NEW EARNINGS THRESHOLD

In accordance with a recently released determination by the Minister of Labour, with effect from 01 July, 2011 the earnings threshold for the purposes of the Basic Conditions of Employment Act, No. 75 of 1997 (“the BCEA”) will be increased from R149,736 per annum to R172,000 per annum. (In this regard, “earnings” is defined in the determination as being an employee’s “regular annual remuneration before deductions (i.e. income tax, pension, medical and similar payments but excluding similar payments (contributions) made by the employer in respect of the employee: Provided that subsistence and transport allowance received, achievement awards, and payments for overtime worked shall not be regarded as remuneration for the purpose of this notice.”)

For practical purposes, this means that with effect from 01 July 2011, only employees who earn in excess of R172.000 per annum will be excluded from the provisions of the BCEA pertaining to ordinary hours of work (section9), overtime (section10), compressed working weeks (section11), averaging of hours of work (section 12), meal intervals (section 14), daily and weekly rest periods (section 15), pay for work on Sundays (section 16), night work (section 17(2)), and payment for public holidays on which the employee would not ordinarily work (section 18(3)). Any employee who earns below this threshold amount will be entitled, by law, to receive the payments and/or benefits provided for in these sections.