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The rights of commission based employees during the Covid-19 lockdown

Are the rights of commission based and commission only employees the same or similar to that of regular employees? Will they be entitled to any form of income during lockdown?

Commission based and commission only employees are questioning whether or not they will receive any form of income during this 21 day lockdown period.

Section 213 of the Labour Relations Act, 66 of 1995 as amended, defines an employee as -

  1. any person, excluding an independent contractor, who works for another person or the State and who receives, or is entitled to receive, any remuneration; and
  2. any other person who in any manner assists in carrying on or conducting the business of an employer.

Therefore, when applying the aforesaid definition, commission based and commission only employees are considered employees.  They have the same rights and obligations as a salaried employee.

As of 2018 all commission based employees are legally entitled to receive at least the minimum wage prescribed in terms of the National Minimum Wage Act of 2018 (the Act) and the commission payment in terms of their agreement with the employer. There are however employees who, despite the Act, receive an income based solely on commission exclusive of this minimum wage.

Section 3 of the Act provides that the laws relating to employee minimum wages apply to all employees and their employers.  Members of the South African National Defense Force, the National Intelligence Agency and the South African Secret Service are however excluded, as are volunteers.  

Accordingly, every employee is entitled to the payment of a wage in an amount no less than the national minimum wage which cannot be waived and which takes precedence over any contrary provision in any contract of employment.

Commission based employees, similarly to all other employees, are entitled to some form of income during this lockdown. This income may either derive from forced paid annual leave or the COVID-19 Temporary Employer/Employee Relief Scheme (TERS).

Employers who unilaterally impose annual paid leave on their employees, do so in terms of Section 20(10) of the Basic Conditions of Employment Act, 75 of 1997 which provides that annual leave must be taken:

  1. In accordance with an agreement between the employer and employee; or
  2. If there is no agreement in terms of paragraph (a), at a time determined by the employer in accordance with this section.

Should paid annual leave not be financially viable for employers, both the employer or employee may apply for the Covid-19 TERS, provided that all the following requirements are met:

  1. The employer must close the business for a 3 (three) month or less period;
  2. The earnings of employees must be compromised due to this shut down;
  3. The business must be under financial distress due to the close of the business;
  4. The business must be registered with the UIF; and
  5. Employees must be contributors to the UIF.

In respect of commission only employees, with employment opportunities being scarce, despite it being contrary to the law, many South Africans still perform work and receive only a commission as compensation.

Many who are gardeners, domestic workers or commission only employees and who still do not receive a basic minimum wage, despite the Act, are faced with difficult times during this lockdown period. These workers are placed in unfortunate circumstances where they are unable to claim the COVID-19 TERS and will not receive an income during this period.

Workers are encouraged to challenge the legality of their agreements with their employers by contacting either the CCMA, or our firm for assistance.


Disclaimer

This article is not intended to provide legal advice; it is for general information purposes only and to provide a general understanding of the law.  It is advisable that advice relating to the specific circumstances of your matter be sought from an attorney before acting upon the content of this article.  This article is written at a particular point in time and accordingly may not always reflect the most current legal developments, legislation and/or judgments which may be applicable from time to time. The author and/or Rushmere Noach Incorporated are not responsible for any errors or omissions in the content.