Mar 31,2012 / News / Legal Brief

Broadened application of the provisions in the Basic Conditions of Employment Act could have major consequences for business – particularly in sectors such as agriculture.

This is the view of Jacques van Wyk, director and employment law specialist at Werksmans Attorneys. He says, “The recent announcement by the Free State Labour Department that farms in the province would be inspected for labour law compliance, comes on the back of changes to the earnings threshold under the Basic Conditions of Employment Act that extend the applicability of the BCEA and will entitled more employees to benefits under that Act”.

The announcement, which came shortly before the amendment to the Basic Conditions of Employment Act earnings threshold became effective on 1 July, should be seen in a broader context, says van Wyk.

“By announcing that farmers, who have traditionally been major employers in the Free State, are to be assessed in terms of ‘wages, hours of employment, leave and other legislation such as termination of employment, remuneration, deductions and written particulars of employment,’ the authorities are giving notice that the Act will be strictly applied to all those who now qualify for protection under it.”

The cost implications of this action could be substantial for businesses across various sectors.

“Non-compliance with the broadened scope of application of the Basic Conditions of Employment Act will be enforced through the levying of penalties and even court action. Employers found wanting could find themselves bearing major additional costs,” says van Wyk.

“Besides coping with tough trading conditions caused by the present recessionary climate and spiralling input costs, employers now face increased obligations in respect of leave, overtime pay, enhanced pay for work on Sundays and Public Holidays. This will undoubtedly impact their bottom lines” continues van Wyk. The effects are likely to be seen in increased administration and labour costs as a result of the increased number of people to whom the rate for overtime pay and other benefits applies.

The position of employees seeking to enforce their rights through the labour courts is also strengthened.

“It is essential that employers engage their employees regarding the changes that impact them and ensure that all records are maintained and available for inspection by the relevant authorities,” concludes van Wyk.