With effect from July 1, 2011 employees whose annual ‘earnings’ exceed R172,000 (currently R149,736) will be excluded from the application of various sections of Chapter Two (Regulation of Working Time) of the BCEA – see below.

There is also a change in the definition of ‘earnings’.   Payments for any type of overtime will be excluded from the calculation of earnings.   At present only ‘intermittent payments for occasional overtime’ are excluded.

In terms of the BCEA s 6(3) the Minister of Labour must make a determination excluding “any category of employees earning in excess of an amount stated in that determination”.

For that purpose the Minister has defined ‘earnings’ to mean the ‘gross’ regular annual remuneration (defined in the BCEA as ‘any payment in money or in kind, or both in money and in kind, made or owing to any person in return for that person working for any other person, including the State’) before deductions (income tax, pension, medical and similar payments).

Earnings do not include any employer contributions and the following are excluded from the definition of ‘earnings’:

  • Allowances for subsistence and transport.
  • Achievement awards.
  • Payments for any overtime worked.

In other words the ‘total cost to company’ will be greater than the ‘earnings’ when the employer contributes to any pension, medical and similar scheme because these payments are excluded from the definition of ‘earnings’.

For ease of reference this is the definition of ‘earnings’ as it exists at present (until June 30, 2011) –

‘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 allowance received or achievement awards, intermittent payments for occasional overtime shall not be regarded as remuneration for the purpose of this notice’.

Excluded sections of Chapter Two of the BCEA (Regulation of working time) as from July 1,2011

[GG 34287 – Regulation Gazette 9535 – GNR 422 dated 13 May 2011].

Employees earning in excess of R172,000 per annum (R14,333 per month) will be excluded from the following sections of the BCEA:

9          Ordinary hours of work.

10        Overtime.

11        Compressed working week.

12        Averaging of hours of work.

14        Meal intervals.

15        Daily and weekly rest period.

16        Pay for work on Sundays.

17(2)   Night work.

(1)  In this section, “night work” means work performed after 18:00 and before 06:00 the next day.

(2)  An employer may only require or permit an employee to perform night work, if so agreed, and if—

(a)        the employee is compensated by the payment of an allowance, which may be a shift allowance, or by a reduction of working hours; and

(b)        transportation is available between the employee’s place of residence and the work-place at the commencement and conclusion of the employee’s shift.

18(3)   Public holidays.

(1)  An employer may not require an employee to work on a public holiday except in accordance with an agreement.

(2)  If a public holiday falls on a day on which an employee would ordinarily work, an employer must pay—

(a)        an employee who does not work on the public holiday, at least the wage that the employee would ordinarily have received for work on that day;

(b)        an employee who does work on the public holiday—

(i)         at least double the amount referred to in paragraph (a); or

(ii)        if it is greater, the amount referred to in paragraph (a) plus the amount earned by the employee for the time worked on that day.

(3)  If an employee works on a public holiday on which the employee would not ordinarily work, the employer must pay that employee an amount equal to—

(a)        the employee’s ordinary daily wage; plus

(b)        the amount earned by the employee for the work performed that day, whether calculated by reference to time worked or any other method.

View or download the recent Labour Appeal Court case regarding overtime – Mondi Packaging (Pty) Ltd v Director-General: Labour [2010] 11 BLLR 1131 (LAC) in which the employer’s appeal was disallowed.