employment law ensight - march 2007 (pdf)

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employment law ensight - march 2007 (pdf)

employment lawIGHTrecent casesmarch 2007liability for injuries to brokers’staff: a shot in the arm?There are few businesses these daysthat do not make use of labour brokers.Using staff provided by labour brokersis a seductive alternative for companiesthat have become weary of the manyand varied obligations involved in beingan employer nowadays. What is oftennot appreciated, however, is that whilecompanies that make use of labourbrokers are relieved of a wealth ofobligations that they would otherwiseowe if they were the employer, they alsolose some of the statutory protectionsfrom liability that employers enjoy.This was illustrated in a matter that wasrecently considered by the Supreme Courtof Appeal. In Crown Chickens (Pty) Ltdt/a Rocklands Poultry v Rieck, Ms Rieckhad worked as a cashier in a retail shopattached to a poultry farm run byRocklands Poultry in Uitenhage. Shewas employed by a labour broker whomade her services available to RocklandsPoultry in return for a fee. One afternoon,a group of armed men entered the retailshop and robbed the staff and customers.Before they left, they became aware thatsecurity personnel had been alerted tothe robbery and they then seizedMs Rieck and, holding a gun to her head,forced her to accompany them as they fled.Outside the shop they called upon thesecurity personnel to back off otherwisethey would shoot Ms Rieck. They thenbundled her into the rear seat of a vehiclebelonging to a customer that was parkedoutside the shop and, with some of therobbers on either side of her in the rearseat, the vehicle sped away swaying fromside to side as the wheels spun on thegravel. Rocklands Poultry’s loss controlofficer had been in his office at the timebut when he was alerted to the robberyin progress, he rushed over and saw thethree robbers leave the shop withMs Rieck and force her into the vehicle.He then ran to the main access gateand, as the vehicle sped past him, heby stuart harrisonfired two shots from his handgun at thedeparting vehicle, intending to strikeone of the wheels and prevent its escape.Two shots were also fired by one of hiscolleagues for the same purpose. Thevehicle continued on its way but one ofthe shots had struck the rear of thevehicle, penetrating the rear seat andhitting Ms Rieck in the arm. When therobbers became aware that she had beenshot, they appeared to panic andabandoned the vehicle (and Ms Rieckin it) in a nearby township, where shewas rescued by local residents.Ms Rieck sued Rocklands Poultry fordamages arising from her injury.Rocklands Poultry defended the matterasserting, in the first place, that it wasreasonable for its employees to shoot atthe vehicle in order to stop it and therebyavoid the risk that Ms Rieck might be killedby the robbers if they managed to escapeand, secondly, that the statutory immunityfor employers for liability for workplaceinjuries provided for in Section 35(1) ofthe Compensation for Occupational Injuriesand Diseases Act 130 of 1993, appliedwith the result that Ms Rieck’s claim oughtto lie against the Workmen’s CompensationCommissioner, and not Rocklands Poultry.The SCA rejected the assertion that it wasreasonable to shoot at the vehicle in thecircumstances, finding that it was no lessthan foolhardy to attempt to prevent theescape of the armed robbers who wereholding Ms Rieck hostage as it exposed herto very real and immediate danger fromany of a number of causes which faroutweighed the possible risk to her safetyif the robbers escaped [for example, shecould have been struck by a wayward bullet(as she was), she might have been injuredif the shots caused the driver to lose controlover the car and, indeed, if the shots hadachieved their purpose and stopped therobbers’ vehicle, she would have beenexposed to the risk of again being held witha gun to her head while the robbers persistedin attempting to escape].The attempt by Rocklands Poultry to relyon Section 35(1) of COIDA was alsorejected by the SCA, which examined thelengthy legislative history of workmen’scompensation in South Africa togetherwith the definition of “employee” and“employer” in COIDA and concluded thatthe legislation had consistently recognizedthat, for its purposes, a workman has onlyone employer at any time (there areexceptions that are not material for presentpurposes), which is the person with whomthe workman is in a contractual relationshipof employment. Importantly for this case,the SCA held that that person remains theworkman’s employer even if the workman“companies who usestaff provided bylabour brokers shouldbe aware, therefore,that they do not enjoyCOIDA immunity”performs his services for another. Forpurposes of COIDA, therefore, the labourbroker was the employer of Ms Rieck,and not Rocklands Poultry, and thereforeRocklands Poultry was not immunizedin terms of Section 35 of COIDA againstan action for damages. Rocklands Poultrywas accordingly liable to Ms Rieck forthe damages suffered by her as a resultof her being shot in the arm by one ofthe Rocklands Poultry employees.Companies who use staff provided bylabour brokers should be aware, therefore,that they do not enjoy COIDA immunityfrom claims by such staff for workplaceinjuries, deaths or diseases (which claimscan be substantial). Apart from payingparticular attention to providing a safeworkplace for such staff, therefore, suchcompanies may also wish to considertaking out an appropriate insurance tocover their potential liability in this regard.p2


