The updated Automotive Production and Development Programme – Phase 2 (APDP2) regulations were published in the Government Gazette dated 11 February 2021. These regulations become effective from 1 July 2021. No benefits will be claimable under APDP from 31 June 2021. The published regulations did not include any of the referenced information documents (Doc A, Doc B, or Form C2). The release of these documents is expected shortly together with the operational details of this gazette. Key Takeaways From The Automotive Production and Development Programme APDP2 wants to support the vision of the South African Masterplan of creating a “globally competitive and transformed automotive industry which actively contributes to the sustainable development of South Africa’s productive economy." This is in order to create prosperity for industry stakeholders and the broader society. Participation under this APDP2 is voluntary. The APDP2 consists of rebates and refunds of the relevant customs duties as legislated in the Customs Act. Production Rebate Certificates (PRCs) are duty credit certificates issued by ITAC. These certificates indicate the amount of customs duty that can be rebated using the Production Incentives (PI). This is an incentive available to final manufacturers of eligible products in South Africa. Such manufacturers must be B-BBEE compliant and registered taxpayers. Completed applications claiming PRCs must be submitted to ITAC no later than 12 months after the invoice for eligible products. Production Incentive (PI) value is determined by local value addition adjusted by the PI Factor, and the applicable customs duty: • The PI Factor for PRC claims applicable to specified motor vehicles: 50% • The PI Factor for PRC claims applicable to automotive components and tooling: 62.5% Eligible products under APDP2: • Specified motor vehicles fitted with an engine and gearbox manufactured in a licensed, special vehicle manufacturing warehouse in South Africa. • Specified motor vehicles not fitted with an engine or gearbox manufactured in a licensed, special vehicle manufacturing warehouse in South Africa. • Automotive components applicable to specified motor vehicles. • Automotive tooling. • Automotive components applicable to heavy motor vehicles, meeting all requirements. • Specified motor vehicles manufactured in a licensed, special manufacturing warehouse in South Africa, destined for assembly outside the borders of the Republic, must be in the form of kits that have untrimmed painted bodies with no parts assembled to the body (Exclusions apply here). Where the above product requirements are not met there are alternative requirements that may apply. Standard Materials: Qualifying value-added materials set forth in APDP2 Info Doc A. The SVA used in the manufacture of an eligible product will be 25% of the value of the standard material. The calculation of Company Specific Percentage (CSP) is calculated by ITAC and used by SARS to calculate the Volume Assembly Localization Allowance (VALA). Entities qualifying for CSP: • Motor vehicle manufacturers with a plant capacity of 10 000 units per annum may apply. • ITAC will calculate CSP and provide this to SARS only where a light motor vehicle manufacturer achieves a minimum production level of 10 000 units in the most recent four-quarter total. • A registered light motor vehicle manufacturer that introduces a new model to replace an existing model in its manufacturing plant. “Dead quarters” application to be dependent on the ITAC’s decision. • New motor vehicle manufacturers that are new entrants but only qualify for VALA where they have a production capacity of 10 000units per annum. VALA is used to reduce the value for customs duty purposes. Where a manufacturer uses the excess VALA in a quarter rebate duty on vehicles imported, SARS will reduce VALA by 20%. Specified motor vehicle manufacturers and component manufacturers are required to declare their imported component and material values in a form quarterly. Where incorrect information is supplied the document will become void and may result in the full purchase price of items being regarded as the imported content values. Values must be determined using the method and basis of calculation set out by the ITAC, where values must be entered as Rand amounts and not percentages or in a foreign currency. The gazetted regulations do not clarify the exact requirement for B-BBEE compliance levels, despite press statements referring to Level 6 for 2022 and Level 4 for 2023. We expect the Minister will clarify these details soon. Please find attached the published Government Gazette for your ease of reference. If you would like to discuss the impact of the Updated Automotive Production and Development Programme on your business, please do not hesitate to contact me on richard@globalbusiness.co.za .

