Compensation for Occupational Injuries and Diseases Act: ROE Maximum Earning amount increase

Department of Labour published Government Gazette notice no. 42092 on 7 December 2018 in respect of the increase of the maximum amount of earnings on which the assessment of an employer will be calculated. The effective date is 1 March 2019.

The prescribed amount under Section 83(8) of the Compensation for Occupational Injuries and Diseases Act No 130 of 1993 (COIDA) has been increased to R458 520 per annum.

Currently, the maximum amount of earnings is R430 944 per annum.

 

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

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Basic Conditions of Employment Amendment Act, 2018; Labour Laws Amendment Act, 2018; and Labour Relations Amendment Act, 2018

As mentioned in our previous news flash with regard to the National Minimum Wage Bill assented by the President on 23 November 2018, three other bills were also signed into law on the same day, namely the Labour Laws Amendment Bill, amendments to the Basic Conditions of Employment Act, and the Labour Relations Amendment Bill.

On Tuesday, 27 November 2018, the respective Amended Acts, together with the National Minimum Wage Act, have been published in the following Government Gazettes:

  • GG 42059: Basic Conditions of Employment Amendment Act, Act 7 of 2018
  • GG 42060: National Minimum Wage Act, Act 9 of 2018
  • GG 42061: Labour Relations Amendment Act, Act 8 of 2018
  • GG 42062: Labour Laws Amendment Act, Act 10 of 2018

The Labour Laws Amendment Act is notable as it was not introduced by Government but was instead introduced as a private member’s bill by African Christian Democratic Party in November 2015.

The most important aspect of this amendment is that it allows for all parents, including fathers, same-sex couples, adoptive and surrogate parents, to access leave as follows:

  • An employee, who is a parent of a child, is entitled to ten consecutive days of parental leave;
  • An employee, who is an adoptive parent of a child below the age of two, is entitled to:
    • Adoption leave of at least ten consecutive weeks; or
    • At least ten consecutive days of parental leave.
  • An employee, who is a commissioning parent in a surrogacy agreement, is entitled to:
    • Commissioning parental leave of ten consecutive weeks; or
    • At least ten consecutive days of parental leave.

The Labour Laws Amendment Act, 2018 also amend the Basic Conditions of Employment Act, 1997 to insert new definitions and make provision for parental, adoption and commissioning parental leave to employees. A collective agreement may not reduce an employee’s entitlement to parental, adoption or commissioning parental leave. In addition to this, the Unemployment Insurance Act, 2001, is also amended to make provision for the right to claim parental and commissioning parental benefits from the Unemployment Insurance Fund and to provide for the application for, and the payment of, parental and commissioning parental benefits from the Unemployment Insurance Fund.

The amendments to the Basic Conditions of Employment Amendment Act, Act 7 of 2018, provide for the following:

  • The inclusion of the National Minimum Wage;
  • The insertion of a new section to provide for daily wage payments applicable to employees or workers who earn less than the earnings threshold – an employee who works for less than four hours on any day must be paid for four hours work on that day;
  • Where a sectoral determination prescribes wages that are higher than the NMW, the wages in that sectoral determination and the remuneration and associated benefits based on those wages must be increased proportionally to any adjustment of the NMW in terms of the National Minimum Wage Act;
  • To include enforcement of the provisions of the National Minimum Wage Act, 2018, the Unemployment Insurance Act, 2001 and the Unemployment Insurance Contributions Act, 2002.

The Labour Relations Amendment Act, 2018 has been amended to:

  • Increase the period the Minister has to extend a collective agreement to non-parties from 60 to 90 days and the agreement shall only be extended if parties are sufficiently represented within the scope of the council;
  • Provide criteria for the Minister before the Minister is compelled to extend the collective agreement;
  • Provide for the renewal and extension of funding agreements;
  • Provide for picketing by collective agreement or by determination by the Commission in terms of picketing regulations;
  • Provide for the classification of a ratified or determined minimum service, where minimum service refers to the minimum number of employees in a specific essential service who may not strike;
  • Extend the meaning of ballot to include any voting by members that is recorded in secret with regard to registered trade unions and employer’s organisations;
  • Make way for the establishment of an advisory arbitration panel to deal with long and violent strike action in the interest of labour stability.

