same work or work of equal value that are directly or
indirectly based on one or more factors listed in Section 6 (1) of the
Employment Equity Act.
Three keys’ aspects must be considered when determining whether

the employer has an obligation to apply pay /remuneration equity in
the workplace
1) Are the jobs that are being compared the same,
substantially the same or of equal value in terms of an
objective assessment?
2) Is there a difference in the terms and conditions of
employment, including pay /remuneration, of the
employees in the jobs that are being compared?
3) If there are differences in the terms and conditions of
employment, can these be justified on fair and rational
grounds?
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It is important to note that differences in terms and conditions
of employment, including pay /remuneration of employees of
the same employer, do not automatically constitute unfair
discrimination. Factors that justify a difference include:
1) Seniority or Length of Service

2) Qualifications, skills and abilities
3) Performance – provided the employer has a performance
management system which is consistently applied
4) Demotions
5) Temporary employment for experiential learning
6) A shortage of skill in a particular job classification
7) Any other factor that is not related to unfair discrimination
as set out in Section 6 (1) of the Employment Equity Act
10 SKILLS DEVELOPMENT
10.1 What is it and must I pay?
The Skills Development Levy (SDL) is a levy imposed to encourage

learning and development in South Africa and is determined by an
employer’s salary bill. The funds are intended to be used to develop
and improve employee skills.
Payment towards the levy grant scheme is legislated in terms of the

Skills Development Levies Act, 1999. Under this act every employer in
South Africa who:
• is registered with SARS (South African Revenue Services) for
PAYE; and
• has an annual payroll in excess of R500,000
• must register with SARS to pay the Skills Development Levy
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The Skills Development Levy (SDL) is levied at 1% of the total amount
of remuneration (less any specific exclusions) paid to employees.
10.2 How can I claim back?
Employers can claim the following from their SETA:
1) Mandatory Grant
Mandatory Grants are paid by the SETA if the company fulfils the
requirements to receive the grants. Provided a suitable
Workplace Skills Plan (WSP) and Annual Training Report (ATR)
are submitted to the appropriate SETA (and you have met all the
appropriate requirements) you are entitled to a mandatory
grant of 20% of the Skills Development Levies you have paid for
the relevant period.
In order to qualify to receive the mandatory grant, the levy-

paying employer must meet the following criteria:
• Be registered in terms of the Skills Development Levies
Act
• Be an up-to-date levy-payer registered in terms of the
Skills Development Levies Act
• All levy payments need to be up to date at the time of the
approval and for the reporting period
• Employ a skills development facilitator
• The WSP and ATR are submitted by the required deadline
• The WSP for the previous reporting period has been
submitted and implemented according to the
prescriptions for implementation by the SETA
• Any employer who has a recognition agreement with a
trade union will have to provide proof that the WSP and
27
ATR have been subject to consultation with recognised
trade unions and they have been signed off by the
relevant union
2) Discretionary Grant
Discretionary grants are aimed at encouraging stakeholders to
contribute towards skills development. The bulk of discretional
funding is directed at the provision of PIVOTAL or learning
programmes, which comprise the following:
• Learnerships
• Work Integrated Learning
• Internships
• Bursaries
• Skills programmes
All these training interventions are expected to result in

qualifications or partial qualifications aligned to the National
Qualifications Framework and as contemplated in the Grant
Regulations. Discretionary Grants are allocated at the sole
discretion of the SETA.
You may apply for a discretionary grant if you have put in place
a PIVOTAL Programme. PIVOTAL is an acronym' which means
professional, vocational, technical and academic learning
programmes that result in qualifications or part qualifications on
the National Qualifications.
11 DEPARTMENT OF LABOUR INSPECTIONS
Employers often require clarity on the rights of Department of Labour

(DOL) inspectors who conduct inspections at their workplaces (and
with good reason). They also ask what their rights as employers are,
28
and what the limitations are in terms of inspectors’ right to
information.
The DOL sends inspectors to monitor and enforce compliance in terms

of labour law. The minister of labour gives each inspector a signed
certificate so that they can identify themselves. You can ask for the
certificate if you are not sure of the inspector’s identity or designation.
If he/she doesn’t have one, you can deny him/her access until he/she
provides one.
The certificate will identify the person as a labour inspector and will
state which legislation he can monitor and enforce, as well as which
functions he can perform. The inspector has the power to enforce all
labour laws which the DOL is responsible for.
These laws include:

• The Basic Conditions of Employment Act (BCEA)
• The Labour Relations Act (LRA)
• The Compensation of Occupational Injuries and Diseases Act
(COIDA)
• Occupational Health and Safety (OSH) Act
• COVID-19 Compliance
A labour inspector can enter your workplace at any reasonable time

to investigate and enforce compliance, but you will receive written
notification under normal circumstances.
The labour inspector’s duties include:

• Advising you and your employees of your rights and obligations
in relation to the labour laws
• Investigating complaints about non-compliant employers
• Conducting inspections of workplaces
29
• Ensuring that employers comply at the workplace
The inspector will issue a compliance order if you do not comply
The labour inspector’s rights include:

• The right to information relating to employment laws
• The right to make copies of documents
• The right to inspect and question you about any article,
substance or machinery at the workplace
• The right to question you about the work you do
• The right to inspect or question you about documents relating
to employment laws
If the inspector removes any items from your workplace, he must

acknowledge receipt and return it within a reasonable time.
How to prepare for an inspection

