Be wary of recorded conversations
Be wary of recorded conversations – companies may be within their rights to secretly record conversations with employees

Contrary to popular belief, companies may be within their rights to secretly record conversations with employees and use that information against them in a court of law. However, the reverse is also true. Nicol Myburgh, Head of the Human Resource Business Unit at CRS Technologies, says this has the potential to significantly change the dynamic in the workplace.

According to Section 4 of the Regulation of Interception of Communications and Provision of Communication-Related Information Act (RICA), it is not illegal to secretly record a conversation you are party to. But it is still illegal to do so as a way of intercepting communications to commit an offence, for example obtaining a person’s bank account information.

“The argument that recording these conversations infringes on an employee’s (or employer’s) right to privacy is outweighed when using the recording in court is in the interests of justice. Of course, there is nothing prohibiting the addition of an explicit clause in employment contracts that mitigates against the risk of having communications intercepted.”

Smartphones and tablets come standard with audio recording features, making it virtually undetectable

Technology has made it incredibly easy to record conversations without other parties being aware of it. Most smartphones and tablets come standard with audio recording features, making it virtually undetectable when somebody runs the app and puts the phone or tablet out of sight.

“Often, these conversations can be used as evidence in disciplinary hearings and other disputes even before they go to the CCMA or court. Further complicating matters is that courts do not hold privacy rights as absolute. Instead, they take other factors into account that can trump privacy rights.”

An example of this is in Harvey v Niland, where evidence was obtained by hacking into the respondent’s Facebook account. Evidence can therefore be presented in various forms and not necessarily only in the form of an audio recording.

Nevertheless, it remains in the best interests of either party to obtain recordings legally. From an employer perspective, fair process must be followed, with the employee being given an opportunity to respond to the evidence presented against them.

If you are a third party, you need informed consent

“From a legal perspective, it should also be noted that either party can record a conversation that they are part of. But if you are a third party, you need informed consent from one of the other parties to legally record that conversation. It is often this consent that confuses people into thinking all parties must agree to have a discussion recorded.”

Of course, if the recording is inaudible then it cannot be admissible. Myburgh says that employers or employees therefore need to ensure that the audio can be heard, and that the data is stored in a safe place to avoid it being lost, deleted, or edited in a way that will also make it inadmissible.

“Companies are operating in a dynamic, technology-driven environment. It should always be assumed that any conversation or meeting will be recorded, like assuming all work email will be read by a supervisor. In this way, both the employee and employer can ensure no mismanagement takes place.”

Why Outsource your HR?

The business case for outsourcing the HR function is straightforward – it provides any-sized business with a dependable resource that can be used to effectively manage HR with less cost, less risk and less pressure on resources, if you have the right partner on board.

We do not simply endorse this business model because it is our speciality; there are practical business reasons for companies to take this route – and research backs this up.

For example, according to the ADP Research Institute the most compelling reasons for companies to consider outsourcing their HR function include: stabilise costs, lower risk, increase employee productivity and drive business results.

It is important to place these reasons in context. As we are all aware, South Africa’s economy is not growing as fast as it should be. At the time of writing this piece, the country’s GDP is forecasted to grow by just 1.5% for 2019.

Times are tough for businesses across the board and especially for SMEs, which are acknowledged to be one of the most active and sizeable contributors to the country’s economy.

SMEs, particularly, are under heavy pressure to operate with limited resources – especially spare capital and skills availability.

New developments effecting HR and technology

There really isn’t a great deal available to mobilise a team of HR experts and utilise their skills at any given time to deal with issues like tax, regulatory changes, new developments effecting HR and technology.

Lower risk is actually a lot more strategic than some would imagine. Smaller operations must do all they can to compete, sustain themselves and be agile – there is little room for mistakes, and most importantly the market is not forgiving when it comes to messing up on HR.

It really is all about choice… empowering the decision maker with a powerful alternative. They can outsource all the HR functions, or just some of them to a partner.

As experts have written, the model is described as “a kind of partnership” where the outsourcing provider acts as a “a co-employer of your staff members”.

Outsourcing the HR function

Outsourcing the HR function to an experienced, credible and established service provider will give decision makers peace of mind and time to focus on the business, and on strategy. They don’t have to worry about whether or not the company is complying with legislation, whether employees are effectively onboarded, or if the latest tax information and compliance has been considered and factored into the operation.

Once again ADP Research Institute has listed several key advantages linked to outsourcing some administration functions.

For example, it alleviates the administrative burden on internal staff, enables more cost-effective administration, and enhances integration across multiple benefits areas.

The question of whether or not to outsource something as important as HR is really not applicable anymore. The model works and continues to gain popularity within ever-increasingly competitive and resource-intensive markets. Today, it is really not about whether or not to outsource, but more when and to whom?

