Does the exclusion of certain employees under ch 2 of the BCEA mean that those employees are not entitled to be compensated for overtime worked?

March 1st, 2021

By Kefentse Letlala

Most employment contracts specify that employees are required to work overtime. Section 10 of the Basic Conditions of Employment Act 75 of 1997 (the Act) sets out the minimum conditions and benefits afforded to certain employees who are required to work overtime. However, what is the legal position for employees specifically excluded by the Act?

Section 6 of the Act states that the provisions of s 10 do not apply to:

  • ‘(a) senior managerial employees;
  • (b) employees engaged as sales staff who travel to the premises of customers and who regulate their own hours of work;
  • (c) employees who work less than 24 hours a month for an employer’.
  • Employees who earn a salary of R 211 596,30 per annum.

Employers need to ensure that they are not incorrectly excluding employees from the provisions of the Act. In the case of Mondi Packaging (Pty) Ltd v Director-General, Labour and Others [2010] 11 BLLR 1131 (LAC), the court held that the term ‘gross pay’ in the ministerial determination means gross wage or gross pay in respect of ordinary hours of work, but excludes overtime pay. This means that in order to establish whether an employee is excluded from the protection of the Act, employers must consider only their normal wages/salary earned for normal working hours.

Employees mentioned in s 6 are specifically excluded from the protection and the benefits afforded under s 10 of the Act, namely that –

  • employees are required to work overtime regulated by agreement; and
  • the employees cannot work overtime amounting to more than ten hours a week and to claim the additional payment increase in rate of pay for overtime worked.

Accordingly, such employees have to regulate their overtime conditions and rate of pay in their contact of employment. The employee and the employer must agree on the maximum number of overtime hours that can be worked per day or week and how the employee will be compensated for overtime worked.

Employees should be aware that employers must regulate overtime conditions and compensation as it is required by the Act.

Section 7 of the Act, which relates to the regulation of working time, is still applicable to such employees and it necessitates that the employer must regulate an employee’s working hours, including hours of overtime worked. The employer must take into consideration the provisions of the Occupational Health and Safety Act 85 of 1993, the health and safety of the employee, the Code of Good Practice on the Regulation of Working Time in terms of s 87(1)(a), as well as the family responsibilities of the employee in determining the employee’s working and overtime hours.

Furthermore, s 29(g) of the Act requires an employer to give the employees (exception being employees who work less than 24 hours a month) written particulars of the rate of pay for overtime worked when the employee commences employment. It is thus a requirement of the Act that the conditions and compensation for overtime worked be contained in the above employee’s contract of employment.

Employers should be aware that they cannot require employees excluded by the Act to work overtime without any form of compensation unless the employees specifically agree to it in writing. If there is no such agreement, such employees may legally refuse to work overtime and to force them to work overtime would amount to forced labour in terms of s 48 of the Act.

Compensation for overtime for employees excluded by the Act can be in two forms, namely –

  • payment of the employee’s hourly rate; or
  • time off in lieu of overtime worked.

The maximum an employee can request is their normal hourly rate and time off will be on a scale of 1:1.

Employers must be vigilant of the wording used in the contract of employment. Incorporating a clause that overtime will be paid in accordance with the Act does not necessarily mean that employees excluded by the Act are not entitled to compensation in terms of the Act. In the case of Higgs v Natal Wholesale Jewellers (Pty) Ltd (LC) (unreported case no D1361/01, 1-5-2003) (Woodroffe AJ), the contract of employment stated that overtime would be compensated for at the rates dictated by current legislation. The employer argued that the clause meant that the employee was not entitled to be compensated for overtime as her annual salary exceeded the threshold as set by the Act.

The Labour Court interpreted the clause to mean that the employer had agreed to pay the employee overtime at the prevailing rates in current legislation irrespective of the fact that her annual salary was above the legislated threshold and held that the employer’s defence had no merit.

Employees must also be vigilant when reading their contract of employment, especially in cases where the contract states that overtime will be paid in accordance with the company overtime policy. Employees must request a copy of the policy and read it before signing on the dotted line.

Employees are also encouraged to seek clarification in instances where the contract is vague regarding the form of compensation that will be given for overtime worked.

Employees must also be mindful of the danger of working overtime at their own discretion. If the contract of employment states that overtime must be worked when required or approved by the employer, employees should refrain from working overtime without such authority.

In the Higgs case, the applicant claimed payment of overtime worked. The contract of employment stated that the employee was required to work overtime at the management’s discretion.

The court drew a distinction between overtime worked at the election of an employee and overtime worked at the election of an employer and required that the applicant prove she had clear authority from her employer to work overtime.

The court held that based on the evidence before the court, the applicant failed to prove that the overtime worked was with the requisite authority from the employer. The employer had initially paid overtime claimed by the applicant but later on disputed and refused to pay overtime claimed by the applicant on the basis that same was not authorised.

The bulk of the applicant’s claim was based on the disputed overtime and the applicant could not provide clear evidence of all the overtime she claimed she had worked which made it difficult to prove that she had the required authority for same.

Last, but not least, unlike employees protected under the Act, employees excluded by the Act do not have the benefit of having their terms and conditions for overtime worked re-negotiated and renewed annually. Consequently, these employees must ensure that they cover all their bases when they conclude their contract of employment.

Kefentse Letlala BA Law BCom Hons Commerce (Rhodes) is a Legal Director at Linde Wiemann RSA in Port Elizabeth.

This article was first published in De Rebus in 2021 (March) DR 8.

De Rebus