The effective date of the Labour Laws Amended Act 2018 and the amended LRA will be published in the Government Gazette.

The amended BCEA takes effect on a date immediately after the National Minimum Wage Act, 2018, has taken effect, which is expected to be 1 January 2019. However, this remains to be determined by the president by proclamation in the Gazette.

To view the respective Acts, please follow the links below:

National Minimum Wage Act, 2018

https://www.gov.za/sites/default/files/42060_gon1303_Act9of2018.pdf

Basic Conditions of Employment Amendment Act, 2018

https://www.gov.za/sites/default/files/42059_gon1302_Act7of2018.pdf

Labour Laws Amendment Act, 2018

https://www.gov.za/sites/default/files/42062_gon1305_Act10of2018.pdf

Labour Relations Amendment Act, 2018

https://www.gov.za/sites/default/files/42061_gon1304_Act8of2018.pdf

 

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

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Ghana 2018/2019 Budget Speech & Income tax Changes

The Minister of Finance, Ken Ofori-Atta, presented the Budget Statement and Economic Policy of the Government of Ghana for the 2019 Financial Year to the parliament on 15 November 2018.

Highlights of the Budget Speech Summarized

  • Real GDP grew by 5.4% in the first half of 2018 compared to the annual target of 5.6%. Non-oil real GDP grew by 4.6% compared to the 2018 target of 5.8%
  • The fiscal deficit was 3.0% of rebased GDP at the end of September 2018 compared to a target of 2.7%
  • Total revenue and grants expected for the 2019 fiscal year is GHS58.9 billion, representing 17.1% of the rebased Gross Domestic Product (GDP)
  • The 2019 fiscal operation will have a budget deficit of GHS14.5 billion based on the total expenditure and total revenue and grants. To reduce the deficit, the government will have to borrow from both foreign and domestic sources
  • Inflation dropped to 9.8% in September 2018, down from 12.2% recorded in September 2017
  • Interest rates eased downward in line with the reduction in the Monetary Policy Rate
  • To help the government track its financial performance, the Ghana budget will integrate the Sustainable Development Goals (SDG’s) framework. This will be the first budget in Africa and second in the world, after Mexico to fully integrate the SDG’s framework

Revenue Policy Measures

  • Tax Identification Number (TIN) enforcement: The Revenue Administration Act, 2016 (Act 915) lists a number of transactions and services that cannot be accessed without a TIN. In 2019 sanctions will be applied against institutions and individuals who breach these provisions.
  • Government has completed a draft policy on exemptions which will be presented to Parliament in 2019 to be passed into law.

Important to note:

  • An additional Personal Income Tax band of 35% for monthly income in excess of GHS10,000 was introduced during the Mid-year Budget Statement and has meanwhile been assented by the President. This new tax band came into effect 01 August 2018.
  • Together with this change, the flat income tax rate for non-resident individuals has also been increased from 20% to 25%. This is applicable to Full Time, Part Time and Temporary non-resident employees.
  • The old and new graduated income tax bands effective from 1 August 2018 are as follows:

Resident Individuals

Annual Tax Rates effective 1 August 2018
Old Chargeable Income New Chargeable Income Rate of Tax (%)
First GHS 3,132 First GHS 3,132 Nil
Next GHS 840 Next GHS 840 5
Next GHS 1,200 Next GHS 1,200 10
Next GHS 33,720 Next GHS 33,720 17.5
Exceeding GHS 38,892 Next GHS 81,108 25
Exceeding GHS 120,000 35
Monthly Tax Rates effective 1 August 2018
Old Chargeable Income New Chargeable Income Rate of Tax (%)
First GHS 261 First GHS 261 Nil
Next GHS 70 Next GHS 70 5
Next GHS 100 Next GHS 100 10
Next GHS 2,810 Next GHS 2,810 17.5
Exceeding GHS 3,241 Next GHS 6,759 25
Exceeding GHS 10,000 35