Mauritius 2019/2020 Budget Speech

On Monday, 10 June 2019, the Prime Minister and Minister of Finance and Economic Development, Pravind Jugnauth, delivered the last Budget Speech of the present Government.

Key Highlights of the Budget Speech

  • The budget deficit is estimated to maintain course at 3.2% of GDP for financial year 2019/2020.
  • Public Sector Debt to GDP has increased to 63% in 2018, and Government plans to reduce the debt to 60% before 2021 by using part of the undistributed surplus of the Bank of Mauritius.
  • Real GDP has been increasing at an annual average rate of 3.7% since 2015 and is forecast to rise further to 3.9% in 2019 and 4.1% 2020.
  • The inflation rate and unemployment have decreased over the last years.
  • The tax legislation will be amended to introduce rules on controlled foreign companies (CFC).

Personal Income Tax Measures

  • Income exemption thresholds for all categories of taxpayers for the income year 2019-2020 are being increased as follows:
    • For a taxpayer who has no dependent or one dependent, the threshold will increase by MUR5,000;
    • For a taxpayer with two dependents, the threshold will increase by MUR20,000;
    • For a taxpayer with three dependents, the threshold will increase by MUR25,000; and
    • For a taxpayer who has four dependents, the threshold will increase by MUR45,000.
  • The additional deduction for a child pursuing tertiary studies and relief for medical insurance premium will now be available for a maximum of 4 dependents instead of 3 dependents.
  • The additional income tax exemption of MUR50,000 will be granted to a retired or disabled person having more than one dependent, instead of being restricted to those having one dependent only.
  • The annual net income subject to tax at a lower rate of 10% has been increased from MUR650,000 to MUR700,000.
  • In addition, an individual deriving a basic salary including compensation not exceeding MUR50,000 in his first month, will benefit from a tax credit of 5% of his chargeable income, provided that his annual net income does not exceed MUR700,000.
  • Solidarity levy not applicable to lump sum income received by a person as pension or death gratuity, effective retrospectively as from 1st July 2017. However, the levy will now apply on an individual’s share of dividend in a société (partnership) or succession.

Contact our legislation team at info@crs.co.za if you require any additional information.

© 2019 CRS Technologies (Pty)Ltd. All Rights Reserved. 

The gender pay gap – inequality continues to impact human resources
Gender pay gap inequality still impacts human resources (HR)

Human resource and human capital management experts agree – the fact that women are generally paid less than men in the workplace has a detrimental effect on society.  As one academic put it – “unfair pay practices perpetuate societal inequalities and keep families in poverty”.

As an industry representative organisation run by, and for HR and HCM professionals, CRS Technologies has a vested interest in monitoring the maturity and overall development of HR.

In South Africa equality is enshrined into the country’s constitution and this includes the workplace.

Any bias or inequality, however applied, and based on race, ethnicity, culture, creed, religion or gender, is outlawed. And so, we have to face facts… there is a shared responsibility between the employer and the employee to ensure equality and to enforce the law where inequality exists or is perpetuated.

Remuneration is a very topical issue at the moment, given the lack of representation of women professionals in key sectors such as IT.

Several key themes form the basis for the global gender pay gap

Academics and industry insiders have identified several key themes that form the basis for the global gender pay gap.

According to the SA Board for People Practices, these themes include skills development, careers, modes of work, job changes and pay, wage negotiations and collective bargaining.

The argument made by those protecting the rights of women in the workplace is that skill sets often stereotypically associated with women, including caring and organising, are generally not paid well.

The important point raised by HR practitioners is that it is important to check our personal feelings and bias ‘at the door’ and realise that these could easily become part of the workplace processes and procedures.

There is also the issue of wage negotiations and the role of unions and industry representatives. The argument is that in many instances it is males who are chief negotiators or representatives, which means that they don’t necessarily always have women’s rights and best interests at heart.

Skills availability will remain a challenge to industry and there is some merit in the debate that skills diversity, equality, application and relevance should begin at school level – even primary school level.

The days of some skills sets being only accessible and relevant to one gender over another are over… today, multi-skills, soft skills and professional certification remain in high demand.

Eradicate unfair treatment

We have to bear in mind that HR and employment legislation, including the Basic Conditions of Employment Act, has been put in place to eradicate unfair treatment and that covers remuneration.

The fundamental, especially when it comes to HR and HCM, is that women have as much right as their male counterparts to have their skills recognised, to be remunerated fairly for their skills, their experience, market knowledge and their value to a business as an asset.

That is the premise for what we all strive for – a workplace that enforces and protects equal opportunity, and gender equality.

The draft Taxation Laws Amendment Bill 2019 published for comments

On 10 June 2019 National Treasury published the initial batch of the draft Taxation Laws Amendment Bill 2019 for public comments. The full text of the 2019 draft Taxation Laws Amendment Bill will be published for public comment in mid-July 2019.

