New Earnings Threshold

Some provisions of the Basic Conditions of Employment Act, the Labour Relations Act and the Employment Equity Act are only applicable to employees who earn below the earnings threshold as set by the Minister of Labour from time to time.

The previous earnings threshold was R205 433.30 per year.

The new earnings threshold as of March 2021 is R211 596.30 per year (see calculation below).


What is included and excluded from the amount?

  1. The amount is before any deductions such as income tax, UIF, medical aid or pension / provident fund contributions
  2. Subsistence allowances and travel allowances are NOT included in the amount
  3. Achievement awards or once off performance payments and bonuses are NOT included.
  4. Payment for overtime is NOT included.

A new document has been added – Probationary Period Contract Clause

In anticipation of our upcoming video, I have loaded a new document to assist Employers – a word document containing my recommended probationary period clause. This clause contains five sections that summarize the requirements of both Employers and Employees during the probationary period. It is my belief that contracts of employment should provide clarity on what either party can expect from the other (this may aid in preventing some unnecessary labour disputes). My contract clause is written to detail what Employees can expect from Employers, but also to remind Employers what their responsibility is during this period. In addition to this, the clause refers to the extension of the probationary period. In the upcoming video I answer the question “can probation be extended and if so, how? “.

The probationary period clause document can be downloaded HERE.

I am aware that many Employers appoint Employees on fixed term contracts to evaluate their performance or “fit” and then issue them with a new contract once they have completed the initial period. In the upcoming video I address this and I will make a longer video about fixed term contracts in future, but for now my recommendation is as follows:

Recommendation: Fixed Term Contracts & Probation

I recommend that Employers issue one contract prior to commencement of service or on commencement that includes a provision that covers the initial period / probationary period rather than using two contracts. I do not recommend that Employers use fixed term contracts for probation and I am of the opinion that the use of a fixed term contract for probation does not offer any benefits to Employers nor does it exempt them from the requirements as detailed in the Labour Relations Act (and accompanying codes of good practice) to fairly terminate the employment relationship at the end of the initial period.

In the upcoming video I detail all the requirements before, during and at the end of the probationary period to assist Employers to comply with the relevant labour laws, and to assist Employees to know what to expect or to ask for if they are not being offered support in the initial period.

Employment Relations Videos

The videos are free and contain a lot of information for Employers and Employees to help them navigate the dynamic employment relationship and complex labour laws. To assist me in bringing you more content, on a regular basis, any of the following is helpful:

  1. Subscribing to my Youtube Channel. You can find it HERE.
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  5. Purchasing any of the documents in my downloads shop.
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The more people engage with the content, the more I can continue to invest into the content.

Your support is appreciated,

Carmen Fourie

Can Employers deduct notice of termination from Employees who do not resign with sufficient notice?

Employers and Employees are required to give notice of termination as per the Basic Conditions of Employment. You can watch my video on Notice of Termination HERE. In that video I discuss what needs to happen if an Employer does not give sufficient notice of termination. In the latest video I answer the question “What happens if an Employee does not give sufficient notice”.

Employers deducting notice of termination from Employees who do not give sufficient notice is common practice and happens very often, however…

“Just because something is common practice does not mean it is good practice or that it is lawful and allowed”. – Carmen Fourie, Employment RelationsTweet

There will also often be a clause in the contract that says some version of “If an Employee does not give notice of termination as per the Basic Conditions of Employment / as per the contract of employment, the Employer has the right to deduct the amount of notice from the Employee’s final payment”. However…

“Just because something is in the contract of employment does not mean it is allowed” – Carmen Fourie, Employment RelationsTweet

Notice of termination is covered in Chapter 5 (Section 37 & 38) of the Basic Conditions of Employment Act. The content of those clauses are covered in the video on Notice of Termination and are not repeated in today’s blog / video. To answer today’s question, we turn to Chapter 4 Section 34 of the Basic Conditions of Employment – Deductions and other acts concerning remuneration.

If your preferred method of getting information is through watching and listening, you can watch the full video answering “Can Employers deduct notice of termination from Employees who do not give sufficient notice?” HERE.

