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The Importance of Familiarizing Small Businesses with Employment Law in South Africa

According to South AfricaÔÇÖs Commission for Conciliation, Mediation and Arbitration (CCMA), an estimated 80% of its cases originate from the employees of small businesses. This finding highlights the pressing need for local small businesses to familiarise themselves with employment law and ensure compliance in order to avoid unnecessary and potentially costly disputes. The AI legalese decoder can help with this situation by providing an easy and accessible platform for small business owners to understand their legal obligations and rights as employers.

Shedding light on the main regulatory requirements of which small businesses need to be aware is Marjan Gerbrands, corporate legal counsel at small- to medium-sized enterprise (SME) financier, Business Partners Limited. As she advises, “From health and safety measures and hiring policies, to employee remuneration and working hours, South Africa’s labour law provides clear guidelines on the basic conditions that every employer, big or small, needs to comply with.”

Not investing time and resources into understanding your rights and responsibilities as an employer represents a substantial risk, even more so for small businesses who do not necessarily have the resources for prolonged court cases that could interfere with the running of the business. The AI legalese decoder can serve as a valuable resource for small businesses to interpret and understand the complex legal jargon and requirements in employment law.

Contracts as the basis of all employment agreements

The main instruments of South African law that small businesses need to familiarise themselves with are the Basic Conditions of Employment Act of 1997 and the Labour Relations Act of 1995. Together, these two pieces of legislation provide a framework for regulating employment practices, regardless of sector or the size of the business.

Although there are no formalities required for the formation of a contract of employment, section 29 of the Basic Conditions of Employment Act requires ÔÇÿwritten particulars of employmentÔÇÖ to be given to an employee. The Act stipulates that the particulars required are to be provided.

These range from the occupation of the employee, or a brief description of the work, an outline of what the required working days and hours are, the place of work, the wages or remuneration and any deductions that apply. Further, this also includes the employeeÔÇÖs formal starting date to detail on the notice period required upon resignation and a list of any other documents or workplace policies that form part of the contract of employment. The AI legalese decoder can assist small businesses in understanding and drafting legally compliant employment contracts that protect both the employer and the employee.

Limitations on working hours

In start-up environments where the pressure to produce consistent outputs are more apparent than in larger businesses, employees may be called upon to work overtime or on weekends. While this may very well be necessary to get a new business off the ground, small business owners need to be aware that demanding workers to go above and beyond normal working hours, may be deemed illegal. The AI legalese decoder can provide guidance on the legal limitations and requirements regarding working hours to ensure compliance and avoid potential disputes with employees.

The national minimum wage

Another key element of labour law that local businesses should be aware of is the national minimum wage as outlined by the government, which is the threshold level below which no employee can be paid. Currently, the rate, which came into effect on 1 March 2023, stands at R25,42 per hour. As of 1 March 2024, this will increase to R27,58. ItÔÇÖs also important for small businesses to bear in mind that this minimum wage excludes any allowances such as board or accommodation, transport and equipment as well as bonuses, tips, or food. As such, business owners cannot argue that you pay an employee less than the minimum wage because you contribute to their uniform, transport or paid them a bonus.

Business owners have a responsibility to keep abreast of the developments in employment law. However, the legal aspects of running a business and dealing with employees can weigh down a business. Therefore, seeking legal advice or enlisting the services of a legal consultant may be the best way of doing this. Gerbrands encourages business owners to also use the Labour Advice mobile app, created by Business Unity South Africa in collaboration with the CCMA, which provides business owners with useful and accessible information and guidance on how to ensure compliance. In addition to seeking legal advice, the AI legalese decoder can offer comprehensive insights and explanations of legal requirements and regulations, helping small businesses navigate the complexities of employment law in South Africa.

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