The Minister of Employment and Labour has increased the earnings threshold and the national minimum wage.

Earnings Threshold Adjustment: Effective April 1, 2024, the Minister of Employment and Labour has revised the earnings threshold from R241,110.59 per annum (R20,092.54 per month) to R254,371.67 per annum (R21,197.63 per month). The earnings threshold, as defined, constitutes the regular annual remuneration of an employee before the deduction of income tax, pension, medical aid, and analogous contributions, excluding corresponding payments by the employer. Notably, subsistence and transport allowances, achievement awards, and overtime remuneration do not factor into this calculation.

Employees surpassing the earnings threshold are exempted from certain provisions regulating work hours, overtime compensation, compressed schedules, averaging of hours, meal breaks, rest intervals, Sunday remuneration, night shifts, and public holiday compensation under the Basic Conditions of Employment Act, 1997 (BCEA). Conversely, individuals earning between R20,093 and R21,198 per month will now qualify as "vulnerable" workers, thereby enjoying enhanced entitlements according to the BCEA.

Implications for Temporary and Fixed-Term Employees: Temporary employment services (TES) employees earning within the aforementioned bracket shall, from April 1, 2024, be deemed to be employees of the TES client, provided they satisfy the criteria delineated in Section 198A of the Labour Relations Act (LRA). Should such employees engage in non-temporary duties for a duration exceeding three months with the client, they may attain the status of permanent employees of the latter, consequently rendering the client jointly and severally liable for any BCEA non-compliance by the TES.

Similarly, fixed-term contract employees earning within the stipulated range will, as of April 1, 2024, be deemed permanent employees of their respective employers if they meet the requisites articulated in section 198B of the LRA. An employer's failure to justify the term's duration may prompt the designation of these employees as permanent, necessitating equal treatment in comparison to permanent counterparts.

National Minimum Wage Augmentation: Commencing March 1, 2024, the Minister has raised the national minimum wage by 8.5%, elevating it from R25.42 to R27.58 per ordinary hour worked. This increase pertains to most workers, encompassing farm and domestic labourers, whose minimum wage has aligned with the national rate since 2022.

However, exemptions apply to individuals engaged in expanded public works programs or enrolled in learnerships, with distinct wage revisions applicable to each category. Expanded works program participants will witness their minimum wage escalate from R13.97 to R15.16 per hour, while learnership participants, as per Section 17 of the Skills Development Act, 1998, will receive increased allowances commensurate with their National Qualifications Framework (NQF) level and earned credits.

Exceptions and Compliance Imperatives: Certain personnel, including members of the South African Defence Force, the National Intelligent Agency, the South African Secret Service, and volunteers, are exempted from the ambit of the National Minimum Wage Act, 2018. Employers are strongly urged to ensure adherence to the revised minimum wages, as non-compliance may trigger penalties under Section 76A(1) of the BCEA.

To maintain compliance, employers must undertake comprehensive reviews of employment contracts and policies to align them with the revised legislated amounts. Furthermore, audits of both the workforce and labour suppliers are imperative to ensure BCEA compliance across the board.

These regulatory adjustments signify enhanced remuneration and safeguards for a substantial portion of the South African workforce, underscoring the evolving landscape of labour law in the nation.

 

Navigating Arbitration: Understanding the global landscape of arbitration

Introduction: Better than arm wrestling, arbitration is becoming increasingly popular as an alternative to resolving disputes in national courts. Its appeal lies in various factors including finality, confidentiality, speed, enforceability, neutrality, and adaptability to specific case circumstances. This article explores the global landscape of arbitration, its benefits, and the considerations parties must bear in mind when choosing this method of dispute resolution.

1.     Globalization and Arbitration's Rise:

·         The surge in cross-border trade and investment has propelled arbitration as the preferred mechanism for resolving international disputes.

·         International perspective of arbitrators and practitioners fosters a less narrow-minded approach compared to national courts.

2.     Navigating Varied Legal Landscapes:

·         Differences in procedural laws across jurisdictions can impact arbitration agreements, requiring parties to be mindful of default and mandatory rules.

3.     Court Intervention in Arbitral Proceedings:

·         Parties typically prefer to keep disputes out of national courts but may require court intervention for asset or evidence preservation.

·         The extent of court intervention varies, influencing the attractiveness of jurisdictions for arbitration.

4.     The Crucial Arbitration Agreement:

·         Arbitration agreement serves as the foundation of the tribunal's jurisdiction and parties' obligation to arbitrate.

·         Variances in national laws regarding the validity, scope, and interpretation of the agreement can significantly affect dispute outcomes.

5.     Jurisdiction Disputes:

·         Tribunals generally decide their own competence, but differences exist in courts' power to reconsider tribunal decisions on jurisdiction.

6.     Challenging Awards and Enforcement:

·         Arbitration awards are typically challenging to contest, ensuring finality in disputes.

·         Varying court approaches to enforcing awards and grounds for challenging them impact arbitration's effectiveness.

7.     Role of Party-Appointed Arbitrators:

·         Party-appointed arbitrators contribute to confidence in the decision-making process.

·         Variances in their duties across jurisdictions affect impartiality and presentation of parties' perspectives.

Conclusion: Arbitration offers numerous advantages over litigation, making it an attractive option for resolving disputes, especially in an increasingly globalized world. However, parties must navigate diverse legal landscapes and consider factors such as court intervention, arbitration agreements, jurisdiction disputes, award challenges, enforcement, and the role of party-appointed arbitrators. Understanding these complexities ensures effective utilization of arbitration and maximizes its benefits for all parties involved.