Lesson 1, Topic 1
In Progress

2.5. Employment conditions are compiled and interpreted for the venture

ryanrori January 12, 2021

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What employers must do

If the owner of the business pays someone to work for the business, then the owner becomes an employer, or boss, and the person working for him or her is an employee, or worker.

The employer and the employee will agree about what the employee must do, how many hours the employee must work, how much the employee will be paid, and so on. These are called the conditions of employment.

Conditions of employment

Because there are many people looking for jobs and too few jobs, employers are more powerful than employees – they can pay little and make employees agree to work long hours. The law tries to make the agreement fairer, by saying that there are some things the employer must do and some things she or he is not allowed to do. The most important aspects this section will look at are:

Sectoral determinations

Basic Conditions of Employment Act

Labour Relations Act

Sectoral determinations

The Wage Act says the Minister of Labour can appoint a Wage Board. The Basic Conditions of Employment Act says the Minister can appoint an Employment Conditions Commission. The role of the Wage Board and Employment Conditions Commission is the same: to investigate the wages and conditions of employment in a particular industry or sector.

The government wants to encourage businesses to grow and does not want to cripple a business because it has to pay very high wages. When the Board or Commission does its investigations, it looks at things like:

Whether employers will be able to run a successful business if they have to pay a certain wage to their employees.

The cost of living in the area where the businesses are run.

How much it costs employers to feed or give the employee a place to stay.

The Wage Board or Employment Conditions Commission then recommends a minimum wage and conditions of work (such as maximum number of hours) to the Minister of Labour. If the Minister approves it, it is published in the government gazette as a wage determination or sectoral determination. All employers in that industry or sector have to obey it.

An employer will have to pay a fine to the Department of Labour if he or she does not do what the sectoral determination says employers must do.

If an employer feels that the business will be crippled if it pays the minimum wages or obeys the other conditions of employment published in the government gazette, the employer can apply to the Department of Labour to be exempt from (not have to obey) the wage or sectoral determination. A group of employers who work in the same type of business in the same area can apply together.

If there is no wage determination or sectoral determination, then the Basic Conditions of Employment Act applies.


The Wage Act also says the employers must keep the following two registers:

Daily attendance register, where the employer must mark whether the employees have come to work or not.

Wage register, where the employer must write down when wages are paid to each employee and how much was paid.

The Basic Conditions of Employment Act

An employer will have to pay a fine to the Department of Labour if she or he does not do what the Basic Conditions of Employment Act says employers must do. The employer will first be sent a Compliance Order which is an instruction telling the employer to comply with the terms and conditions in the BCEA. If the employer defies the Compliance Order after it has been reviewed by the Director-General of the Department of Labour, he/she could be sent to prison for contempt of court.

The Labour Relations Act

When the owner of the business has employed someone to work for the business, she or he cannot dismiss the employee just because the owner does not want the employee to work for her or him anymore.

If an employer wants to dismiss an employee, it must be fair. Fairness is decided in two ways:

Substantive fairness

The employer must have a proper and fair reason to dismiss the employee. The Labour Relations Act says that an employer is allowed to dismiss an employee for 4 reasons:

Misconduct (the employee has done something seriously wrong)

Unacceptable performance (the employee does not do the job properly)

Incapacity (the employee cannot do the job properly due to illness or disability)

Retrenchment (the employer is cutting down on staff)

‘Substantive fairness’ weighs up whether the punishment fits the crime. Specific focus is on whether the rule that was broken was valid and necessary, whether the employee knew the rule, whether the employer has been consistent in applying the rule and finally what mitigating factors apply.

Procedural fairness

This can mean that:

The employer must warn the employee that his or her work is bad or behaviour is not good, and that next time he or she will be fired.

The employee must understand the charges against him/her and be given enough time to prepare a defence against the charges.

The employer must give the employee a chance to give his or her side of the story before deciding to dismiss him or her.

The employee must be given a chance to be represented by a fellow-employee and given an opportunity to cross-examine evidence presented against him/her.


If the employee has done something wrong that is bad for the business, like speaking badly to customers, or that is unacceptable conduct in the workplace, the employer must:

Give the employee informal advice if it is a small mistake.