employment lawIGHTarticlesmarch 2007employer is obliged to keep theseparticulars for a period of three yearsafter termination of the employee’semployment. An employer must collectand collate all the above writtenparticulars and keep them on record forthe purposes of a labour inspection.Information about remuneration in termsof Section 32 and Section 33 of the BCEARemuneration in money should bepaid in South African currency eitherdaily, weekly, fortnightly or monthly.Such remuneration should either be paidin cash, by cheque, or by direct depositinto a bank account designated bythe employee. Payment must take placeno later than seven days after thecompletion of the period for which theremuneration is payable or aftertermination of employment. Anypayment in cash or by cheque must bemade at the workplace or at a placeagreed to by the employee. The paymentmust be made during the employee’sworking hours or within 15 minutes ofthe commencement or conclusionthereof. The payment must be in a sealedenvelope. It then becomes the propertyof the employee.“the employer isobliged to keep theseparticulars for threeyears after terminationof employment”An employer must supply an employeewith certain information in writing oneach pay day. It usually takes the formof a pay slip. The following informationmust be supplied:• The employer’s name and address;• the employee’s name and occupation;• the period for which the paymentis made;• the employee’s remuneration in money;• the amount and purpose of anydeduction made from the remuneration;• the actual amount paid to theemployee; and• if relevant to the calculation of thatemployee’s remuneration—- the employee’s rate ofremuneration and overtime rate;- the number of ordinary andovertime hours worked by theemployee during the period forwhich the payment is made;- the number of hours workedby the employee on a Sundayor public holiday during thatperiod; and- if an agreement to averageworking time has been concludedin terms of section 12, the totalnumber of ordinary and overtimehours worked by the employee inthe period of averaging.The above information must be given tothe employee at the workplace or at aplace agreed to by the employee, duringthe employee’s ordinary workinghours or within 15 minutes of thecommencement or conclusion of thoseworking hours. The payslips used by theemployer should be amended to containall of the information described above,should this not already be the case.In our next newsletter we will tell youabout your compliance obligations underother pieces of labour legislation andabout which you can also be asked bya labour inspector.possible defences to a compliance orderHere are some practical tips that couldhelp you if you are served with acompliance order by a labour inspector.• A labour inspector can’t issue acompliance order dealing with anamount that is payable to anemployee under the BCEA if theemployee is covered by a collectiveagreement that provides for disputesof this nature to be resolved byarbitration.• A labour inspector can’t issuea compliance order dealing withan employee who is a senior manageror an employee who earns more thanthe threshold which is currentlyR115 572 per year.• A labour inspector can't issue acompliance order if otherproceedings have been instituted forthe recovery of an amount, or ifproceedings were previouslyinstituted but withdrawn (whichmeans that an employee can’t firsttry a civil claim and then if that doesnot work ask the department oflabour to issue a compliance order.)• A labour inspector can’t issue acompliance order if the amount hasbeen payable by you to the employeefor longer than 12 months beforeeither the date on which theemployee first complained to a labourinspector OR the date on which theinspector first tried to secureyour written undertaking to paythe amount.If you want to object to a complianceorder you must do so in writing to theDirector-General within 21 days ofreceiving the order.p4


