Copyright: Celeste Allan Inc. Labour and Tax Legislation Presentation by: Celeste Allan
Copyright: Celeste Allan Inc. Definition of employee n An “employee” means - – any person, excluding an independent contractor, who works for another person or for the State and who receives, or is entitled to receive, any remuneration; and – any other person who in any manner assists in the carrying on or conducting the business of the employer
Copyright: Celeste Allan Inc. Tests:Contractor vs Employee n CCMA and Court tests – Dominant impression test n substance vs form – Organisational test n part of organisation – Control test n supervision over individual
Copyright: Celeste Allan Inc. Impending amendments-BCEA n Independent contractor or employee – control and direction – hours of work – part of organisation – 40 hours per month over three months – economically dependant – tools/equipment provided – only one “employer”
Copyright: Celeste Allan Inc. Impending amendment - LRA n Independent contractor or employee – same as BCEA provisions – excludes any person earning R p.a – advisory award if earns R or more
Copyright: Celeste Allan Inc. SARS requirements for employment contract n a written contract of employment n disclosing full remuneration – basic salary – allowances – reimbursive expenditure n annual increases in writing n Pension/Provident and Medical Aid schemes - contributions
Copyright: Celeste Allan Inc. Definition - personal services company n Personal services company - a company or trust, other than a labour broker, where any service rendered on behalf of the company or trust to a client is rendered personally by a person who is a connected person in relation to the company or trust
Copyright: Celeste Allan Inc. Personal services company n Test - three or more employees who are not connected to the member or owner of the company n if three or more employees, then deemed to be a sole trader and therefor not a personal services company
Copyright: Celeste Allan Inc. Tests for personal services n If service is rendered directly to the client by you personally n the hours of work are subject to control/supervision of client n remuneration subject to regular payments n company receives directly or indirectly 80% of it’s income from services rendered to that client (ie subsidiaries) n there must not be a cost of service
Copyright: Celeste Allan Inc. Personal Services companies, Directors and SDL n PAYE - at a flat rate of 35% from 1 March 2002 n SDL calculated and paid over on Directors salaries
Copyright: Celeste Allan Inc. Directors - employees or employers? n Employee – service agreement n Director – provisions of Company Act n Shareholder – shareholder agreement – memorandum of articles of association
Copyright: Celeste Allan Inc. Termination of employment of Director n Audi alteram partem rule – disciplinary hearing – board meeting n Termination of directorship – Company’s Act n Termination of shareholding – shareholders agreement – good leaver/bad leaver