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With skills in short supply and the level of unemployment in South Africa rising, the issue of how best to manage people in business remains pertinent.

The various forms of leave accrual, and entitlements as set out in the Basic Conditions of Employment Act (BCEA), provide for the minimum leave- however no limit is placed on maximum amounts which a business may decide to make available to employees.

This should remain within the confines of objectivity, consistency, transparency, ethical practice and good governance – or could risk becoming subject to discrimination and complaints of unfair labour practice.

This is the reality of the market today, says Nicol Myburgh, Head of HR Business Unit at HR and HCM specialist services provider CRS Technologies.

Myburgh explains that the four main types of statutory leave are enacted in the BCEA; including annual leave, sick leave, family responsibility leave and maternity leave, but these do not in any way limit additional leave types and entitlements which the employer may wish to offer – such as study leave, paternity leave, cultural leave and marriage leave.

Related: Time Is Money – And The Labour Law Is Clear On That

“It should be noted that even though employers may offer the above additional leave types at their own discretion they should have appropriate reasons for approving or declining the applications or they could be at risk of having an unfair labour practice or a discrimination complaint leveled against them,” says Myburgh.

Another challenge facing most businesses is how best to manage issues such as accrued leave, leave encashment and additional paid leave.

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As CRS Technologies explains, accrued leave is the amount of leave time that an employee has accrued as per the BCEA, Bargaining Council, Sectoral Determination, Company Policy or any other reason recognised by legislation, but which has not yet been used or paid. This is a financial liability for the employer.

In terms of the BCEA the accrual of leave is only applicable to annual leave, the employee is entitled to 15 working days per annum on full pay. The Act states “21 consecutive days” and reference to a calendar will show that 21 consecutive days equals 15 working days based on a 5-day week, or 18 working days based on a 6-day week.

‘Consecutive’ means that an employee has an entitlement to take the accrued leave in successive days.

“This doesn’t mean that an employee immediately has 15 days leave due to him/her from the first day of employment, this leave has to be accrued before it comes due and it is accrued by a simple formula, as follows: 15 Days divided by 12 months’ equals 1.25 days leave accrued per month. In other words, this leave is only available to the employee once it has been accrued,” Myburgh advises.

However, as CRS Technologies explains, other statutory leave types become immediately available, with two variations, during the first 6 months of employment –  sick leave, which is accrued at one day paid sick leave for every 26 days worked, where after the employee’s full entitlement becomes available and is not subject to accrual. Family Responsibility Leave becomes available after 4 months of employment.

Leave encashment

Leave encashment is a term used to describe what is in effect the selling of one’s leave and amounts being paid out for the financial value of leave days.

“The BCEA is quite clear on this based on section 21, employers may not pay workers instead of granting leave, except on termination of employment,” says Myburgh.

However, many companies do still encash leave without terminations taking place. In terms of the BCEA this is not allowed, or is it?

“Yes, within certain conditions it is allowed,” says Myburgh. “The BCEA makes provision for minimum leave entitlements either 15 or 18 paid days depending on 5 or 6-day work weeks. If, as per company policy, employment contract or mutual agreement, an employee receives a leave entitlement larger than the minimum, it is not regulated by the BCEA because this is a benefit over and above what is provided by the BCEA.”

Related: What The Law Says About Employee Leave And Absence

This means that additional paid leave over and above the statutory minimum, can be regulated by the company policy, and may be paid out.

The MEIBC provides for additional paid leave over and above the minimum entitlement provided for by the BCEA.

For Myburgh and colleagues at CRS Technologies, the issue of leave management in general is one that many businesses will have to grapple with as staff satisfaction and retention are major issues in the digital age.

Alternatively, those that are intent on growth and for whom issues like digitisation and agility remain challenges, will have to come to terms with and understand these issues thoroughly if they are to successfully evolve.

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The Basic Conditions of Employment Act (BCEA) sets the fundamental conditions of service for all employment situations, ranging from the domestic to, with variations, the industrial.

When it comes to hours worked per week in business, particularly overtime, the BCEA is precise – the maximum normal working time allowed is 45 hours per week, any overtime is voluntary and may only be worked in agreement between employer and employee.

Nicol Myburgh, Head of HR Business Unit at CRS Technologies, an HR and HCM specialist services provider, offers a broad perspective on the matter and the company’s view, which, as he explains, is only a guideline.

Myburgh says there are terms and conditions that have to be taken into consideration – including the fact that the above regulation excludes lunch breaks. “Lunch breaks are, by law, not defined as working time and will therefore be unpaid,” and does not mean the employee must work 45 hours per week normal time.

Related: Master The Ins And Outs Of South Africa’s Labour Laws

“The normal working hours are determined by mutual agreement between employee and employer, in this aspect the act only provides the maximum limit of 45 hours, and does not mean the employee MUST work 45 hours per week normal time. The statutory limitation of 45 hours per week means that the employee may not work more than 45 hours per week normal time,” says Myburgh.

Labour legislation is also clear on overtime, defined as time worked in excess of the normal working hours.  “The maximum permissible overtime is three hours per day or 10 hours per week. The employee must be paid at one and a half times his/her normal wage rate except for Sunday work and work on public holidays, which must be paid at twice the normal wage rate. The employees aren’t necessarily paid for overtime, instead by mutual agreement, they can be granted time off in lieu of payment calculated by the same formula mentioned above,” Myburgh continues. 

By mutual agreement

However, this segment of the law is only applicable to employees earning below the earnings threshold, as determined by the Minister, and is currently R205 433,30.

As CRS Technologies executives explain, overtime payment or time off in lieu thereof for employees earning above this threshold is not compulsory, but rather a mutual agreement between employer and employee.

Employees earning above the threshold for overtime who are not compensated by employers have the right to refuse to participate in overtime work.

While it is true that each industry has its own variations and is governed by specific dynamics, legislation regulating overtime is applicable irrespective.

“No employee may work more than 45 hours per week normal time and the no employee may work more than 10 hours per week overtime. However, while the BCEA sets the fundamental minimum rules, there are legislated variations based on sectoral or industry operational requirements.  A sectoral determination, a Bargaining Council Main agreement or a union agreement, etc. may bring about variations on the conditions mentioned above since these documents are viewed as extensions of the act.  These are known as delegated legislation,” says Myburgh.

Related: What The Law Says About Employee Leave And Absence

CRS Technologies refers to the security industry as an example.The company explains that Sectoral Determination 6: Private Security Sector, regulates among other conditions the maximum normal working hours to 48 hours per week for a security officer.

“…And the Metal and Engineering Industries Bargaining Council regulates the conditions for employees operating in the industry, among other conditions the ordinary hours of work shall not exceed 40 in any one week for employees on day shift and/or night shift or employees working on the two and/or three-shift system,” Myburgh explains.

A further example is the retail industry, where overtime provisions allow for extended shopping hours.