Try to help the employee correct and solve the problem. (corrective discipline)

Take formal disciplinary action, that can get harsher as the employee repeats the misconduct. (progressive discipline)

Give the employee warnings.

The final warning should be in writing. (you can go straight to a final warning if it is very serious misconduct, like assault or theft).

Keep a record of all disciplinary action taken.

Hold a formal investigation, where the employee must get a chance to respond to the charges and can be represented by a co-worker or shop steward.

Give the employee notice or notice pay unless the misconduct is a serious breach of contract, like theft, assault and so on.

Where normal termination of employment takes place i.e. if an employee is paid at the end of every week, then the employer must give:

For the first six months of employment, one week’s notice


pay for one week if the employer wants the employee to stop working immediately.

After six months of service, and up to one year, the employer must give the employee two weeks notice. Once the employee has worked for more than one year, the employer must give him or her 4 weeks notice.

Incapacity (unacceptable performance)

Where the employee is unable to meet the performance standards due to no fault on his or her part.

If the employer feels that the employee is not doing his or her job properly, before the employer is allowed to dismiss the employee, the employer must be sure that:

The employee was told what was expected from him or her in the work, and was given proper training and guidance.

The employee’s work was properly evaluated against a fair standard known to him or her.

The employee was given a fair chance to improve and was evaluated over a reasonable time.

The employee is so bad at the job, that it is very bad for the business and so it would be fair to dismiss him or her

The employee could not be transferred to an alternative position, even if it is a demotion.

The employer must:

Hear the employee’s side of the story and consider alternative positions.

Consider accommodating the employee in an alternative position if this is practical.

Give the employee notice or notice pay.

Incapacity (disability or ill health)

If the employee is off sick for a long time and the employer cannot manage without someone doing that job, then the employer can dismiss the employee and hire a new person. If an employee gets permanently sick or disabled, then the employer can dismiss the person if they cannot do their job any more, the job cannot be changed so that they can do it, and there is not another job for him or her.

The employer must:

Hear the employee’s side of the story.

Give the employee notice or notice pay.

Remember that the employee can claim UIF for 8 months.


It is a good idea for an employer to try out new employees before giving them the job. This is called probation. When the employer and employee agree on the conditions of employment, the employer must tell the employee that they will first try out the relationship for 1, 2 or 3 months. The Labour Relations Act says the probation period must be reasonable for the kind of job the worker will do.

It is important to write a letter to the employee saying:

How long the employee will be on probation for.

What the notice period will be while on probation.

During the first six months it must be at least 1 week.

How much the employer will pay every week or month.

Exactly what the employee’s job is.

The name, address, telephone number of the company and all details of the job.

The employer and the employee must each have a copy. The employer and the employee must both sign the letter.


The law says that it is fair for an employer to dismiss (retrench) an employee if the employer:

Needs to cut down on staff for economic reasons.

Example: Zoliswa makes clothes and employs 3 seamstresses. A PEP store opens down the road and many of Zoliswa’s customers now buy their clothes at PEP stores. If Zoliswa carries on with 3 seamstresses, her business will lose too much money. So she decides to dismiss one of the seamstresses. The law says that she should dismiss the employee who was employed last (the last in first out rule), unless specific ‘skills’ are necessary for the job.

Is changing the way the business operates, and the employee does not have the right skills.

Example: Zoliswa decides to change her business. Instead of sewing clothes, the business will cut out patterns for a bigger business. None of the employees know how to cut patterns and it will take too long to teach them. Zoliswa is allowed to retrench the employees and employ people who know how to cut out patterns.

Upgrades technology.

Example: Zoliswa buys 2 electric machines. Now 2 people can do the work of 3. She is allowed to dismiss the employee who she employed last.

The employer must follow certain steps before retrenching employees.

If the employer retrenches an employee, the employer must pay the employee at least one week’s wages for every year the employee has worked for the business. This is called severance pay.

The employer does not have to pay severance pay, if the employer offers the employee another job that is nearly the same and the employee refuses to take it. If the employee has a good reason for not taking the new job, the employer must pay the severance pay.

There are special circumstances when an employer can apply to the Department of Labour not to pay retrenchment money to employees.

If the employer sells the business as a going concern, the new owner must employ the old owner’s employees and their service must come across to the new owner.