• Display the various summary Acts where all your employees can
see it. These include Basic Conditions of Employment Act, Labour
Relations Act, Occupational Health and Safety. It is a good idea
to display a summary of the Employment Equity Act if you are
designated
• Keep an attendance register. You must keep a record of each
employee on file, usually for a period of three years (in terms of
section 31 of the BCEA). The record must include your
employees’ names and occupations, working hours and
remuneration
• Provide written particulars of employment (section 29 of BCEA)
• Provide a copy of your policies and disciplinary procedures
carried out at the workplace
30
• Provide your Compensation of Occupational Injuries and
Diseases Act (COIDA) and Unemployment Insurance,
registration number, as well as proof of last payments
This information must be current. When changes are made, give

employees a copy of the changes. The details must be kept for three
years after termination of the employment contract
12 EMPLOYEE DOCUMENTATION
12.1 Contracts of Employment
Chapter 4, subsection 29 of the Basic Conditions of Employment Act

requires that an employer provide an employee with a written
document at commencement of employment i.e. a Contract of
Employment. There are specific elements which must be included
such as place of work; employment date; hours of work; rate of pay;
overtime rate and leave entitlement.
This document must also be kept by the employer for a period of three
years after termination of employment.
12.2 Keeping of Records

requires that every employer must keep a record containing at least
the following information:
a) The employee’s name and occupation
b) The time worked by each employee;
c) The remuneration paid to each employee;
d) The date of birth of any employee under 18 years of age;
e) And any other prescribed information
31
This record must be kept by the employer for a period of three years
from the date of the last entry in the record.
12.3 Information about remuneration

requires that every employer must give an employee the following
information in writing on each instance that the employee is paid:
a) The employee’s name and occupation

b) The time worked by each employee
c) The remuneration paid to each employee
d) The date of birth of any employee under 18 years of age
e) And any other prescribed information
This record must be kept by the employer for a period of three years
from the date of the last entry in the record.
12.4 Disciplinary Rules
‘Code of Good Practice: Dismissals’ advises that all employers should

adopt disciplinary rules that establish the standard of conduct
required of their employees.
An employer’s rules must create certainty and consistency in the

application of discipline. This requires that the standards of conduct
are clear and made available to employees in a manner that is easily
understood.
32
12.5 What documents to provide on Termination?
When an employee leaves the company, the employer must provide

the employee with the following documentation: -
1) Final Payslip
2) Certificate of Service in line with Chapter 5, Section 42 of
the Basic Conditions of Employment
3) UI-19
4) Notification of Dismissal (if relevant)
13 FIXED TERM CONTRACTS – DO’S AND DON’TS

13.1 Does Section 189B Apply?
The first issue to determine with regards to entering a Fixed Term

Contract (FTC) would be to ascertain whether Section 198B applies to
the specific organisation, or the specific individual to be employed.
Section 198B (2) states the following:

“198B (2) – This section does not apply to:
a) Employees earning in excess of the threshold prescribed by
the Minister in terms of Section 6(3) of the Basic Conditions of
Employment Act (currently this amount sits at R211596.30
per annum);
b) An employer that employs less than ten employees, or that
employs less than fifty employees and whose business has
been in operation for less than two years, unless:
i. the employer conducts more than one business; or
ii. the business was formed by the division or
dissolution for any reason of an existing business;
and
33
c) An employee employed in terms of a Fixed Term Contract
which is permitted by any statute, sectoral determination or
collective agreement.”
What this would tend to indicate is that a contract entered into, for
example, with an employee who earns over the threshold, will not
have to comply with this specific section and the employer could
engage this FTC for a period in excess of three months without any
formal justification.
13.2 Length of a Fixed Term Contract
The employer needs to firstly consider what period they require the
employee to work.
Should the employee be a solution for a short-term problem, then an

FTC can still be entered into.
Should the period be greater than three months then the employer
(under the new amendments) would be required to have a formal
justification for entering into an FTC for the longer period.
In terms of the amendments, the Act sets out the possible

justifications one could have for an FTC over the three-month
threshold. These are the following:
“(4) Without limiting the generality of sub-section 3, the conclusion
of a Fixed Term Contract will be justified if the employee:
a) is replacing another employee who is temporarily absent
from work;
34
b) is employed on account of a temporary increase in the
volume of work which is not expected to endure beyond
twelve months;
c) is a student or recent graduate who is employed for the
purpose of being trained or gaining work experience in
order to enter a job or profession;
d) is employed to work exclusively on a specific project that
has a limited or defined duration;
e) is a non-citizen who has been granted a work permit for
a defined period;
f) is employed to perform seasonal work;
g) is employed for the of an official public works’ scheme or
a similar public job creation scheme;
h) is employed in a position which is funded by an external
source for a limited period; or
i) has reached the normal or agreed retirement age
applicable in the employer’s business.”
This formal justification would have to be reflected in the employee’s

contract and indicate the reason for the FTC to be longer than the
three-month period.
13.3 Renewal of a Fixed Term Contract
Should an employer at any given stage attempt to renew an FTC,

either one which was previously below the three month threshold, or,
which would now then go over such period, or alternatively an FTC
which was already over the three month period, but which would
require to be renewed, the employer would have to extend such an
offer to the employee for renewal in writing. The employer would also
have to state reasons for this renewal (as contemplated above)
35
13.4 Nature of an Employee’s Work
A further aspect which needs to be considered is that an employer

may employ an employee using an FTC for a duration longer than
three months should the nature of the work for which the employee
is employed be of a limited or definite duration. Again, this would link
into one of the justifications regarding the specific project for which
an employee may be employed or for a specific set of deliverables that
the company could justify.
13.5 Fixed Term Contracts Exceeding 24 months
One final aspect that an employer will also be required to consider,

with regards to FTCs, would be that any employee who is employed
to work exclusively on a specific project that has a limited or defined
duration, and where such contract exceeds a twenty four month
period, would be entitled to the payment of one week’s remuneration
for each completed year of the contract, calculated in accordance with
Section 35 of the Basic Conditions of Employment Act on the expiry of
this contract.
The only time that this payment would not be applicable would be if
the employer offers the employee employment or procures
employment for the employee with a different employer, which
commences at the expiry of the contract and on the same or similar
terms.
36
14 LEAVE
The following section is based on the Basic Conditions of
Employment Act. Should your business fall under a Bargaining
Council the Bargaining Council rules would apply
14.1 Annual Leave
According to Chapter 3, Subsection 20 of the Basic Conditions of