employment lawIGHTnews and viewsmarch 2007who is an employee?by itayi gwaunzaA new Code of Good Practice: Who is anEmployee ("the Code") was recently issued.The Code primarily sets out guidelinesfor determining whether persons areemployees as opposed to independentcontractors for purposes of employmentlegislation such as the Labour RelationsAct ("LRA) and the Basic Conditions ofEmployment Act ("BCEA") and is a usefuldocument to refer to for anyone who isrequired to make the distinction betweenan employee and independent contractor.Anyone applying or interpretingemployment legislation is required to takethe Code into account and the variousThe Code deals with the presumption asto who is an employee which is referred toin the LRA and the BCEA. The presumptionapplies to employees who earn below thethreshold amount referred to in the BCEA(currently R115 572 gross earnings perannum). The Code confirms that in anyproceedings in terms of the BCEA or LRAif a party is able to demonstrate the presenceof any one of seven factors listed in theLRA and BCEA then that person ispresumed to be an employee and the onuswill be on the other party to disprove thatthe person is an employee. The Codediscusses the 7 factors in some detail.court decision that have arisen dealingwith the distinction between employeesand independent contractors. The Codemakes reference to some of those cases.• Distinguishing between an Employeeand Independent ContractorSome of the specific issues that are dealtwith in the Code are the following:The Code goes into some detail on howyou can go about distinguishing between• The Presumption as to who isan Employeean employee and an independentcontractor or proving that a person whois presumed to be an employee is in factnot an employee. For example the Codehighlights the various factors that theCourts may take into account when taskedwith determining whether a person is anemployee or an independent contractorand discusses those factors in some detail.• Temporary Employment Services(Labour Brokers)The Code also sets guidelines on how todetermine whether persons that aresupplied to a company by a temporaryemployment service (or Labour Broker asthey are sometimes referred to) is anemployee or independent contractorvis-à-vis the temporary employment serviceand confirms that you must look at theactual working relationship between theworker and the company for whom theworker provides services or works.The Code will come in handy where youare tasked with determining whetheranyone engaged at your establishmentor whom you intend to engage is anemployee or independent contractor forpurposes of our employment law.the status of medical certificatesissued by traditional healersEmployers are often unsure of the legalstatus of certificates from traditionalhealers presented by employees in lieuof medical certificates from medicalpractitioners to explain absence fromthe workplace.The Traditional Health Practitioners Actis intended to regulate the practice oftraditional healing. Only some sectionsof this Act have come into operation.The Basic Conditions of EmploymentAct provides in section 23(2) that amedical certificate presented by anemployee to explain absence from workresulting from ill health “must be issuedand signed by a medical practitioner orby fritz malanany other person who is certified todiagnose and treat patients and who isregistered with a professional councilestablished by an Act of Parliament.”The position at present is that thoseprovisions of the Traditional HealthPractitioners Act that have been put inoperation have not brought the envisagedInterim Traditional Health PractitionersCouncil of South Africa, which is theprofessional council to be established forregulation and registration of traditionalhealers, into full operation and does notyet allow for registration of Traditional HealthPractitioners with “a professional councilestablished by an Act of Parliament”.“employers are thereforeat present under no legalobligation to acceptcertificates from traditionalhealers and should informemployees accordingly”Although regulations have been passed toappoint members of the Interim TraditionalHealth Practitioners Council of South Africa,the Council is not yet in a position to acceptany registrations of traditional healers.Employers are therefore at present underno legal obligation to accept certificatesfrom traditional healers and shouldinform employees accordingly. In future,and when traditional healers becomeregistered, employers will only be obligedto accept certificates from registeredtraditional healers.p5


