We believe it is critical for business owners to be aware of rapid changes to tax legislation in South African. Fortunately, we have the expertise to guide businesses through the ‘minefield’ of tax legislation and updates.

The latest change is that PAYE BRS for Employer Reconciliation version 17.0.2 was published, as amended by SARS, and published on 10 July 2018.

Why is this important? Well, for starters the changes in the official document – under Revision History – amends the validation for monthly calculated ETI to make provision for the designated Special Economic Zones (SEZ).

A list of SEZ’s for ETI purposes has been added as Appendix E in the BRS.

To make life a bit easier, we’ve put together a table of SEZ’ under discussion: –

COE                 COEGA SEZ

DTP                  DUBE TRADE PORT SEZ

EAL                  EAST LONDON SEZ

MAP                 MALUTI-A-PHOFUNG SEZ

SLB                  SALDANHA BAY SEZ

RIB                   RICHARDS BAY SEZ

It is important to take note that employees who are employed at a fixed place of business within the SEZ zones listed (and where the person renders services to that employer mainly within that SEZ), the age limit to determine if the employee qualifies for ETI, does not apply,

This means employees of any age can qualify to generate the tax incentive for an employer.

For more information and to access the new BRS, click here

CRS Technologies stresses that legislation offers a guide, but can only solve some of the challenges businesses face in effectively dealing with employee incapacity. 

Employees can be incapacitated due to ill-health/injury or poor work performance, and South Africa has developed legislation that guide business owners – but knowing the law is only part of managing this process effectively warns leading HR and HCM solutions provider CRS Technologies.

Nicol Myburgh, Head of HR business unit at CRS Technologies, says three sets of legislation must be considered when it comes to this issue, including the Labour Relations Act (LRA), the Occupational Health and Safety Act, and the Employment Equity Act (EEA).

“Each of these Acts contributes to- or covers the issue of employee incapacity in one way or another. While it is essential to know exactly how, this is only part of the management’s responsibility,” says Myburgh.

To illustrate, CRS Technologies explains that Schedule 8 of the LRA explains the procedure for incapacity. If an employee is temporarily unable to work the employer should consider the extent of the incapacity and consider alternatives to dismissal.

If the incapacity is more permanent in nature, the employer should ascertain the possibility of securing alternative employment or adapting the duties or work circumstances of the employee to accommodate the employee’s disability.

“Particular consideration should be given to employees who are injured at work or who are incapacitated by work-related illness. The courts have indicated that the duty on the employer to accommodate the incapacity of the employee is more onerous in these circumstances.

In these cases the employer should seriously consider actions other than dismissal, for instance light duty or adapting the employee’s job to accommodate him/her,” Myburgh adds.

Disability is included as one of the listed grounds for discrimination and the EEA states: ““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.”

CRS Technologies affirms that management must not only be aware of legal stipulations (and these are substantial), they have to also ensure compliance and that they instil an environment conducive to open, frank and honest discussion and consultation between the employer and employee.

Despite the extent to which labour law covers incapacity of employees and forces a company to be proactive, Myburgh believes that for the most part, businesses are not adhering to the law.

“Not because they don’t want to or refuse to adhere to it, they are just not aware that they are non-compliant, there are so many requirements with regards to incapacity and the process can get extremely complex, non-compliance is not due to anything untoward just ignorance. Unfortunately Employers usually find out too late that a mistake was made, they only realise this upon receiving an 7.11 CCMA application to appear for arbitration,” he adds.

For now, businesses will need to keep focused on legal developments and compliance, but especially how to handle what CRS Technologies describes as their toughest challenge: how to differentiate between incapacity and discrimination and what reasonable accommodation is in practice.

 

Constitutional Court ruling on Labour Brokers

On 27 July 2018, the Constitutional Court provided clarity to an area that has been a matter for different interpretation over a period of time.

With regard to temporary employees, the Labour Relations Amendment Act, 2014, which came into effect 1 January 2015, determined that a temporary worker, working more than 3 months, becomes a permanent worker in respect of labour rights.

