Employees who earn above the earnings threshold, which is determined by the Minister of Employment and Labour under the Basic Conditions of Employment Act (BCEA), do not enjoy the same protections as employees who earn below the set threshold.
An employee’s earnings are calculated as the regular remuneration (gross pay) before deductions such as income tax, pension, and medical aid. Allowances and contributions made by the employer, such as transport and cell phone allowances, are excluded. The current earnings threshold, effective from April 2024, is R254,371.67 per year or R21,119.64 per month. If an employee earns more than this amount, they are not afforded certain provisions of the BCEA.
These provisions include:
- Ordinary hours of work (Section 9)
- Overtime (Section 10)
- Compressed working weeks (Section 11)
- Averaging of working hours (Section 12)
- Meal intervals (Section 14)
- Daily and weekly rest periods (Section 15)
- Sunday pay (Section 16)
- Night work (Section 17(2))
- Public holiday pay (Section 18(3))
Employees who earn below the threshold can demand the above as rights, whereas those who earn above the threshold must negotiate these as benefits.
If an employee earning above the threshold receives some or all of the above protections per their employment contract, these favourable terms and conditions will remain valid and enforceable. The provisions cannot be removed or limited solely due to the employee’s higher earnings. For instance, if an employee earning above the threshold receives overtime pay, this benefit cannot be removed based on their earnings.
There are additional implications of the earnings threshold regarding referrals to the CCMA. An employee who wishes to refer a matter to the CCMA for monetary claims (Section 73A) may only refer the matter for conciliation. If the dispute remains unresolved during conciliation, employees who earn above the threshold do not have the option to refer the matter to arbitration and must take the dispute to the Labour Court for adjudication.
Similarly, in unfair discrimination disputes (Section 10(6)(aA) of the Employment Equity Act), an employee earning above the threshold can refer the matter for conciliation at the CCMA. If unresolved, the employee must proceed to the Labour Court for adjudication, as they do not have the option for CCMA arbitration.
According to Section 198B of the Labour Relations Act, related to fixed-term contracts, an employee earning below the threshold who is employed on a fixed-term contract for over three months may be deemed a permanent employee if there is no justifiable reason for the contract’s limited duration. Employees earning above the threshold are not afforded the same protection and will not be deemed permanent under similar circumstances.
Employers are encouraged to consider the earnings threshold and ensure compliance with relevant provisions that afford, or limit employees’ rights based on earnings.
Contact Invictus for tailored guidance on how the earnings threshold may impact your business. Reach us at 086 173 7263 or email admin@invictusgroup.co.za. Let us help you ensure your business remains compliant and well-informed.
