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HRTorQue Outsourcing
HRTorQue Reporter
June 2015
 
HRTorQue Reporter Archive
Table of Contents
1. CCMA Settlement Awards
2. Sick Leave - Medical Certificates
3. Increase in Contribution Rate
4. What is compassionate leave? What is family responsibility leave?
5. South Africa's Hospitality Sector Minimum Wage
6. Employment Equity - Records
7. What are the requirements for sick leave for an injury on duty (IOD)?
8. The Travel Deduction Calculation
9. Travel Reimbursement
10. Contact the HRTorQue Team
1. CCMA Settlement Awards
Author: David Beattie
When we are processing payrolls (on an outsourced basis) we regularly receive requests to pay employees in terms of an instruction from the Commission for Conciliation, Mediation and Arbitration (CCMA). Clients will forward a copy of a settlement agreement stipulating that the employee is paid a certain amount.

When explaining that a tax directive has to be applied for in cases such as these there is often a query from the labour representative who facilitated the agreement. The logic applied by labour practitioners is that the award agreement is clear that a certain amount has to be paid by a certain date, and that no deductions can be made from arbitration awards.

In our opinion, amounts received as a result of a CCMA or Labour Court award would be specifically included in 'gross income' in terms of Section 1 - definition of 'gross income', paragraph (d) or (f). With the payment, constituting 'gross income' there is an obligation to withhold employee's tax.

The amount of employee's tax that the employer is required to withhold must be ascertained by way of a tax directive application to SARS. SARS has published Interpretation Note 26 (March 2004) which provides clear guidelines as to the responsibility put on employers in this regard.
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2. Sick Leave - Medical Certificates
Author: Melany Bydawell
The Basic Conditions of Employment Act states the following with regards to "proof of incapacity".

Proof of Incapacity

23. (1) An employer is not required to pay
An employee in terms of section 22 if the employee has been absent from work for more than two consecutive days or on more than two occasions during an 8 week period and, on request by the employer does not produce a medical certificate stating that the employee was unable to work for the duration of the employee's absence on account of sickness or injury.

(2) The medical certificate must be issued and signed by a medical practitioner or any other person who is certified to diagnose and treat patients and who is registered with a professional council established by an Act of Parliament.

It follows that, for example, if an employee goes to a clinic to collect medication and returns to work with a certificate of attendance, that does not necessarily mean that this absence is to be treated as sick leave because they have not been booked off for "illness or injury". These absences may be treated as annual/unpaid leave.
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3. Increase in Contribution Rate
Author: Karen van den Bergh
(Engineering Industries Pension Fund / Metal Industries Provident Fund)

As per the main agreement amendment regarding the Annual Contribution Increase programme gazetted on 3rd August 2012 (MIPF - Government Notice R.596) the contribution rates from both funds will increase with effect 1 July 2015.

The contribution rate for both employee and employer will increase from the current 6.9% to 7% of pensionable remuneration.
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4. What is compassionate leave? What is family responsibility leave?
Author: Melany Bydawell
Prior to the introduction of 'Family Responsibility Leave' in the Basic Conditions of Employment Act, organisations had policies for 'Compassionate Leave'.

There is sometimes confusion around this and there is no legislative requirement for Compassionate Leave to be granted under the BCOEAct. Only family responsibility leave is provided for.

Some organisations do still choose to give additional days as 'compassionate leave', however that needs to be regulated in a leave policy or the organisation's employment contracts.
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5. South Africa's Hospitality Sector Minimum Wage
Author: Melany Bydawell
South Africa's Hospitlity Sector minimum wage has been adjusted upward with effect from 1 July 2015.
 
The change in the minimum wage is in line with the Basic Conditions of Employment Act (BCEA) which empowers Labour Minister, Mildred Oliphant to adjust wages in the sector.
 
The new minimum wage will be applicable until 30 June 2016.

In terms of the new sectoral determination, the minimum wages for employers with 10 or less employees will apply as follows:
 
Monthly R2 760.59 (2015/16) from R2 601.88 (2014/15)
Weekly R637.10 (2015/16) from R600.48 (2014/15)
Hourly rates will be adjusted to R14.15 (2015/16) from R13.34 in (2014/15)

The new minimum wages for employers with 10 or more employees will apply as follows:
 
Monthly rates will increase to R3 076.98 (2015/16) from R2 900.08 in (2014/15)
Weekly R710.12 (2015/16) from R669.30 (2014/15)
Hourly rates will be adjusted to R15.77 (2015/16) from R14.87 in (2014/15)

The Sectoral Determination covers any commercial business or part of a commercial business in which employers and workers are associated for the purpose of carrying on or conducting one or more of the following activities for reward in a hotel, motel, inn, resort, game lodge, hostel, guest house, guest farm or bed and breakfast establishment including short stay accommodation, self-catering, timeshares, camps, and caravan parks.

It also includes restaurants, pubs, taverns, caf├ęs, tearooms, coffee shops, fast food outlets, snack bars, industrial or commercial caterers, function caterers, contract caterers and includes all activities or operations incidental to or subsequent on any of the activities mentioned above.

The Hospitality Sector sectoral determination excludes workers and employers involved in the trade of letting of flats, rooms and/or houses. It also excludes all workers and employers covered by another sectoral determination in terms of the Basic Conditions of Employment Act. It further excludes areas that are covered by a Statutory Council or a Bargaining Council.