Previously, the Labour Court handed down judgement to provide clarity on the interpretation of the “deeming provision” contained in section 198A (3)(b) of the Labour Relations Act (LRA). There was much debate as to whether the deeming provision means that the client of a Temporary Employment Services (TES) becomes the sole employer or the dual employer of the TES employees.
At the time, the legal position was that TES employees remain the employees of the TES and, by virtue of the deeming provision, could assert their rights against the clients of the TES as well. The
finding of the Labour Court supported the “dual employer” approach and TES employees would not transfer to the client as the sole employer.

This was not the end of the debate around this amendment to the LRA.

There were two different views on the “deeming provision” clause. One view is that, once the deeming provision kicks in, the company using a labour broker becomes the sole employer of the employees placed by that labour broker. This would mean the employees placed by the labour broker are effectively “transferred” to the client of the labour broker. The second view is that a dual employment relationship arises with both the labour broker and the client of the labour broker being regarded as employers of employees placed at the company, which is using the labour broker.

The Constitutional Court’s decision last week favoured the first approach and, therefore, effectively means the company or business where a worker is placed by a labour broker becomes the sole
employer of that worker upon completion of three months of service, if that employee earns below R205 433 a year.

This also means all labour rights can be demanded of the client instead. That includes unionisation rights, the right to strike and bargain and any other right the Labour Relations Act gives a worker. In addition, in terms of sub-section 4, should a TES or client terminate an employee’s assignment to avoid the operation of Section 198A(3)(b), that termination will be considered a dismissal and the usual remedies available through the LRA will apply.

The court ruling does not ban labour broking in its entirety, it merely confirms that after three months employees have labour relation rights against the client (where they work). Ordinarily‚ the
labour broker will remain the employer of the placed worker in terms of contract.

Contact our legislation team at info@crs.co.za if you require any additional information.

© 2018 CRS Technologies (Pty)Ltd. All Rights Reserved.

Over the years, ERP systems have evolved, becoming increasingly sophisticated with highly customised functionality available. There is a lot of disruption happening in this now very competitive space and machine learning is reducing some of the HR intervention but, in my opinion, one area that ERP has not been able to get right is a Payroll integration. Developers can talk for hours about multiple applications needing to co-exist and integrations having to be graceful but at the end of the day they need to work too and Payroll is not particularly graceful in many ERP systems, yet. The gumboot dancer among ballerinas. Here’s the good news— we’re changing that! If you are actually considering any kind of ERP-based Payroll integration, before you dive into any new investment, please just take a moment to chat to me first because you’re very likely to find your solution resides close to home within CRS. I won’t divulge any more but rest assured there’ll be lots of noise as rollout draws closer as this is set to be another one of CRS’ complete game changers.

I am also pleased to share that CRS can now assist with the execution of non-Payroll rewards.
Reward schemes are a cornerstone of successful employee motivation strategies and a tried and tested tactic to improve staff retention, so we’ve put a lot of time into really considering the
kind of rewards that will resonate with our clients’ employees. There are various types of rewards on offer, from funeral package vouchers to fast-food food coupons and the range will
grow based on needs. Drop me a line or chat to one of our consultants to find out more about this new CRS offering.

With end of year tax submissions opening in September, just a reminder that we are here to make tax season stress free! All the Sars changes and new requirements are updated in our systems and we are on track to handle every element of the submission process for you. Of course it is best to start early and get it behind you so please start your tax season planning now.

Lastly, with August being Women’s Month, a big thank you to the incredible ladies of CRS who, I admit, I’d be lost without! Doing a quick head count, men are definitely in the minority at CRS—consultants, developers and even our ExCo—the ladies have majority rule! This was never planned but to be honest, it works. I’d also like to acknowledge and thank the incredible ladies among our clients, suppliers and other stakeholders who also play such a vital role in CRS’ success.

Have a great (Women’s) month
Ian McAlister