Employment Act, employees are entitled to:
- 21 consecutive days leave for each annual leave cycle or
- 1 day per 17 days worked or
- 1 hour per 17 hours worked
It is often misunderstood how to calculate the actual number of

working days the employee is entitled to. Here is an easy method of
calculating below:
No. of Working Days per week X 3 weeks (21 consecutive days) =

Number of days annual leave
Examples
3 day a week work
3 days x 3 weeks = 9 days leave per annum
1.5 day a week work
1.5 days x 3 weeks = 4.5 days leave per annum
5 day a week work
5 days x 3 weeks = 15 days leave per annum
In the event the employee works a set number of days per month but
not per week, you can use the following calculation:
37
No. of Working Days per month ÷ 4.33 weeks = Number of days per
week X 3 weeks (21 consecutive days) = Number of days annual leave
Examples
10 days per month
10 days ÷ 4.33 weeks = 2.3 days per week x 3 weeks = 6.9 days annual
leave per annum
20 days per month
20 days ÷ 4.33 weeks = 4.6 days per week x 3 weeks = 13.85 days
annual leave per annum
15 days per month
annual leave per annum
14.2 Sick Leave
14.2.1 Sick Leave Entitlements

Employment Act during every sick leave cycle (36 months) an
employee is entitled to an amount of sick leave equal to the number
of days the employee would ordinarily work during a period of six
weeks.
Here is an easy method of calculating
No. of Working Days per week X 6 weeks = Number of days sick leave
Examples
3 day a week work
3 days x 6 weeks = 18 days leave per 3-year cycle
1.5 day a week work
38
1.5 days x 6 weeks = 9 days leave per 3-year cycle
5 day a week work
5 days x 6 weeks = 30 days leave per 3-year cycle
In the event the employee works a set number of days per month but
not per week, you can use the following calculation
No. of Working Days per month ÷ 4.33 weeks = Number of per week
X 6 weeks = Number of days sick leave
Examples
10 days per month
10 days ÷ 4.33 weeks = 2.3 days per week x 6 weeks = 13.8 days leave
per 3-year cycle
20 days per month
20 days ÷ 4.33 weeks = 4.6 days per week x 6 weeks = 27.6 days leave
per 3-year cycle
15 days per month
leave per 3-year cycle
Important Note: A new employee is only entitled to 1 day’s paid sick

leave for every per 26 days worked during the first six months of
employment.
14.2.2 Medical Certificates

In terms of Section 23 of the Basic Conditions of Employment Act an
employer does NOT have to pay an employee if he/she does not bring
a medical certificate covering their absence from work for the
following
• More than 2 consecutive days
• More than 2 occasions in an eight-week period
39
If the employee does not produce a medical certificate the employer
does not have to pay the employee for sick leave for the entire period
of the absence.
14.3 Family Responsibility Leave

Employment Act, an employee who has been employed with an
employer for longer than four months AND works for at least 4 days a
week is entitled to three days paid leave per annual leave cycle for the
following:
1) When the employee’s child is sick or
2) In the event of the death of
a. The employee’s spouse or life partner or
b. The employee’s parent, adoptive parent,
grandparent, child, adopted child, grandchild or
sibling
Reasonable proof may be required by the employer before payment

may be made.
14.4 Parental Leave
MATERNITY LEAVE
An employee is entitled to at least four consecutive months’ unpaid
maternity leave. Maternity leave may commence:
• At any time from four weeks before the expected date of birth,
unless otherwise agreed; or
• On a date specified by a medical practitioner or midwife
40
Unless certified fit by a medical practitioner or midwife, the employee
may not return to work for at least six weeks after the birth of her
child. An employee who has a miscarriage during the third trimester
of pregnancy or bears a still-born child is entitled to maternity leave
for six weeks after the miscarriage or still-birth.
PATERNITY LEAVE
An employee is entitled to at least ten consecutive days’ unpaid
Paternity leave. Paternity leave may commence on the day the
employee’s child is born.
ADOPTION LEAVE
An employee, who is an adoptive parent of a child who is below the

age of two is entitled to at least ten weeks unpaid Adoption leave.
If an adoption order is made in respect of two adoptive parents, one

of the adoptive parents may apply for adoption leave and the other
adoptive parent may apply for Parental Leave of 10 consecutive days.
COMMISSIONING PARENTS LEAVE

An employee, who is a commissioning parent in a surrogate
motherhood agreement is entitled to at least ten weeks unpaid
Commissioning Parental Leave. If a surrogate motherhood agreement
has two commissioning parents, one of the commissioning parents
may apply for Commissioning Parent leave and the other
commissioning parent may apply for Parental Leave of 10 consecutive
days.
Payment and/or benefits