The current wage increases have been determined by utilising the CPI (excluding owners' equivalent rent) reported by Stats SA in April 2015. The current level of CPI is 4.6%. The minimum wage increases is therefore determined by adding 4.6% plus 1.5% as stated in the current Sectoral Determination. The total increase is 6.1%.
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6. Employment Equity - Records
Author: Karen van den Bergh
The Employment Equity Act (EEA) places a legal obligation on "designated employers" to retain records of its workforce, its employment equity plan and other records relevant to its compliance with the EEA.

It is advisable to keep records of all interviews conducted with job applicants. In terms of the EEA, a job applicant may challenge a recruitment decision on the basis of unfair discrimination within six months of the recruitment decision - a period for which the employer should retain the relevant records.
 
Other employee-related legislation includes the Skills Development Act and the Occupational Health and Safety Act, both of which also prescribe those records employers are obliged to retain.

Employers bound by such legislation are urged to familiarise themselves with the provisions of these Acts to avoid penalties.

You could retain all documentation in files and archive them or discuss your needs with karen@hrtorque.co.za and investigate keeping all your records on the internet linked to each employee - always available from anywhere at any time in our online HR/Payroll system - eTorQue.
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7. What are the requirements for sick leave for an injury on duty (IOD)?
Author: Melany Bydawell
According to Section 24 of the Basic Conditions of Employment Act, an employee's absence as a result of a 'work-related injury' is not regarded as sick leave.

If the employee is absent for more than three days up to a period of three months, an employer is required to pay 75% of the employee's wage for a period of up to three months. This is recoverable from the Compensation Commissioner (CC).

In the event that the employee is still not able to resume duties (whether these are the normal duties or those that may have been adapted to accommodate the employee), the employer can commence with an incapacity process.

Care is to be taken in these cases as there is a fair process that needs to be followed in terms of the Code of Good Practice - Incapacity, prior to termination of employment.

Melany Bydawell is able to assist you in such instances: melany@hrtorque.co.za
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8. The Travel Deduction Calculation
Author: David Beattie
With the tax filing season opening on 1 July you should be preparing the supporting documentation that will be used to submit your 2015 tax return.

If you have received a travel allowance it is important to remember that you must have a detailed logbook in the format required by SARS to justify any travel deduction claim. With approximately one in three returns being verified by SARS there is a high possibility that you will be required to submit this logbook to SARS for scrutiny.

For those taxpayers who are used to getting a healthy tax refund due to their travel claim it is important to note that the travel deduction will be slightly less (if comparative mileage is done year on year) when it comes to submitting your 2016 tax return. The reason for this is because SARS has reduced the fuel rate in the deemed expenditure table (from R 3.30 in the 2015 tax year to R 3.18 in the 2016 tax year).

Whilst the fixed cost and repair components increased SARS saw fit to reduce the fuel element because of the unusually low fuel price at the time. The logic of this decision was very strange considering the fuel price was at an unsustainable low and that the Ministry of Finance were also increasing the fuel and Road Accident Fund Levy.

Whilst some tax practitioners are advising taxpayers to keep a record of actual expenses incurred as a means of ascertaining their travel deduction, it may still be better for the average taxpayer to use the deemed expenditure method.

However taxpayers may keep accurate records and then compare the quantum of the deduction to the result of using the deemed expenditure method. Taxpayers may use the method that gives them the best result when completing their tax return.
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9. Travel Reimbursement
Author: David Beattie
When an employee is reimbursed for business travel, it is important for an employer and an employee to carefully look at:
•  The rate at which they are reimbursed.
•  The projected kilometres to be travelled.
•  An accurate logbook must be kept.

In a case where you state that an employee is reimbursed at a rate higher than the prescribed rate, but travels less than 8000 kilometres per year, you need to take note of the following:
•   The only real difference this will make on your payroll is the IRP5 code against which the reimbursement is reflected. In all cases, the reimbursement is tax-free on the payroll. In the case where the prescribed rate is exceeded or the 8000 km is exceeded the Commissioner states that the reimbursement will be taxed on assessment.
When either the prescribed rate or the kilometre limit is exceeded the IRP5 code against which the reimbursement should be reflected is 3702, otherwise 3703 should be used.
When an employee is reimbursed for business travel it is very important to ensure that the employee keeps an accurate logbook of his/her business as well as private travel, as this will become the documentation that SARS will review on assessment.
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10. Contact the HRTorQue Team
Head Office (Durban)
 
Phone: 031 564 1155
Fax: 031 564 1228
 
Email: info@hrtorque.co.za
Website: www.hrtorque.co.za
 
Address: 163 Umhlanga Rocks Drive
Durban North, KwaZulu-Natal
 
FB
 
Sales
Melany Bydawell: 031 582 7425
melany@hrtorque.co.za or 083 441 5618

Payroll & HR Administration
Karen van den Bergh: 031 582 7413
karen@hrtorque.co.za or 082 891 1722

Human Resources / Employee Relations
Melany Bydawell: 031 582 7425
melany@hrtorque.co.za or 083 441 5618
 
Employment Equity & Skills Development
Melany Bydawell: 031 582 7425
melany@hrtorque.co.za
Nicky Hardwick: 031 582 7418
nicky@hrtorque.co.za
 
Tax
Dave Beattie: 031 582 7410
dave@hrtorque.co.za

Executive Coach and Team Interventions
Melany Bydawell: 031 582 7425
melany@hrtorque.co.za
 
Payroll Third Party Administrator

Kacey Chetty: 031 582 7409
kacey@hrtorque.co.za
 
Accounts
Cheryl Naidoo: 031 582 7408
cheryl@hrtorque.co.za

Dispatch
Karl van der Merwe: 031 582 7407
karl@hrtorque.co.za
 
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