FET FIRST Management Practice NQF Level 4 Students Book T. Krul

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2 FET FIRST Management Practice NQF Level 4 Students Book T. Krul

3 FET FIRST Management Practice NQF Level 4 Student s Book T. Krul, 2009 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, photocopying, recording, or otherwise, without the prior written permission of the copyright holder or in accordance with the provisions of the Copyright Act, 1978 (as amended). Any person who commits any unauthorised act in relation to this publication may be liable for criminal prosecution and civil claims for damages. Every effort has been made to trace the copyright holders, but in the event of the unintentional omissions or errors, any information that would enable the publisher to make arrangements will be appreciated. First published 2009 by Troupant Publishers (Pty) Ltd P O Box 4532 Northcliff 2115 Distributed by Macmillan South Africa (Pty) Ltd Cover design by René de Wet Typeset by Nazley Samsodien Edited by Melanie Wagner ISBN: While every effort has been made to ensure the information published in this work is accurate, the authors, editors, publishers and printers take no responsibility for any loss or damage suffered by any person as a result of reliance upon the information contained therein. The publishers respectfully advise readers to obtain professional advice concerning the content. To order any of these books contact Macmillan Customer Services at: Tel: Fax: pieterses@macmillan.co.za Acknowledgements: MRC South Africa, UCT Communications and Marketing Department, The Department of Labour, the Centre for Simplified Strategic Planning, Inc., The University of Pretoria s Gordon Institute of Business Science, Intel Corporation and SASBO.

4 Contents Topic 1: Application of legislation on business operations...1 Module 1: The Basic Conditions of Employment Act... 2 Unit 1.1: Requirements of the Basic Conditions of Employment Act...2 Unit 1.2: Termination of employment...11 Module 2: The Employment equity Act Unit 2.1: The Employment Equity Plan...18 Unit 2.2: The Employment Equity Committee...30 Module 3: The Skills Development Act Unit 3.1: Requirements of the Skills Development Act...35 Unit 3.2: The relationship between the SETAs and employers...45 Summary...49 Summative assessment...51 Topic 2: Strategic planning...53 Module 4: Business strategy Unit 4.1: Identifying business objectives...54 Unit 4.2: Business strategy...58 Unit 4.3: Communicating strategy...63 Module 5: Aligning business with strategy Unit 5.1: Supporting business strategy...68 Unit 5.2: Resource requirements...73 Module 6: Business performance Unit 6.1: The business environment...75 Unit 6.2: Environmental Analysis...93 Summary...99 Summative assessment Topic 3: Human resources development Module 7: The training needs of a business Unit 7.1: Skills and expertise Unit 7.2: Addressing skills gaps Summary Summative assessment Topic 4: Management functions Module 8: Making management decisions Unit 8.1: The decision-making process Module 9: Management functions Unit 9.1: Introduction to management functions Unit 9.2: Planning Unit 9.3: Organising Unit 9.4: Leading Unit 9.5: Controlling Summary Summative assessment Topic 5: Change management Module 10: The importance of change management Unit 10.1: Introduction to change of management Unit 10.2: Implementing change management Module 11: Risks and change agents Unit 11.1: Change management risks Unit 11.2: Effective change agents Summary Summative assessment Topic 6: Team motivation Module 12: Theories of motivation Unit 12.1: Motivation theories Unit 12.2: Applying motivation theories Module 13: Motivating a team Unit 13.1: Analysing team motivation Unit 13.2: Motivating factors Module 14: Team feedback Unit 14.1: Team performance Summary Summative assessment Appendix to Topic Glossary PoE guidelines...204

5 Topic 1 Application of legislation on business operations

6 Module 1 The Basic Conditions of Employment Act Overview By the end of this module, you should be able to: explain the regulations relating to working hours discuss how the requirements of the Basic Conditions of Employment Act are applied within an organisation explain the conditions for termination of employment prescribed by the Act apply the conditions for termination of employment prescribed by the Act to a specific employment contract. Unit 1.1 Requirements of the Basic Conditions of Employment Act Think about it What do you think should be contained in the Basic Conditions of Employment? Why do you think it is important for such rules to be regulated or made law? Words & obligations: social, legal or moral requirements Introduction to the Basic Conditions of Employment Act (BCEA) The South African Constitution states that all people have a right to fair labour practices (Section 23.1). In order to make sure that this right is offered to employees, government passed the Basic Conditions of Employment Act (Act 75 of 1997) to make it easier for businesses to carry out this basic human right. By setting up and supplying the guidelines for basic conditions of employment, the Act meets the terms of the obligations of the Republic as a member state of the International Labour Organisation (ILO). The ILO is part of the United Nations (UN), an organisation that helps to keep peace in warring nations as well as offering help in making sure that human rights Get your act together with the Employment Act 2 Module 1: The Basic Conditions of Employment Act