Any period of Parental benefits leave shall not be paid by the
employer (unless the employer’s own policies make allowance for
41
this). The employee may claim directly from the UIF department for
any benefits due in this regard.
14.5 COVID-19 Leave

in accordance with Department of Health (DOH) and Department of
Employment and Labour (DOEL) Gazettes as of 1st March 2021 and
Guidelines issued on 1st February 2022.
• If an employee has tested positive and is showing symptoms

he/she must isolate for 7 days. The employee should be granted
sick leave for the duration of the absence. Where the employee
has exhausted his/her sick leave allocation annual or unpaid leave
may be granted
• If an employee has tested positive and is asymptomatic, he/she is
not required to isolate and may return to work depending on
company policy
• Continued non-attendance at work due to claims of COVID-19
exposure with no factual evidence to support these claims should
be treated as unauthorised absence.
42
15 DISCIPLINE
15.1 Misconduct vs Incapacity
Schedule 8 of the Labour Relations Act makes provision for employers

to dismiss employees under certain circumstances. According to this
schedule employers may address and dismiss employees for conduct,
capacity or operational requirements. In other words, dismiss for
either misconduct, incapacity or a retrenchment as a result of the
operational requirements of the employer. An employee’s failure to
fulfil the terms of his/her contract of employment can be categorised
into two main headings: -
MISCONDUCT refers to an employee’s failure to abide by the

employer’s rules, instructions or to act in good faith and in his/her
employer’s best interests. The choice to conform or not lies with the
employee, therefore where an employee misconducts himself,
depending on the severity of the misconduct, this generally results in
disciplinary action because he/she is at fault.
INCAPACITY refers to an employee’s failure to fulfil the performance

requirements of his/her job. This could be because the employee is
either not able/incapable of doing so and could be due to
43
circumstances beyond his control such as insufficient training or
illness.
It is important that employers understand the difference between the

two as the management of it is very different. With incapacity there is
a degree of ‘no fault’ on behalf of the employee. There is therefore
more onus on the employer to establish the reasons for the incapacity
and to assist the employee to achieve the required level of
performance.
15.2 Levels of Discipline
There are various levels of discipline which are generally applied

where an employee has transgressed in some way
1) Verbal Warning
2) Written Warning
3) Final Written Warning
4) Demotion as an alternative to Dismissal
5) Suspension without pay as an alternative to Dismissal;
15.3 How long is a warning valid for?
This would depend solely on your Disciplinary Code.
The general rule of thumb is that a verbal and written warning are
valid for 6 months and a final warning is 9 months. The purpose of the
expiry of a warning is to allow the person to once again have a “clean
record”. In addition, it allows the employer to gauge the next step in
progressive discipline.
44
15.4 Progressive and Punitive Discipline
The Code of Good Practice for Dismissals states that employers should
adopt an approach of corrective or progressive discipline with the
view of attempting to correct employee’s behaviour.
The idea is that the discipline should become more severe if the
employee continued to transgress in the same manner, in the hope
that their behaviour can be corrected. For example, a person who is a
late comer may begin by receiving a Verbal Warning which then
progresses to a Written Warning and then to a Final Written Warning
and finally Dismissal
Punitive Discipline is reserved for more serious cases of misconduct

where the employee must be disciplined in a more serious manner
due to the nature of the transgression. For example, an employee who
is negligent and loses the company money may receive a Final Written
Warning in this instance.
The Code is also very clear that while Dismissal as a first option is
available, it is reserved for serious cases of misconduct such as
Dishonesty (and issues of similar impact).
15.5 Suspension from Duty
An employee may be suspended from duty on full pay, but this must
be justified.
As a rule of thumb suspension would be acceptable under the

following circumstance: -
• The accused will interfere with evidence or intimidate witnesses
• The accused may retaliate against the employer or complainant
45
• The nature of accusation against the accused. i.e. Sexual
Harassment or Assault
• The accused may continue to repeat if left on site. For example,
theft, assault
16 TERMINATIONS
16.1 Notice periods
Chapter 5, Section 37 of the Basic Conditions of Employment Act

states that a contract of employment may be terminated on notice or
payment given in lieu of notice of not less than
a) One week if the employee has been employed for six
months or less;
b) Two weeks if the employee has been employed for more
than six months but not more than a year;
c) Four weeks if the employee has been employed for one
year or more;
Unless the employer falls under a Bargaining Council or Sectoral

Determination with different conditions this notice period may not be
reduced.
The employee’s employment may be terminated by the Employer

summarily at any time and without any payment in lieu of notice, if
the Employee is guilty of a serious misconduct or commits a breach of
a material obligation.
16.2 Termination within Probationary Period
Most employers include a probation period into their contracts of

employment when engaging new staff and yet they do not understand
what a probation period means.
46
While there is still a procedure to be followed before terminating an
employee during or at the end of the probation period, the law allows
for leniency in the reasons for their dismissal.
This leniency in terms of the Labour Relations Act, No. 66 of 1995

(“LRA”) Item 8 of Schedule 8 of the LRA (“Item 8”) allow employers to
place newly hired employees on a probationary period, determined in
advance and of a reasonable duration. The duration of the
probationary period must be determined by considering the nature of
the job and the time it will take to determine the employee’s
suitability for the position.
During this period employers must advise the employee of any aspects
in which the employer considers the employee to be failing to meet
the required performance standard. This feedback should be done in
writing and the employee is entitled to reasonable evaluation,
instruction, training, guidance or counselling in the work standards
required.
Item 8 of the LRA goes on to say that any person, albeit a Judge or
Commissioner, evaluating the fairness of a dismissal of a probationary
employee for poor work performance “ought to accept reasons for
dismissal that may be less compelling than would be the case in
dismissals effected after the completion of the probationary period”.
In view of the above and during the probationary period, employers

are given more leniency in their reasons for dismissal than would be
the case after the employee’s employment has been confirmed.
47
16.3 Operational terminations (Retrenchments)
Companies experience difficulties from time to time or they