‘Poor performance’ refers to the employee’s inability to discharge their contractual obligations as they do not possess the required skills/ability to do so. It is important to remember that what we are referring to here is a situation where the employee “cannot do the job” as opposed to “will not do the job”. An employer will frequently charge an employee with poor performance which is actually an act of misconduct. In this case, the employee's ability to do the job is not disputed. Rather what the employer has taken issue with is the employee’s “devil may care” attitude in doing something that is all too familiar to them. So, to summarise, you can bring these types of charges against an employee if: They do not meet a performance standard. The employee was aware – or was expected to be aware – of the standard. The employee was given a fair opportunity to meet the standard. Dismissal must be the appropriate sanction for the offense. How To Learn More About Handling Poor Performance Issues If you want to learn more about handling poor performance issues – as well as other aspects of absenteeism and leave abuse – then you need to attend our Managing Absenteeism and Leave Abuse webinar.

According to section 22 of the Basic Conditions of Employment Act (BCEA), a “sick leave cycle” means a period of 36 months of employment with the same employer. This period immediately follows: An employee’s commencement of employment; or The completion of that employee’s prior sick leave cycle. During every leave cycle of this nature, an employee is entitled to an amount of paid sick leave equal to the number of days that the employee would normally work during a period of six weeks. During the first six months of employment, an employee is entitled to one day’s paid sick leave for every 26 days worked. During an employee’s first cycle, an employer may reduce the employee’s entitlement to sick leave by the number of days’ leave taken. An employer must pay an employee for a day’s leave: The wage the employee would ordinarily have received for work on that day; And on the employee’s usual pay day. An Agreement About Sick Leave An agreement may reduce the pay to which an employee is entitled for any day’s absence if: The number of days of paid sick leave is increased at least commensurately with any reduction in the daily amount of sick pay; and The employee’s entitlement to pay: – For any day’s sick leave is at least 75% of the wage payable to the employee for the ordinary hours the employee would have worked; and – For sick leave over the sick leave cycle is at least equivalent to the employee’s entitlement. Don’t Let Employees Pull The Wool Over Your Eyes! Very often, employees will try to pull the wool over their eyes and try to apply for sick leave – when there’s no reason for this. Join us for the Managing Absenteeism and Leave Abuse course and never again be fooled by employees who are chancing their arms.

In the 3IR, the hierarchical structures underpinned by a centralised command and control culture of managers worked for many organisations, despite themselves. One reason for this is that consumers had limited choices and the pace of change was slow. Products and services changed but there was no real transformation. The top banks, the biggest retail outlets, and the household cinema names decided what they would push into the marketplace based on “inside-out” business strategies. One would be forgiven to have labeled many of the executives of the said businesses as mutual admiration societies where they were more concerned with their self-centered egos than with the client and customer needs. This reality is evident when one engages with executive teams and managers who are still running businesses, even though they have not transformed themselves. The fruits of such executive teams are conflict, self-centredness, selfish ambition, and a lack of trust. The reason – in the 4IR the structures are becoming flatter, collaborative teams that are client-centric and build outside-in business strategies are needed, and high levels of trust determine the agility of to respond to change. The 3IR manager who is incapable of becoming a 4IR leader will ultimately not survive and if the organisation allows the 3IR manager to continue to operate, the result will be employees who are disengaged, don’t have a sense of belonging, and will ultimately bring the organisation to its knees. Building Sustainable Businesses What then should organisations do in order to turn the corner into building sustainable businesses in the 4IR? The answer is that they need to build both the character and the competence of their leaders and then cascade this across and downward through the organisation. Generally speaking, competence is present in the form of skills, knowledge, and experience (although skillsets required are changing very quickly). What is missing is trust, managing and leading with EQ, a lack of client-centric thinking, and decisions that are still based on quantitative data only rather than a combination of quantitative and qualitative human-centric information. Empathising with clients, customers and employees is a capability that largely escapes many executives and managers who are in it for themselves rather than leveraging the principles of exponential return that can come from putting the interests of others first. It is my view that many organisations that have been victims of the 4IR (which has been accelerated by C19) can trace their demise back to the executives who were more interested in their comfort than their character. How do we know this? Well, take a look and see the absence of EQ and transformational leadership training in the WSPs of businesses. Despite trust being at an all-time low as a result of retrenchments, remuneration cuts, personal loss, and the like, the absence of these initiatives is deafening. If you would like to get in touch with me, please don’t hesitate to email me at john@globalbusiness.co.za .