7 are taken into account around the world. As part of the UN, the ILO brings together different governments, employers and workers to support decent work conditions throughout the world. This means that it is important for those who are part of the ILO to take into account all matters that are connected to the ILO. Parliament passed a Basic Conditions of Employment Act in December The new Act replaced an old apartheid law, and was part of the Labour Ministry s plan to reform the South African labour market. In many ways, the BCEA is important in deciding what workers rights and obligations are worth. In the next section we will explore what these rights are. Words & labour market: the conditions under which workers have to work; labour power is bought and sold Regulations relating to working time In the second part of the Act, the regulation of working hours are dealt with. This part of the Act is divided into 12 sections (Sections 7 to 18). Assessment activity 1.1 (Group) In groups of two to three students, read and summarise the following regulations. Each group should work through a Section and then present it in summary form to the rest of the class, pointing out the key conditions dealt with under each Section. Section 7: Regulation of working time 1) Every employer must regulate the working time of each employee: a) in accordance with the provisions of any act governing occupational health and safety; b) with due regard to the health and safety of employees; c) with due regard to the Code of Good Practice on the Regulation of Working Time issued under Section 87(1)(a); and d) with due regard to the family responsibilities of employees. Section 8: Interpretation of day For the purposes of Sections 9 to 16, day means a period of 24 hours measured from the time when the employee normally commences work, and daily has a corresponding meaning. Words & regulate: to control or direct according to a rule or law regard: close attention to something commences: starts Section 9: Ordinary hours of work 1) Subject to this Chapter, an employer may not require or permit an employee to work more than: a) 45 hours in any week; and b) nine hours in any day if the employee works for five days or fewer in a week; c) eight hours in any day if the employee works for more than five days in a week. Module 1: The Basic Conditions of Employment Act 3

8 Words & progressive: continue steadily in steps entitled: to have a right to something, to be allowed something permitted: to be allowed contemplated: covered, thought about 2) An employee s ordinary hours of work in terms of Subsection (1) may by agreement be extended by up to 15 minutes in a day but not more than 60 minutes in a week to enable an employee whose duties include serving members of the public to continue performing those duties after the completion of ordinary hours of work. 3) Schedule 1 establishes procedures for the progressive reduction of the maximum ordinary hours of work to a maximum of 40 ordinary hours of work per week and eight ordinary hours of work per day. Section 10: Overtime 1) Subject to this Chapter, an employer may not require or permit an employee to work: a) overtime, except in accordance with an agreement; b) more than 10 hours overtime a week. 2) An agreement in terms of Subsection (1) may not require or permit an employee to work more than 12 hours on any day. 3) An employer must pay an employee at least one and one-half times the employee s wage for overtime worked. 4) Despite Subsection (2), an agreement may provide for an employer to: a) pay an employee not less than the employee s ordinary wage for overtime worked and grant the employee at least 30 minutes time off on full pay for every hour of overtime worked; or b) grant an employee at least 90 minutes paid time off for each hour of overtime worked. 5) a) An employer must grant paid time off in terms of Subsection (3) within one month of the employee becoming entitled to it. b) An agreement in writing may increase the period contemplated by paragraph (a) to 12 months. 6) An agreement concluded in terms of Subsection (1) with an employee, when the employee commences employment, or during the first three months of employment, lapses after one year. 7) a) A collective agreement may increase the maximum permitted overtime to 15 hours a week. b) A collective agreement contemplated in paragraph (a) may not apply for more than two months in any period of 12 months. Section 11: Compressed working week 1) An agreement in writing may require or permit an employee to work up to 12 hours in a day, inclusive of the meal intervals required in terms of Section 14, without receiving overtime pay. 2) An agreement in terms of Subsection (1) may not require or permit an employee to work: a) more than 45 ordinary hours of work in any week; b) more than 10 hours overtime in any week; or c) on more than five days in any week. A working week 4 Module 1: The Basic Conditions of Employment Act

