HEAD FOR SUCCESS
Business studies Grade 12
TERM 1
Topic 1: Impact of recent legislation on business –
response to demands for redress and equity.
BASIC CONDITIONS OF EMPLOYMENT ACT
(NR 75 OF 1997)
(every employer and employee have the right to fair labour practices)
BASIC CONDITIONS OF EMPLOYMENT ACT
(NR 75 OF 1997)
NATURE of the BCEA:
• The Constitution gives people the right to fair labour practices and this act ensures
that the right is complied with.
• This Act applies to all employers and employees, excluding members of the South
African National Defence Force, National Intelligence Agency and unpaid
volunteers of charity organisations.
• This Act applies to casual workers, temporary and permanent workers, as well as
individual contractors.
• The law also lays down the minimum conditions that should be included in the
employment contract between the employer and employee. This contract may be
adjusted to the requirements of the individual employee and employer.
BASIC CONDITIONS OF EMPLOYMENT ACT
(NR 75 OF 1997)
PURPOSE of the BCEA:
• The Act lays down the minimum requirements of employment.
• Ensures that working conditions of unorganised and vulnerable workers meet
minimum standards.
• Removes rigidities and inefficiencies from the regulation of minimum conditions of
employment.
• Promotes flexibility.
• Improves economic development and social justice.
• Regulates the right to fair labour practices.
BASIC CONDITIONS OF EMPLOYMENT ACT
(NR 75 OF 1997)
HOW CAN THE GOALS BE MET?
• Working time
• The BCEA regulates working hours of employees, excluding senior management staff,
employees who work less than 24 hours a month and traveling salespersons who may
make their own arrangements.
• Maximum number of hours a worker may work per day depends on the number of
working days per week that the employer requires from employees, for example:
• a 6-day working week, maximum 8 hours per day, with maximum of 45 hours per week.
• a 5-day working week, maximum 9 hours per day, with maximum of 45 hours per week.
BASIC CONDITIONS OF EMPLOYMENT ACT
(NR 75 OF 1997)
HOW CAN THE GOALS BE MET?
• Overtime
• The employee must agree to work overtime.
• Not more than 3 hours per day or a maximum of 10 hours per week.
• Overtime pay is one and a half times the normal rate during weekdays and Saturdays.
• Sundays and public holidays overtime pay is twice the normal rate.
• Employer and employee may agree on whether the compensation is paid to the
employee or if the employee may deduct the number of hours for overtime worked,
from normal working hours.
BASIC CONDITIONS OF EMPLOYMENT ACT
(NR 75 OF 1997)
HOW CAN THE GOALS BE MET?
• Meal breaks and rest periods
• After 5 hours of work, employees gets a break of 60 min. Can be reduced to 30
minutes by a written.
• After a day’s work, the employee must get 12 hours continuous rest (before he works
the next day)
• After a week’s work the employee must get 36 consecutive hours rest (weekend).
BASIC CONDITIONS OF EMPLOYMENT ACT
(NR 75 OF 1997)
HOW CAN THE GOALS BE MET?
• Annual leave
• Leave cycle of 12 months begins on the day the employee assumes office.
• After a year of continuous employment with the same employer, the employee is
entitled to 21 consecutive calendar days leave at full pay.
• For every 17 days worked, the employee gets one day’s leave.
• Accumulated leave of an employee can only be paid o the employee if the employee
terminated his / her contract with the employer.
BASIC CONDITIONS OF EMPLOYMENT ACT
(NR 75 OF 1997)
HOW CAN THE GOALS BE MET?
•
Sick leave
• An employee has a sick leave cycle of 36 months with the same employer beginning on the day he /
she assumes office.
• During the first six months of continuous employment, the employee is entitled to one day’s paid sick
leave for every 26 days worked.
• Sick leave may not be transferred from one cycle to another.
• During this cycle, the employee is entitled to paid sick leave equal to the number of days the employee
would normally work in six weeks, e.g.:
• a 6-day work week, gives an employee 36 days sick leave during a 36 month sick leave cycle (6 x 6)
• a 5-day work week, gives an employee 30 days sick leave during a 36 month sick leave cycle (5 x 6)
• An employer can insist on a medical certificate for paid sick leave when the employee is absent for
more than 2 consecutive days due to illness, or more than twice in eight weeks.
BASIC CONDITIONS OF EMPLOYMENT ACT
(NR 75 OF 1997)
HOW CAN THE GOALS BE MET?
• Maternity leave
• A pregnant women is entitled to four consecutive months of maternity leave.
• Commencement of such leave is usually four weeks before the expected date of childbirth
or on a date recommended by the doctor.
• No employee may go back to work within six weeks after giving birth, unless a doctor
certifies that she is fit to return to work.
• The employee must notify the employer of what date the maternity leave begins and when
the employee will return to work.