 

  • However, following feedback from the public after the implementation of the new tax band, Government concluded that some relief from this tax measure is justified. Accordingly, Government proposes to review this band to impact monthly income above GHS20,000 at a rate of 30%. This should come into effect 01 January 2019.
  • The tax bands will be further adjusted to reflect the new minimum wage.
  • The new minimum daily wage is GHS10.65, 10% up from GHS9.68, effective 1 January 2019.

 

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

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NATIONAL MINIMUM WAGE BILL SIGNED INTO LAW

President Cyril Ramaphosa has signed the National Minimum Wage (NMW) Bill into law on Friday, 23 November 2018.

The Bill comes into effect 1 January 2019.

The NMW was meant to come into effect in May but due to issues that arose when the legislation was drafted, it had to be postponed. The NMW is expected to benefit about 6 million workers that currently earn below R20 per hour.

There are a few exceptions to the national minimum wage of R20 per hour, which include:

  • The minimum wage for farm workers will be R18 per hour
  • The minimum wage for domestic workers will be R15 per hour
  • The minimum wage for workers on an expanded public works programme is R11 per hour

Together with the NMW Bill, three other bills were also signed into law on the same day. These are the Labour Laws Amendment Bill, amendments to the Basic Conditions of Employment Act, and the Labour Relations Amendment Bill.

More details to follow soon.

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

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INCREASE OF THE OFFICIAL INTEREST RATE ANNOUNCED

The monetary policy committee (MPC) of the South African Reserve Bank has decided to increase the repo rate for the first time in two years. The announcement was made on Thursday, 22 November 2018.

The repo rate is increased by 25 basis points to 6,75% per year, effective from 23 November 2018. This means that the rate at which the SARB lends to your bank has risen from 6,5% to 6,75%.

For employers, the official interest rate applicable to payrolls will be 7,75%.

The definition of “official interest rate” in the Seventh Schedule of the Income Tax Act means:

  • In the case of a loan which is denominated in the currency of the Republic, the South African repurchase (repo) rate + 100 basis points; or
  • In the case of a loan which is denominated in any other currency, the South African repurchase rate applicable in that currency +100 basis points.

Where a new repurchase rate or equivalent rate is determined, the new interest rate applies for the purposes of this definition from the first day of the month following the date on which that new repurchase rate or equivalent rate comes into operation.

 

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

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2019 Budget Speech Highlights

In her inaugural national budget presentation, Zambian Finance Minister, Honourable Margaret Mwanakatwe, informed the nation that the 2019 budget was framed on building on the firm foundation of the past seven years and tackling the challenges ahead.

The theme of the 2019 National Budget is “Delivering Fiscal Consolidation for Sustainable and Inclusive Growth”.

The budget objectives are as follows:

  • GDP growth of 4%
  • Inflation of between 6% and 8%
  • Reduce the fiscal deficit to 6.5% of GDP from 7.4% in 2018
  • Increase domestic revenue to not less than 18.4% of GDP from 17.7% in 2018
  • Reduce domestic borrowing from 4% to 1.4% of GDP
  • Digitalise the entire revenue collection process in an effort to broaden the tax base and enhance compliance levels
  • Raise international reserves to at least 3 months of import cover
  • The Minister proposed to roll out an increased K86.8 billion budget next year, or 28.9% of GDP, up from K71.6 billion in the 2018 national budget.
  • It is proposed that Value Added Tax (VAT) be abolished and replaced with Sales Tax. Guidance on how the Sales Tax will be administered is yet to be provided. The Sales Tax will be non-refundable, and Government expects the process to be simpler
  • Amendment of the VAT Act to provide for the prosecution of the directors or managers of a company, where the company commits an offence under the VAT Act
  • In 2019, Government will commence with the implementation of the National Health Insurance Act No 2 of 2018 in a phased manner and will ensure universal access to quality healthcare services
  • No changes have been proposed to the existing personal income tax regime, therefore the PAYE bands and rates remain as follows:

