The True Economic Impact of the World’s Lockdowns, Covid-19 changes considerations around life insurance, Consumers urged to get back on track post premium relief options. Demotion can occur in the following ways: ... with a reduction of salary as an alternative to retrenchment. The demotion and reduction in salary is a drastic step in particular when done without the consent of the employee. Many large South African employers, … Should an employer demote an employee without affording the employee the right to be heard, it could amount to an unfair labour practice with the employer being liable to the employee for either reinstatement or compensation. The Basic Conditions of employment Act allows only certain deductions from salary for debt and damages caused to the employer. A salary reduction can’t occur unless you notify the employee of the pay cut first. I am also aware that my request will require a six-month waiting period before consideration for a salary adjustment or rate increase. Despite trying circumstances, employers are advised to take all labour law considerations into account before imposing demotion on an employee. … If they have reduced your salary without you agreeing to, that is what is called a unilateral change of the terms of the agreement and would therefore be illegal and unenforcible. where it is found that false information has been circulating), employees who fail to obey a reasonable instruction to attend work can be disciplined. Wrongful demotion occurs when an employer unlawfully bases the decision to demote an employee on discriminatory reasons. However, if the employer attends to a full and proper investigation and there is still no real or justifiable reason for concern or fear about contracting the virus (e.g. *An employee acting temporarily in one position – has been transferred back to his/her old position. • The employee’s subordinates are taken away. Boundaries HR should establish for employee wellbeing in a POST-COVID-19 world, Africa is greatly challenged by COVID-19 pandemic, Statutory Bodies / Regulatory / Ombudsman, [a] Eliminate non-advice sales / telesales, [b] Implement industry standards for non-advice information, [c] Introduce an insurer-funded pro-bono advice network to low income earners, [d] Reinforce the Policyholder Protection Rules. • An employee acting temporarily in one position gets transferred back to his/her old position. Employers must always obtain the employee’s consent to a demotion, in writing, as it entails the changing of an employee’s terms and conditions of employment. And data insights are key. Should an employee refuse the demotion, the employee will be entitled to severance pay, as long as the reason for refusal is justifiable. Section 186(2)(a) of the Labour Relations Act 66 of 1995 provides that any act or omission involving the unfair conduct of the employer in relation to Demotion constitutes an unfair labour practice.There are three contexts in which Demotion arises and such are:1. Meet some of our people who are benefiting from flexible working across RELX. As South African cases of the Covid-19 ... they are advised to take all labour law considerations into account before imposing demotion on an employee. In … Tritely, a salary reduction could amount to demotion, albeit it may be so not automatically as even without a reduction in salary, redeployment may solely constitute a demotion.4 The commissioner never The Applicant submitted that a demotion does not automatically entail a reduction in salary. It is common cause that the employee’s salariy was reduced by two thirds as a result of her redeployment. This is a difficult situation to navigate, because refusing to take the pay cut could mean losing your job altogether. There is little room on a R50 pm policy for advisers to be remunerated for the time it would it would take to educate & fulfil admin function. ArcelorMittal South Africa has announced short-time and salary reductions for all employees with effect from April 2020. Complete our Salary Survey and Win a Wage! Demotion may be one of the ways to assist employers with financial issues due to COVID-19:Demotion can occur in the following ways: The employer gives the employee a letter stating that he/she has been demoted due to:• The employee’s pay and/or responsibilities are reduced. The Demotion of Workers must be Procedural - South Africa The Labour Relations Act makes provision for the demotion of an employee in the right circumstances. The demotion and reduction of remuneration are within reasonable ranges. Consider the following examples of wrongful demotion: Heard: 29 October 2015. Despite trying circumstances, employers are advised to take all labour law considerations into account before imposing a demotion on an employee. ... with a reduction of salary as an alternative to retrenchment. South African workers will still be entitled to payment, should their employer ask them to remain at home during this crisis. 