The important role played by tertiary institutions in South Africa with regard to the general development of the country, cannot be disputed. To ensure that tertiary institutions provide education of high quality, competent employees are needed. These employees however have to be paid competitive salary packages. Employee benefits, which form 40 percent of an employer's payroll costs, constitute an important cost component and need to be scrutinised more closely with the aim of managing it as efficiently and effectively as possible. To achieve this goal the primary purpose of this research is thus to determine to what extent the present employee benefits provided by tertiary institutions in South Africa, address the diverse needs of employees. From the empirical study it is clear that employees' awareness of benefits offered and their divergent preferences, necessitates a more flexible approach to the management of benefits. A flexible benefit system would thus be an option. / Human Resource Management / M. Comm. (Business Management)

The important role played by tertiary institutions in South Africa with regard to the general development of the country, cannot be disputed. To ensure that tertiary institutions provide education of high quality, competent employees are needed. These employees however have to be paid competitive salary packages. Employee benefits, which form 40 percent of an employer's payroll costs, constitute an important cost component and need to be scrutinised more closely with the aim of managing it as efficiently and effectively as possible. To achieve this goal the primary purpose of this research is thus to determine to what extent the present employee benefits provided by tertiary institutions in South Africa, address the diverse needs of employees. From the empirical study it is clear that employees' awareness of benefits offered and their divergent preferences, necessitates a more flexible approach to the management of benefits. A flexible benefit system would thus be an option. / Human Resource Management / M. Comm. (Business Management)

The meaning of the term “benefits” in the context of unfair labour practice jurisprudence, having previously been unsettled for more than a decade, has now been settled by the Labour Appeal Court in the Apollo.1 Prior to Apollo,2 our courts have struggled to adopt a stance to maintain the distinction between disputes of rights and disputes of interest as separate compartments. The prevalent view at that stage was that, in order for an employee to lodge a dispute at the CCMA or Bargaining Council the employee would have to show that he or she had a right to the benefit that arises by virtue of contract, statute or collective agreement, failing which the CCMA or a Bargaining Council would not have the jurisdiction to determine the dispute, in which case it may constitute a dispute of interest and the employee will have to embark on an industrial action to secure a benefit. Apollo3 endorsed a previous decision of the Labour Court,4 i.e. by placing “benefits” into the following two categories: (1) Where the dispute is about a demand by employees concerning their benefits, it can be settled by way of industrial action. (2) Where the dispute concerns the fairness of the employer's conduct, it must be settled by way of adjudication or arbitration. As a result of the above categorisation, the CCMA or Bargaining Council may adjudicate a dispute relating to benefits where there is a pre-existing benefit and the employer refuses to comply with its obligation towards the employer in that regard. It may also adjudicate disputes relating to the provision of a car allowance (i.e. where the employer retains the discretion to grant or withhold the allowance) and disputes relating to the provision of bonuses (i.e. where the employer retains the discretion to grant or withhold the bonus). In this treatise, I set out the history and development of the legislation in relation to the concept of “benefits” (in the context of unfair labour practice) so as to understand how our Labour Appeal Court has now come to settle the issues above.

In the last decade South Africa saw the introduction of s 8C into the Income Tax Act, no.58 of 1962, the introduction of IFRS 2 into the International Financial Reporting Standards and the promulgation of the 2008 Companies Act. Each of these changes is relevant to and impact on the consequences flowing from executive share incentive schemes, from the perspective of both the employer company offering the scheme and the employee participating in the scheme. The aim of this study was to analyse, from the employer company’s perspective, the implications of each discipline in isolation, as well as the interrelationship of the three disciplines. The further aims of this study were to utilise the findings from the analyses to identify where legislative amendment is required to close loopholes or ensure equitable results, to identify where the interrelationship of the three disciplines result in unintended consequences, and to provide recommendations on how to avoid these adverse consequences. The most significant findings of this study are summarised below. Due to the legal precedent created by the Supreme Court of Appeal in the Labat case, the mode of settlement – cash or equity – will be the determining factor as regards the availability of an income tax deduction in the hands of the employer company. It is submitted that legislative amendment is required to rectify this inequitable result. Where payment by the employer pursuant to a share appreciation rights scheme occurs in a year of assessment subsequent to the year of assessment in which vesting occurred, changes in the value of the underlying equity instrument from the vesting date to the payment date could result in adverse income tax consequences to the employer and/or the fiscus. To address this, it is recommended that the Income Tax Act should be amended to expressly bring cash-settled executive share incentive schemes within the scope of s 7B and to align the provisions of s 7B and 8C in order to avoid anomalies existing between these two sections in so far as the income tax consequences in the hands of the participating employees are concerned.

MPM / Oliver Tambo Institute of Governance and Policy Studies