implement new technology that potentially affects certain positions
in the company.
There is a very specific way to deal with this restructuring of the

workplace and it is governed by section 189 (A) (for 50 or more
employees employed: so-called large-scale retrenchments) or section
189 (3) of the LRA (less than 50 employees employed).
For Large scale retrenchments the CCMA is involved via a process

called facilitation, and this is done in order to try and prevent job
losses.
The following is a high-level summary of the prescribed retrenchment

process:
1. Consultation
Like all dismissals, retrenchments must be both procedurally and

substantively fair. Section 189 of the LRA requires all consulting
parties to reach consensus on the various matters (specified below).
The LRA requires that consultation must take place when the
employer contemplates retrenchment. The consultation is a process
and not a once-off meeting.
Section 189(1) of the LRA provides that, before retrenching,

employers must consult any person whom the employer is required
to consult in terms of any collective agreement that may be in force.
48
If there is no collective agreement, meetings should be held with all
employees that could be affected by the retrenchment.
Section 189(2) of the LRA states that the consulting parties must
attempt to reach consensus on the following matters:
• The possibility of avoiding the dismissal i.e. alternatives to
dismissal
• Appropriate measures to minimize the dismissals
• Measures to change the timing of the dismissals
• Appropriate measures to mitigate the effects of retrenchment
• The method for selecting the employees to be dismissed; and
• Severance Pay
2. Notification of Retrenchment
The LRA provides for the disclosure of certain information by the

employer on matters relevant to the consultation. Although the
matters, in respect of which information for the purposes of
consultation is required, are specified in section 189(3) of the LRA, the
list in that section is not a closed one. If considerations, other than
those that are listed, are relevant to the proposed dismissal or the
development of alternative proposals, they should be disclosed to the
consulting party.
Section 189 (3) of the LRA requires the employer to disclose in writing
to the employees or their unions (where applicable) all relevant
information including but not limited to:
• The reasons for the Retrenchment
• Alternatives to dismissal that were considered and the reasons
why they were rejected
• The number of employees likely to be affected
• Proposed method of selection
49
• Severance Pay
• Assistance that the employer will be offering
• Possibility of future re-employment
• The notice will also serve as an invitation to consult between the
parties
3. Opportunity for feedback
The employer must allow the affected employee the opportunity to

make representations in relation to the proposed retrenchment, oral
or written. If the employee makes representations in writing, the
employer must respond in writing.
4. Criteria for selection
Section 189(7) of the LRA provides that employers may select

employees to be retrenched according to the criteria they have agreed
upon by the consulting parties. If no criteria have been agreed upon,
that the selection must be fair and objective, the LIFO (“last in, first
out”) principal is often applied but is not the only principal.
5. Notices of termination
The employer must issue notices to the employees, who have been
selected to be retrenched, after the consultation process has been
completed.
6. Severance Pay
Employees are entitled to receive severance pay only if they are

retrenched for operational requirements. The requirements regarding
severance pay are set out in section 41 of the Basic Conditions of
50
Employment Act (“BCEA”). Section 41 of the BCEA provides that an
employer must pay an employee who has been dismissed for
operational requirements “severance pay equal to at least one
week’s remuneration for each completed year of service with
that employer”.
7. Payments
The employer must pay the retrenched employee the following

payments:
• Severance pay;
• Any outstanding leave due (up to date of dismissal); and
• Notice pay (either in terms of the BCEA or as per employment
contract).
17 PRE-EMPLOYMENT CLEARANCES
Pre-employment checks have increased in popularity lately as

incidents of resume/CV fraud have rocketed. Companies are
encouraged to include pre-employment checks in their recruitment
processes to reduce liability and to safeguard their brands and
workforce.
Legalities When Conducting Pre-Employment Checks
The following legislation should be considered when looking at pre-

employment checks:
• The National Qualifications Framework Amendment Act 12 of

2019 prevents applicants from misrepresenting qualifications on
their job applications. The legislation allows for the SAQA (South
African Qualifications Authority) to establish and maintain
51
registers of misrepresented and fraudulent qualifications, along
with a “name and shame” process. There can be harsh
consequences for a job applicant who lies about their
qualifications in South Africa.
• Another important piece of legislation pertaining to pre-
employment checks in South Africa is the Employment Equity Act
55 of 1998 (EEA), which promotes fair and equal treatment in
employment, and prevents discrimination on the grounds of race,
gender, pregnancy, marital status, family responsibility, ethnic or
social origin, colour, sexual orientation, age, disability, religion,
HIV status, conscience, belief, political opinion, culture, language
and birth.
• The Protection of Personal Information Act (No. 4 of 2013), also
known as the POPI Act: Companies conducting pre-employment
checks will face extensive penalties for noncompliance with the
POPI Act so it is critical that they thoroughly understand the
legislation. The POPI Act defines personal information as race,
gender, sex, pregnancy, marital status, address information and
medical, financial, criminal, education or employment history.
The act governs the rights to privacy by ensuring that:
o There is no haphazard or random collection of
personal information,
o There is correct sharing of personal
information,
o There is correct retention or destruction of
personal information; and
o There is a clear reason for collecting specific
personal information.
Factors to take into account while performing pre-employment

checks:
52
• South Africa has an incredibly high crime rate combined with a
low conviction rate so criminal record checks alone may not be
enough to get a clear picture of an applicant’s background. This
means that it may be necessary to blend multiple pre-
employment checks, including criminal record searches,
employment history verification, educational degree verification,
etc.
• South African labour laws dictate that pre-employment checks
must be connected to the job that an applicant is applying for. If
a person has a criminal record for driving for under the influence
of an intoxicating substance, he or she can be prohibited from a
driver position, but this conviction would be considered irrelevant
if the person is applying for a job as an accountant.
• When gathering information for pre-employment screening
purposes, it is vital to get consent from the applicant prior to
processing personal information.
• Criminal Record Checks are primarily used for employment
purposes while the Police Clearance certificate is predominantly
used for immigration and visa purposes.
Pre-employment checks available:

