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Can You Withhold Remuneration Due To An Employee Who Gives 24H Notice

The Basic Conditions of Employment Act sets out minimum requirements to notice period(s) that must be adhered to by Employer and Employee.

The provisions are seven days if the employee worked less than six months, two weeks if the employee worked more than six months but less than a year and four weeks if the employee worked for more than a year. Employees who fall under Bargaining Councils or a Sectoral

Determination will also be held liable to serve out the applicable stipulated notice period in accordance with its collective or main agreement.

If an employee tenders a resignation with insufficient notice period the employer will not be permitted to deduct any monies for the notice period not worked by the Employee. The Employee will however be in breach of contract and the Employer will instead have recourse to hold the employee liable for the notice period not served

The Employer can therefore seek relief from the courts in this instance and sue the employee for damages or apply for specific performance required from the Employee.

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Employee Status: Commission-only Employee

Some questions linger with regards to the legal employment status of an employee who is remunerated on a 100% commission basis, especially during the COVID-19 lockdown. The question of whether a commission-based employee is considered an employee is a prevalent one, especially in the South African employment environment where many employers try to circumvent he Labour Relations Act (LRA) in how they describe persons who perform services to their business. (Also read: “The Perpetual Independent Contractor,” 12 March 2020.)

According to Section 1 of the LRA, an employee is defined as:

Any person, excluding an independent contractor, who works for another person, or for the State, and who receives, or is entitled to receive, any remuneration, and any other person, who in any manner, assists in carrying on or conducting the business of an employer.

In addition, Section 83A of the Basic Conditions of Employment Act states that a person is presumed to be an employee of any other person to for whom they work or to whom they render services until the contrary is proven, regardless of the form of contract, if one of the following factors are present:

  • the way in which the person works is subject to the direction or control of another person
  • the person’s working hours are subject to the control or direction of another person
  • where a person works for a business or organisation, the person is a part of that business or organisation
  • the person has worked for another person an average of 40 hours per month for the preceding 3 months
  • the person is economically dependent on the person for whom they work or renders services
  • the person is provided with tools or equipment with which to perform the work or services by the other person
  • the person only works for or renders services to 1 (one) person,

These factors are referred to collectively as the “Section 83A Presumption.” This presumption is however not applicable to person who earn above the threshold of R205 433.30 per year, as per section 6(3) of the Basic Conditions of Employment Act.

A commission-only employee is a person who derives their entire income from the commission they earn on the work performed or services rendered to another person.

Commission-only employees typically have flexible working times and the way their work is performed, or services rendered may be left to the employee’s discretion and are not usually controlled by the employer.  The BCEA does not, however, set a required minimum time that an employee must work and only provides for limits on work time in terms of chapter 2 of the Basic Conditions of Employment Act.

Considering the application of the Section 83A Presumption, a commission-only employee will likely meet the basic requirements to be deemed an employee. Therefore, employers must ensure that commission-only employees are provided the minimum rights as per the Basic Conditions of Employment Act.

In terms of the COVID-19 lockdown, it is important to keep in mind that according to the National Minimum Wage Act (NMWA) of 2018, all commission based employees are legally entitled to receive at least the minimum wage and the commission payment in terms of their agreement with the employer. Section 3 of the NMWA provides that the laws relating to minimum wages apply to all employees and their employers.  This means that every employee is entitled to receive no less than the national minimum wage. The Act takes precedence over any contrary provision in any contract of employment and cannot be waived. Thus, commission-only employees are entitled to some form of income during this lockdown whether from mandatory paid annual leave or through the COVID-19 Temporary Employer/Employee Relief Scheme (TERS).

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Reimbursement of training costs

Can an employer deduct money for training should the employee resign within a specific period after completing the training?

Many employers provide training to new employees when they join the company. The reason for training may vary from on-the-job training to train the new employee on proprietary systems of software, to being sent on formal skill development courses. Current employee may also require new training should the business’s operational requirements request it and or a new system is being implemented.

When an employee resigns, especially soon after completing training, employers are quite justified in feeling wronged. The question becomes, may they hold the employee liable for the costs and expenses incurred for the specific training?