• There are also maternity leave provisions relating to stillborn babies and adoption of
children.
BASIC CONDITIONS OF EMPLOYMENT ACT
(NR 75 OF 1997)
HOW CAN THE GOALS BE MET?
• Family responsibility leave
• Only applicable if the employee is more than four months with the same employer.
• After the four months, the employee is entitled to 3 days paid leave in each annual leave
cycle.
•
•
•
•
E.g. in the case of illness or death.
The employer can insist on evidence before the employee is paid for such leave.
This type of leave may not be carried over to the next leave cycle
A mutual agreement with the employer can be arranged to increase this leave up to five days
in the case of serious illness/death/funeral of a close relative, if the next of kin is beyond
250 km’s from the employee’s home.
BASIC CONDITIONS OF EMPLOYMENT ACT
(NR 75 OF 1997)
HOW CAN THE GOALS BE MET?
• Compensation and deductions
• The employer must compensate the employee to the amount and time stipulated in the
employee’s employment contract.
• The employee must receive a salary advice, showing the employee’s details, gross pay,
deductions and net pay.
• The act prescribe minimum wages for certain groups of workers which employers must
comply to, such as domestic workers, farm workers, etc.
• The employer is obliged to deduct certain compulsory deductions from the employee’s
gross salary and to pay these deduction to the relevant authorities such as, income taxes,
and contributions to the UIF
BASIC CONDITIONS OF EMPLOYMENT ACT
(NR 75 OF 1997)
HOW CAN THE GOALS BE MET?
• Notice of service termination
• Mutual notice of service discontinuation by the employer and employee is determined
by the BCEA.
• Notice must be given in writing, unless the employee is illiterate.
• The employer can pay the employee for the notice period instead of giving a written
notice.
• The period of notice of service discontinuation is as follows with respect to the service
period : 1 – 6 months = 1 week; 7 – 12 months = 2 weeks; longer than 12 months = 4
weeks.
BASIC CONDITIONS OF EMPLOYMENT ACT
(NR 75 OF 1997)
HOW CAN THE GOALS BE MET?
• Administrative duties
• The BCEA requires various administrative duties related to employees and
therefore a human resources department in businesses is essential in
businesses.
• E.g. the preparation of an employment contract for each employee, induction of new
employees, preparation of salary advices, recording of hours overtime worked if
applicable, keeping of the employee’s employment history for at least three years,
providing service certificates at the end of the employee’s employment history for at
least three years, providing service certificates at the end of the employee’s tenure,
calculating bonuses if applicable, leave administration, etc.
BASIC CONDITIONS OF EMPLOYMENT ACT
(NR 75 OF 1997)
HOW CAN THE GOALS BE MET?
• Child labour
• To prevent children being exploited by employers, no child under the age of 15 years
may be employed.
• Children between 15 to the age of 18 years may not do dangerous work intended for
adults.
• Children in the age groups mentioned above may not work in the beverage industry of
in places where alcohol is served.
BASIC CONDITIONS OF EMPLOYMENT ACT
(NR 75 OF 1997)
ADVANTAGES:
DISADVANTAGES:
Lays down the basic conditions of
employment.
Can increase the cost of labour, because
minimum wages are set for vulnerable
workers.
Prohibits mistreatment of vulnerable
workers.
Increased labour costs lead to increased
prices – this may affect economic growth.
Standardises legal relationships between
employers and employee.
Does not apply to all workers, e.g. workers
who work less than 24 hours per month.
Clarifies legal relationships between
employers and employees.
All the administrative aspects regarding
employment is time consuming.
BASIC CONDITIONS OF EMPLOYMENT ACT
(NR 75 OF 1997)
VOORDELE:
NADELE:
Provides certainty as to employer and
employee rights at a limited cost.
Employment contracts can be seen by
employers and employees as restrictive.
Provide guidelines to assist workers to be
treated with dignity in the workplace.
Employees may not work more than the
required hours per week as prescribed,
irrespective if the employee would like to
do so to earn more money.
Provide rules for resignations and
retirement.
All the requirements that must be met are
time consuming and the costs are high.
BASIC CONDITIONS OF EMPLOYMENT ACT
(NR 75 OF 1997)
VOORDELE:
NADELE:
Fair treatment of employees in the
workplace.
Businesses are forced to operate within
the regulations of the BCEA.
Prevent unfair discrimination regarding
compensation, leave, etc.
Difficult to fulfil all the provisions and not
all these provisions are properly managed
in the business .
Creates a framework for acceptable
practices in employment.
Some businesses consider the BCEA as
unimportant and see it as an unnecessary
hassle.
Ensures that employees have valid
employment contracts.