This initial batch is intended to ask for comments on two specific amendments that are more urgent and require further consultation. Written comments on the initial batch of the 2019 draft Taxation Laws Amendment Bill are due on 25 June 2019.

The two amendments referred to, are:

Aligning the effective date of tax neutral transfers between retirement funds with the effective date of retirement reforms, which is

1 March 2021.

  • In 2013, retirement fund reform amendments were effected to the Income Tax Act regarding the annuitisation requirements for provident funds. The main purpose of these amendments was to improve the protection of retirement fund interests during retirement, resulting in provident funds being treated similarly to pension and retirement annuity funds with regard to the requirement to annuitise retirement benefits.
  • These amendments were originally intended to come into effect on 1 March 2015, however, further negotiations within NEDLAC have not been finalised, resulting in the effective date for the annuitisation requirements for provident funds being postponed to 1 March 2021.
  • Each postponed requires several amendments to various provisions of the Income Tax Act. One change was accidentally left out in paragraph 6(1)(a) of the Second Schedule to the Income Tax Act, which makes provision for tax neutral transfers between retirement funds.
  • To correct this, it is proposed that urgent changes be made to the Income Tax Act to align the effective date.

Addressing abusive arrangements aimed at avoiding the anti-dividend stripping provisions.

  • This amendment is not applicable to Employers/Employees.

Click  here to view the media statement
Click  here to view the initial batch of the draft Taxation Laws Amendment Bill 2019
Click  here to view the Explanatory Memorandum

 

Contact our legislation team at info@crs.co.za if you require any additional information.

© 2019 CRS Technologies (Pty)Ltd. All Rights Reserved.

 

Access to a tax advisory service during tax season adds value
Access to a tax advisory service adds value in a substantial manner during the annual tax season.

We all know the drill by now… around this time of the year, tax season, businesses have to ensure compliance with SARS legislation governing the submission of returns.

We also all realise that we are operating in a vastly different economic environment, in which many businesses are struggling with cash flow and unable to pay outstanding tax debt to SARS.

It is not surprising that many business owners choose to take the wrong route as a short-term solution and actually avoid submitting their returns.

Our partner and tax business continuity specialist Tax Debt Compliance is pretty clear when it comes to its advice on this issue: not only is it illegal, but not submitting a return will incur severe penalties and high interest charges for your business.

So what are operators to do? It is a bit of a catch-22 situation – not submitting may ease the pressure on cash flow (albeit temporarily), but it is not a true reflection of the state of the business and will end up costing more – however, submitting may be a stretch too far!

That is why we have partnered with Tax Debt Compliance to provide a tax advisory service.

How does this service help?

Well, it comprises a range of tax relief mechanisms:

  • Negotiation of affordable instalment agreements with SARS on behalf of your business;
  • Compromise applications to SARS which, if approved, will enable your business to settle tax debt at a reduced amount;
  • Tax due diligences to ensure compliance with South African tax legislation;
  • Formulation of tax opinions for businesses considering entering into complex transactions that could hold significant tax consequences.

These are the immediate benefits to clients looking for some kind of intervention and assistance with tax.

Not only does this mean you are actually being proactive in dealing with the challenges, you are also being realistic in terms of where the business is positioned and have a credible way of influencing the outcome.

Our tax advisory service is there to be used and to help… contact us now for more information!

Flag of Kenya
News on Kenya’s National Housing Development Fund

The latest news about Kenya’s National Housing Development Fund (NHDF) is that its implementation has been delayed.

On Monday 27 May 2019 the implementation of the NDHF levy was extended by the Employer and Labour Relations Court, which effectively barred the government from enforcing the disputed 1.5% housing levy.

This levy was supposed to take effect in May, in accordance with a government directive in April making it mandatory for employers to deduct and remit the levy by the 9th of every succeeding month.

It has come to light that the case challenging the levy was initially filed by Central Organisations of Trade Unions (COTU), as well as various other parties, including the Trade Union Congress of Kenya, Consumers Federation of Kenya (CoFeK) and the Federation of Kenyan Employers (FKE).

As a leading human resources and human capital management services provider, established in Africa to keep abreast of these markets across the continent, CRS is committed to informing you – our customer – of changes to regulation. That is our mandate and that is exactly what we will continue to do.

For more information and advice, please contact our legislation team at info@crs.co.za.

The impact of compliance on cloud and the payroll

Impact of compliance on cloud and payroll

The impact of compliance on cloud and the payroll

At a time when so much attention is placed on the General Data Protection Regulation (GDPR) of the European Union and the Protection of Personal Information Act (Popia) in South Africa, companies must consider a plethora of permutations when it comes to the hosting of their data. Ian McAlister, General Manager of HR (human resources) and payroll specialists CRS Technologies South Africa, believes this is especially critical when it comes to sensitive HR and payroll data.

