The amended labour legislation that has been discussed and anticipated for the last 3 years is one step closer to being finalized. The amended Labour Relations Act and the new Employment Services Act were passed in parliament yesterday and have been sent to the State President for assent. This means that their implementation is imminent, however there will be provision in the Acts for transitional arrangements so that companies have time to ensure compliance.

We suggest that clients perform an audit of their employment practices to ensure that they will be compliant with the various amendments dealing with

• Use of labour brokers;
• Fixed term employees, and
• Part time employees.

Special attention should be given to the obligation to ensure that terms and conditions of employment of fixed and part time employees are not less favourable than those enjoyed by permanent employees. This will include benefits such as those provided by medical aid and retirement funds.

Please contact our department should you require training regarding the labour legislation amendments or assistance with audits of employment practices.

The recent Budget Speech also significantly impacted on the employment law sphere.  Currently a severance package to be paid out following an employee’s retrenchment and any lump sum benefit payable by a retirement fund on the retirement of an employee are classified together for tax purposes. The change arising from the recent Budget Speech is that the tax free portion in respect of these amounts will increase  from R315 00 to R500 000. This is a “once in a lifetime” benefit and only the unused portion can be used in a subsequent retrenchment or retirement scenario.

Verlie Oosthuizen, Partner

Contact: 031 575 7206 and voosthuizen@wylie.co.za