Let’s unpack the requirements of Section 34 now, to answer the above question.

Section 34(1) An employer may not make any deductions from an employee’s remuneration unless –

(a) subject to subsection (2), the employee in writing agrees to the deduction in respect of a debt specified in the agreement; or

(b) the deduction is required or permitted in terms of a law, collective agreement, court order or arbitration award.

We’ll unpack subsection 2 in a moment. But essentially what the above is saying is that a deduction can only be made if there is an agreement about the specific debt (subject to Subsection 2) or the deduction is required or allowed in terms of a law, collective agreement, court order or arbitration award. Examples of deductions that are allowed or required in terms of a law, collective agreement, court order or arbitration award include union subscriptions if it is required by a collective agreement, PAYE, UIF and a garnishee order (this is not an exhaustive list). Deductions of notice of termination do not fall under those and therefore to answer our question we look to the requirements of Section 34(1)(a) and subsection 2.

Section 34 (2) A deduction in terms of subsection (1) (a) may be made to reimburse an employer for loss or damage only if –

There are four “ifs”. Meaning a deduction is only allowed if it meets the four requirements detailed below in addition to the requirement of having a written agreement in place. Often the contract clause referred to above is stated as the written agreement. But then the important question is, does the deduction of notice of termination meet the following requirements:

34(2)(a) the loss or damage occurred in the course of the employment and was due to the fault of the employee;

(b) the employer has followed a fair procedure and has given the employee a reasonable opportunity to show why the deductions should not be made;

(c) the total amount of the debt does not exceed the actual amount of the loss or damage; and

(d) the total deductions from the employee’s remuneration in terms of this subsection do not exceed one-quarter of the employee’s remuneration in money.

Testing the deduction of notice against the four requirements above. I would say that it can meet the requirements of a & b, but I have my doubts about c & d. To prove that the deduction does not exceed the actual amount of loss or damage, the actual amount of loss and damage needs to be quantified and this is extremely difficult to do in most cases. The loss or damage is not purely the employee’s remuneration for the notice period. The loss or damage would be things like loss in sales, disruptions to operations, loss of client’s and other similar losses. As you can imagine these are difficult to quantify and pinpoint that it is as a result of the employee not working out their notice period. In my nearly 6 years of working in this field I have not had a situation where an Employer could accurately quantify the loss / damage. That doesn’t mean it isn’t possible, I just have not come across it. Furthermore, if it can be quantified, what is the likelihood that it will amount to the notice pay that is deducted?

The final requirement could possibly be met if the notice payment is under 25% of the total paid to the employee. But for a deduction to be fair, it needs to meet all four the requirements. In my opinion, deducting notice does not meet the requirements for a fair deduction and I therefore recommend that employers do not deduct the notice pay from employee’s final payment.

What then can an Employer do if an Employee does not work out their notice period?

An Employer can choose to take legal action. This, however, is a lengthy and costly procedure. But the possibility of it happening may be sufficient to deter employees from not giving sufficient notice. An Employer can also disclose that an Employee did not give sufficient notice, which may impact on an Employee’s employability.

I recognise that times Employees have requirements that make it difficult to work out their notice. In the video on Notice of Termination I discuss my recommendations for dealing with this.

This video discusses deducting notice pay, therefore just a reminder that notice does not need to be paid by the Employer if the Employee resigned and chose not to work out their notice. If it was the choice of the Employer, the Employer would need to pay out notice.

For weekly Employment Relations content subscribe to my Youtube Channel or follow any of the social media accounts: Facebook | Twitter | LinkedIn

If you find these posts helpful, please help us by sharing them on social media or commenting on social media.

Carmen Fourie, Employment Relations Director & Employment Relations Practitioner

Sick Leave Contract Clause

If you are looking for how to include sick leave in your contracts of employment and ensure compliance with the Basic Conditions of Employment Act – You can use our template and download it HERE.