9 Section 12: Averaging of working hours 1) Despite Sections 9(1) and (2) and 10(1)(b), the ordinary hours of work and overtime of an employee may be averaged over a period of up to four months in terms of a collective agreement. 2) An employer may not require or permit an employee who is bound by a collective agreement in terms of Subsection (1) to work more than: a) an average of 45 ordinary hours of work in a week over the agreed period; b) an average of five hours overtime in a week over the agreed period. 3) A collective agreement in terms of Subsection (1) lapses after 12 months. 4) Subsection (3) only applies to the first two collective agreements concluded in terms of Subsection (1). Section 13: Determination of hours of work by Minister 1) Despite this Chapter, the Minister, on grounds of health and safety, may prescribe by regulation the maximum permitted hours of work, including overtime, which any category of employee may work: a) daily, weekly or during any other period specified in the regulation; and b) during a continuous period without a break. 2) A regulation in terms of Subsection (1) may not prescribe maximum hours in excess of those permitted in Sections 9 and 10. 3) A regulation in terms of Subsection (1) may be made only: a) on the advice of the Chief Inspector appointed in terms of Section 27 of the Occupational Health and Safety Act, 1993 (Act No. 85 of 1993), or the Chief Inspector appointed in terms of Section 48 of the Mine Health and Safety Act, 1996 (Act No. 29 of 1996); and b) after consulting the Commission. Words & collective: to include all those involved, as a group prescribe: set down as a rule or guide Commission: a formal group that meets to decide on matters for which the group was formed remunerated: to be paid for services Determine employees working hours Section 14: Meal intervals 1) An employer must give an employee who works continuously for more than five hours a meal interval of at least one continuous hour. 2) During a meal interval the employee may be required or permitted to perform only duties that cannot be left unattended and cannot be performed by another employee. 3) An employee must be remunerated: a) for a meal interval in which the employee is required to work or is required to be available for work; and b) for any portion of a meal interval that is in excess of 75 minutes, unless the employee lives on the premises at which the workplace is situated. 4) For the purposes of Subsection (1), work is continuous unless it is interrupted by an interval of at least 60 minutes. 5) An agreement in writing may: a) reduce the meal interval to not less than 30 minutes; b) dispense with a meal interval for an employee who works fewer than six hours on a day. Module 1: The Basic Conditions of Employment Act 5

10 Section 15: Daily and weekly rest period 1) An employer must allow an employee: a) a daily rest period of at least 12 consecutive hours between ending and recommencing work; and b) a weekly rest period of at least 36 consecutive hours, which, unless otherwise agreed, must include Sunday. 2) A daily rest period in terms of Subsection (1)(a) may, by written agreement, be reduced to 10 hours for an employee: a) who lives on the premises at which the Keep the prescribed daily and weekly rest period workplace is situated; and b) whose meal interval lasts for at least three hours. 3) Despite Subsection (1)(b), an agreement in writing may provide for: a) a rest period of at least 60 consecutive hours every two weeks; or b) an employee s weekly rest period to be reduced by up to eight hours in any week if the rest period in the following week is extended equivalently. Words & equivalent: in a similar way, same Section 16: Pay for work on Sunday 1) An employer must pay an employee who works on a Sunday at double the employee s wage for each hour worked, unless the employee ordinarily works on a Sunday, in which case the employer must pay the employee at one and one-half times the employee s wage for each hour worked. 2) If an employee works less than the employee s ordinary shift on a Sunday and the payment that the employee is entitled to in terms of Subsection (1) is less than the employee s ordinary daily wage, the employer must pay the employee the employee s ordinary daily wage. 3) Despite Subsections (1) and (2), an agreement may permit an employer to grant an employee who works on a Sunday paid time off equivalent to the difference in value between the pay received by the employee for working on the Sunday and the pay that the employee is entitled to in terms of Subsections (1) and (2). 4) Any time worked on a Sunday by an employee who does not ordinarily work on a Sunday is not taken into account in calculating an employee s ordinary hours of work in terms of Section 9(1) and (2), but is taken into account in calculating the overtime worked by the employee in terms of Section 10(1)(b). 5) If a shift worked by an employee falls on a Sunday and another day, the whole shift is deemed to have been worked on the Sunday, unless the greater portion of the shift was worked on the other day, in which case the whole shift is deemed to have been worked on the other day. 6) a) An employer must grant paid time off in terms of Subsection (3) within one month of the employee becoming entitled to it. b) An agreement in writing may increase the period contemplated by paragraph (a) to 12 months. 6 Module 1: The Basic Conditions of Employment Act

11 Section 17: Night work 1) In this Section, night work means work performed after 18h00 and before 06h00 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 workplace at the commencement and conclusion of the employee s shift. 3) An employer who requires an employee to perform work on a regular basis after 23h00 and before 06h00 the next day must: a) inform the employee in writing, or orally if the employee is not able to understand a written communication, in a language that the employee understands: i) of any health and safety hazards associated with the work that the employee is required to perform; and ii) of the employee s right to undergo a medical examination in terms of paragraph (b). b) at the request of the employee, enable the employee to undergo a medical examination, for the account of the employer, concerning those hazards: i) before the employee starts, or within a reasonable period of the employee starting, such work; and ii) at appropriate intervals while the employee continues to perform such work. c) transfer the employee to suitable day work within a reasonable time if: i) the employee suffers from a health condition associated with the performance of night work; and ii) it is practicable for the employer to do so. 4) For the purposes of Subsection (3), an employee works on a regular basis if the employee works for a period of longer than one hour after 23h00 and before 06h00 at least five times per month or 50 times per year. 5) The Minister may, after consulting the Commission, make regulations relating to the conduct of medical examinations for employees who perform night work. Section 18: 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; Words & hazard: a danger, something that is harmful interval: the amount of time between two activities or events conduct: carrying out Employees should work reasonable hours Module 1: The Basic Conditions of Employment Act 7