• Criminal Records Checks - Criminal Record Checks are the most
common background checks conducted. These searches are
performed for permanent, contract or volunteer positions and
are used by potential employers to understand a candidate’s
employment history and character. Criminal Records Checks are
conducted through the AFIS, or the Automated Fingerprint
Identification Service, which is the database that is searched
during the AFIS criminal check. In the event the candidate has no
criminal record, AFISwitch returns a report indicating “no illicit
activity identified.” If there is a match found with the AFISwitch
53
system, it sends a “SAPS Verification Requested” report and asks
if the applicant requires further information.
• National Credit Act - The individual credit report provides a
summary of an individual’s credit history. Other information
provided in the report includes information on the individual’s
bad debt and collections, trade account information,
bankruptcies and court liens or judgments. The South African
National Credit Act dictates that Consumer Credit Records,
commonly known as credit checks, can only be conducted on
people applying for positions that require honesty because they
handle cash or manage finances. It also requires that consent is
obtained from the candidate prior to conducting a credit check.
• Education Degree Verification– it is common to verify only the
highest degree obtained by a candidate. Educational institutions
will be contacted to verify dates of attendance, graduation date
and degree information.
• Employment Verification – Employers will be contacted to verify
the individual’s title, dates of employment and if the candidate is
eligible for rehire. Typically, employment verifications do not
extend beyond a 7-year time frame, absent a legal or regulatory
requirement to obtain that information. Current employers will
only be contacted with express consent from the applicant.
• Reference Checks – A reference check is different to an
Employment Verification in that a reference check will provide
information on the applicant’s work ethic, attendance and other
job-related aspects that may affect your decision to employ the
individual. Requirements: Applicant name and date of birth,
reference’s relationship, contact name and contact information
(including phone number and email address).
• ID Check – A validation and/or verification of the data subject’s
identity documents.
54
• Professional Reference Checks – This search is conducted via
telephone (or at times e-mail) with the individual’s personal or
professional references using a standard list of questions.
• Civil Records Search – This search is conducted at the local level
through county court judgments. The report may include case
type, file date, case number, name of court where case was filed,
plaintiff, defendant and disposition if a case can be located.
• Professional License Verification – This search verifies the
individual’s claimed license. Most often, the Professional License
Verification simply provides the current status of the license
claimed; however, other details such as license number, date of
issuance, expiration and disciplinary action may be provided
when available.
• Bankruptcy Records Search – This search is conducted at the local
level through the court based on the jurisdiction of the address
provided. The report may include file date, case number, name of
court where case was filed and case status if a bankruptcy case
can be located.
• Motor Vehicle Records – Currently, employers can verify the
validity of a driver’s license and public driving permit.
18 HARASSMENT IN THE WORKPLACE
The Code of Good Practice on the Prevention and Elimination of

Harassment in the Workplace was issued on 18th March 2022 and
replaces the Code of Good Practice on Sexual Harassment
This code regulates various aspects relating to harassment in the

workplace. This harassment includes, but is not limited to physical,
psychological or verbal harassment as well as sexual and racial
harassment.
55
Harassment is generally understood to mean a) any unwanted
behaviour that impairs dignity; b) creates a hostile or intimidating
workplace for one or more employees or is calculated to, or has the
effect of, inducing submission of the victim of the harassment by
actual or threatened adverse consequences and [c] is related to one
or more grounds in respect of which discrimination is prohibited in
terms of section 6(1) of the” Employment Equity Act 55 of 1998.
The code applies to all employers and employees in the workplace.
Employees include applicants for employment and volunteers who

assist in any manner in carrying on or conducting the business of an
employer.
The code applies to a working environment, but recognizes that

perpetrators and victims of harassment can include any person having
dealings with the business (including, but not limited to owners,
clients, customers, suppliers, contractors, volunteers, persons in
training including interns, apprentices and persons on learnership).
The Harassment Code requires that employers assess their current

policies and procedures to address all types of harassment in the
workplace and ensure that they address these in line with code.
Organisations can be held liable if they do not deal with issues of

harassment.
19 MARIJUANA IN THE WORKPLACE
On 18th September 2018, the Constitutional Court legalised the use

of marijuana in a private capacity.
56
The consumption, possession and cultivation of cannabis may have
been decriminalised in certain circumstances, but the order of the
Constitutional Court certainly has no bearing on the rules of the
workplace.
The question that has arisen for many employers is “What do I do if I

suspect a person is under the influence of cannabis?”
This is very simple and is no different to alcohol and/or any other drug.
Employees are permitted to drink alcohol (i.e. it is legal) but may not
do so whilst on duty and may not come to work under the influence
of alcohol. The same rules apply to cannabis.
The Occupational Health and Safety Act is also quite clear that an
Employer shall not permit any person who is, or who appears to be,
under the influence of intoxicating liquor or drugs, to enter or remain
at a workplace.
20 GROSS SALARY VS NET SALARY
Many of us are quite confused about salary structures. Very few of us