Firstly, it is important to keep in mind that Section 34(2) of the BCEA specifies that:

“2) A deduction in terms of subsection (1)(a) may be made to reimburse an employer for loss or damage only if–

a) the loss or damage occurred in the course of employment and was due to the fault of the employee

b) the employer has followed a fair procedure and has given the employee a reasonable opportunity to show why the deductions should not be made

c) the total amount of the debt does not exceed the actual amount of the loss or damage; and

d) the total deductions from the employee’s remuneration in terms of this subsection do not exceed one-quarter of the employee’s remuneration in money.”

If a (advisably written) agreement was established between the employer and the employee that the employee would be liable to repay the costs of the training should s/he resign within a specified period after completion of training, the employer will be able to enforce the signed written agreement. The employer will then be allowed to recover from the employee a proportionate / pro rata amount of the training costs incurred by the employer for the employees training received.

The written agreement would have to meet the following criteria:

  • That is was signed/agreed to prior to the commencement of the training.
  • That it disclosed all the terms and costs to the employee prior to the signing of the agreement.
  • That it clearly stipulates the terms under which the employee would be liable to repay such
  • That it stipulates the period for which the employee will be held liable for those costs.
  • That is stipulates how the proportionate / pro rata amount will be worked out should the employee leave/ resign before the specified period has lapsed.

If training is offered on the condition that the employee may be held liable to reimburse the costs should s/he resign for any reason or is dismissed, before training could commence, through no fault of the employer within a certain time, the employee must be given a fair opportunity to refuse the offer of training should s/he feel that the conditions are unacceptable for whatever reason.

If no agreement was signed prior to the training, it is implied that the employer is offering the training at company cost without requiring the employee to reimburse the employer. An employer has no legal entitlement after the fact to demand the repayment of training costs if the only basis is that the employee has resigned.

To succeed in a claim for reimbursement of training costs against an employee, the employer would have to show that a valid agreement was in place prior to incurring the cost of the training. The reimbursement claimed cannot exceed the actual cost of the training, that is, the total provable cost of providing the training less the portion claimed by the employer in terms of the Skills Development Act.

Employers are cautioned to carefully consider when imposing a liability for training costs on an employee should s/he resign, as this may result in the provision falling under the scope of the Conventional Penalties Act 15 of 1962, if the cost claimed is deemed to be a penalty and the penalty amount is disproportionate to the actual loss/damage suffered by the employer.

This article is being provided for informational purposes. Contact Joblaw for any enquiries and legal advice.

 

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Importance of having disciplinary warnings on file

It is an unfortunate reality that even the most diligent and fair employer or business-owner will at some point be required to apply disciplinary action or issue warnings in situations in the best interest of the company and the employee.

Disciplinary procedures and warnings, when appropriately used and managed, is not intended to punish a wrong but to correct wrong actions.

Warnings can range from a verbal warning to a final written warning depending on the circumstances under which it occurred or the severity of the misconduct or offence in need of correction. The severity of a warning can progressively be increased if the employee keeps repeating the offences or continues to commit offences against the established disciplinary code despite previous attempts to rectify the situation. Warnings issued should always follow the company’s established Disciplinary Code and it must be on record that the employee being sanctioned has seen, read and understood the disciplinary code. Employers are encouraged to discuss the company’s Disciplinary Code with Employees on a yearly basis.

Item 7 (b) of Schedule 8 to the Labour Relations Act provides:

If a rule or standard was contravened, whether or not:

(i)           The rule was a valid or reasonable rule or standard

(ii)           The employee was aware, or could reasonably be expected to have been aware, of the rule or standard;

(iii)         The rule or standard has been consistently applied by the employer

The drafting and dissemination of the company disciplinary code, as well as record that all employees have been informed of the disciplinary code is the first step in a vital record keeping process to fairly and lawfully apply disciplinary actions which may lead to warnings. The lack of such a paper trial may invalidate any defence against an unfair business practise/dismissal claim at the CCMA from the start.

A written warning must, at minimum, contain the following,

  • the identity of the employer and the employee
  • details of the offence: nature of, date of and time of offence
  • the terms of the warning and the period of validity
  • a clear statement of the corrective actions required by the sanctioned employee
  • a clear statement of the consequences for the sanctioned employee should he/she fail to fulfil the requirements as stated above or repeated offenses within the warning period
  • verifiable proof (in the form of the employee’s signature or witnesses) that the warning was delivered and received by the employee.