12 Working on public holidays 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. 4) An employer must pay an employee for a public holiday on the employee s usual payday. 5) If a shift worked by an employee falls on a public holiday and another day, the whole shift is deemed to have been worked on the public holiday, but if the greater portion of the shift was worked on the other day, the whole shift is deemed to have been worked on the other day. Assessment activity 1.2 (Class) Read the Section below and then have a class discussion about why you think that most of this Section does not refer to those in management. Exceptions to regulation of working hours The Section dealing with the regulation of working time in the Basic Conditions of Employment Act has the following exceptions, which are listed in Section 2 (6) below. 1) This Chapter, except Section 7, does not apply to: a) senior managerial employees; b) employees engaged as sales staff who travel to the premises of customers and who regulate their own hours of work; and c) employees who work less than 24 hours a month for an employer. 2) Sections 9, 10(1), 14(1), 15(1), 17(2) and 18(1) do not apply to work, which is required to be done without delay owing to circumstances for which the employer could not reasonably have been expected to make provision and which cannot be performed by employees during their ordinary hours of work. 3) The Minister must, on the advice of the Commission, make a determination that excludes the application of this Chapter or any provision of it to any category of employees earning in excess of an amount stated in that determination. 8 Module 1: The Basic Conditions of Employment Act

13 4) Before the Minister issues a notice in terms of Subsection (3), the Minister must: a) publish in the Gazette a draft of the proposed notice; and b) invite interested persons to submit written representations on the proposed notice within a reasonable period. (Adapted from: Understanding the regulations related to working hours Although the regulations of working hours may be clearly seen in the way a business offers remuneration, time off, overtime pay, meal time, night work and so on, it is often easiest to measure by what is in a business s policies and procedures. The policies and procedures will refer to what is in a contract of employment, which is a document given to each employee to sign when they are employed by the business. Most of the regulations related to working time will be stipulated in an employee s contract of employment. Because this is signed by both the manager (representing the business) and by the employee, it is taken as a collective agreement if there is anything different from what the Act states. Examples 1 and 2 below contain extracts from contracts of employment. A contract of employment Example 1 Extract from a Contract of employment Section C: Hours of work 1.1 The employee may be required to work for a maximum of 45 ordinary hours per week. The normal days of work are Monday to Friday and ordinary working hours are from 09h00 to 18h00 each day. However, you may be asked as part of your normal hours of work to work on Saturdays. Hours and days of work may also be changed to meet the needs of the business. 1.2 The employee may be required to clock in when reporting for duty and clock out when leaving work or leaving the premises for whatever reason. 1.3 The employee agrees to work on Sundays as required by the exigencies of the business. Due to the nature of the business, employees frequently have to work on Sundays. As such payment for four Sundays per month, whether or not these are actually worked or not, is calculated into the employee s gross monthly salary as set out hereunder. 1.4 The employee also agrees to work overtime upon request. Payment for 10 overtime hours per week is calculated into the employee s gross monthly salary as set out hereunder. As we can see, the hours of work are very clearly stated in this contract. The requirement to work Sundays and overtime is also included, and employees of this company will be paid for this type of work as part of their monthly salary according to the calculations set out in the contract. Module 1: The Basic Conditions of Employment Act 9

14 Example 2 Extract from a Contract of employment Section 1: Hours of work, working time and public holidays 1.1 The number of hours in an employee s ordinary working week shall be from the arrival time of 08h00 until the leaving time of 17h00, depending on the start time of 8 (eight) working hours per day, and the employee s normal working week is from Mondays to Fridays. The specific working hours will be determined and published by the employer. The employer may from time to time, owing to requirements of the work and after due consultation, change the work schedule of hours of work. Strict adherence to the prescribed working hours and times is required. 1.2 The parties agree to a meal interval of 30 (thirty) minutes after 5 (five) hours of work at times as directed by the employer s management, or as dictated by the operational circumstances at any given time. 1.3 Working time on the client s premises shall be according to the client s rules and according to the provisions of any act governing occupational health and safety at each particular site. 1.4 The employer will normally not be required to work on weekends or public holidays except by agreement between the employer and the employee owing to operational circumstances. Payment on such days will conform to the directives of current legislature. 1.5 The employee agrees, owing to the nature of the employer s activities, to perform overtime work as and when required. Notice of such work shall be dependent on the overtime rates as described in the relevant Industry Agreements. Section 2: Overtime 1. The employee may be, as and when necessary, expected to work additional hours overtime as a result of operational requirements during the week, and/or during public holidays. 2. As the employer s business entails working to tight deadlines to service customer needs, it is agreed that reasonable period of notice in respect of overtime is seldom viable and that the employee will attend to overtime, if at all possible. 3. Overtime will only be recognised for payment purposes if the working of such overtime and the duration thereof has been approved in advance. 4. Overtime will be limited to and paid at the rates prescribed in the legislation. In the case of part-time employees, only time worked in excess of a normal working day of 8 (eight) hours shall be deemed to be overtime. Time worked in excess of the contractual hours up to the normal working day of 8 (eight) hours will be remunerated at the normal hourly rate. 10 Module 1: The Basic Conditions of Employment Act