This document contains a complete sick leave clause that details the Employee’s entitlement to sick leave during the first 6 months of employment and thereafter. This clause takes into account variations in the number of days an employee ordinarily works and details the requirements for when an employee is required to produce a medical certificate to be entitled to paid leave leave. There is an additional sub-clause clearly indicating that Employers can verify medical certificates or obtain information pertaining to the medical certificate. The document is a 1 page Word document. This clause should not be used alone and should be inserted into the contract of employment. This clause can be supplemented by the sick leave policy available for download.

Sick Leave Policy Template

You can download our Sick Leave Policy Template HERE.

This policy is used to clearly set out the requirements for a medical certificate to be accepted. It provides a list of what will be accepted and what will not be accepted, including reference to clinic notes. Furthermore, the sick leave policy includes information on dishonest conducted related to medical certificates (altered medical certificates and medical certificates issued from unregistered practitioners). This policy is a 1 page word document.

Overtime Agreement Template

Overtime can only be worked by agreement. You can download our Overtime Agreement Template HERE.

This agreement is used to implement overtime in accordance with the requirements of the Basic Conditions of Employment. It includes all provisions of Section 10 of the BCEA, as well as other important restrictions. Furthermore, this agreement includes all variations allowed for remuneration of overtime and the additional information that accompanies the use of different variations. This document is just over 2 pages and is in Word format to be easily edited. It can be used as a stand alone agreement or inserted into contract of employment.

Section 189(3) Retrenchment Letter

You can download a template for a Section 189(3) Retrenchment Letter HERE. To get the most from the template and start your retrenchment off on the right foot – watch our video on How to draft a Section 189(3) retrenchment letter on our Youtube Channel.

Who represents Employees during a Retrenchment Consultation?

When an Employer contemplates dismissing one or more Employees for reasons based on the Employer’s operational requirements (i.e. retrenchment), the Employer must consult with…..

Firstly – Any person whom the employer is required to consult with in terms of a collective agreement (this is usually in the case where an Employer belongs to a bargaining council and the bargaining council agreement regulates who should be consulted).

If the above is not applicable:

Secondly – A workplace forum, if there is a workplace forum in the organisation where the proposed dismissals are taking place (a workplace forum is formally established through the requirements detailed in the Labour Relation Act).

If the above is not applicable:

Thirdly – Any registered trade union whose members are likely to be affected by the proposed dismissals.

If the above is not applicable:

Fourth – Any representative nominated by the Employee.

PLEASE NOTE: Unlike disciplinary matters or incapacity matters, an Employee may be represented by someone outside of the organisation during a retrenchment consultation. It is not limited to a trade union representative or a fellow employee.

The above information is paraphrasing of Section 189(1) of the Labour Relations Act.

Is your Retrenchment a Section 189 or Section 189A (Large Scale Retrenchment)

It is important for both Employers and Employees to know whether their retrenchment falls under Section 189 or Section 189A. Section 189A is commonly referred to as a large scale retrenchment. This article will help you determine whether yours is a Section 189 or Section 189A.

A retrenchment is considered a Section 189A, when:

Firstly – the Employer employs more than 50 employees and

if the Employer is contemplating dismissing (for reasons related to operational requirements):

  • at least 10 employees if the Employer employs up to 200 employees;
  • at least 20 employees if the Employer employs more than 200, but not more than 300 employees;
  • at least 30 employees if the Employer employs more than 300, but not more than 400 employees;
  • at least 40 employees if the Employer employs more than 400, but nor more than 500 employees; or
  • at least 50 employees if the Employer employs more than 500 employees.

Another important factor – the total number of employees dismissed for operational requirements by the Employer in the 12 months prior to issuing the Section 189(3) are counted in the numbers above.

For the requirements of both a Section 189 and Section 189A see the Labour Relations Act for more details.

Can Managers force Employees to work Overtime ? | Can Employees refuse to work Overtime?

In this video I answer the often asked question: Can Employers force Employees to work Overtime / Can Employees refuse to work overtime. I unpack some relevant sections of Section 10 of the Basic Conditions of Employment Act, and provide some practical examples what would would (in my opinion) constitute as reasonable refusals to work overtime.

Overtime Agreement: HERE

How to Calculate the Earnings Threshold: HERE