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Ask the expert – Special Dispensation for Small Businesses

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Question

Does employment legislation accommodate the challenges faced by small businesses?

Answer

Yes, certain provisions of the Basic Conditions of Employment Act (BCEA) have been relaxed to accommodate small businesses, in particular employers who employ less than 10 employees.  

Brief explanation

Not many employers are aware of the Ministerial Determination that was issued in respect of small businesses as long ago as 1999 (“the Small Business Determination”). While the provisions are not all that far-reaching, some provisions could be quite useful to the small employer. These include that the weekly overtime hours, i.e. hours in excess of 45 hours per week, are limited to 15 hours per week (as opposed to 10 hours) and that for the first ten hours of overtime worked in a week the employer has to pay the employee only one and one third of the employee’s normal rate (as opposed to one and one half of the normal rate). When it comes to an agreement for the averaging of normal hours and overtime hours, such agreement only has to be reached with employees on an individual basis; it does not have to be a collective agreement.

A further advantage relates to family responsibility leave. Normally employees are entitled to
3 days’ paid family responsibility leave per year. The concession afforded by the Small Business Determination is that the employer and employee may agree to reduce the employee’s annual leave by the number of days’ family responsibility leave granted. If such provision is contained in the contract of employment, any family responsibility leave taken by the employee could be deducted from annual leave. The effect of this would be that family responsibility leave for small businesses would be unpaid.

The Small Business Determination does not apply in the case of domestic workers, the public service, an employer who conducts more than one business, or any business that is formed by the division or dissolution of an existing business. While the provisions contained in a bargaining council agreement or sectoral determination take precedence over the Small Business Determination, sectoral determinations may nevertheless recognise the provisions of the Small Business Determination, for example the sectoral determination for the hospitality sector.

Article written by Jan Truter of Labourwise

www.labourwise.co.za is an on-line labour relations service aimed at assisting employers with the implementation of effective labour relations. They can be contacted via the website or info@labourwise.co.za.

Copyright © Sanlam, 2016

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