Such payments are however granted to employees at the discretion of the employer. 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. South African workers will still be entitled to payment, should their employer ask them to remain at home during this crisis. The procedure to be followed in implementing a fair demotion. Despite trying circumstances, employers are advised to take all labour law considerations into account before imposing a demotion on an employee. With some employees also opting to self-quarantine, there are a number of labour law considerations that South African businesses will have to consider. A refusal to pay salary is breach of contract and contra to the BCEA. Browse on or click to, DEMOTION AS AN ALTERNATIVE TO RETRENCHMENT, ONE WAY TO ASSIST EMPLOYERS WITH THE COVID-19 OUTBREAK. The dispute came to the attention of the second 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. The employees must, in principle, agree to the salary changes. South African workers will still be entitled to payment, should their employer ask them to remain at home during this crisis. https://ceosa.org.za › demotion-as-an-unfair-labour-practice Do you know when it is legal to make a pay deduction from a salary in South Africa? As previously mentioned, the legal way to make changes to an employee’s salary is in consultation with them. Remember, consultation aimed at seeking alternatives to retrenchment is imperative! Senior Associate at Christodoulou & Mavrikis Inc and the head of the Labour Law Department. A salary reduction can’t occur unless you notify the employee of the pay cut first. 5. 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. 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 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 view of the above decision employers should never implement demotion before obtaining the appropriate labour law advice as to: In terms of Ngxowa v Sebenza Manufacturing System [2009] 11 BALR 1122 (MEIBC], a demotion occurs when the Employer diminishes the status of the work or responsibilities of an Employee even when their remuneration remains the same. 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. I am also aware that my request will require a six-month waiting period before consideration for a salary adjustment or rate increase. ... News From Africa. The procedure to be followed in implementing a fair demotion. The Basic Conditions of employment Act allows only certain deductions from salary for debt and damages caused to the employer. If a movement leads to a reduction in status, such is a demotion, irrespective what the employer may wish to term it. South African workers will still be entitled to payment, should their employer ask them to remain at home during this crisis.2. where it is found that false information has been circulating), employees who fail to obey a reasonable instruction to attend work can be disciplined. It can arise through the reduction of salary, change in terms and conditions of employment and indeed transfer. [34] In my view, the arbitrator misconstrued the juridical concept of demotion. If the employee earns below the income threshold a complaint can be lodged with the department of labour. And data insights are key. I am also aware that my request will require a six-month waiting period before consideration for a salary adjustment or rate increase. 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. where it is found that false information has been circulating), employees who fail to obey a reasonable instruction to attend work can be disciplined. 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. How much will depend on the circumstances. JR1658/01 Award Date 26 Sept 03 Jurisdiction Labour Court Jhbg Judge Judge Ndlovu Subject Review: Grievance Unfair Labour Practice Unfair Demotion … *The employee’s subordinates – have been taken away. How to give affordable and appropriate financial advice to the low income market segment. [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. In Plaatjies vs RK Agencies (2005, 1 BALR 77) the employer offered the employee an alternative position at a lower salary due to the fact that the employer had lost a major contract. 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. 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 … 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. This is because one wrong move could result in an unfair labour practice. 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. Introduction [1] The applicant, Ms Michelene Pretorius, was employed as a security officer by G4S at the Rand Refinery site. However, many employers unjustly demote their employees based on discrimination. THE SOUTH AFRICAN POLICE SERVICES Applicant and ... transfer was not to affect his salary and benefits. 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. 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. 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. If the employee earns below the income threshold a complaint can be lodged with the department of labour. 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”. 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). The most obvious cost-cutting mechanism is persuading employees to agree to a reduction in salary. Since a Demotion without consent is a repudiation of the employment contract, it, therefore, entitles the employee to sue for breach of contract. 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. Should employees be forewarned about salary cuts? Consider the following examples of wrongful demotion: 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. 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. There are many reasons that could result in lawful demotions. 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. 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. 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. ... "My boss says he is going to take R50 off my salary each month for expenses in the workplace, such as coffee, tea etc. Demotion as an alternative to retrenchment. 