Earnings Threshold

There seems to be still confusion amongst employers and employees on how to interpret what has been written regarding the Earnings Threshold.

 The threshold earnings figure is R 172 000 per annum or R14 333.33 p/m. For the purpose of defining the word "threshold", it means the following : 

 Earnings is defined in the Government Gazette Notice as ‘the 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 allowances received, achievement awards or payments for overtime shall not be regarded as remuneration for the purpose of this notice.’

The previous definition to be found as a footnote in the BCEA under Chapter Two: Regulation of Working Time s6, referred to ‘intermittent payments for occasional overtime’. The new wording which excludes overtime altogether has brought some certainty to the payroll equation and does away with fluctuations whereby an employee might be under the threshold one month and above it the next.

Persons earning under the threshold amount:

These persons have the full protection of every section of the Basic Conditions of Employment Act (BCEA).

The act entitles such persons to certain things such as:

• overtime may only be worked by agreement between employer and employee.
• the employee has the legal right and entitlement to demand payment for overtime. worked, at the rate of 1,5 times   his normal wage rate, or at whatever rate is applicable.
• the employee can also enter into an agreement with the employer whereby he can be given time off work instead of payment for overtime worked.
• generally, the employee can legally refuse to work more than 45 hours per week normal time and he can legally refuse to work more than 10 hours per week overtime and he can legally refuse to work more than 12 hours in any one day, consisting of nine hours normal time and three hours overtime. There are some circumstances where the employee may not be able to refuse, such as in emergency overtime, but that is not the issue under discussion.
    
  There are some other conditions as well, but we are not going to go into all of them for the purpose of this article.. From the above you will note that persons earning under the threshold have a "legal right to demand"

Persons earning over the threshold amount:

Persons earning over the threshold amount do not have a legal right to demand anything in respect of Sections 9, 10, 11, 12, 13, 14, 15, 16, 17 and 18(3) of the Act (the BCEA)

The difference should be clear:

• [a] persons earning under  the threshold have a legal right to demand in respect of the above-mentioned sections.
• [b] persons earning over  the threshold do not have a legal right to demand in respect of the above-mentioned sections.
• The persons earning over the threshold amount, do however have a right to negotiate.

Thus, the persons earning over the threshold amount must approach the employer and say to him " we must negotiate and reach  agreement on how many normal hours of work you require of me, and how many overtime hours of work you require of me, and we must negotiate and reach agreement on what compensation you will give me for overtime worked."

"We must also negotiate and agree on work for public holidays and Sundays, and we must negotiate and agree on requirements and compensation for standby duties and callouts."

That is what the person earning over the threshold must do - he cannot demand, therefore he must negotiate.

The employer is in a similar position - the employer also cannot demand that employees earning over the threshold must work overtime, standby duties, attend callouts etc, without limitation and without compensation.

The reason why the employer cannot make those demands is stipulated in section 48 of the BCEA, which reads as follows :
 
1)  Subject to the Constitution, all forced labour is prohibited.
2)  no person may, before his or her own benefit or for the benefit of someone else, cause, demand, or impose forced labour in contravention of subsection (1).

Therefore, for persons earning over the threshold,  the employer is in the same situation - he cannot demand but he can negotiate. Thus, all you employees out there who earn more than the threshold - put your problem to your employer in writing, ask for a meeting where the issues can be discussed and negotiated, and agreement can be reached.

If the employer does happen to refuse point-blank to compensate in any way for overtime worked, then the employee who earns over the threshold does have the right to refuse to work the overtime. The principal here is very simply: "No pay = No work." Such a refusal of course will open up another can of worms, but that is a different subject altogether. I do hope that this newsletter has clarified the position.

Article first published by Labourwise