know the difference between total cost to company, gross, basic or
cash package.
Basic Salary
• The amount of salary paid to you before any additional benefits
such as… medical aid, pension, and allowances. It is the part of
your salary that is fixed every month and DOES NOT include
overtime pay and any bonus or 13th cheque.
57
Gross Salary
• The amount of salary paid to you after adding all your benefits
and allowances and before deducting any tax.
• Made up like this:
o Basic salary
o Allowances such as travel, entertainment, computer,
cell phone, etc
o Overtime and bonus for the specific period
Net Pay
• What is left of your salary after deductions have been made for
PAYE (tax), UIF, union levies, staff deductions, garnishees etc. is
known as net pay or ‘take home pay’ - the amount of money that
is paid into your bank account.
Cost to Company
• Companies use the term “Cost to Company” to calculate the
total cost to them (the Company) to employ you. i.e. all the costs
associated with your employment contract.
• It could include the following:
o Gross salary
o Company contributions to medical, pension/provident,
UIF, SDL, group insurance etc.
o 13th cheque and bonuses
o Use of company property such as car, petrol card,
computer/notebook, software etc.
o Cost of any loans, bursaries and interest-free or low
interest loans
o Cost of any expenses paid on your behalf such as insurance
and telephone at home etc.
o Costs of share options and incentive schemes etc.
58
o On Target Earnings (OTE) – if you work in a sales-related
job and the salary on offer includes a commission portion.
TCOE vs Basic + packages

• When negotiating with a new employee it is important for an
employer to be clear on whether the rate of pay provided is a
TCOE (Total cost of employment figure) or a Basic Salary + figure.
This rate of pay is the starting point for the employees’ package.
Where TCOE applies then if an employee elects not to receive a
medical aid employer contribution their basic alary would
increase. In a basic plus package they would just not receive this
contribution but their basic would remain the same.
21 BROAD BASED BLACK ECONOMIC EMPOWERMENT
In the decades before South Africa achieved democracy in 1994, the

apartheid government systematically excluded African, Indian and
coloured people from meaningful participation in the country's
economy.
Black economic empowerment is an important policy instrument

aimed at broadening the economic base of the country – and through
this, at stimulating further economic growth and creating
employment. The strategy is broad-based, as shown in the name of
the legislation: The Broad Based Black Economic Empowerment Act of
2003. This reflects the government's approach, which is to "situate
black economic empowerment within the context of a broader
national empowerment strategy … focused on historically
disadvantaged people, and particularly black people, women, youth,
the disabled, and rural communities".
The Codes of Good Practice on BEE:
59
The codes require that all entities operating in the South African
economy contribute towards the objectives of BEE.
The first phase of the codes

Encourages all entities, public and private, to implement proper BEE
initiatives through the issuing of licences, concessions, sale of assets
and preferential procurement.
The second phase of the codes

It covers the seven components of the B-BBEE scorecard, namely:
• Ownership
• Management control
• Employment equity
• Skills development
• Preferential procurement
• Enterprise development
• Socio-economic development (including industry - specific
and corporate social investment initiatives
The B-BBEE Act of 2003 makes the codes binding on all state bodies
and public companies, and the government is required to apply them
when making economic decisions on:
• Procurement
• Licensing and concessions
• Public-private partnerships
• The sale of state-owned assets or businesses
From an HR perspective, it is important to note that BBBEE is impacted

by your talent management approach. In other words, the people
profile (race/gender/disability) you hire and how your organisation is
60
represented at each level based on this profile (employment equity).
It also ties in to how you train your people (skills development) and
your supply chain. An integrated approach to managing BEE is
essential to do it well.
22 CCMA
22.1 Referring Disputes
Employees can refer matters such as -

• Dismissal,
• Wages and working conditions
• Workplace changes, or
• Discrimination
The following disputes cannot be referred to the CCMA-

• Where an independent contractor is involved
• Where the case does not deal with an issue in the LRA or
Employment Equity Act (EEA) (Basic Conditions of
Employment Act (BCEA) issues may be linked to unfair
dismissal disputes and unfair retrenchment disputes in the
LRA at the CCMA)
• Where a bargaining council or statutory council exists for
that sector
• Where a private agreement exists for resolving disputes
(for example: private arbitration)
Time limits to referring matters to CCMA

Unfair Dismissal 30 days from date dispute
arose
Unfair Labour Practice 90 days from date dispute
arose
61
Discrimination Cases 6 months from date dispute
arouse
22.2 CON/ARB Process
The Con-arb process at CCMA is a quicker process of conciliation and

arbitration for individual unfair labour practices and unfair dismissals.
This process allows for conciliation and arbitration to take place as a
continuous process on one day. The process is compulsory in matters
relating to:
• Dismissals for any reason relating to probation; and
• Any unfair labour practice relating to probation.
If no objection is received, this process may be used for any other
dispute (conduct, capacity, continued employment intolerable, less
favourable terms after a s197 or s197A transfer, reason for dismissal
unknown, or an unfair labour practice). This process may not be used
for dismissals relating to unprotected strikes.
These disputes must be referred to the Labour Court after conciliation

has failed at the CCMA. The CCMA must give both parties at least 14
days' notice of the hearing date. If a party fails to appear, the
conciliation will continue. If the arbitration does not immediately
follow the conciliation as set out in the notice, the arbitration must be
scheduled either in the presence of both parties at the conciliation or
by the CCMA giving 21 days' notice to both parties.
Objections to the con-arb process

An employee may object by indicating such on the LRA form 7.11.
Employers may object to this process by giving written notice to the
CCMA at least 7 days prior to the hearing.
62
IMPORTANT NOTE: Regardless of the employer objecting to this
process, the employer must attend the conciliation.
22.3 Conciliation
Conciliation is a process where a commissioner meets with the parties

in dispute and explores ways to settle the dispute by agreement.
At conciliation a party may appear in person or

