Iron out the grey areas in employment contracts

What does sectoral  determination mean?
Most employees are protected by the Basic Conditions of Employment Act, which sets the standard for minimum conditions of employment. In certain cases, to protect vulnerable employees in a specific sector, sectoral determinations are made to provide minimum conditions for employees. One such sector is the farming industry where Sectoral Determination 13 regulates the basic conditions of employment and remuneration of farm workers in South Africa.

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Who is a farm worker?
Any person involved in farming activities, including a general worker on a farm, all domestic workers who work in a house on a farm, and also a security guard (not employed in the private security industry) employed to guard the farm and areas where farming takes place.

Is a written contract with a farm worker necessary?
Section 29 of the Basic Conditions of Employment Act requires all employers to have a written agreement with employees.
Information regarding remuneration and written particulars of employment as required by Sectoral Determination 13, can also be included in the contract. A written contract serves as a preventative and precautionary measure for both parties, so that they know exactly what they are getting themselves into.

What type of contracts are used?
There are essentially two kinds of written contracts an employer can enter into with his farm worker. Firstly, a permanent employment contract is for farm workers permanently employed for an undetermined period. Secondly, there is a fixed term employment contract, in which the farm worker is only employed for a fixed period of time, as set out in the contract. A number of key items should be dealt with in these contracts, including contact details, place of work, working hours, wages/payment, overtime, benefits, salary deductions, leave, and termination of employment.

What working hours are allowed for farm workers?
A farm worker may not work more than 45 hours in any week, and nine hours on any day if he/she works five days or less a week, or eight hours in any day if he/she works for more than five days in any week. Overtime is any work done by agreement that exceeds the above limits. If farm workers are required to work overtime, they must be paid at a rate of 1,5 times the normal wage. Otherwise, an agreement can be reached whereby, instead of paying the employee for overtime worked, time off is given.

Night work (after 8pm and before 4am) may only be required or permitted by agreement and if transport is made available. The worker must then be compensated with an additional allowance of at least 10% of the ordinary daily wage. Where a farm worker is required to work on Sundays and public holidays, the rule of thumb is that he/she must be paid double their daily remuneration rate.

What are the minimum wages/payments?
Sectoral Determination 13 provides for minimum wages and payment rates for farm workers, with which all employers must comply and must be included in their contracts. These wages and rates must also be increased annually in accordance with the relevant determination. The 2014/15 monthly rate is R2 420,41, the weekly rate is R558,60, the daily rate is R111,72 (applicable to farm workers who work nine hours per day), and the hourly rate is R12,41.

Can deductions be made from a farm worker’s remuneration?
Certain compulsory, statutory deductions such as UIF and PAYE, must be made, if applicable. There are other deductions that both the farm worker and employer can agree to, for example if the employer provides the farm worker with accommodation, a deduction not exceeding 10% of the worker’s wage can be agreed on, provided the accommodation complies with certain basic conditions. Additionally, deductions for a medical aid and pension fund can also be negotiated.
Employers must, however, tread carefully when it comes to deductions and ensure beforehand that they are allowed to make the deductions in terms of Sectoral Determination 13.

Which kinds of leave must be granted?
Annual leave, sick leave, family responsibility leave, and maternity leave should be included in the employment contract.

How must employment be terminated?
The farm worker must give notice if he/she wishes to end the employment relationship. If employed for less than six months, the notice period is one week. If employed for more than six months, the notice period is one month. Ideally, these periods should also be included in the employment contract. If the employer wishes to terminate the farm worker’s employment, he must do so in accordance with the Labour Relations Act. Notice must be given in writing, but if the farm worker is illiterate or does not understand the written notice, it must be explained in a language he/ she can understand.

Where does the law stand on the use of labour brokers?
The current Labour Relations Act (LRA) is clear that persons employed through labour brokers are not employees of the ‘client’. However, when the new amended LRA comes into play, any person employed through labour brokers will become an employee of the labour broker’s client after three months. Currently, the labour broker and the ‘client’ are severally and jointly liable for any contravention of the labour law, and the status quo remains because although the amendments have been agreed to, it is not yet enforceable.

Is it beneficial for a farmer to use labour brokers?
Currently, yes. However, with the proposed LRA amendments, the farmer will ultimately assume the responsibility of a de facto employer and no differentiation will be allowed between an employee whose service was engaged by an individual farmer or are employed through a labour broker. After the three-month period lapses, the farm worker will be considered a ‘permanent’ employee. With farm workers employed directly, however, a fixed term contract can be entered into without the red tape necessary when going through a labour broker.

Where can I get a copy of the Sectoral Determination?
Download it from the Department of Labour’s website at www.abour.gov.za. It also contains a pro forma contract format that can be used for farm workers.

Phone Leah Molatseli on 051 400 4160l, email her at [email protected], or visit www.phinc.co.za.

This article was originally published in the 14 February 2014 issue of Farmer’s Weekly.