2. South Africa’s new 2021 school calendar will come at a big cost Government plans more long-term rules for travel, weddings, and rentals in South Africa More … In Plaatjies vs RK Agencies (2005, 1 BALR 77) the employer offered the employee an alternative post at a lower salary due to the fact that the employer had lost a major contract. Should such refusal of demotion, as opposed to retrenchment be unreasonable, the employee will not be entitled to severance pay in terms of Sub-Sections 41(2) and 41(4) of the Basic Conditions of Employment Act 75 of 1997. Remember, consultation aimed at seeking alternatives to retrenchment is imperative! Do you know when it is legal to make a pay deduction from a salary in South Africa? ... Demotion may be one of the ways to assist employers with financial issues due to COVID-19: Demotion can occur in the following ways: ... with a reduction of salary as an alternative to retrenchment. Do you know when it is legal to make a pay deduction from a salary in South Africa? https://ceosa.org.za › demotion-as-an-unfair-labour-practice overtime, salary and/or wage bill costs. The … You Share, We Compare. Improving the knowledge and skills of South Africa’s teachers is an important part of strengthening our education system. A reduction in salary can be a demotion, although it does not always necessarily follow. How much will depend on the circumstances. Be the first to know when we update the LexisNexis COVID-19 Resource Centre. Y This means a demotion cannot be effected unilaterally by an employer without consulting with the employee. It is sometimes negotiated and agreed to at the start of the employment relationship and the terms are embodied in the employment contract. If an employer cuts pay without notifying an employee, it can be considered a breach of contract, depending on … This may assist with small, medium and large businesses having to accommodate the financial distress that the COVID-19 has and will still bring to the economy of South Africa. Demotion as an alternative to retrenchment – one way to assist employers with the COVID-19 outbreak ... with a reduction of salary as an alternative to retrenchment. During these desperate times, desperate measures are … There was a target to reduce expenses by R68 000 000.00 (sixty eight million rands) which meant that the company had to achieve a 10% reduction of its entire expenditure.5 29. ... "My boss says he is going to take R50 off my salary each month for expenses in the workplace, such as coffee, tea etc. [33] It should be noted that this case is different to those cases where an employee in anticipation of the outcome of a disciplinary hearing resigns. A pay cut may be temporary or permanent, and may or may not come with a reduction in responsibilities. An employer cannot just say: ‘I’m going to demote her because she […] There was a target to reduce expenses by R68 000 000.00 (sixty eight million rands) which meant that the company had to achieve a 10% reduction of its entire expenditure.5 29. IN THE LABOUR COURT OF SOUTH AFRICA HELD AT PORT ELIZABETH REPORTABLE Case Number: P284/09 ... transfer was not to affect his salary and benefits. Employers must always obtain the employee’s consent to a demotion, in writing, as it entails the changing of an employee’s terms and conditions of employment. *The employee’s subordinates – have been taken away. In the case of a dismissal for operational requirements, an employer may suggest that the employee consider accepting an inferior position to the one previously held, with a reduction of salary as an alternative to retrenchment. He then referred a dispute to the third respondent as a demotion within the contemplation of Section 186(2) of the Labour Relations Act as amended. This is a difficult situation to navigate, because refusing to take the pay cut could mean losing your job altogether. The employees must, in principle, agree to the salary changes. Research Tip: Review your search strategy with the Research Map feature |, Here are four tips to help patent professionals shed their old ways and avail themselves of modern patent search to…. Not your usual 9 to 5. Can an employer drop the current salary of an employee for the following reasons demotion, succession planning, poor - Answered by a verified Lawyer ... where the husbond is General Manager in a Private Game Reserve in South Africa with app. 4. There is no requirement under South African employment legislation for employees to receive these payments. where it is found that false information has been circulating), employees who fail to obey a reasonable instruction to attend work can be disciplined. While the arbitrator accepted this as a valid reason the demotion was still unfair because the employer had failed to consult with the employee before making the offer. Together with this diminished power is the loss of the dignity of the employee and of course more often than not a drop in salary. Lavery Modise and Sicelo Mngomezulu The Labour Relations Act makes provision for the demotion of an employee in the right circumstances. of salary and benefits at the time of JF Kern’s departure that he would have had a legitimate claim of demotion at the time of the reduction of salary and when other conditions occurred”. This may assist with small, medium and large businesses having to accommodate the financial distress that the COVID-19 has and will still bring to the economy of South Africa. While the arbitrator accepted this as a valid reason, the demotion was still unfair because the employer had failed to consult with the employee before making the offer. Get your South African law questions answered by Experts. With some employees also opting to self-quarantine, there are a number of labour law considerations that South African businesses will have to consider. The Basic Conditions of employment Act allows only certain deductions from salary for debt and damages caused to the employer. What is the solution? The change made may be in the form of a sudden reduction in salary for some or other reason, changes to commission structure or a reduction in