employment lawIGHTnews and viewsmarch 2007the uia: calculating benefits(or the case of the magically disappearing days)"Knowing what to measure and how to measureit makes a complicated world much less so. Ifyou learn how to look at data in the right way,you can explain riddles that otherwise seemimpossible. Because there is nothing like thesheer power of numbers to scrub away layers ofconfusion and contradiction." – Steven D Levittand Stephen J Dubner: Freakonomics p14On 5 February 2007, the Minister ofLabour published regulations to giveeffect to section 13 of the UnemploymentInsurance Act, which sets out the methodfor determining the benefits to which acontributor to the UnemploymentInsurance Fund (UIF) is entitled.by anton steenkamp and annie erwinIn terms of section 13(3), the benefitspayable to UIF contributors accrue at therate of one day's benefit (the dailyremuneration rate) for every six completeddays of employment as a contributor.This is subject to a maximum of 238days’ benefits in the four-year periodpreceding an application for benefits. Acontributor will therefore be eligible toclaim 238 days’ benefits after beingcontinuously employed for four years.Where a contributor has worked for fouryears continuously, the number of daysemployed equals 1460. Divided by 6,this works out at 243.33 days, which is5.33 days in excess of the maximumprescribed by section 13.To get around this anomaly, theregulations outline the method tocorrectly calculate the number of days’benefits, interpreted from its originaltabular form as follows:1. 238 days per four-year cycle equatesto 34 weeks per four-year cycle;2. This in turn equates to 8.5 weeksper each year of the four-year cycle;3. 8.5 weeks per year equates to 59.5days per year; and4. 59.5 days per year x 4 years equals238 days.Voila! 5.33 days have disappeared. Hasthe riddle been solved or are you moreconfused than ever?to EE or to BEE - what is the question?by adam ismail*p6Employers are familiar by now with theEmployment Equity Act (EEA) but thequestion that arises is how does theEmployment Equity Act interact with theBroad-Based Black EconomicEmpowerment Act (BEE Act), as well asthe recently promulgated Codes of GoodPractice on Black Economic Empowerment,which came into effect on 9 February 2007?The BEE Act, as read with the Codes, isgovernment's attempt to create a framework,amongst other things, to promote theeconomic transformation of South Africaand enable meaningful participation ofblack people in the economy. The Codesprovide the framework created by the BEEAct with the necessary detail for businessesto determine the degree to which they aretransforming, by making provision for abalanced scorecard. The balancedscorecard is made up of 7 elements ofvarious weightings which add up to 100points. The elements are ownership,management control, employment equity,skills development, preferentialprocurement, enterprise development andsocio-economic development initiatives.Employment equity contributes up to 15points of the balanced scorecard. Theintroduction of the Codes has not in anyway affected the obligation to comply withthe EEA. But whereas the EEA caters forall black people, females and people withdisabilities, whether black or white, theBEE Act is restricted to black persons,which is defined as the “generic term whichmeans Africans, Coloureds and Indians,who are citizens of the Republic of SouthAfrica by birth or descent, or are citizensof the Republic of South Africa bynaturalization before the commencementof the Constitution, or after thecommencement date of the Constitution,but who, without the apartheid policy, wouldhave qualified for naturalization beforethen”. In other words the BEE Act isrestricted to those who are genuinelypreviously disadvantaged as a result ofapartheid, including those who were in exileas a result of apartheid and does not coverblack people from other countries.The EEA and the BEE Act, although bornout of a common purpose, have verydifferent objectives, in that the EEA isa tool to promote and measure theadvancement of designated groups inbusinesses while the BEE Act, as readwith the Codes, uses such advancementas a measuring tool for BEE compliance.measurement category and criteriablack disabled employees as a percentage of all employeesusing the adjusted recognition for genderblack employees in senior management as a percentage of allsuch employees using the adjusted recognition for genderblack employees in middle management as a percentage ofall such employees using the adjusted recognition for genderblack employees in junior management as a percentage of allsuch employees using the adjusted recognition for genderbonus point for meeting or exceeding targets aboveThe Employment Equity scorecard isreflected in the table below.The adjusted recognition for genderprovided for in the Employment Equityscorecard does need some explanation.It is an attempt to load the weightingof the employment of black femalesby a business calculated in accordancewith a formula that gives extrapoints for the employment ofblack females.The two pieces of legislation worktogether to achieve a similar objectivebut do so in different ways. However,both pieces of legislation are alsodependent on one another in thatbusinesses are required to completethe Employment Equity scorecardin terms of the Codes using the datathat is filed with the Department ofLabour in terms of the EEA.weightingpointscompliance targetsyears 0-5 years 6-10* Adam is a director in the firm's corporate department and can be contacted for more information on BEE


employment lawIGHTour teammarch 2007susan stelzner- director anddepartment headross alcock- directorbradley conradie- directorrod harper- directorstuart harris- directorfritz malan- directoranton steenkamp- directorpenny bosman- senior associateedwin ellis- senior associatealex ferreira- senior associatenicolene van der westhuizen- senior associateebrahiem abrahams- associateroewayda abrahams- associatethandeka dube- associateitayi gwaunza- associatecharmaine lack- associatekeren machanik- associatethabang ntshebe- associatesuemeya hanif- associatefelicia van rooi- associatep7

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