Legal View

A legislative look at 2013

Johannesburg, 06 Dec 2012
Read time 4min 50sec
Rob Cooper, Director of Legislation Updates and Proposed Legislation at Softline VIP, part of the Sage Group.
Rob Cooper, Director of Legislation Updates and Proposed Legislation at Softline VIP, part of the Sage Group.

The dawn of 2013 brings a number of legislative changes that are looming on the horizon. This is according to Rob Cooper, Director of Legislation Updates and Proposed Legislation at Softline VIP, part of the Sage Group.

Proposed changes to the South African Labour Relations Act (LRA) and the Basic Conditions of Employment Act (BCEA) are on the cards for 2013 in the wake of massive protest action that has crippled the country.

"Some of the proposed changes include the fact that minimum wages can be prescribed by the minister of labour. Public officials are also proposed to have the power to prohibit strikes in their sectors. It is also proposed that unions must ballot and get majority agreement to strike or picket, but there is strong opposition from Cosatu, which sees this as a curtailment of its freedom to strike and one wonders whether this will be in the final legislation," says Cooper.

Fortunately, the debate about whether labour brokers should be closed down or regulated seems to have gone the way of stricter regulation. A decision has, however, been passed that 'atypical' employees become 'deemed' employees after six months. The upheaval in the industry has seen the number of labour brokers dramatically reduced from 3 234 in 2010 to 2 685 in 2011.

"These proposals have been pushed through Nedlac, despite labour and business differences. Parliament's Labour Portfolio Committee is to finalise last 'discussions' with amendments to the respective bills having been published on 22 October 2012. The effective date is yet to be announced," explains Cooper.

Employment Equity Act proposals were recently released by Nedlac that will see the Act continuing to focus on provincial targets instead of national demographic targets. "Increased fines and powers are proposed in addition to the introduction of the concept of equal pay for work of equal value. These proposals could quite possibly be rolled out in conjunction with the BCEA and LRA amendments," says Cooper.

South Africa has a total of 19.5 million unemployed people, of whom 4.5 million are 'officially' unemployed in addition to 60% not having a matric. Of the youth under the age of 25, around 50% are unemployed. Unfortunately, the Youth Subsidy, which had reached a fairly advanced stage, was given the political boot at the ANC's June policy conference, to be replaced by a 'Job Seeker Grant', of which there are no details available. It is expected that more information will be released at the Mangaung elective conference.

"Tax relief for medical expenses is expected to change in either March 2013 or March 2014, from a deduction calculation to a 'Medical Tax Credit' method of calculation," says Cooper. "Contribution expenses for all taxpayers are to be defined, while an assessment method to calculate the tax relief on total medical expenses is to be tabled. These proposals will result in a gradual reduction of the value of our current tax relief, which has been the trend over the past two years."

The National Health Insurance project is set to be a 14-year project of which the total cost is still being debated. "The Budget 2012 funding options were to increase the VAT rate, or to increase the surcharge on taxable income, or to introduce a payroll tax contribution. Thus far, the Medium-Term Budget Policy Statement remained silent on the subject, though a Treasury discussion document is expected soon," says Cooper.

There will be a major move towards the standardisation of retirement funds and there are many reasons for the proposed changes. "The poor performance by some private retirement funds is a major catalyst, as is the prevailing low retirement savings level in the country. Also, the tax and administration rules around retirement funds are simply too complex," explains Cooper.

The purpose of the change is to ensure that all retirement funds have the same administration and tax rules. "The intention is to utilise the tax and administration rules that are applicable to retirement annuities and to replicate it for retirement funds. There are many 'vested interests' to be protected and it will only be applicable to South African residents. The rollout is tentatively planned for March 2014," says Cooper.

Proposals for a National Retirement Fund have also been tabled, which will take the form of a mandatory statutory fund that provides pension, life insurance and disability benefits. The fund is to be phased in over the next four years and will place pressure on the private sector retirement funds.

Proposed changes to the Unemployment Insurance Act will affect 'credit days', which is proposed to be calculated as one calendar day for every four calendar days employed. "The proposal will also see an increase in the income replacement rate and may remove certain exclusions or limitations in the Act," says Cooper.

The introduction of the virtual UIF office system allows individuals to apply for UIF benefits electronically. "It effectively eliminates the need to queue at the labour office, reduces the cost of 'accessing' the benefit, and reduces the benefit approval time from about four weeks to 48 hours," explains Cooper.

"These are just some of the changes lined up for 2013 and we will continue the discussion as we near the budget speech in the new year," concludes Cooper.

Softline VIP

Softline VIP is a leading supplier of payroll and human resource management solutions in South Africa, Namibia and Botswana. Coupled with an extensive service offering, Softline VIP is the only payroll and HR solution geared to meet the challenges of the modern payroll office. The VIP products are synonymous with ease-of-use, stability and reliability, with the flexibility to cater to the unique needs of every client. VIP promises long-term sustainability over and above legislative compliance. VIP understands the human resources and payroll environment and offers the client peace of mind by providing a total solution.

Softline VIP achieved an overall fourth place in the top 10 for medium-sized businesses in the Deloitte Best Company to Work For Survey 2009, and a second place in the industry category "business and professional services". Softline VIP also emerged one of 48 participants out of an overall 98 to score above the standard of excellence threshold of more than 75%.

Softline VIP products include:

VIP Premier - Softline VIP also supplies leading technology to service large and corporate clients. VIP Premier is geared towards increasing the functionality of payroll systems and provides an uncomplicated solution for medium-sized to large organisations. One of the key features of this product is that it is quick to implement in comparison to similar solutions. Meeting the needs of any payroll office and supplying the most suitable solution is important for Softline VIP as it strives to ensure practical solutions for all users. Its products are easy to use and reliable, and the information produced is accurate and complies with all statutory requirements.

VIP Classic - VIP Classic is the perfect solution for clients with bigger operations than the one-man business. VIP Classic provides the same flexibility as larger systems but is aimed at the small to medium-sized business sector. This software offers a total solution to users.

VIP Essentials - VIP Essentials is geared to small businesses and contains the same ease-of-use and stability of all VIP's products. VIP Essentials is an affordable product making it an ideal solution for the small business paying less than 30 employees.

Softline has a solid track record of profitability and cash generation. The group delivers quality accounting, payroll and CRM software solutions that improve the efficiencies of businesses around the world.


Softline is a leading provider of business software and related services. Founded in 1988 by Ivan Epstein, Alan Osrin and Steven Cohen, Softline was established during the formative years of the business software industry. While Softline's heritage is in the SME market, the group also offers expertise and solutions that meet the needs of specific industries and larger organisations. In 2003, Softline was acquired by The Sage Group, a FTSE 100 company. Softline has a solid track record offering customers local expertise backed by the global Sage brand. The group delivers quality software solutions to make customers' business lives easier.

The Sage Group

The Sage Group is a leading global supplier of business management software and related products and services, principally for small to medium-sized enterprises. Formed in 1981, Sage was floated on the London Stock Exchange in 1989. Sage has 6.3 million customers and 13 600 employees worldwide. It operates in over 24 countries covering the UK, Europe, North America, South Africa, Australia, India and China. For further information, please visit

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