the amount of commission paid, the removal of or reduction in some other benefits such as a bonus, or something of that nature. Your employer can offer a demotion with reduction in pay as alternative to dismissal. The demotion and reduction of remuneration are within reasonable ranges. If the employee has a particular health issue that would make them particularly vulnerable to the disease, this must be taken into consideration. The employee must have agreed to the deduction. If an employer cuts pay without notifying an employee, it can be considered a breach of contract, depending on … Whether the demotion is merited (in COVID-19’s case it would be, as the employer will no longer be able to afford salaries). Cookies help us to understand you better. Since a Demotion without consent is a repudiation of the employment contract, it, therefore, entitles the employee to sue for breach of contract. As the employee moves into their lower ranking position, their pay decreases as well. Hoffmann v South African Airways [2000] 12 BLLR 1365 (CC): “…An order of instatement, which requires an employer to employ an employee, is a basic element of the appropriate relief in the case of a prospective employee who is denied employment for reasons declared impermissible by the Constitution. The procedure to be followed in implementing a fair demotion. Some pay cuts also affect an employee’s raises, bonuses, and benefits. When a demotion occurs, and the previous salary is considerably above what other people in the new position are making, a pay cut makes sense. I understand that this voluntary demotion will result in a decrease in salary and per our recent discussion, my new annual salary will be $52,000. Inform employees of any salary reductions before changing their pay rate. the demotion did not involve a significant reduction in the employee's remuneration or duties. Demotion may be one of the ways to assist employers with financial issues due to COVID-19: Demotion can occur in the following ways: The employer gives the employee a letter stating that he/she has been demoted due to: • The employee’s pay and/or responsibilities are reduced. The employees must, in principle, agree to the salary changes. Should employees be forewarned about salary cuts? Delivered: 24 November 2015. As Mr Moyle had not been dismissed at the employer's initiative, it was not necessary for the Full Bench to decide whether there had been a "significant" reduction in the employee's remuneration or duties for the purposes of the exception in s386(2). Pay Deductions and work agreement, Payroll Deductions and contract, pay deductions and wages. All about Salary Deductions, Labour Law and Work in South Africa, Decent Work and salaries and Labour Law in South Africa and more on Mywage South Africa. With some employees also opting to self-quarantine, there are a number of labour law considerations that South African businesses will have to consider. Together with this diminished power is the loss of the dignity of the employee and of course more often than not a drop in salary. This, in turn, led to even senior management having to agree to a salary reduction of 10%. A number of international and local companies have requested that their employees work from home due to the dire consequences of the COVID-19 coronavirus pandemic. Pay cuts are often made to reduce layoffs while saving the company money during a difficult economic period. The procedure to be followed in implementing a fair demotion. It can arise through the reduction of salary, change in terms and conditions of employment and indeed transfer. COVID19: What will my medical scheme pay for? Copyright © 2021 LexisNexis. In Piki vs Development Action Group, the CCMA held that an employer is not permitted to unilaterally change the employment conditions of the contract of employment without the employee’s consent. However, if the employer attends to a full and proper investigation and there is still no real or justifiable reason for concern or fear about contracting the virus (e.g. [34] In my view, the arbitrator misconstrued the juridical concept of demotion. ... with a reduction of salary as an alternative to retrenchment. In different circumstances alleged demotions can occur in numerous ways including: The employer gives the employee a letter stating that he/she has been demoted The employee’s pay and/or responsibilities are reduced The employee’s subordinates are taken away This may assist with small, medium and large businesses having to accommodate the financial distress that the COVID-19 has and will still bring to the economy of South Africa.Remember, consultation aimed at seeking alternatives to retrenchment is imperative.Please note, this content does not constitute legal advice and you are advised to seek professional assistance. Demotion may be one of the ways to assist employers with financial issues due to COVID-19: ... with a reduction of salary as an alternative to retrenchment. Demoting an employee can only be done under certain conditions. A demotion usually means a reduction of the responsibility or power or status which an employee previously enjoyed. If the employee earns below the income threshold a complaint can be lodged with the department of labour. Demotion may be one of the ways to assist employers with financial issues due to COVID-19: ... with a reduction of salary as an alternative to retrenchment. Should an employer demote an employee without affording the employee the right to be heard, it could amount to an unfair labour