Our latest ramblings.
Enjoy! We definitely have some important things to say
Our latest ramblings.
Enjoy! We definitely have some important things to say
If you have recently received a compliance order from the National Bargaining Council for the Road Freight and Logistics Industry then you need to understand a few basic things:
Let’s look at the following 2 options:
If you do nothing, the agent who issued the compliance order will issue a certificate of outcome stating that the issue has not been resolved. This will get the wheels in motion for the matter to be referred to arbitration.
At arbitration, the arbitrator will then listen to the case and if you attend the arbitration, you can state your case. The Main Agreement stands, and if you have indeed not complied with any of the clauses, the arbitrator will take the compliance order amounts and issue an award against your company. This however is not the end of it.
The arbitrator now also has the authority to award interest and penalties and costs against you. Penalty costs can be up to 200% of the original capital amount owed. This is not funny at all. This is where you are going to wish you paid the compliance order when it landed on your desk.
Disputing the matter
If you choose to dispute the matter, there is really not much fighting to do. You can either prove that you are not liable to pay the funds / monies on the compliance order, or you can prove that you have already paid the funds / monies.
Of course proving that you have paid something means that you present a proper proof of payment.
If you need some guidance on this, then please contact us at Mediant Solutions
or if you want to DIY (do it yourself), then sign up for Module 3 of our online training here.
012 993 4509
Here is a quick overview of WHO WE ARE 🙂
We are, first of all a PAYROLL BUREAU
That means we process payrolls (any type) on behalf of companies. Our clients are mostly small to medium sized companies who function under the jurisdiction of a Bargaining Council.
That brings us to our expertise.
We really understand Bargaining Councils.
That means if we do your payroll, we can make sure your “stuff” is compliant.
Many companies seem to think that we are the Bargaining Council. Please no.
We understand Bargaining Councils because we have been in this industry for many years now.
If you do not want us to do your payroll for you, we can still assist you by training your staff.
And if you want to do the training in the comfort of your own office, home (or car), then do our online training :-).
Many of you might know this by now, but we have embarked on an adventure of EPIC proportions to travel through our beautiful country South Africa on a 12-month long #Roadtrip!
We are doing this as a company on the one hand to market our services and make our company famous 🙂 and on the other hand as a family (see our youtube channel here) to see our country and awaken the explorers in us and in our children.
Throughout the months May to July 2018, we will be in Kwazulu Natal, where we are working and playing and making ourselves available to companies who might be in need of some of our services.
If you are so lucky to find yourself in this pretty part of SA (and you have some challenges that we can assist with), please do contact us and we can set up a meeting to assist you.
In South Africa, where labour laws are quite a handful and almost everybody needs a labour consultant to try and ensure they do things right, a contract of employment is something that you do not want to drop the ball with.
Here are some things we think your contract should have:
(Should you be in the Road Freight and Logistics Industry – we have done all the work for you already!
Click here to access our online shop with all the different types of contracts and polices you could need.)
Perhaps you have taken over a payroll from someone, or when you were setting up your payroll, you were not aware of the specific industry rules.
Categorising employees correctly is VITAL to running a smooth payroll. If you do not do this right, then any or all of the following could happen:
So how should you approach an audit to establish whether your employees are classified correctly?
First, you should insure that you have a set of rules (recent) for the industry that you work in. Many Bargaining Councils have detailed definitions of employees and this is very handy. Then you need to look at your own in-house documents. Are there job descriptions and contracts of employment? What is being printed as a job title on the pay slips?
Set up an excel sheet with the above information in each column and do a comparison. Remember to discuss this with line managers, or operations managers in order to ensure that your understanding of a position is correct.
And lastly, if something has to change, the employee needs to be informed of this. If the change affects the employee’s pay package then consultations need to be held and you may need assistance from a labour relations consultant.
Although many Tax Practitioners pass Bargaining Council issues onto their HR department, it is important to realise the effects these institutions have on Payrolls.
There are currently 47 registered Bargaining Councils in South Africa. Of these, 3 are Statutory Bargaining Councils, 6 are Local Government Bargaining Councils and 38 are Private Sector Bargaining Councils.
The largest Private Sector Bargaining Councils are the National Bargaining Council for the Road Freight and Logistics Industry (NBCRFLI), The Metal and Engineering Industries Bargaining Council (MEIBC), and the Motor Industry Bargaining Council (MIBCO).
