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Use this tip to avoid paying your employee up to 24 months in salary for failing to follow the new changes to the LRA

by , 04 February 2015
The Labour Relations Amendment Act came into effect on 1 January 2015.

The two major changes in the Act is the use of employees who belong to labour brokers as well as hiring employees on a fixed-term contract.

One expert says these two changes have 'far reaching effects' for you.

Here's a useful tip he suggests you use to comply before March 31 to avoid paying up to 24 months salary.

Before we get to the tip though, here's a reminder of the two key changes to the LRA

1. Hiring employees who belong to labour brokers
The Act says if employees from labour brokers are in your company for more than three months, they become your permanent employees. This means, their terms and conditions are the same as your permanent employees.
2. Hiring workers on a fixed-term contract
According to the change, you can only hire employees on a fixed-term contract that's longer than three months if you meet these conditions:
  • The nature of the work must be for a limited or specific duration; and
  • You must have a 'justifiable reason' for fixing the term of the contract.
If you don't meet these requirements and you let your employee work for longer than three months, it will be like you've hired him on a permanent basis. You'll have to treat him the same as permanent employees who do similar work. This includes giving him benefits.
The DoL expects you to comply with these two changes and all the others by 31 March 2015. If, after this time, you're not compliant, it will charge you hefty penalties.
Don't let it get to that.
Use this tip to comply…
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The LRA amendment came into effect on 1 January 2015. Do you know what the key changes are?
You might be aware the Labour Relations Act amendment came into effect, but the real question is do you know how these changes affect you and your company?
That's why we have the Labour Law for Managers Loose Leaf Service which provides you with updates every time a new labour law comes into effect. We keep you updated so you can comply and avoid penalties that could cripple your business!
Get your copy here



Here's a tip you can use to comply with the LRA

According to Ludwig Frahm-Arp, president of the South African Society for Labour Law (Gauteng Chapter), the LRA changes present a number of challenges and raise questions such as:
  • Must you increase headcount and costs by making both fixed term contract employees and those from labour brokers permanent employees?
  • How should you address differences in remuneration and benefits if they exist?
He says the best way to address these challenges and comply with the Act is to carefully analyse your business. This will help you understand why you hire people on fixed term contracts. Or why you use employees from labour brokers in the first place.
With both these changes, the Act stresses that you can only use these employees for longer than three months when you truly need them because of your requirements.
By analysing your business, you'll be able to see if you truly need them. And make sure you don't go against the Act when you employ them.
You should, for example, 'review terms and conditions upon which you hire employees on fixed term contracts of longer than three months to ensure you treat these employees as favourably as your permanent employees,' says Frahm-Arp.
Since complying with changes to the LRA is complex, we recommend you attend the Labour Relations Amendment Act Workshop happening on the 20th February 2015. We'll show you everything you need to know and do to comply with these changes before 31 March. Click here for more details…

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