15 Assessment activity 1.3 (Group) In groups of two to four students, answer the following questions: 1) Give a brief summary of each of the regulations dealing with working hours under the Basic Conditions of Employment Act. 2) Analyse the work hours that are practised in a business that you work in, or speak to someone at any South African firm, to find out how each of the above Sections of the regulations to working hours is adhered to. a) Give examples of any four areas where this Section of the Basic Conditions of Employment Act is being followed. b) Are there any instances where Sections of this Act are not adhered to? Explain your answer. Unit 1.2 Termination of employment Conditions for termination of employment The Basic Conditions for Employment Act also gives rules as to how businesses should treat the termination of employment. This Section of the Act is divided into six Sections, numbered Section 37 to Section 42. Assessment activity 1.4 (Group) In small groups, read and then prepare a short summary of the following Sections that relate to the termination of employment. Each group should work through a section and then present it in summary form to the rest of the class, pointing out the key conditions dealt with under each Section. Termination of employment Section 37: Notice of termination of employment 1) Subject to Section 38, a contract of employment terminable at the instance of a party to the contract may be terminated only on notice of not less than: a) one week, if the employee has been employed for six months or less; Words & terminable: able to be terminated Module 1: The Basic Conditions of Employment Act 11

16 Words & illiterate: unable to read or write oral: by speaking, verbal concurrent: at the same time dispute: to argue about, question or challenge waive: to give up the right to something, to put aside reside: to live or occupy b) two weeks, if the employee has been employed for more than six months but not more than one year; c) four weeks, if the employee: i) has been employed for one year or more; or ii) is a farm worker or domestic worker who has been employed for more than six months. 2) a) A collective agreement may permit a notice period shorter than that required by Subsection (1). b) Despite paragraph (a), a collective agreement may permit the notice period of four weeks required by Subsection (1)(c)(i) to be reduced to not less than two weeks. 3) No agreement may require or permit an employee to give a period of notice longer than that required of the employer. 4) a) Notice of termination of a contract of employment must be given in writing, except when it is given by an illiterate employee. b) If an employee who receives notice of termination is not able to understand it, the notice must be explained orally by, or on behalf of, the employer to the employee in an official language the employee reasonably understands. 5) Notice of termination of a contract of employment given by an employer must: a) not be given during any period of leave to which the employee is entitled in terms of Chapter Three; and b) not run concurrently with any period of leave to which the employee is entitled in terms of Chapter Three, except sick leave. 6) Nothing in this Section affects the right: a) of a dismissed employee to dispute the lawfulness or fairness of the dismissal in terms of Chapter Eight of the Labour Relations Act, 1995, or any other law; and b) of an employer or an employee to terminate a contract of employment without notice for any cause recognised by law. Section 38: Payment instead of notice 1) Instead of giving an employee notice in terms of Section 37, an employer may pay the employee the remuneration the employee would have received, calculated in accordance with Section 35, if the employee had worked during the notice period. 2) If an employee gives notice of termination of employment, and the employer waives any part of the notice, the employer must pay the remuneration referred to in Subsection (1), unless the employer and employee agree otherwise. Section 39: Employees in accommodation provided by employers 1) If the employer of an employee who resides in accommodation that is situated on the premises of the employer or that is supplied by the employer terminates the contract of employment of that employee: a) before the date on which the employer was entitled to do so in terms of Section 37; or 12 Module 1: The Basic Conditions of Employment Act

