Frequently asked questions about payment

Payment of remuneration:
An employer is required to pay salary within 7 days of the end of the period for which remuneration is due. If a specific pay date is specified in any employment contract or other agreement, the employer is required to follow the terms of the agreement. On each payday, a company is required to furnish an employee with a correct payslip.

Deductions from remuneration:
Except for statutory deductions such as PAYE, UIF, any deduction mandated by Court Order, or deductions for retirement fund contributions or medical aid contributions, an employer may not make any deductions from an employee’s remuneration without the employee’s express authorization.

Overpayments of remuneration to employee:
If an employer unintentionally or incorrectly estimates an employee’s remuneration, resulting in an overpayment to the employee, the employer is entitled to reclaim such overpayment from the employee.

Termination of Employment: (Notice periods)
•  The statutory notice period is one week during the first six months of employment.
•  It is 2 weeks for the second six months of employment, and then it is 4 weeks.
The employer may vary these durations in an employment contract or agreement, provided that the same notice period agreed upon also applies to the employer. For example, the company may compel the employee to resign with one calendar month’s notice. If the employer agrees to fire the employee with notice, the company will also provide the employee one calendar month’s notice of dismissal.

Then the stipulation in the employment contract requiring one calendar month’s notice is legal. If the employer does not agree, the clause in the employment contract for one calendar month notice is void, and the notice period specified in the Act will apply.

When can I give notice of resignation?
•  The Act requires that notice of termination of an employment contract be made in writing. As a result, when an employee resigns, he must do so in writing to his employer.
•  The Act also states that an employer may not give notice of termination of a contract of employment during any period of leave to which the employee is entitled, which means that an employer may not give an employee notice of dismissal or termination of contract while the employee is on annual leave, maternity leave, or family responsibility leave.
•  There is no provision in the Act that prevents an employee from providing his employer notice of termination while on any leave to which he is entitled.
•  While the employee is on sick leave, the employer may offer the employee notice of termination or dismissal.
•  The employer may not require an employee to take annual leave during a period of notice, and the employee may not take annual leave during a period of notice.
•  Under certain conditions, an employer may cancel an employment contract with no notice.
•  There is no provision in the BCEA that allows an employee to terminate an employment contract by resigning with no notice. The only exception to this is if the employer has created an unpleasant working environment and the employee has decided to resign and leave the premises immediately, registering a constructive dismissal case with the CCMA.
•  In general, however, providing the employer 24 hours notice is illegal, and if the employee does so, the employer has the right to sue the employee for breach of contract.

Payment instead of notice:
If an employee gives notice of resignation, or if the employer gives notice of contract termination or dismissal, and the employee is required to leave the premises immediately, the company is still required to pay the employee for the entire period of notice given by the employee.

If an employee gives notice of resignation but then wishes to leave the job immediately, the employer has the discretion to approve that request but is not required to pay the employee for the time of notice given. The employer may also decline such a request from the employee.

What payments can I expect when I resign?
In general, following resignation or dismissal, an employee is entitled to notice pay, salary up to the last day worked, and any owed leave money. Bonuses are typically paid pro rata, however this depends on the employer’s bonus payment policy and any other bonus payment arrangements that may be included in an employment contract or collective agreement. Accrued retirement fund benefits will also become payable to the employee in accordance with the fund’s rules.

Retrenchment:
In terms of retrenchment, the minimum severance pay is one week’s wage for each year of service completed. Normally, severance settlements are arranged between the company and the employee. Sections 189 and 189A of the Labour Relations Act include the full legislative retrenchment procedures.

Salary Increases:
Salary increases are not restricted by labor regulations, save as specified for under any Main agreement or collective agreement, which normally includes provisions for yearly wage or salary negotiations. Salary increases are a matter of mutual interest between employer and employee in the absence of such an agreement. The employer is under no duty to provide annual raises.

Salary decreases:
In general, an employer’s wage may not be extensively considered. However, this is subject to a variety of variables. For example, the general rule is that an employer may not make unilateral changes to work terms and conditions (including remuneration) unless the employee is first consulted and approval is gained.

However, if an employee has been properly demoted for any reason, the salary for the lower job will obviously apply. The employer is under no obligation to keep the employee on a pay appropriate for a higher-level position than the employee currently holds. This can occur when a demotion consequence is used as an alternative to dismissal in a disciplinary proceeding. A mutual agreement demotion may also occur in a case of incapacity – poor work performance – where it has been determined that an employee is unable to effectively perform in a given role, but is capable of performing at a lower level.
Instead of being fired, the employee can accept the demotion, but the lesser wage for the lower post will apply. The employee has no legal right to demand that the salary for the higher or previously filled post be applied.

Kind Regards

CPI Payroll Support Team

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