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

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COIDA Regulation on Injury on Duty (IOD) and Occupational Disease (OD) documentation to be provided by Employers

On 9 November 2018, the Compensation Commissioner, Vuyo Mafata, published the COID Act Regulation with regard to Injury on Duty (IOD) and Occupational Disease (OD) documents to be provided by employers to the Compensation Fund.

The regulation as published in Government Gazette No. 42021, serve to inform all Employers and Employees of the primary documents needed for the registration, adjudication and processing of IOD/OD claims which will improve the turn-around time and finalization of the claims.

The regulation is a detailed explanation of the following:

  • The registration of a claim process
  • The documents required for the reporting of the IOD/OD
  • The process of determining whether the IOD/OD is in fact work-related
  • The documentation needed to determine the liability of the claim
  • The management of benefits payable, such as banking details
  • The treatment of a patient by a medical service provider for up to 24 months
  • Documentation required for the processing of Temporary Total Disablement (TTD) and Temporary Partial Disablement (TPD) benefits
  • Documentation required for the processing of Permanent Disability (PD) benefits
  • In respect of fatal claims, the documentation required to consider payment of compensation to the dependants of the deceased

To view the Government Notice, please follow the link:

https://www.gov.za/sites/default/files/42021_gon1217.pdf

 

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

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PRELIMINARY DRAFT REVISION OF THE LABOUR LAW SUBMITTED BY GOVERNMENT

Mozambican Government has submitted the preliminary draft revision of the Mozambican Labour Law on Wednesday 24 October for discussion. The proposal was presented to employers and trade unions in Maputo by the Ministry of Labour, Employment and Social Security.

The draft labour law aims to replace the current Labour Law which has been in force since 2007. The Minister of Labour, Employment and Social Security Victoria Diogo said that the revision of the Labour Law aims to respond to the current challenges of the market while guaranteeing fundamental labour rights.

The most significant proposals are as follows:

  • To extend the level of relationship for the allocation of five days of compassionate leave. Parents-in-law and sons and daughters-in-law have been added to the list of relatives which already includes spouses, parents, children, stepchildren, siblings, grandparents and step-parents.
  • New rules on the limits of hiring foreign labour. The current limitations do not match market dynamics and will deter those who want to invest in Mozambique.
  • The prohibition of HIV/Aids testing for job seekers. Currently, several Mozambican entities request HIV/Aids testing for job seekers, but the Health Ministry argues that this is a private matter.
  • To add Transport, Hospitality and Catering, General and Food Retailing to the sectors whose services are considered essential, meaning that in the case of a strike, workers in those sectors would be required to ensure the provision of minimum services, as already applies to medical services, water supply, energy and fuels and telecommunications.
  • Labour disputes would be subject to labour mediation, before being submitted to arbitration or labour courts, except in cases of precautionary measures.

The preliminary draft revision will be considered by the Labour Advisory Committee before being submitted to the Council of Ministers and later to the Assembly of the Republic for approval.

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

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SOUTH AFRICA MEDIUM TERM BUDGET POLICY STATEMENT 2018

The Minister of Finance, Minister Tito Mboweni, has delivered the Medium-Term Budget Policy Statement on Wednesday 24 October 2018.