17 b) in terms of Section 38, the employer is required to provide the employee with accommodation for a period of one month, or if it is a longer period, until the contract of employment could lawfully have been terminated. 2) If an employee elects to remain in accommodation in terms of Subsection (1) after the employer has terminated the employee s contract of employment in terms of Section 38, the remuneration that the employer is required to pay in terms of Section 38 is reduced by that portion of the remuneration that represents the agreed value of the accommodation for the period that the employee remains in the accommodation. Section 40: Payments on termination 1) On termination of employment, an employer must pay an employee: a) for any paid time off that the employee is entitled to in terms of Sections 10(3) or 16(3) that the employee has not taken; b) remuneration calculated in accordance with Section 21(1) for any period of annual leave due in terms of Section 20(2) that the employee has not taken; and c) if the employee has been in employment longer than four months, in respect of the employee s annual leave entitlement during an incomplete annual leave cycle as defined in Section 20(1): i) one day s remuneration in respect of every 17 days on which the employee worked or was entitled to be paid; or ii) remuneration calculated on any basis that is at least as favourable to the employee as that calculated in terms of Subparagraph (i). Section 41: Severance pay 1) For the purposes of this Section, operational requirements means requirements based on the economic, technological, structural or similar needs of an employer. 2) An employer must pay an employee, who is dismissed for reasons based on the employer s operational requirements or whose contract of employment terminates or is terminated in terms of Section 38 of the Insolvency Act, 1936 (Act No. 24 of 1936), severance pay equal to at least one week s remuneration for each completed year of continuous service with that employer, calculated in accordance with Section 35. 3) The Minister may vary the amount of severance pay in terms of Subsection (2) by notice in the Gazette. This variation may only be done after consulting NEDLAC and the Public Service Coordinating Bargaining Council established under Schedule 1 of the Labour Relations Act, ) An employee who unreasonably refuses to accept the employer s offer of alternative employment with that employer or any other employer is not entitled to severance pay in terms of Subsection (2). elect: choose Words & severance: something that is cut off NEDLAC: the National Economic, Development and Labour Council on termination of employment, an employer must pay an employee for any paid time off that the employee is entitled to. Module 1: The Basic Conditions of Employment Act 13

18 Words & CCMA: Commission for Conciliation, Mediation and Arbitration conciliation: to overcome the distrust or dislike toward something or someone; to come together to find an agreement to a problem arbitration: those involved in a dispute give their arguments to an impartial person or group who is chosen by mutual agreement adjudicate: to hear and settle a dispute, to be a judge sector: part of the economy; industry 5) The payment of severance pay in compliance with this Section does not affect an employee s right to any other amount payable according to law. 6) If there is a dispute only about the entitlement to severance pay in terms of this Section, the employee may refer the dispute in writing to: a) a council, if the parties to the dispute fail within the registered scope of that council; or b) the CCMA, if no council has jurisdiction. 7) The employee who refers the dispute to the council or the CCMA must satisfy it that a copy of the referral has been served on all the other parties to the dispute. 8) The council or the CCMA must attempt to resolve the dispute through conciliation. 9) If the dispute remains unresolved, the employee may refer it to arbitration. 10) If the Labour Court is adjudicating a dispute about a dismissal based on the employer s operational requirements, the Court may inquire into and determine the amount of any severance pay to which the dismissed employee may be entitled and the Court may make an order directing the employer to pay that amount. Section 42: Certificate of service 1) On termination of employment an employee is entitled to a certificate of service stating: a) the employee s full name; b) the name and address of the employer; c) a description of any council or sectoral employment standard by which the employer s business is covered; d) the date of commencement and date of termination of employment; e) the title of the job or a brief description of the work for which the employee was employed at date of termination; f) the remuneration at date of termination; and g) if the employee so requests, the reason for termination of employment. Exceptions for the conditions of termination of employment The Section of the Basic Conditions of Employment Act that deals with the termination of employment does not apply to those employees who work less than 24 hours per month for an employer. Application of the conditions for termination of employment Again, many of the business s means for dealing with conditions for termination of employment are included in the policies and procedures, as well as in the employee s contract of employment. 14 Module 1: The Basic Conditions of Employment Act

19 Read the examples below which contain extracts from contracts of employment, relating to the termination of employment. Example 3 The employee s employment may be terminated either by them or by the employer by the giving of written notice to the other party as follows: 1. During the first 3 (three) months of employment: 1 (one) day s notice. 2. Payment, instead of notice, may be arranged by mutual agreement between both parties, subject to all other requirements of this contract having been met and satisfied. 3. Nothing in this contract affects the rights of any party to act according to the employer s Disciplinary Code, the Labour Relations Act, 1995, the Basic Conditions of Employment Act, 1997, or any other act, statute, regulation or ordinance that has relevance to the relationship between the parties. Example 4 1. This contract may be terminated at the discretion of the employer or the employee upon written notice of termination, as follows: 1.1) during the first 6 (six) months of employment, 2 (two) week s written notice of termination; 1.2) after the first 6 (six) months of employment but before 12 (twelve) months employment, 1 (one) month s written notice of termination; 1.3) after 12 (twelve) months of employment, 2 (two) months written notice of termination. 2. The notice periods detail in clause 1 shall not apply where summary termination of this contract occurs for any cause recognised by law as being sufficient. 3. The company s normal retirement age is 65 (sixty-five) years of age and should the employee still be employed by the employer, the employee will retire at the end of the month in which they turns 65 (sixty-five) years of age. 4. Owing to the fact that past employees have resigned in January, the employee agrees that they may not tender their resignation in the month of January unless the employer consents to this. 5. If the employee breaches this clause and leaves the employment of the employer prior to the lapse of the notice period, the employee agrees that they will be liable to the employer in the amount of salary that they would have earned during the notice period. This is deemed to be a reasonable estimation of the damages suffered by the employer as a result of the employee s breach of this clause. This clause does not limit the employer s right to insist on specific performance. Module 1: The Basic Conditions of Employment Act 15

