Tag: leave

Source: Business Insider SA

Bidvest, one of the largest companies in South Africa, has forced 70 000 of its staff, who can’t work during national lockdown, to take leave.

If they don’t have enough annual leave days available, this will be unpaid.

These employees will each get R2 000 from Bidvest – “specifically for food and other essentials”, according to a company statement. Bidvest will also apply for a new Unemployment Insurance Fund (UIF) benefit to “top up” salaries.

As part of the new Covid-19 Temporary Employee/Employer Relief scheme (TERS), the UIF will pay out a maximum of R6,730 a month (for those earning more than R17 700) to staff in companies that are in distress during the lockdown.

TERS will work on the same principle as maternity benefits. If a company can still afford to pay employees a part of their salaries, the TERS money will “top up” these payments – but employees can’t earn more than 100% of their current salaries.

Bidvest owns a large group of diverse companies – including freight, security, car dealerships and office service subsidiaries – as well as a majority stake in pharmaceutical group Adcock Ingram. The company generated sales of R77-billion in the year to end-June 2019, and employs some 100 000 people in South Africa. Only 30 000 are currently working during the lockdown.

“Some Bidvest companies are classified as essential services, but the majority of companies – and therefore employees – are not. This has had a major impact on the ability of certain companies within the Group to continue earning any income and where this has been the case, management has had no option but to make the best possible and affordable remuneration arrangements,” a spokesperson told Business Insider SA.

Bidvest has given a commitment that no employees will be retrenched during this lockdown period, and staff received their full salaries for March. Executives in the company have agreed to a 40% pay cut during the lockdown.

“There are approximately 80 000 employees (of the 100 000 people employed in South Africa) that earn less than R10 000 a month. It is hoped, therefore, that the UIF payments together with the additional R2,000 per month, will ensure that the majority of Bidvest’s South African employees receive their full salary during the lockdown period.

“Employees who are not working will receive a minimum of R2 000 a month, nett payment, at the end of April, and thereafter if necessary. This is in addition to the UIF/TERS benefits that we are arranging for employees to ensure that they are not left destitute during this difficult time,” said Bidvest Group CEO Lindsay Ralphs.

Bidvest saw its profits climb by almost 10% to R4.6-billion for the year to end-June, and generated more than R7-billion in cash.

“Many other listed companies are trying to protect their employees during this time – even struggling companies are trying to pay their employees 20% of 30% of their salaries,” one affected Bidvest employee told Business Insider on Monday. “It would be different if Bidvest is broke, but this is a huge brand. They are trying to protect the shareholders at our expense.”

Even though unlimited leave is not a new concept internationally, the news that a local specialist banking group has embraced it has raised a few eyebrows.

Nicol Myburgh, head of the HR Business Unit at CRS Technologies, says this approach necessitates a radical change in thinking from corporate policy-makers.

‘Bottomless’ holidays first appeared in the mid-90s and have steadily spread across US and British firms. Yet South African businesses are still hesitant to adopt this trend, owing to concerns around abuse of such a policy.

“While these concerns are legitimate, organisations that implement an unlimited leave policy can just as easily take it away if it is abused as it is not a minimum requirement dictated by the Basic Conditions of Employment Act (BCEA). On the flip side, it gives employees the freedom to plan their own lives and shows them how much the company trusts and cares about them,” says Myburgh.

However, he cautions that an unlimited leave policy only makes sense if it makes staff more productive. It is not about maintaining a business-as-usual approach and hoping for the best.

“An unlimited leave policy goes against the traditional thinking of an organisation and requires a complete mindset change from management and staff. The best way to manage such a policy is to start with strict measurement criteria and couple it to specific targets, levels of achievement, and outcomes.”

“To avoid abuse, employees should be informed that such a leave policy is not regulated by the BCEA, but instead by company policy. The business can therefore impose its own terms and conditions on anything that is provided above and beyond the BCEA. Employees should be made aware that this leave is subject to strict achievable outcomes or the policy could be reversed.”

Myburgh believes that an unlimited leave policy does not necessarily translate to all industry sectors and is arguably more suited to the corporate environment. “Statistics show that staff in manufacturing companies tend to use all their leave in a leave cycle, albeit annual, family responsibility or sick leave. The inference could be made that they are abusing their leave and thus an unlimited leave policy would not be recommended.”

Expectations are high that more companies in South Africa will gradually start embracing this trend. With unlimited leave already very popular in the US and Europe, there should be a shift in the same direction from local businesses.