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. There are three contexts in which demotion arises and they are: In Piki and Development Action Group Inc (2002) 23 ILJ 609 (CCMA)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. 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. The employee must have agreed to the deduction. 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. … 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. A refusal to pay salary is breach of contract and contra to the BCEA. 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…. It is common cause that the employee’s salariy was reduced by two thirds as a result of her redeployment. The demotion and reduction of remuneration are within reasonable ranges. 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. 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. • The employee’s subordinates are taken away.• The employee is required to report to someone who used to report to him/her. Case Law & Legislation Review: By Gary Watkins Steven Raymond Van Wyk v Albany Bakeries (Pty) Ltd & 2 others Case No. 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. 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. Copyright © 2021 LexisNexis. ... with a reduction of salary as an alternative to retrenchment. Since a Demotion without consent is a repudiation of the employment contract, it, therefore, entitles the employee to sue for breach of contract. Since a Demotion without consent is a repudiation of the employment contract, it, therefore, entitles the employee to sue for breach of contract.However, an employer should always consider a demotion as an alternative to retrenchment. This means a demotion cannot be imposed unilaterally by an employer without consulting with the employee. 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. In view of the above decision employers should never implement demotion before obtaining the appropriate labour law advice as to: 1. 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. If an employer cuts pay without notifying an employee, it can be considered a breach of contract, depending on … [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. 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. Y 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. Demotion and payroll Sometimes a demotion comes with a reduction of pay. An employer may look to demote an employee as an alternative to dismissal after South African companies hit by coronavirus could consider demotion rather than retrenchment South Africa turns to IMF and World Bank for … This, in turn, led to even senior management having to agree to a salary reduction of 10%. Advertising. The employees must, in principle, agree to the salary changes. 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. the demotion did not involve a significant reduction in the employee's remuneration or duties. 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. • The employee’s subordinates are taken away. 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. Demotion represents a significant variation to the employee’s contract of employment. You Share, We Compare. 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. Wrongful demotion occurs when an employer unlawfully bases the decision to demote an employee on discriminatory reasons. Post-Covid-19 business success is not about navigating the new normal, it’s about defining it. In … A salary reduction can’t occur unless you notify the employee of the pay cut first. If you are reducing a demoted employee’s wages, make sure you tell the employee first. 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. Meet some of our people who are benefiting from flexible working across RELX. Based on work performance. • An employee acting temporarily in one position gets transferred back to his/her old position. RELX Group and the RE symbol are trade marks of RELX Intellectual Properties SA, used under license. [30] The Applicant's view is illogical and misdirected if not opportunistic. Many large South African employers, … 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. 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 Deductions and work agreement, Payroll Deductions and contract, pay deductions and wages. ... 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. Lavery Modise and Sicelo Mngomezulu The Labour Relations Act makes provision for the demotion of an employee in the right circumstances. These include: 1. ... with a reduction of salary as an alternative to retrenchment. Improving the knowledge and skills of South Africa’s teachers is an important part of strengthening our education system. South African workers will still be entitled to payment, should their employer ask them to remain at home during this crisis. 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. Improving the knowledge and skills of South Africa’s teachers is an important part of strengthening our education system. Get your South African law questions answered by Experts. 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. 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. Get your South African law questions answered by Experts. The … 28. An employer cannot just say: ‘I’m going to demote her because she […] However, did you know that demotion can also mean a reduction of a person’s dignity, even if the salary … In terms of Ngxowa v Sebenza Manufacturing System [2009] 11 BALR 1122 (MEIBC], a demotion occurs when the employer diminishes the status of the work or responsibilities of an employee even when their remuneration remains the same. Demotions, that is the reduction in an employee’s job grade (or rank) and status, can be a tricky area for employers. ArcelorMittal South Africa has announced short-time and salary reductions for all employees with effect from April 2020. 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. 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. 4. 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. The demotion and reduction in salary is a drastic step in particular when done without the consent of the employee. 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. 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