HIGHLIGHTS SUMMARISED

  • Economic growth has been revised down from 1.5% to 0.7% in the current year, and the global environment remains challenging for emerging market economies.
  • Inflation is expected to remain within the 3-6% target band over the medium term, despite pressure from a weaker exchange rate and higher oil prices.
  • Revenue collections up to the end of September 2018 have grown by 10.7% compared to the same period last year.
  • It is estimated that the revenue collection for the year 2018/19 will show a shortfall of R27.4 billion. An underestimation of Value Added Tax (VAT) refunds due has led to an overly optimistic view of revenue growth.
  • The slow pace of VAT refunds has hurt the cash flow of several companies, including small businesses. The Acting SARS Commissioner has committed to processing the outstanding VAT refunds as quickly as possible.
  • The consolidated budget deficit is estimated at 4% in 2018/19, compared with the 2018 Budget projection of 3.6% of GDP.
  • Government debt is now expected to increase to 55.8% of GDP for this year, rising to 58.5% of GDP by 2021/22 to service the budget deficit. This is well up from February’s estimates of 55.1% for this year, rising to the previously estimated 56.2% for 2021/22.
  • Gross debt is projected to stabilize at 59.6% of GDP in 2023/24. Government remains committed to ensuring fiscal sustainability.
  • Over the next three years, government will spend R5.9 trillion, including R1.9 trillion on health and education, and R911 billion on social development.
  • Increases in the major tax instruments will be avoided unless the economic environment requires it.
  • Revenue projections assume no changes to tax rates but provide for annual adjustments to personal income tax brackets, levies and excise duties in line with inflation.
  • National departments’ compensation ceilings to be retained, which implies continued restrictions on personnel budgets and public employment.
  • Government is working with Development Finance Institutions (DFI’s) and private-sector partners on an infrastructure project preparation facility.
  • The 2018 public-service wage agreement exceeds budgeted baselines by about R30.2 billion through 2020/21. No additional funding is available, National and Provincial departments are expected to fund shortfalls by adjusting within their compensation baselines.
  • State institutions are being repaired and renewed, however, serious governance problems exist across the public sector. State-owned companies need to be reconfigured in several ways.

 

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

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The Compensation for Occupational Injuries and Diseases Amendment Bill 2018

On 18 October 2018, the Minister of Labour, Mildred Nelisiwe Oliphant, published the proposed amendments in the Compensation for Occupational Injuries and Diseases Bill, 2018 (The COIDA Amendment Bill) for public comment.

Proposed changes that will be of importance to employers are the following:

  • The definition of an employee.
  • The definition of an employer.
  • The meaning of the Financial Year to be changed to the first day of April in any year and the last day of March in the following year (currently March to February).
  • The insertion of a definition for remuneration.
  • The provision for rehabilitation, re-integration and return to work of occupationally injured employees.
  • The provision for the regulation of the use of health care services.
  • The provision for the re-opening of claims.
  • Provision of criminal and administrative penalties.
  • The regulation of compliance and enforcement, and the provision for a no-fault based compensation system and matters connected therewith.
  • The replacement of the concept mandators to contractors and sub-contractors.
  • The inclusion of domestic workers.

To view the Government Notice, please follow the link:
https://www.gov.za/sites/default/files/41985_gon1133.pdf

At the same time, the Draft changes to the Regulations on the Compensation Fund New Assessment Model under the COID Act has also been published for public comment.

The main proposals are:

  • To reduce the existing 102 assessment subclasses to 5 main assessment classes to simplify the process of dealing with the Compensation Fund.
    The reason for this change is because the Compensation Fund assesses employers based on the industry they operate in and are assigned to a specific assessment class for the basis of determining their liability to the Fund. However, due to the different number of classes, employers often are registered in incorrect classes resulting in inaccurate collection and recording of the Compensation Fund’s financial performance. The current classes also contribute fraudulent conduct by different stakeholders who may not want to pay the assessment fees related to the industry in which the employer operates.
  • A new assessment class for Households has been introduced.

To view these Regulations, please follow this link:
https://www.gov.za/sites/default/files/41984_gon1132.pdf

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

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