Update on the BCEA Changes

Dear Members

 As most of you know the start of 2019 has shown a significant increase in the change to Labour Legislation.  In this snippet we introduce you to the changes to the Basic Conditions of Employment Act read with the National Minimum Wage Act. 

As a brief introduction the Basic Conditions of Employment Amendment Act (BCEAA) introduced the national minimum wage (NMW), and as a result certain provisions of the Basic Conditions of Employment Act, No 75 of 1997 (BCEA) have been affected. Therefore, the BCEAA, inter alia, incorporates certain provisions of the NMWA.

An Employer’s failure to pay in accordance with the provisions of the NMWA (now dealt with in the BCEAA) will be subject to a fine. The fine is calculated per employee as the greater amount of twice the value of the underpayment or twice the employee’s monthly wage. The National Minimum Wage Commission has replaced the Employment Conditions Commission. Over and above these changes the Basic Conditions of Employment Act now provides that an employee who is not paid in accordance with the NMWA / BCEAA may now institute a claim in the Commission for Conciliation, Mediation and Arbitration (CCMA) for such failure. (Please refer to further comments below regarding this subject). 


The BCEAA includes section 9A which deals with “daily wage payment”.  This section provides that an employee (an employee now includes an employee in terms of the NMWA definition) who works for less than four hours on any day must be paid for four hours of work (regardless of whether the four hours was worked or not).  This section specifically deals with employees earning below the national earnings threshold.  (The current earnings threshold as per Section 6(3) of the BCEA is R205,433.30). 


The BCEA further provides that if any sectoral determination at the date of the promulgation of the NMWA, prescribes wages that are higher than the national minimum wage, the wages in that sectoral determination and the remuneration and associated benefits based on those wages must be increased proportionally to any adjustment of the national minimum wage.


The BCEA, as stated above, provides that any employee may now refer a dispute to the CCMA for the failure of an Employer to pay any amount referred to in the BCEA.  The BCEA also amended the functions of a labour inspector which now provides that “any payment” refers to payments dealt with under the BCEA, the NMWA and the Unemployment Insurance Act (UIA) and/or the Unemployment Insurance Contributions Act (UICA).  The rights of an inspector have been amended to such an extent where the inspector may appear on behalf of the Director-General in any proceedings in the CCMA or Labour Court concerning a failure to comply with the legislation referred to above.


The general “written undertaking” and “compliance order” by an employer to comply with any undertaking regarding provisions of the BCEA (Sections 68 and 69) has been amended to also include non-compliance with the NMWA, the UIA and the UICA. Any failure by an employer to comply with any undertaking can now be referred to the CCMA and made an arbitration award. What this means is that, in the event of any further non-compliance with such undertaking, a Sheriff may be appointed to attach.  


As a result of the above provisions a new Section 73A has now been added to the BCEA which deals with “Claims for failure to pay an amount”.  This section sets out the provisions of any employee or worker (as defined in the NMWA) who may refer a dispute to the CCMA concerning the employer’s failure to pay any amount owing to that employee or worker in terms of the Act.  “Any amount” may include, earnings, wages, leave pay etc.  The process has been simplified to the extent that the matter will be dealt with by the CCMA as a Con/Arb (Conciliation and Arbitration) and neither party may object to the process of Con/Arb. The appointed Commissioner must commence arbitration of the dispute immediately after certifying that the matter was unresolved.  Where an employee proves any amount owed to the employee and the employer fails to substantiate this amount an award will be issued and the employer will be bound by the award. 


Section 73A is specifically for employees earning below the prescribed threshold (R205,433.30), and deals with any amounts owing in terms of the BCEA, the NMWA, a contract of employment, a sectoral determination or a collective agreement.  


If an employee refers an unfair dismissal dispute the employee may now, in terms of Section 74 of the BCEA (which deals with the consolidation of proceedings), request that the arbitrator (CCMA) deal with the failure of the employer to pay any amount which is due in the same process as the unfair dismissal dispute (even if the employee earns above the national minimum wage). 


Furthermore, the payment of interest by an employer on any amount due and payable to an employee, as provided for in section 75 of the BCEA, as well as proof of compliance detailed in section 76 of the BCEA, is incorporated to reference the NMWA.


An employer may now be liable to fines in terms of section 76A if the employer paid an employee less than the national minimum wage. The amount of the fine will be the amount that is the greater of twice the value of the underpayment, or twice the employee\'s monthly wage. In cases where an employer has failed for a second time (or thereafter) to pay the employee the national minimum wage, the employer will be liable to a fine of three times the value of the underpayment or three times the employee’s monthly wage. Not only does the CCMA now enjoy jurisdiction to deal with these matters, but the matters may be referred to the Labour Court, the High Court, the Magistrates Court or the small claims court.  All employers are therefore advised to ensure that all employees are paid in accordance with the NWMA and further that any monies due to employees are paid out on termination. 


To schedule a Labour Legislation update please feel free to contact us. 



Tanya Barnard 

Kusile Consulting Services 

011 609 2630


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