Labour and BEE legislation changes affect hospitality industry

With the Labour Relations Amendment Act (No. 6 of 2014) that took effect on 1 January 2015, as well as the Amended B-BBEE Codes, businesses in the hospitality industry will have to make significant changes to the way they do business.

Some of the most crucial changes in the Labour Relations Act relate to the regulation of ‘atypical employment’ which includes fixed term employees, employees employed by temporary employment services (labour brokers) and part-time employees.  According to Dianne Robinson of Integrated Labour Solutions, companies should be clear about the risks associated with employing atypical employees, the financial implications as well as steps that they should take to ensure that they maintain flexibility with as little risk as possible.

The Amended B-BBEE Codes, which will come into effect on the 1st of May 2015, has caused a lot of confusion in the industry. According to Robin Matthews of Invasset B-BBEE Services, one of the major confusions within the market is the status of sector codes. Should companies which fall under a sector code be governed under that code until it is amended, or do all companies revert to the amended codes as from the 1st of May 2015? Matthews’ view is that companies should be governed within their sector codes until the respective sector codes have been amended and, to date, no sector code has been amended.

Other changes include the reduction of the number of elements that a company’s BEE status is assessed on from seven to five, the introduction of priority elements which can result in a “drop” in level if companies do not comply with this, as well as the emphasis of black ownership throughout the entire scorecard.  “One of the most significant changes, is the fact that an EME (Exempted Micro Enterprise) and QSE (Qualifying Small Enterprise) with 100% and 51% black ownership automatically now qualifies as a level 1 & level 2 contributor and the only prove they need to provide is a sworn affidavit indicating the turnover and level of black ownership whereas all other entities need to go through a verification process and are evaluated on the five elements,” says Matthews. He also states that the planning, strategy formulation and preparation will be crucial for companies to achieve a B-BBEE certificate based on the amended legislation. He strongly recommended that companies appoint a competent B-BBEE Consultant to assist them with the very technical changes and elements that form part of these Codes.

These were some of the pertinent legislation changes that were discussed at the FEDHASA Cape Labour Update Seminar on Thursday 23 April. FEDHASA Cape members were informed of changes and also advised on how to manage these changes. According to Rob Kucera, Chairperson of FEDHASA Cape, this type of expert advice on issues pertaining to their businesses and gaining access to service providers that can assist them with the implementation, are just some of the benefits of being a FEDHASA member. “We believe that we also give our members a voice to give feedback to Government on proposed legislation changes,” Kucera added.

Author: Muzi Mohale

Hi there, am your host and I blog about the tourism industry in South Africa. You're also welcome to contribute your expert content on matters affecting the industry. You can reach me on muzi[at]tourismedition.com

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