Transcript Labour and Tax Legislation

Labour and Tax Legislation
Presentation by: Celeste Allan
Copyright: Celeste Allan Inc.
Definition of employee
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An “employee” means –
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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
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CCMA and Court tests
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Dominant impression test
 substance
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Organisational test
 part
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vs form
of organisation
Control test
 supervision
over individual
Copyright: Celeste Allan Inc.
Impending amendments-BCEA
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Independent contractor or employee
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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

Independent contractor or employee
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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
 disclosing full remuneration
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basic salary
allowances
reimbursive expenditure
annual increases in writing
 Pension/Provident and Medical Aid
schemes - contributions
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Copyright: Celeste Allan Inc.
Definition - personal services
company

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
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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
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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
 SDL calculated and paid over on
Directors salaries
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Copyright: Celeste Allan Inc.
Directors - employees or
employers?
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Employee
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Director
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service agreement
provisions of Company Act
Shareholder
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shareholder agreement
memorandum of articles of association
Copyright: Celeste Allan Inc.
Termination of employment of
Director
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Audi alteram partem rule
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Termination of directorship
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disciplinary hearing
board meeting
Company’s Act
Termination of shareholding
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shareholders agreement
good leaver/bad leaver
Copyright: Celeste Allan Inc.