The Employment Equity Act (EEA) provides guidelines on how to deal with unfair discrimination and recourse for employees who suffer the consequences of unfair discrimination. It is about promoting equal opportunities for all employees and seeks to redress imbalances of the past that were experienced by historically disadvantaged individuals (who are known as designated groups). Section 60 obliges the employer to promote awareness and act immediately when learning of possible discrimination: (1) If it is alleged that an employee, while at work, contravened a provision of this Act, or engaged in any conduct that, if engaged in by that employee’s employer, would constitute a contravention of a provision of this Act, the alleged conduct must immediately be brought to the attention of the employer. (2) The employer must consult all relevant parties and must take the necessary steps to eliminate the alleged conduct and comply with the provisions of this Act. (3) If the employer fails to take the necessary steps referred to in subsection 2, and it is proved that the employee has contravened the relevant provision, the employer must be deemed also to have contravened that provision. (4) Despite subsection (3), an employer is not liable for the conduct of an employee if that employer is able to prove that it did all that was reasonably practicable to ensure that the employee would not act in contravention of this Act. Non-receipt of Certificate Of Compliance The Employment Equity Act Amendments which are expected to be promulgated mid 2021 also propose that employers should not receive a certificate of compliance should they be found to have unfairly discriminated against employees. This certificate of compliance will prohibit employers from doing business with the state in terms of Section 53 of the EEA. There are no fines imposed for non-compliance with Chapter 2 of the EEA (unfair discrimination), however, the Act states that the CCMA and/ or Labour Court many make any appropriate award against the employer. Hence, aggrieved employees can refer unfair discrimination claims to the CCMA and/or the Labour Court. The question now arises as to what recourse an individual can have against a perpetrator of unfair discrimination who is NOT an employee of the same employer (i.e. an external party such as a contractor or visitor to the workplace). This is where PEPUDA steps into the gap and enables litigation against such third parties. Whichever way you look at it, employers will be negligent not to design, implement, create awareness, enforce fair discrimination, and prohibit harassment of any person, albeit a fellow employee or otherwise. If you would like to discuss the above further – or any other employment equity matters with me – please don’t hesitate to contact me at thembi@globalbusiness.co.za .

Human resources (HR) professionals and practitioners are being called on to broaden their strategies and plans. In addition, HR is being called upon to address the entire length, breadth, and height of “people”: People as “employees” People as “contractors” People as part of the human cloud People as human beings People as talent. This requires that a number of things be put in place: The business strategy needs to be fully understood, The design of the HR strategy needs to be carefully aligned with the business strategy, The various workforce models available have to be evaluated, The competency requirements over the next five years need to be mapped, Policies and procedures need to be re-engineered, Employment contracts must be significantly revisited, and The entire employment life cycle has to come under the spotlight. Of course, don’t forget that to add to this complexity, the ever-changing labour laws and related statutes come into play – pending LRA and EEA amendments, COIDA amendments, UIF amendments, POPI, AARTO, and case law. Why You Need to Register for the Strategic HR Management Course In the Strategic Human Resources Management Course, we draw on global research and thought leaders to bring you a thought-provoking session that also looks at models and frameworks for HR strategy development.

The success of a disciplinary enquiry (DE) often depends on the effort which the representative puts into the preparation of the case. The value of thorough preparation cannot be emphasised enough. Regardless of whether the disciplinary enquiry will result in formal or informal disciplinary action, an investigation should always be done in order to make sure of the facts of the matter. It is not enough for the employer representative to rely on allegations, suspicions, or views in the disciplinary enquiry. The facts of the matter have to be investigated in sufficient detail in order to make a decision about if the disciplinary process is to be initiated and/or what sanction could possibly attach to the contravention. 3 Main Stages There are three main stages of disciplinary enquiry. These are the following: The Investigation, Conceptualisation Of The Case, and Formulation Of Charges. Learn how to Conduct a Disciplinary Enquiry Correctly with Global Business Solutions (GBS) In our Effective Discipline in The Workplace Course, you’ll gain practical skills required by both the initiator and the chairperson, the types of evidence and their weightings, how to present the evidence as well as how a chairperson should determine guilt on a balance of probabilities. Here’s a breakdown of what will be covered:

