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EARNINGS THRESHOLD

The Minister of Employment and Labour, in terms of Section 6 (3) of the Basic Conditions of Employment Act, No. 75 of 1997, (the Act), determine that all employees earning in excess of R211 596.30 (two hundred and eleven thousand, five hundred and ninety six rand, thirty cents) per annum, be excluded from sections 9, 10, 11, 12, 14, 15, 16, 17(2) and 18(3) of this Act with effect from 1 March 2021. This increase represents an increase of R6,163 or 3% from the previous amount of R205,433.30, which has been in effect since 1 July 2014.

The Earnings Threshold is the dividing line where certain provisions of the Labour Relations Act (LRA), the Basic Conditions of Employment Act (BCEA) and Employment Equity Act (EEA) apply to employees earning less and more than the threshold. The sections covered in these acts are intended to protect vulnerable employees and regulate, amongst other things, hours of work, overtime, work over weekends, lunch breaks and even where labour disputes need to be handled if they are paid under the threshold and the employer has the freedom to choose if he will remunerate employees for these provisions if they earn more than this threshold.

1 Basic Conditions of Employment Act

In terms of the Basic Conditions of Employment Act, employees earning in excess of the earnings threshold of R 211 593.30 per annum or R17 633 per month are excluded from the following nine provisions. These employees are also excluded from the automatic protections – meaning they are NOT automatically entitled to the following provisions.  These are handled individually in contract negotiations with respective employers at the time of employment.

Employees earning under this threshold of R211 593.30 enjoy the full protection of the BCEA, and can demand the provisions as described in the BCEA.

i) Section 9 – Ordinary hours of work

The maximum hours of 45 hours are the hours required for employees earning in excess of the threshold and in addition these staff members are required to work the additional hours to fulfil their mandate. Due to the level of their employment they are not required to be compensated for Overtime / Sunday time and on Public Holidays worked. This clause is handled individually in contract negotiations with respective employees if they are earning above the threshold at the time of their employment.

Employees earning under the threshold has the full protection of the BCEA.

ii) Section 10 – Overtime

Applicable to employees earning under the threshold or if paid above threshold as per negotiations at the time of their employment

iii) Section 11 – Compressed working week

Applicable to staff earning under the threshold

iv) Section 12 – Averaging of hours

Applicable to staff earning under the threshold

v) Section 14 – meal intervals

Applicable to staff earning under the threshold or if paid above threshold as per negotiations at the time of their employment

vi) Section 15 – Daily and weekly rest periods

Applicable to staff earning under the threshold

vii) Section 16 – Work on Sunday

Applicable to employees earning under the threshold or if paid above threshold as per negotiations

viii) Section 17.2 – Night work

Applicable to staff earning under the threshold

ix) Section 18.3 – Public holidays

Only paid to employees earning under the threshold or if paid above threshold as per negotiations

2) Employment Equity Act

In terms of the Employment Equity Act, an employee earning in excess of the earnings threshold who has a dispute under Chapter two of the EEA relating to unfair discrimination, is not permitted to refer the dispute to the CCMA for arbitration, unless the dispute relates to alleged unfair discrimination on the grounds of sexual harassment, or the parties all agree to arbitration and is obliged to refer the dispute to the Labour Court for adjudication.

Employees earning under this threshold enjoy the full protection of the EEA, and can demand the provisions as described in the Act.

3) Labour Relations Act

In terms of the Labour Relations Act, employees earning in excess of the earnings threshold are not subject to the deeming provision in accordance with which employees engaged by a temporary employment service/labour broker who are not performing a temporary service are deemed to be employees of the client for purposes of the LRA. Also fall outside the scope of the provisions relating to fixed-term employees who are deemed to be employed indefinitely after three months (in the absence of justifiable reasons for fixing the term of the contract).

4) Remuneration To determine whether an employee earns in excess of the earnings threshold, ‘earnings’ of R211 596.30 per annum or R17 633 per month means an employee’s regular annual remuneration before the deduction of income tax, pension fund contributions, medical aid contributions and similar payments, and also excludes similar contributions made by the employer in respect of the employee  This is also subject to the proviso that subsistence and transport allowances received, achievement awards and payments for overtime worked do not fall within the scope of remuneration

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