A warning should only be issued after a fair disciplinary process, and this process must be started immediately after the employer finds out about the transgression, conducted and completed as soon as possible to enable the employer to issue a warning (if warranted) with the most specific, concise information possible. This will help to avoid any future problems that may lead to a challenge at work or at the CCMA.

It is vital to any business and employer to keep accurate, detailed record of every disciplinary action and warning, including verbal warnings, documenting the charges and actions taken. To not do so imposes a huge risk to the employer should any disciplinary action be challenged at the CCMA, which could lead to monetary awards or reinstatement of a sanctioned employee.

In case law, refer to Gcwensha v CCMA & others, where the employee had been dismissed for gross negligence. Diligent recordkeeping by the employer evidenced that the employee had several previous warnings for incompetence, negligence and inefficiency. Gcwensha was on a current warning when he was dismissed. The court found that the employee had a ” deplorable record” of transgressions and misconduct, which the employer was entitled to take into consideration when deciding on the appropriate sanction to be taken for the current transgression. The employer was able to defend this action and avoid reinstatement of the employee because of the verifiable history of warnings he had on file.

The opposite was true in NUMSA v John Thompson Africa (Pty) Ltd [1997] 7 BLLR 932 (CCMA). It was the lack of proper record keeping that lead to the employer being ordered to reinstate the employee who was dismissed on charges of ‘wilful damage to and deliberate misuse of company property, using abusive language, and being under the influence of an intoxicating substance.’ The employee appealed the dismissal according to the employer’s established procedures, but at the appeal hearing there were no records of the proceedings or evidence tabled at the disciplinary hearings to make available to the chairperson to consider. It could not be proven that the employment relationship had irretrievably broken down due to the employee’s behaviour and it was ordered that the employee be reinstated.

Schedule 8 (Code of Good Practice – Dismissal) requires that employers must keep records of all disciplinary action taken against employees, the reason for it, and the outcome of that disciplinary action. An employer that does not do this, goes to the CCMA with little ammunition – and his case becomes quite indefensible.

 

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Unauthorized absence from work

The classic “AWOL” employee, or in labour parlance, an employee that is absent without authorisations, is quite possibly the most regular headache for any employer and HR department to deal with. In the current atmosphere of fear and uncertainty related to the COVID-19 pandemic in South Africa, employees as more likely to not report to work, and employers will be challenged to make sure they handle such absences correctly and fairly.

Before any action on unauthorised absence is taken in the months ahead, all employers are urged to take disciplinary action with compassion, to understand that there is a real and visceral threat affecting the judgement of employees on whether or not to report to work – as this will be taken into account at future CCMA challenges should an employee feel unfairly treated. However, employers must also act in the best interest of their business and the future health and well-being of the company and the other employees. This is a tough task.

In terms of the law with regards to unauthorised absences, it is best to start at the first principle, that is, due to the nature of the employment contract between the employee and the employer, an employee has a duty to enter into and remain in service when required to do so except in times that authorisation for absence has been granted.

In circumstances where an employee is unable to return to work after leave or sick leave, the employee can reasonably be required to inform the employer of this continued absence and the reason he/she will not be returning to work as agreed. It is important to note that should an employee be absent without authorisation and this requirement to inform were not met, it does not necessarily warrant a dismissal. The reason for the employee’s absence must first be established and based on that the employer can determine the appropriate disciplinary action to take.

There is a difference between absenteeism, abscondment and desertion in South African law:

  • Absenteeism is a short period of unauthorised absence from work.
  • Abscondment is an unauthorised absence from work for an unreasonably long period.
  • Desertion is when an employee either leaves the employer’s employment or fails to return to work with a clear intention to not return to work at all. If there is an intention to return to work at some point, it is not a case of desertion but of absenteeism or abscondment depending on the length of the absence.

In cases of absenteeism and abscondment, the employer must schedule a disciplinary hearing prior to dismissing an employee by following the normal and fair disciplinary procedures.

In cases where it becomes clear through investigation of the facts that the employee has deserted employment, evidence such as if the employee relocated to a different town or province during the absence or the employee had taken up employment with another employer, it is advisable for the investigating employer to address a letter to the last known address of the employee. This letter should inform the employee that it is believed that the employee has deserted his/her employment and that his/her employment will be terminated on a certain date, should  the employee not return to work or contact the employer by a given deadline. If this deadline is not met, employment will be terminated.

Contact JOBLAW for expert guidance on these and any other labour related issues.

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