IS THIS THE END OF TES AS WE KNOW IT?

1. IS THIS THE END OF TES AS WE KNOW IT? Amendments & TimingPre-requisites in the A-typical SpaceInterpreting FTC & TES provisionsBig-Ticket Items (including Equal pay)BBBEE vs Labour Law

2. Time to Face up to the …. 2014 2013 2015 2012 2011 LARGEST regulatory changes in the past 40 years

3. Broad-mindedness Business Complexity

4. Brussels (24 February, 2014). In 2013, the private employment services (PrES) industry showed its strongest results since the beginning of the recession in 2008. The USA, Japan and Europe, together worth 82% of the worldwide PrES industry market, all reported a return to growth: In November 2013 the US Staffing Employment Index reached 102, its highest position in six years and a notable growth of 6.9% y-o-y.

5. Labour Relations Act amendments

6. Three ways of securing human capital Business strategy SBO’s human capital needs Independent contracting/sub contracting Temporary employment services • Direct employment • FTC • Part-time • Permanent

7. Fixed-term contracts Many shades of grey • A ‘Dismissal’ means • (b) an employee engaged under a fixed-term contract of employment reasonably expected the employer • to retain the employee on an indefinite contract of employment but otherwise on the same or similar terms as the fixed term contract, but the employer offered to retain the employee on less favourable terms, or did not offer to retain the employee • A ‘fixed term contract’ means a contract of employment that terminates on • the occurrence of a specified event • the completion of a specified task or project; or • a fixed date, other than an employee’s normal or agreed retirement age • Employment in terms of a fixed term contract in contravention of the above is deemed to be of indefinite duration

8. That deeming provision What does it really mean when it says the CLIENT is the deemed employer? • (4A) If the client of a temporary employment service is jointly and severally liable in terms of section 198 (4) or is deemed to be the employer of an employee in terms of section 198A (3)(b) • the employee may institute proceedings against either the temporary employment service or the client or both the temporary employment service and the client • a labour inspector acting in terms of the Basic Conditions of Employment Act may secure and enforce compliance against the temporary employment service or the client, as if it were the employer, or both; and • any order or award made against a temporary employment service or client in terms of this subsection may be enforced against either

9. Fixed-term contract structure Applies irrespective of direct FTC or via a TES • Joint and several liability for breaches of BC/SD/BCEA R205K per annum REMUNERATION • Joint and several liability for breaches of BC/SD/BCEA • Joint and several liability for LRA (if TES is involved) • Equal treatment • Organisational rights 3months DURATION OF CONTRACT • SERVICE LEVEL AGREEMENT • indemnifications • insurances • SOP’s

11. Equal treatment

12. Under the Labour Relations Act • JUSTIFIABLE REASON for different treatment... includes the fact that the different treatment is as a result of the application of a system that takes into account • the employee’s seniority, experience or length of service • merit criteria • the quality or quantity of work performed • any other relevant criteria of a similar nature • (that is not prohibited in terms of section 6 of the Employment Equity Act)

13. Determining Equal Pay risk exposure - first things first! • Fields & data (data sheet) • Client perm • Client part-time • Client FTC • TES A– Earning more than R205K/pa B – Contracted for less than 3 months C – Normal absenteeism replacement D – Trainee/intern/learnership/ apprenticeship E – Short-term project F – Justifiable reason (LOS/experience/performance/ merit/other) CRUCIAL… Design & Develop a revised DISPENSATION STAFFING SOLUTION going forwards Options Clean up “Gene Pool”

14. BBBEE AMENDED CODES

15. BBBEE DYNAMICS “UNDER PRESSURE” • Threats: • Recalibration of BBBEE Verification Score Level Requirements • Priority Element Minimums • EAP targets for Management Control/EE and Skills Development • Definition of “Empowering Supplier”

16. HIER KOM GROOT MOEILIKHEID! Its not what happens to you, but how you respond!!

17. National Sub-race & Gender now applies to Management Control/EE and Skills Development Table 1: Profile of the national EAP by race and gender Male Female Total AM African male 40.7% AF African female 34.2% 74.9% CM Coloured male 5.8% CF Coloured female 5.0% 10.8% IM Indian male 1.9% IF Indian female 1.1% 3% WM White male 6.4% WF White female 4.9% 11.3% TOTAL 54.8% TOTAL 45.2% Source: Statistics South Africa, (QLFS 3 2012) (all percentages are rounded to one decimal point)

18. Your Client(s) Finding Relevance General PP from all = 5 QSE PP = 3 EME PP = 4 51 Black Owned = 9 30% Black Female = 4 Preferential Procurement 25 Your Business Workforce Plan Strategic Imperatives EE Act Employment Tax Incentive BBBEE LR Act SETA’s/ SARS Youth Employment Tax Rebate R1000pm (24 months) Fines for not making reasonable progress starting at 2% of annual turnover Ownership 25 Equal Pay/ Treatment Dismissal Rights FTC regulations TES provisions Mandatory Grants Discretionary Grants Learnership tax Rebates R100K & R60K Management Control 15 6% payroll 4% NPAT Skills Development 20/25 Preferential Procurement 25 Supplier Development 10 Enterprise Development 5 Socio-economic Development 5

19. Strategic Partner Characteristics (2014 & beyond) • Global Best-practice, Locally • Values, Culture & Track Record • Immerse into Client Business Drivers

20. JOHN BOTHA 082 457 0000 john@zbconsulting.za.com