BUSINESS LAW &TAX
NOVEMBER 2024 WWW.BUSINESSLIVE.CO.ZA
A REVIEW OF DEVELOPMENTS IN CORPORATE AND TAX LAW
Raids: what are you going to do when they come for you?
CHECKS AND BALANCES
No company or sector is insulated from •compliance inspections, whether planned or random Lauren Salt ENS uring September 2024, the department of employment & labour conducted more than 2,500 compliance raids in the hospitality sector. This spate of compliance audits was triggered by a TikTok video posted by a former waitress at Babel, a restaurant in Menlyn Park. The waitress’ complaint centred around the requirement that she needed to purchase her own uniform and tools of the trade, including a bottle opener and cigar cutter. Additionally, she stated that there was no basic salary in place, and she was required to pay the restaurant various
D
fees, including a portion of her tips and fixed amounts for the use of a runner and breakages. department has The announced plans to increase the number of inspectors from 2,000 to 20,000 to sustain these efforts. While the initial focus was on the hospitality industry, the department has now moved on to the logistics sector. Thus, no company or sector is insulated from these raids, and the
HOME AFFAIRS IS OFTEN INVOLVED IN THESE INSPECTIONS TO CHECK FOR COMPLIANCE WITH THE IMMIGRATION ACT
department aims to expand its focus across various industries. Compliance inspections can come about in one of a number of ways, not just as a result of viral TikTok videos. They can arise as a result of a particular complaint to the department (generally in the prescribed manner), as a result of planned sector or company focuses (such as large corporates) or at random (where, for instance, the department drops inspectors at a specific office park). The inspectors are empowered to conduct these inspections with, or without, notice to the employer. When inspections arise out of a specific complaint, they are generally not limited to inspections relating to compliance with one piece of
/123RF — VIKTOR88 labour legislation. Ordinarily, the department checks for compliance with all pieces of legislation which empower it to conduct these inspections. These include the Labour Relations Act, 1995 (LRA), the Basic Conditions of Employment Act, 1997 (BCEA), the Employment Equity Act, 1998 (EEA), the Compensation for Occupational Injuries and Diseases Act, 1993 (Coida), the Occupational Health and Safety Act, 1993 (OHSA) and the Employment Services Act, 2014 (ESA). The department of home affairs is also often involved in these inspections to check for compliance with the Immigration Act, 2002. While this seems like an overwhelming list, unless the
department is tipped off in relation to a specific issue, the inspections are fairly predictable with the information the department inspects being contained on a standard list, which they provide to their inspectors. Having said that, the inspectors often request the information on the spot. As such, it is important that employers are prepared for these audits. We make this caution against the background of our experience in these inspections, where the inspectors request information outside of the scope of the legislative requirements. It is also important for employers to ascertain which of the sections of the relevant acts the inspectors are seek-
ing to determine compliance to and to understand what information would demonstrate such compliance. Inspectors frequently rely on section 66 of the Basic Conditions of Employment Act to request any and all information regardless of its relevance to the assessment of compliance with any particular act. In this regard, section 66(1)(a) provides that “in order to monitor or enforce compliance with an employment law, an inspector may require a person to disclose information, either orally or in writing, and either alone or in the presence of witnesses, on any matter to which an employment law relates, and CONTINUED ON PAGE 2