20 Assessment activity 1.5 (Group) In groups of two or three students, find an example of a policy, procedure or employment contract that deals with termination of employment. 1. Which of the sections under the termination of employment chapter of the act are covered in the contract? 2. What alternative agreements are made that deviate from the normal rule? 16 Module 1: The Basic Conditions of Employment Act

21 Module 2 The Employment Equity Act Overview By the end of this module, you should be able to: provide an overview of the Employment Equity Act (EEA) explain to a group of managers the reasoning behind the Employment Equity Act circulate a document outlining Employment Equity (EE) as a business imperative for any company or organisation operating in South Africa provide a written report detailing an organisation s application of the Employment Equity Act discuss an organisation s EE plan explain the requirements placed on employers by the EEA with reference to an organisation s employment equity plan explain the process to be followed in implementing employment equity with reference to the policy of an organisation and the role of managers in a business unit explain the role of the EE Committee identify who should be represented on that Committee identify the members of the Employment Equity Committee within an organisation analyse the employment policy and practices in a business unit discuss how the business unit complies with the Act and the specific organisation s EE Plan, in terms of its Employment Policy and practices identify barriers that adversely affect disadvantaged people in a specific organisation and a business unit within that organisation. Module 2: The Employment Equity Act 17

22 Words & discrimination: treating someone differently because of age, race, gender, religion, sexual preference, culture and so on disparity: difference, gap equity: equal treatment, giving every person a fair and equal chance Unit 2.1 The Employment Equity Plan Introduction to employment equity The Employment Equity Act (EEA) aims to acknowledge that as a result of apartheid and other discriminatory laws and practices, there are gaps in employment, occupation and income within the national labour market. This law also shows an understanding that those disparities create such obvious disadvantages for certain categories of people that they cannot be set right simply by cancelling discriminatory laws. The Employment Equity Act (1998) was therefore passed in order to: promote the constitutional right of equality and the exercise of true democracy eliminate unfair discrimination in employment ensure the implementation of employment equity to redress the effects of discrimination achieve a diverse workforce broadly representative of our people promote economic development and efficiency in the workforce; and give effect to the obligations of the Republic as a member of the International Labour Organisation. (Adapted from: In the following sections we will explore the purpose of the EEA and look at a brief overview. If there are any words that you do not understand or parts that are difficult to understand, discuss these with your lecturer. The purpose of the EEA is to achieve equity in the workplace The purpose of the Employment Equity Act The purpose of this Act is to achieve equity in the workplace by: promoting equal opportunity and fair treatment in employment through the elimination of unfair discrimination implementing affirmative action measures to redress the disadvantages in employment experienced by designated groups, in order to ensure their equitable representation in all occupational categories and levels in the workforce. 18 Module 2: The Employment Equity Act

23 Assessment activity 2.1 (Individual) How would you explain the purpose of the Employment Equity Act to a group of managers? Overview of the Employment Equity Act The Employment Equity Act covers the following: 1) Prohibition of unfair discrimination: a) This means that no person or organisation is allowed to unfairly discriminate against others on the basis of race, gender, pregnancy, marital status, family responsibility, ethnic or social origin, colour, sexual orientation, age, disability, religion, HIV status, conscience, belief, political opinion, culture, language and birth. b) This also means that medical and psychological testing of employees is justifiable or legislation permits it. 2) Affirmative Action (AA): a) Every employer must implement AA measures for people from designated groups. b) Affirmative Action measures, those measures that are designed to ensure that qualified people from designated groups have equal employment opportunities, are equitably represented at all levels of a designated employer. c) Employers must take steps to consult with employees on AA matters. d) When consulting employees, the employer must disclose all relevant information that will allow all parties to consult effectively. e) Designated employers must conduct analyses of policies, procedures, practices and the working environment to identify barriers that adversely affect people from designated groups. f) A report has to have been submitted to the Director General regarding EE. A copy of this report is also included in the firm s annual financial report. g) The firm must practise successive employment equity, drawing up a new plan before the term of the previous one has come to an end. h) The designated employer must assign a manager to take responsibility for the EE plan. i) The employer has the duty to inform employees of the Act as well as the report submitted. j) Employers must maintain records in respect of its workforce. k) The report should include information regarding the remuneration and benefits received in each occupational category and level of the employer s workforce. Words & prohibit: forbid or ban justifiable: reasonable successive: carry out something step-by-step, implement in growing amounts Module 2: The Employment Equity Act 19