Here are a few things you should know about these institutions:
Bargaining Councils are registered for specific industries, but if (as an example) you transport goods for gain and you need to register with the NBCRFLI (National Bargaining Council for the Road Freight and Logistics Industry) it does not mean that every single person on your payroll would be affected by this.
What you need to look for are the “scheduled employees” for the Bargaining Council that the company falls under. These are the categories of employees that would be affected on your payroll as well.
Most payroll systems would then have a sub-screen of sorts where such employees can be flagged as registered under that specific Bargaining Council. It is important to then also ensure that the category codes used for these employees are the same as what the Bargaining Council uses to ensure that your information on the payroll is the same as what will be captured at the Bargaining Council.
The scheduled employees are usually your blue-collar employees, and they would normally also be listed on the Bargaining Council’s annual minimum wage rate table.
If you need a short course that goes into detail about this, go to our Udemy course “The Jurisdiction of the NBCRFLI” for an in-depth look at this.
As with all statutory bodies, Bargaining Councils demand certain funds and levies to be paid to them. These are deducted and contributed on your payroll and submitted to them using a prescribed form.
At the NBCRFLI, companies pay over Council levies, Wellness Fund contributions, Sick Fund contributions, Holiday Pay Bonus Fund contributions, Annual Leave Pay Fund contributions and Provident Fund contributions.
Some Bargaining Councils (not all) even have online-based portals (much like SARS E-filing) where returns are created and submitted. And much like SARS E-filing, these sites often have little glitches that need to be addressed before one can do a proper submission.
All Payroll Managers should be aware that your payroll data needs to balance with your submission. This is especially true when data cannot be submitted directly from your payroll system to the Bargaining Council. This could be a real challenge, as Payroll systems often export Bargaining Council return data using information on sub-screens, which means that if employees are not flagged as Bargaining Council members, then even though the deductions were made on the payroll, they will not pull through onto your export. This creates quite a problem for companies when they cannot balance back to the original data on the payroll system, but with a little more attention to detail this can be prevented completely.
Compliance Orders may be issued without warning to companies who do not comply with a Bargaining Council’s Collective Agreement. These orders should not be ignored, but rather investigated and disputed, or paid on receipt. Please remember that this might also affect your payroll in the form of back pay, deductions, and classification of employees.
A company usually has 14 days to comply before the matter is referred to arbitration. At arbitration, the commissioner may award up to 200% penalties to a non-compliant company!
Non-compliance could include any of the following issues:
Compliance orders usually originate from a complaint lodged by an employee / or employees or it might even be submitted directly by a trade union who was made aware of issues by its members.
Some Bargaining Councils have Holiday Bonus, Sick Leave and Annual Leave Funds. The principle behind these funds is that companies contribute to them on a monthly basis for each scheduled employee. At the end of the year, the Bargaining Council can then pay out these funds to the employees as a holiday bonus. In the case of annual leave, the Bargaining Council pays it out on application for when the employee goes on leave.
It is important to note, that the Bargaining Council – although it is the one paying out the funds – does not become the employer and is not liable to deduct PAYE from the payout. This remains the obligation of the company, and on the payroll it becomes a taxable company contribution.
The other way in ensuring the money paid to these funds are taxed, is to enter it as an earning as well as a deduction in the period that the Bargaining Council pays out the money to the employees.
One of the main functions of a Bargaining Council is to negotiate wages. When an agreement is reached between the parties, it is first submitted to the Minister of Labour for promulgation. It is important to note that once the parties have signed the agreement, it is not enforceable on companies who are not members of the parties who signed it. It only becomes law to them once the Minister promulgates the agreement and it is gazetted.
Another important factor to remember is that usually the “across the board” (ATB) increases apply to everyone who were employed before the date of promulgation. Those employed after this date will be paid at the new minimum wage rates. Should the ATB increase be insufficient to get an employee’s rate up to the minimum rate for his / her category, then such employee will be paid according to the minimum wage. The increases are normally structured in such a way that those employees with longer service periods would be on higher rates due to the ATB increases awarded to them.
Navigating the sometimes stormy seas of payroll processing in a Bargaining Council environment can be a challenge and it is important to know whether the company falls under the jurisdiction of a Bargaining Council, and what that Bargaining Council’s Collective Agreement states. It therefore makes sense to outsource such a function to someone with expertise on the subject, which is what makes Mediant Solutions a payroll bureau with a difference. You can contact us any time through our contact page.