A lot has changed since amendments were made to the Basic Conditions of Employment Act as at 1 January 2019, specifically to cater for compliance orders to now be entertained by the CCMA as opposed to the Labour Court. Employers are still unsure as to what to do when served with a compliance order, and this article seeks to offer some guidance to employers.
To start with the basics, what is a compliance order? A compliance order is an order which the Department of Employment and Labour (hereinafter referred to as the ‘Department’) seeks to enforce due to an allegation that an employer is not compliant with statutory provisions, such as an employer who fails to pay an employee, at the very least, minimum wage.
Now that the employer has received the compliance order from the Department, the employer has a choice to make as to how they wish to deal with the issue. The employer has two main steps available to them. Firstly, the employer can choose to comply with the order. The employer can do this by indicating to the Department their intention to do so and can enter into a written undertaking to comply with the terms of the order. Employers often use this as an opportunity to make arrangements for deferred monthly payments as opposed to a once-off payment.
The second option which an employer has is that they can oppose the compliance order which was served on them. Should the employer wish to oppose the compliance order, then time is of the essence to the employer. Upon being served with a compliance order, and subject to the provisions of the Basic Conditions of Employment Act, an employer has five (5) days in which to serve and file an affidavit stating why the employer objects to the compliance order and sets forth the defence of the employer, such as the granting of an exemption order in the case of non-payment of, at least, minimum wage to employees.
The employer would refer a dispute to the CCMA for the commission to establish whether there is a valid reason for opposing the compliance order. We would strongly recommend that employers do not spuriously lead defences which do not exist or make circumstances up as the commission has the authority to order that an employer pay a fine on top of any other monies which would become due and payable as per the compliance order.
Should an employer not act on the compliance order for a period of fourteen (14) days then the Director-General of the Department may apply to the CCMA to make the compliance order an arbitration award, where the award will then become enforceable against the employer.
As is clear from the above, time is of the essence when dealing with compliance orders. Once an employer has been served with a compliance order, we would strongly recommend that the employer immediately gets in contact with Consolidated Employer’s Organisation, where we can offer professional and sound legal advice.
Article by: Avishkar Singh
Dispute Resolution Official – Durban