practice with the employer being liable to the employee for either reinstatement or compensation. This is because one wrong move could result in an unfair labour practice. South African workers will still be entitled to payment, should their employer ask them to remain at home during this crisis.2. If an employee is not sick and still willing to attend work, but it is a direct instruction from their employer to remain at home, such employees will still be entitled to earn and receive their normal salary and benefits. South African workers will still be entitled to payment, should their employer ask them to remain at home during this crisis. For instance if the employee has a particular health issue that would make them particularly vulnerable to the disease, this must be taken into consideration, or. Demotion is defined as a reduction of dignity, importance, responsibility, power or status of an employee even if his or her salary and benefits and rank are retained. Demotion is defined as a reduction of dignity, importance, responsibility, power or status of an employee even if his or her salary and benefits and rank are retained. South Africa's auto industry highlights the social and employment cost of innovation Women equal men in computing skill, but are less confident More neurotic, less agreeable, less conscientious: how job insecurity shapes your personality The main reason for this being that in most cases a person would rather have a job with less money than no job at all. Reduction of an employee's salary is often a consequence of the employer's decision to demote the employee for some reason. In view of the above decision employers should never implement demotion before obtaining the appropriate labour law advice as to: 1. Demotion may be one of the ways to assist employers with financial issues due to COVID-19: Demotion can occur in the following ways: The employer gives the employee a letter stating that he/she has been demoted due to: *The employee’s pay and/or responsibilities having been reduced. She earned R12 000 per month. … If an employee refuses to attend work because of concerns of contracting the virus (given the declaration of a disaster by President Cyril Ramaphosa), each case should be dealt with based on its own merits. South African workers will still be entitled to payment, should their employer ask them to remain at home during this crisis. if there is a reasonable concern that an employee may contract the virus while attending work, the employer must attend to an immediate investigation on an urgent basis. A number of international and local companies have requested that their employees work from home due to the dire consequences of the COVID-19 coronavirus pandemic. Mywage.co.za. While the arbitrator accepted this as a valid reason, the demotion was still unfair because the employer had failed to consult with the employee before making the offer. ... with a reduction of salary … RELX Group and the RE symbol are trade marks of RELX Intellectual Properties SA, used under license. Such payments are however granted to employees at the discretion of the employer. Demotion is defined as a reduction of dignity, importance, responsibility, power or status of an employee even if his or her salary and attendant benefits and rank are retained. *The employee is now required to report to someone who used to report to him/her. These include: 1. 28. Should employees be forewarned about salary cuts? Since a Demotion without consent is a repudiation of the employment contract, it, therefore, entitles the employee to sue for breach of contract. A salary reduction is when you reduce the salary of all - or a group - of your employees to reduce the overall payroll costs of your organization. Kayla Shadiack is a Senior Associate at Christodoulou & Mavrikis Inc and the head of the Labour Law Department. As employee costs spiral and the economy labours, more and more employers are facing difficult business decisions.One option that might be preferable to downsizing is to consider asking staff to work short-time or take a pay cut. While salary cuts and reduced working hours are realities many South Africans are facing currently, another mechanism employers can implement is to allow employees to identify what their suitable blend between cash and benefits are, based on their individual needs. South African workers will still be entitled to payment, should their employer ask them to remain at home during this crisis. She advises clients and appears at the Labour Court, CCMA and Bargaining Council, and disciplinary hearings and settlement negotiations where necessary.Kayla has completed a Labour Law Practice Course accredited by Wits University, attaining the top mark in the country. A demotion usually means a reduction of the responsibility or power or status which an employee previously enjoyed. South Africa Law. Although the reason for the demotion and salary cut was seen as fair, the demotion and salary cut itself was not. KEEP UP TO DATE WITH ALL THE IMPORTANT COVID-19 INFORMATION, Customer experience in the ‘now’ generation, How to keep brokers out of the firing line, Getting to grips with contractual versus delictual liability, International trusts and tax consequences, The COVID-19 pandemic and medical schemes, Affinity Health Talks About Long Covid And How To Manage The Effects. The most obvious cost-cutting mechanism is persuading employees to agree to a reduction in salary. The main reason for this is that a person would rather have a job with less money than