“Africa tends to implement Western market trends at its own pace. However, so it might be a while before more companies embrace this as a competitive advantage for employee perks. That being said, it is good to lay the groundwork now and perhaps start experimenting by using it as incentive for completing certain complex projects,” Myburgh concludes.

Investec makes waves with unlimited leave

Source: EWN 

From September – provided they meet their deadlines – Investec staff members would have the option to move onto a new leave regime that places no limits on the number of days taken.

The bank would allow most of its employees to dress in any way they like, depending on who they meet during the day.

“We’re after a very adult relationship with our employees; people should feel entitled to look after themselves.”

The Money Show’s Bruce Whitfield interviewed Lesley-Anne Gatter, head of Human Resources at Investec SA.

Gatter said Investec would pay people according to output, not according to how many hours they were at work.

It would pay substantial bonuses to workers who innovate instead of merely ticking boxes.

The leave days employees decide to take would not affect their salaries.

With skills in short supply and the level of unemployment in South Africa rising, the issue of how best to manage people in business continues to gain traction. Aspects like leave and leave policy often makes the critical difference as to whether a business can retain talent or not.

The various forms of leave accrual, and entitlements as set out in the Basic Conditions of Employment Act (BCEA), provide for the minimum – however no limit is placed on maximum amounts which a business may decide to make available to employees.

However, they should remain within the confines of objectivity, consistency, transparency, ethical practice and good governance – or risk becoming subject to discrimination and complaints of unfair labour practice.

This is the reality of the market today, says Nicol Myburgh, head of HR Business Unit at HR and HCM specialist services provider CRS Technologies.

Myburgh explains that the four main types of statutory leave are enacted in the BCEA; including annual leave, sick leave, family responsibility leave and maternity leave, but these do not in any way limit additional leave types and entitlements which the employer may wish to offer – such as study leave, paternity leave, cultural leave and marriage leave.

“It should be noted that even though employers may offer the above additional leave types at their own discretion they should have appropriate reasons for approving or declining the applications or they could be at risk of having an unfair labour practice or a discrimination complaint leveled against them,” says Myburgh.

Another challenge facing most businesses is how best to manage issues such as accrued leave, leave encashment and additional paid leave.

As CRS Technologies explains, accrued Leave is the amount of leave time that an employee has accrued as per the BCEA, Bargaining Council, Sectoral Determination, Company Policy or any other reason recognised by legislation, but which has not yet been used or paid. This is a financial liability for the employer.

In terms of the BCEA the accrual of leave is only applicable to annual leave, the employee is entitled to 15 working days per annum on full pay. The Act states “21 consecutive days” and reference to a calendar will show that 21 consecutive days equals 15 working days based on a 5-day week, or 18 working days based on a 6-day week. ‘Consecutive’ means that an employee has an entitlement to take the accrued leave in successive days.

“This doesn’t mean that an employee immediately has 15 days leave due to him/her from the first day of employment, this leave has to be accrued before it comes due and it is accrued by a simple formula, as follows: 15 days divided by 12 months’ equals 1.25 days leave accrued per month. In other words, this leave is only available to the employee once it has been accrued,” Myburgh advises.

However, as CRS Technologies explains, other statutory leave types become immediately available, with two variations, during the first 6 months of employment – sick leave, which is accrued at one day paid sick leave for every 26 days worked, where after the employee’s full entitlement becomes available and is not subject to accrual. Family Responsibility Leave becomes available after 4 months of employment.

Leave encashment

Leave Encashment is a term used to describe what is in effect the selling of one’s leave and amounts being paid out for the financial value of leave days.

“The BCEA is quite clear on this based on section 21, employers may not pay workers instead of granting leave, except on termination of employment,” says Myburgh.

However, many companies do still encash leave without terminations taking place. In terms of the BCEA this is not allowed, or is it?

“Yes, within certain conditions it is allowed,” says Myburgh. “The BCEA makes provision for minimum leave entitlements either 15 or 18 paid days depending on 5 or 6-day work weeks. If, as per company policy, employment contract or mutual agreement, an employee receives a leave entitlement larger than the minimum, it is not regulated by the BCEA because this is a benefit over and above what is provided by the BCEA.”

This means that additional paid leave over and above the statutory minimum, can be regulated by the company policy, and may be paid out.
The MEIBC provides for additional paid leave over and above the minimum entitlement provided for by the BCEA.

For Myburgh and colleagues at CRS Technologies, the issue of leave management in general is one that many businesses will have to grapple with as staff satisfaction and retention are major issues in the digital age.

Alternatively, those that are intent on growth and for whom issues like digitisation and agility remain challenges, will have to come to terms with and understand these issues thoroughly if they are to successfully evolve.

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