“The regulatory environment is such that companies face significant financial fines if their data is not stored and maintained according to compliance requirements. Even more significant is the reputational damage to a brand when customer data is compromised. Given the competitive landscape, it is easy for an end-user to migrate to another service provider and never return. Considering the sensitivity of data associated with HR and payroll systems, having that compromised could even more significantly impact the business not to mention its employees.”

All these factors add to the pressure on decision-makers to seriously consider the merits of going the cloud route.

“Irrespective of whether an organisation chooses a private or hybrid environment for HR and payroll systems, the reality is that data has become mission-critical to the running of a business. Without the ability to access and analyse it, no company can hope to remain competitive. And if internal data is stolen or subject to ransomware, decision-makers are threatened on a fundamental level.”

Consider some of these statistics. By 2020, every person will generate approximately 1.7MB of data per second. Also by that year, the accumulated volume of big data will increase from the current 4.4 zettabytes to approximately 44 zettabytes (equal to 44 trillion GB). Google now processes more than 40 000 search queries per second. According to InternetLiveStats.com, when the company was founded in 1998, it was serving 10 000 search queries per day.

“The sheer amount of data means businesses must be more aware than ever about meeting regulatory requirements. One weak link in the chain is enough to potentially bring down the entire organisation. It is vital for a business to partner with a service provider that can assist in meeting compliance requirements while still being able to provide the functionality and benefits of a private or hybrid cloud environment.”

McAlister says this requires a balanced approach that shows the organisation is giving serious consideration to how and where sensitive HR and payroll data is stored while still innovating.

“The private and hybrid cloud environments bring with them all sorts of business advantages. However, this must happen within the regulatory requirements if the organisation is to truly take its strategic deliverables to the next level,” he concludes.

To read more about this topic, click here to download our free White Paper ‘Enhancing Payroll with the Cloud.

Addressing compliance concerns through outsourcing

The South African corporate landscape is highly regulated from an HR and payroll perspective. Businesses must keep up to date regarding the required statutory updates or risk significant financial penalties.

Unfortunately, small business owners are often unaware of these aspects as they rely on in-house skills and systems to manage this. This is where the importance of outsourcing to a specialised partner can make a significant difference assisting the small business owner to register with the relevant industry bodies and keeping up to date with changing legislation.

Non-compliance pitfalls
  • Incorrect calculation of statutory deductions.
  • A failure to submit statutory submissions to industry bodies like the Department of Labour and SARS.
  • Multiple levels of compliance put pressure on small businesses which may not have the capital required to invest more in their payroll capacity.
Risks of non-compliance
  • With monthly salary spend being one of the largest expenses of a small business, non-compliance carries significant financial penalties that can potentially cripple the company or force it to close.
  • HR regulations continually evolve. The legal ramifications of non-compliance and the impact on the HR department, the business, and its employees can be very serious. For example, all designated employers are required to comply with the Employment Equity Act. The cost of non-compliance starts at R1.5 million.
  • Even though an HR generalist may know a bit of everything, the legislative environment requires a specialist given the oversight of such industry bodies as the Department of Labour, SARS, and SETAs.
Benefits of outsourcing compliance
  • Outsourcing compliance empowers companies operating throughout Africa to ensure they meet all regulatory requirements of the countries in which they have a presence.
  • When compliance is managed by employees, they typically work in isolation from other functional specialists. This increases the risks of non-compliance when new legislation is applied. However, to develop in-house risk management and compliance capacity, it is advisable to enter an approved and legal consortium or joint venture, or association with practitioners in related non-HR or employee relations specialisations.

The reality is that when a company faces an audit, investigation, or even litigation, ignorance of the law is no defence.

In the complex environment of employee compensation, benefits, and related issues, it is critical that a small business works with a knowledgeable and trusted partner who specialises in all relevant aspects of compliance.

The recently adopted National Qualifications Framework Amendment Bill has been sent to President Cyril Ramaphosa for assent and once he signs it into law, South Africans who are found guilty of qualification misrepresentation on their CVs could face a harsh fine, up to five years in prison, or both.

According to the proposed legislation, public and private sector employers will be obligated to report people with fake qualifications to the South African Qualifications Authority, which will be responsible for publishing a national name and shame list of misrepresented and fraudulent credentials.

The bill also introduces measures to deal with organisations that issue invalid qualifications, as well as educational institutions that fraudulently claim to offer a qualification.

Until the new legislation is enacted, CV misrepresentation remains a form of misconduct under the Labour Relations Act, for which employees can be dismissed. CRS recommends that employers ask newly appointed employees to complete a comprehensive hand-written application form (in addition to the CV they provide), which includes a disclaimer stating that they will be dismissed if they are found to have misrepresented themselves.