24 3) Commission for Employment: a) A Commission for Employment has been established, consisting of members appointed by the Minister. b) The Commission advises the Minister on good codes of practice, regulations, policy and any other matter concerning the Act. c) The Minister must provide the Commission with staff necessary to carry out its functions. d The Commission may call for written representations from members of the public or hold public hearings. e) The Commission must submit an annual report to the Minister. The EE Committee ensures employment equity in the workplace 4) Monitoring, enforcement and legal proceedings a) Any employee or trade union representative may bring an alleged contravention of this Act to attention. b) The Labour Inspector has the authority to enter, question and inspect. c) The Labour Inspector must ask for a written undertaking from a designated employer to comply with the Act within a specific period. d) A compliance order may be issued if the employer has refused or failed to comply, unless the employer is being reviewed by the Director General. e) An employer may object to a compliance order by making written representations to the Director General. f) A designated employer may appeal to the labour court against a compliance order. g) The Minister must keep a register of designated employers that have submitted the reports required. h) To determine whether a designated employer is implementing employment equity, one must take into account: i) representation of people from designated groups 20 Module 2: The Employment Equity Act

25 ii) progress made in implementing employment equity iii) reasonable efforts made by the employer to implement the equity plan iv) extent to which barriers have been eliminated v) any other prescribed factor. i) The Director General may conduct a review to determine whether an employer is complying with this Act. This may result in approval or a recommendation to improve. j) Non-compliance with the Act may give the Director General grounds to refer the issue to the labour court. k) A conflict of proceedings between the CCMA and labour court should allow the labour court to reach a decision before the CCMA proceeding is concluded. l) Disputes regarding the same employer may be consolidated. m) The Commissioner of the CCMA has the authority to make any appropriate arbitration award with effect to this Act. n) The labour court has exclusive jurisdiction to determine any dispute about the interpretation or application of this Act, except where this Act provides otherwise. o) No person may discriminate against an employee who exercises any right conferred by this Act. p) The procedure for disputes must be followed, including referring the dispute in writing to the CCMA, who must attempt to resolve it. Words & conflict: outcomes of two or more activities may have different requirements that overrule each other consolidate: add to become one; put together jurisdiction: area of authority or power where someone has control Remember that the term employee used in this Act also refers to applicants for a particular position in a business. The designated groups that are referred to include black people, women and those who are disabled. If any disputes arise with respect to the Employment Equity Act of 1998, the employee may lay a complaint with the CCMA in order to reach an agreeable conclusion. It is the responsibility of the employer to prove that the action or situation that is in dispute was fair. Requirements of the Employment Equity Plan According to Section 20 of the Act, the employer is responsible for compiling the EE Plan to serve as a guideline for future compliance to the Act. 1) A designated employer must prepare and implement an Employment Equity Plan, which will achieve reasonable progress towards employment equity in that employer s workforce. 2) An Employment Equity Plan prepared in terms of Subsection (1) must state: a) the objectives to be achieved for each year of the Plan; b) the Affirmative Action measures to be implemented as required by Section 15(2); c) where under-representation of people from designated groups has been identified by the analysis, the numerical goals to Module 2: The Employment Equity Act 21

26 achieve the equitable representation of suitably qualified people from designated groups within each occupational category and level in the workforce, the timetable within which this is to be achieved, and the strategies intended to achieve those goals; d) the timetable for each year of the Plan for the achievement of goals and objectives other than numerical goals; e) the duration of the Plan, which may not be shorter than one year or longer than five years; f) the procedures that will be used to monitor and evaluate the implementation of the Plan and whether reasonable progress is being made towards implementing employment equity; g) the internal procedures to resolve any dispute about the interpretation or implementation of the Plan; h) the persons in the workforce, including senior managers, responsible for monitoring and implementing the Plan; and i) any other prescribed matter. The EE Plan serves as a guideline for compliance with the EEA 3) For the purposes of this Act, a person may be suitably qualified for a job as a result of any one of, or any combination of, that person s: a) formal qualifications; b) prior learning; c) relevant experience; or d) capacity to acquire, within a reasonable time, the ability to do the job. 4) When determining whether a person is suitably qualified for a job, an employer must: a) review all the factors listed in Subsection (3); and b) determine whether that person has the ability to do the job in terms of any one of, or any combination of, those factors. 22 Module 2: The Employment Equity Act