no job at all. Demotion and payroll Sometimes a demotion comes with a reduction of pay. However, many employers unjustly demote their employees based on discrimination. The reason for this is that should the CCMA or bargaining council find the demotion to be unfair the commissioner has the right to: • Reinstate the employee into the position from which he/she was demoted;• award the employee compensation;• apply any other corrective measure that he/she may deem to be appropriate. as an alternative to retrenchment. The employee must have agreed to the deduction. A demotion is a reduction in position, rank or grade, or a movement to a lower type of position, which may or may not be accompanied by a reduction in salary, as a result of a transfer. South Africa Law. Get your South African law questions answered by Experts. He then referred a dispute to the third respondent as a demotion within the contemplation of Section 186(2) of the ... dispute was the demotion and transfer was the issue in … ... News From Africa. How to give affordable and appropriate financial advice to the low income market segment. However, did you know that demotion can also mean a reduction of a person’s dignity, even if the salary … South African workers will still be entitled to payment, should their employer ask them to remain at home during this crisis. As previously mentioned, the legal way to make changes to an employee’s salary is in consultation with them. If a movement leads to a reduction in status, such is a demotion, irrespective what the employer may wish to term it. JUDGMENT. If there is a reasonable concern that an employee may contract the virus while attending work, the employer must attend to an immediate investigation on an urgent basis. overtime, salary and/or wage bill costs. Can an employer drop the current salary of an employee for the following reasons demotion, succession planning, poor - Answered by a verified Lawyer ... where the husbond is General Manager in a Private Game Reserve in South Africa with app. Whether the demotion is merited (in the case of COVID-19 it would be as the employer will no longer be able to afford salaries). In the case of a dismissal for operational requirements, an employer may suggest that the employee consider accepting a more inferior position to the one previously held, with a reduction of salary as an alternative to retrenchment. As a disciplinary measure;2. as an alternative to dismissal for incapacity; and3. *Apply any other corrective measure that he/she deems to be appropriate. As previously mentioned, the legal way to make changes to an employee’s salary is in consultation with them. A demotion occurs if changes to the employee’s conditions of employment are such that they result in a material reduction of the employee’s remuneration, responsibility or status. ... News From Africa. This may assist with small, medium and large businesses having to accommodate the financial distress that the COVID-19 has and will still bring to the economy of South Africa. Browse on or click to, DEMOTION AS AN ALTERNATIVE TO RETRENCHMENT, ONE WAY TO ASSIST EMPLOYERS WITH THE COVID-19 OUTBREAK. Although the reason for the demotion and salary cut was seen as fair, the demotion and salary cut itself was not. And even without a reduction in salary, a transfer may in itself constitute a demotion. An employer should always consider a demotion as an alternative to retrenchment. • The employee’s subordinates are taken away.• The employee is required to report to someone who used to report to him/her. years earlier. It must be noted that there is no clear provision on “a reasonable range”. This means a demotion cannot be imposed unilaterally by an employer without consulting with the employee. South African workers will still be entitled to payment, should their employer ask them to remain at home during this crisis. The company demoted me to a position with lower salary … [30] The Applicant's view is illogical and misdirected if not opportunistic. A refusal to pay salary is breach of contract and contra to the BCEA. Section 186(2)(a) of the Labour Relations Act 66 of 1995 provides that any act or omission involving the unfair conduct of the employer in relation to demotion constitutes an unfair labour practice. Demotion as an alternative to retrenchment. If you are reducing a demoted employee’s wages, make sure you tell the employee first. Since a demotion without consent is a repudiation of the employment contract, it, therefore, entitles the employee to sue for breach of contract. Complete our Salary Survey and Win a Wage! A pay cut is a reduction in an employee's salary. STEENKAMP J . Advertising. Based on work performance. If, however, the employee has travelled to an “at risk” area or has been in direct contact with people who have the COVID-19 disease, the employer may consider flexi/remote working, unpaid leave or sick leave if the employee is sick. Demotions, that is the reduction in an employee’s job grade (or rank) and status, can be a tricky area for employers. Senior Associate at Christodoulou & Mavrikis Inc and the head of the Labour Law Department. 5. [31] The Industrial Court has held as far back as 1992 that demotion is not a word which has some special meaning in labour law. If an employee is not sick and still willing to attend work, but it is a direct instruction from their employer to remain at home, such employees will still be entitled to earn and receive their normal salary and benefits. 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