On Monday 1 July 2013, Minister of Labour Mildred Oliphant, acting in accordance with Section 6(3) of the Basic Conditions of Employment Act, increased the annual earnings threshold to R193 805.00 from the previous figure of R183 008.00.
According to Gavin Stansfield, Director in the Employment practice at Cliffe Dekker Hofmeyr Cape Town, “The earnings threshold is significant as employees who earn in excess of the threshold (now R16 150.41 gross per month) are excluded from the protection offered by certain sections of the Basic Conditions of Employment Act (BCEA).
“These sections govern respectively limiting ordinary hours of work to 45 hours per week (section 9), to payment for any overtime worked in excess of 45 hours (section 10), limitations on a compressed working week (s11), provisions which allow for the averaging of a work week (s12), the mandatory provision of a meal interval of not less than 30 minutes for employees who work for longer than 5 hours (s14), provisions which allow for certain mandatory minimum daily and weekly rest periods (s15), an employee's entitlement to increased pay for work on Sundays (s16), the payment of a mandatory allowance for employees who engage in night work (s17(2)), and increased pay for employees who work on public holidays. Employees who earn in excess of the threshold are not entitled to the minimum protections contained in these sections of the BCEA,” he explains.
“The increase in the threshold has the effect of increasing the number of employees who may be entitled to the above-mentioned minimum rights. In other words, an employee who, until the increase, was earning for example R185 000.00 per annum, would not have been entitled to the payment of overtime. With effect from today's increased threshold, the effective date being 1 July 2013, such employee now becomes entitled to insist on the payment of overtime.
“The increase in the threshold accordingly affects positively that category of employees who currently earn between R183 000 and R193 805.00 as they now become entitled to the above-mentioned basic rights. Employers should accordingly be aware of the increase in order to assess the impact it may have on employees in this band,” Stansfield adds.