BASIC CONDITIONS OF EMPLOYMENT ACT
(NR 75 OF 1997)
IMPLICATIONS FOR SMALL BUSINESSES:
• Increased administrative burden:
•
•
•
•
Employees must be given a contract of employment.
Employers must keep record of employees’ absence and attendance.
Employers must keep record of when employees started to work.
Employers must keep record of the number of hours worked by each
employee.
• Employers must keep record of each employee’s remuneration.
BASIC CONDITIONS OF EMPLOYMENT ACT
(NR 75 OF 1997)
IMPLICATIONS FOR SMALL BUSINESSES:
• Small businesses are saved the time and costs of ascertaining basic rules for
contractual relationships with employees.
• The Act provides small businesses with guidance as to fair contractual terms
with employees.
• Appropriate legal terms and conditions of employment agreements
contribute to a satisfied labour force in small businesses.
• The cost implication for small businesses is limited.
BASIC CONDITIONS OF EMPLOYMENT ACT
(NR 75 OF 1997)
IMPLICATIONS FOR LARGE BUSINESSES:
• Increased administrative burden:
•
•
•
•
Employees must be given a contract of employment.
Employers must keep record of employees’ absence and attendance.
Employers must keep record of when employees started to work.
Employers must keep record of the number of hours worked by each
employee.
• Employers must keep record of each employee’s remuneration.
BASIC CONDITIONS OF EMPLOYMENT ACT
(NR 75 OF 1997)
IMPLICATIONS FOR LARGE BUSINESSES:
• Large businesses are more likely to have the capacity to comply with the Act.
• The Act provides large businesses with guidance as to fair contractual terms with
employees.
• Appropriate legal terms and conditions of employment agreements contribute to a
satisfied labour force in large businesses.
• Child and forced labour is commonly used in some countries – however, it is morale
correct and, in the long run, economically beneficial to prohibit child and forced
labour.
• The cost impact on big businesses is limited.
BASIC CONDITIONS OF EMPLOYMENT ACT
(NR 75 OF 1997)
RIGHTS / IMPLICATIONS OF THE BCEA TO EMPLOYERS:
• May only employ and dismiss employees within the provisions of the Act.
• Working conditions in the workplace must be within the framework of the
Act.
• Must meet the requirements regarding compensation, leave, termination of
contract, etc.
• Must administer the different requirements of the BCEA and proof must be
provided if the Department of Labour requested it.
BASIC CONDITIONS OF EMPLOYMENT ACT
(NR 75 OF 1997)
RIGHTS / IMPLICATIONS OF THE BCEA TO EMPLOYEES:
• Ensure that the employee is treated fairly with regard to compensation,
overtime, leave, etc.
• Must receive a service certificate after a certain number of years of
employment and when service is terminated.
• Fair treatment when service is terminated.
BASIC CONDITIONS OF EMPLOYMENT ACT
(NR 75 OF 1997)
COMPLIANCE WITH THE PROVISIONS IN THE ACT AND PENALTIES IF THE
BUSINESS FAILS TO COMPLY:
• The BCEA provides that inspectors form the Department of Labour may inform
employees about their rights and that they may visit the business to determine whether the
business comply with the provisions.
• A labour inspector will issue a compliance order against employers who fail to comply with
the requirements of the BCEA.
• The inspectors may issue a command to the business if the business do not comply to the
provisions of the Act.
• Businesses may not discriminate against employees who raise complaints about noncompliance with the BCEA by the employer.
• A financial penalty may be imposed against violators.
BASIC CONDITIONS OF EMPLOYMENT ACT
(NR 75 OF 1997)
COMPLIANCE WITH THE PROVISIONS IN THE ACT AND
PENALTIES IF THE BUSINESS FAILS TO COMPLY:
• Offences regarding child labour and forced labour are criminal offences.
• Amounts due in terms of the BCEA can be claimed in the CCMA or the
Labour Court.
• Basic conditions of employment can be enforced by a court order.
• A financial penalty may be imposed against violators.
BASIC CONDITIONS OF EMPLOYMENT ACT
(NR 75 OF 1997)
COMPLIANCE WITH THE PROVISIONS IN THE ACT AND
PENALTIES IF THE BUSINESS FAILS TO COMPLY:
• The section in the Act regarding working hours does not apply to:
•
•
•
•
•
Workers who work less than 24 hours per month.
Workers who earn more than R115 572 per year.
Workers who do emergency work.
Employees in senior management positions.
Sales staff who travel and regulate their own working hours.
BASIC CONDITIONS OF EMPLOYMENT ACT
(NR 75 OF 1997)
COMPLIANCE WITH THE PROVISIONS IN THE ACT AND
PENALTIES IF THE BUSINESS FAILS TO COMPLY:
• The Act does not apply to :
•
•
•
•
The National Defence Force
The National Intelligence Agency
The South African Secret Service
Unpaid volunteers who work for charity organisations