• Be represented by a director or employee of that party; or
• Any member, office bearer or official of that party's
registered trade union or registered employer's
organisation.
Parties should ensure that internal procedures and processes have
been exhausted prior to making a referral to the CCMA.
22.4 Arbitration
When conciliation fails, the applicant may request the CCMA to

resolve the dispute by arbitration. At arbitration a commissioner will
give both parties an opportunity to present their case which may
include evidence such as witness testimony; documentary evidence
etc. The commissioner then decides on the issue in dispute and will
make an arbitration award which is legally binding. If the decision is in
the applicant’s favour the award could include compensation;
reinstatement or reemployment.
In an arbitration hearing the party in dispute may appear in person or

be represented by:
• A legal practitioner*
• A director or employee of the party
63
• Any member, office-bearer or official of the party's
registered trade union or registered employers'
organisation.
*Legal practitioners are not permitted at arbitration where the

fairness of a dismissal is in question and the dismissal relates to the
employee’s conduct or capacity. They can be used though if the
commissioner and the parties’ consent, or if the commissioner decides
that it is unreasonable to expect a party to deal with the dispute
without legal representation.
23 USEFUL WEBSITES
HRTorQue Outsourcing Pty Ltd – www.hrtorque.co.za

CCMA - www.ccma.org.za
Department of Labour – www.labour.gov.za
SARS – www.sars.gov.za
South African Chamber of Business – www.sacob.co.za
South African Government Information – www.gov.za
Statistics South Africa – http://beta2.statssa.gov.za
Ufiling – www.ufiling.co.za
National Institute for Occupational Health – www.nioh.ac.za
64
24 ABOUT HRTORQUE OUTSOURCING
Established over twenty years ago, HRTorQue Outsourcing (Pty) Ltd

assists all size companies to improve their efficiency and
professionalism in dealing with their employees by introducing
practical outsourced HR, payroll and accounting solutions in the
workplace.
These solutions include:
• HR advisory (on all HR matters)

• Outsourced HR (a full outsourced solution including on-site
support. Access to a professional HR team at a fraction of
the cost of doing it yourself)
• Payroll implementation, training and support on multiple
platforms (Sage 300 People, SBCPP, Sage Premier,
Payspace, Psiber)
• Full outsourced payroll
• Time & attendance solutions
• Accounting support for SMEs and individuals (including
offshore tax advisory and income tax filing)
Look out for our weekly free webinars (visit our website for more
details).
HRTorQue is renowned for solving complex HR problems for our

clients. Our practitioners have extensive experience within their areas
of specialism.
65

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HRTorQue

Managers HR and Payroll

All references to masculine gender shall include the feminine (and

While every care has taken in the compilation of this guide, no

1 EMPLOYMENT LAWS ................................................................ 6

Employment in South Africa is regulated by common law, statute and

Basic Conditions of Employment Act

2 STATUTORY REGISTRATIONS FOR EMPLOYMENT

When a business begins to employ staff there are a few standard

Pay as you Earn (PAYE) Registration as an employer is

3 ANNUAL DEADLINES FOR EMPLOYERS AND

31st January Tax Filing season closes for provisional

4 SARS, PAYE AND YOUR EMPLOYEES

2023 Tax Year (1 March 2022 to 28 February 2023):

Taxable Income (R) Rates of Tax (R)

4.2 AA88: What is it and what to do?

The Tax Administration Act empowers the Commissioner for the

SARS will issue the Third-Party Appointment (AA88) Notice in the

On receipt of the AA88 Notice, the employer must do the following:

Where the employer is unable to perform the request, the employer

Possible third parties who can be appointed for individual taxpayers

4.3 Tax Directives

The purpose of a tax directive is to allow SARS to instruct an Employer,

Employers, Fund Administrators and Insurers can request a tax

The Employer / Fund Administrator / Insurer must ensure that the

IMPORTANT NOTE: EMPLOYERS ARE RESPONSIBLE FOR APPLYING

5 EMPLOYMENT TAX INCENTIVE (ETI)

The employer is eligible to claim ETI if the employer–

Top Tip: There is no limit to the number of qualifying employees that

An individual is a qualifying employee if he/she–

ETI Claim = 1,500 – (75% * (5,000 – 4,500)) = R1 125

It is important to understand which employees must be included for

If a claim is made by a casual employee, the Compensation Fund will

IMPORTANT NOTE: ENSURE YOUR PAYROLL DEPARTMENT IS

6.2 Injured Employee – What to do?

An injury at work can happen at any moment and as the Employer,

When consulting a Medical Practitioner, always confirm first whether

The Compensation Commissioner (COID) requires the following three

• Duly completed Employer’s Report of an Accident – ASAP. Make

IMPORTANT NOTE: AS AN EMPLOYER YOU MUST BE REGISTERED

6.3 What to Pay an Employee when on IOD

The purpose of the Compensation for Occupational Injuries and

Payment principle one:

Payment principle two:

It does however exclude:

Payment principle three:

Note: If there is any uncertainty relating to an IOD, complete and

6.4 Workman’s Comp and COVID-19

It is important that any person wishing to make a claim with the

The legislation in this regard is subject to change as new information

As at March 2020 the documentation required for claim, as per above

An employee is defined for UIF as “any natural person who receives

• Is employed by the employer for less than 24 hours a month

How much do you as the employer need to pay?

7.2 When can a person claim UIF?

There are four types you can claim for:

Unemployment Benefits: Where your employment has been

Parental Benefits: These include Maternity; Parental (Paternity);

The following information is correct at time of printing. Amendments

In terms of the Employment Equity Act a company may be deemed a

Schedule 4 – Annual Turnover Threshold – Revised January 2014

Industrial Sector Total Annual

8.2 Requirements of an Employer