Labour and Tax Legislation Presentation by Celeste Allan

Labour and Tax Legislation Presentation by: Celeste Allan Copyright: Celeste Allan Inc.

Definition of employee n An “employee” means – – any person, excluding an independent contractor, who works for another person or for the State and who receives, or is entitled to receive, any remuneration; and any other person who in any manner assists in the carrying on or conducting the business of the employer Copyright: Celeste Allan Inc.

Tests: Contractor vs Employee n CCMA and Court tests – Dominant impression test n substance – Organisational test n part – vs form of organisation Control test n supervision over individual Copyright: Celeste Allan Inc.

Impending amendments-BCEA n Independent contractor or employee – – – – control and direction hours of work part of organisation 40 hours per month over three months economically dependant tools/equipment provided only one “employer” Copyright: Celeste Allan Inc.

Impending amendment - LRA n Independent contractor or employee – – – same as BCEA provisions excludes any person earning R 89000 p. a advisory award if earns R 89000 or more Copyright: Celeste Allan Inc.

SARS requirements for employment contract a written contract of employment n disclosing full remuneration n – – – basic salary allowances reimbursive expenditure annual increases in writing n Pension/Provident and Medical Aid schemes - contributions n Copyright: Celeste Allan Inc.

Definition - personal services company n Personal services company - a company or trust, other than a labour broker, where any service rendered on behalf of the company or trust to a client is rendered personally by a person who is a connected person in relation to the company or trust Copyright: Celeste Allan Inc.

Personal services company n n Test - three or more employees who are not connected to the member or owner of the company if three or more employees, then deemed to be a sole trader and therefor not a personal services company Copyright: Celeste Allan Inc.

Tests for personal services n n n If service is rendered directly to the client by you personally the hours of work are subject to control/supervision of client remuneration subject to regular payments company receives directly or indirectly 80% of it’s income from services rendered to that client (ie subsidiaries) there must not be a cost of service Copyright: Celeste Allan Inc.

Personal Services companies, Directors and SDL PAYE - at a flat rate of 35% from 1 March 2002 n SDL calculated and paid over on Directors salaries n Copyright: Celeste Allan Inc.

Directors - employees or employers? n Employee – n Director – n service agreement provisions of Company Act Shareholder – – shareholder agreement memorandum of articles of association Copyright: Celeste Allan Inc.

Termination of employment of Director n Audi alteram partem rule – – n Termination of directorship – n disciplinary hearing board meeting Company’s Act Termination of shareholding – – shareholders agreement good leaver/bad leaver Copyright: Celeste Allan Inc.