When addressing the equal pay for work of equal value requirements, organisations may be found wanting in the area of Temporary Employment Services (TES). In section 198, the Labour Relations Act (LRA) provides that employees of a TES who earn below the threshold and are placed on a client’s site are entitled to equal treatment. This requires the client and the TES to collaborate and align the overall cost to the company and employment terms of the TES employees with those of the client’s comparable permanent counterparts. In practice, this means that the client and the TES need to consider salaries and wages, annual leave provisions, and even access to vacancies and training of the TES employees. It may require the client to revise some policies such as recruitment policies, remuneration policies, and the like. There is significant financial and reputational risk tied up in non-compliance with these important provisions with CCMA awards amounting to millions of rands not being uncommon. Attend Our Equal Treatment And Equal Pay For Work Of Equal Value Online Workshop If you would like to learn more about equal pay provisions (such as those described in the article above) in your area of business then you need to attend our Equal Treatment and Equal Pay for Work of Equal Value Workshop on 15 April which is facilitated by John Botha and Thembi Chagonda .

The COVID-19 pandemic significantly shifted the way in which people work. There has been a push to move online and, as a result, a number of work-from-home arrangements have been made. However, these types of arrangements pose challenges to management in terms of monitoring performance and ensuring that work outputs are timeously delivered. A case in point is that of Lucas Dysel Crouse Incorporated v Commission for Conciliation, Mediation and Arbitration and Others (C784/2018) [2021] ZALCCT 3 (19 February 2021) . In this matter, an employee was taken to task for her excessive use of social media during working hours and also for accessing confidential information. Facts Of The Case In this matter, the employee was employed as a typist. On one occasion, she was filling in for the bookkeeper at reception and happened to see a sheet on which the salaries of all employees were detailed. The employee noticed that other employees had received pay increases while she had not. Subsequently, the employee took this matter up with management. The employer gave evidence that her performance at work was ‘slapdash’, as evidenced by the typing errors in her work, and that she spent excessive time on social media and playing games during work hours. The employer further stated that he should have fired her a long time ago, however he felt sorry for her. During the engagement with the employee, he invited her to resign. Her response was that the employer ‘should do what he wanted to’. This remark was construed as insubordination and, as a result, the employee was dismissed. The CCMA found that the dismissal of the employee was substantively unfair but procedurally fair. The employer was ordered to pay nine months' compensation. On review to the Labour Court, the Court overturned that decision finding that the employee had been spending excessive time on social media while the rest of her work was not being done. Although the Court found that she was not guilty of insubordination, they did find that the amount of time she spent on social media – including Facebook – was a problem. The employee’s Facebook usage, in the evidence, made up 54% of her non-work computer usage. Owing to this, the Labour Court confirmed that the decision of the dismissal was fair and not substantively unfair. The employer took a pragmatic approach. Looking at all the evidence, notwithstanding what the charge was, the Court took the view that considering all of the evidence the dismissal was substantively fair. Time spent on social media can be tracked by the employer. Many employees spend excessive time, not working but on social media platforms. If you have any queries, on matters such as the one above or other labour-law-related matters, please don’t hesitate to contact me at johnny@globalbusiness.co.za or Grant at grant@globalbusiness.co.za .

Equality in remuneration is gaining statutory and litigious momentum with the existing provisions of the Employment Equity Act (EEA) and Codes of Practice underpinning no fewer than 826 CCMA referrals on equal pay disputes over the period April 2019 to February 2020. What is even more concerning is that the pending amendments to the EEA would result in employers losing these cases and not receiving EE Compliance Certificates for three years. This would exclude them from access to state tenders. By law, the EE plan must include measures to address unjustifiable income differentials within a reasonable time period. There are two dimensions to this – Firstly, the horizontal equal pay analysis in which people doing the same, similar or jobs of equal value should as a general principle be earning equitably; and Secondly, the vertical income gap between the top 10% of earners and the bottom 10% needs to be narrowed. Employers would be well positioned if they conducted the necessary analysis, identified gaps, drafted remuneration policies, and took steps to address these areas. Attend our Equal Treatment and Equal Pay for Work Of Equal Value Online Workshop If you would like to learn how to conduct the necessary analysis, identify gaps, draft remuneration policies, and take steps to address these areas, you need to attend our Equal Treatment and Equal Pay for Work of Equal Value Workshop on 15 April which is facilitated by John Botha and Thembi Chagonda .