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Maritime & Transport
Don't skimp on general average cover

Exporters and importers should not under-estimate the impact of a General Average (GA) declaration on their bottom line if they don't have the correct insurance in place.

Corporate
Mutual assistance and co-operation between the South African Revenue Service and foreign tax authorities

Recent international developments have made it increasingly difficult for taxpayers to hide their assets or to avoid tax and South Africa has joined the list of countries that fully comply with international standards on the transparency and exchange of taxpayersí information. South Africa is a member of the OECDís Global Forum on Transparency and Exchange of Information for Tax Purposes (the Global Forum) (chaired by the chief officer of legal and policy at the South African Revenue Service (SARS), Kosie Louw). The Global Forum recently conducted a peer review of 50 jurisdictions, and South Africa is one of only 18 fully compliant countries.

Employment Law
Traditional healer Ďcertificatesí for sick leave

If a person chooses to visit an alternative medical practitioner like a traditional healer for health-related ailments and is consequently absent from work, is an employer obliged to accept a sick note produced by the alternative medicine practitioner? In the case of Kievits Kroon Country Estate (Pty) Ltd v Mmoledi and Others (875/12) [2013] ZASCA 189 the Supreme Court of Appeal (SCA) had to answer the question of whether a traditional healerís certificate can be equated to a medical certificate for the purposes of sick leave.

Corporate
Dealing with competitively sensitive information in a merger context

It is widely accepted that information exchanges between competitors can have the effect of "substantially preventing, or lessening, competition in the market", and therefore may fall foul of section 4(1)(a) of the Competition Act 89 of 1998, as amended (the "Competition Act). Parties intending to acquire or merge with a competitor ought to be wary of the information that is exchanged between them during the necessary due diligence and pre-merger negotiations. The most obvious risk is that the transaction fails, leaving competitively sensitive information in the firmsí hands, exposing them to the risk of allegations of anti-competitive conduct. Information exchanges in the course of the due diligence and negotiations are thus a walk on the proverbial tight rope.

Employment Law
Annual Leave: Take it or lose it

A recent Labour Court ruling has helped to remove uncertainty as to whether statutory annual leave that is not taken is forfeited. The Basic Conditions of Employment Act, 1997 (the BCEA) provides that employees are entitled to a minimum of 21 consecutive daysí annual leave for every leave cycle of 12 monthsí continued employment. This works out to approximately 15 working days of leave a year for employees who work a five-day week, and 18 working daysí annual leave for those who work a six-day week.

Employment Law
Youth wage subsidy a delicate balancing act

The Employment Tax Incentives Act, 2013 (EITA), was signed into law on 18 December 2013 as one of governmentís responses to the persistently high rate of youth unemployment. The EITA seeks to encourage the employment of younger workers by allowing a reduction in the mandatory pay as you earn tax (PAYE) that is payable by employers to the South African Revenue Service (SARS), in respect of employees who qualify in terms of the Act. The EITA has, however, not been without controversy. Critics have expressed concern about the temptation created for employers to give preference to younger workers over older workers in order to gain the tax benefit. The Act does, however, seek to address this concern.

Corporate
Using derivatives to enhance portfolio management

Pursuant to regulation 28(7) of the Pension Funds Act of 1956 (the Act), a notice permitting pension funds (Funds) to obtain exposure to derivative instruments (the Notice) has been published wherein guidelines are set out to which Funds need to abide when making use of derivative instruments. It is clear from the wording of the Notice that Funds are only to use derivatives as a mechanism to hedge any risks that may arise by virtue of the assets held by a Fund in terms of regulation 28, or as a mechanism to enhance the portfolio management of any such assets. The Notice is however unclear in regards to certain aspects that relate to the use of derivative instruments. One such an ambiguity is to be found in the provisions of section 1.3.2 of regulation 28 (7) where it is stated that:

Employment Law
Dealing with processing errors that cause the mismatching of retirement fund returns

Many retirement funds are experiencing practical difficulties in paying members their fund return which remained in the fund after the member had exited the fund as a result of processing errors. The processing errors typically relate to timing difference between the actual time the transactions occur and the time when those transactions are deemed to have occurred for purposes of calculating the memberís benefits. The effect of the processing errors is that the minimum individual reserve paid to a member in terms of section 14A(1)(a) of the Pension Funds Act, 1956 (PFA) is less (or more) than the notional fund reserve to which that member is entitled. In many instances the value of the notional fund return owed to a member by a fund is only a small amount.

Employment Law
Pension interest assigned in terms of a decree of divorce: a problem deferred?

Prior to the amendments made to the Pension Funds Act 24 of 1956 (PFA), section 37D(1)(d) of the Act provided that a retirement fund may "deduct from a memberís benefit or minimum individual reserve, as the case may be, any amount assigned from such benefit or individual reserve to a non-member spouse in terms of a decree granted under section 7(8)(a) of the Divorce Act, 1979". Sections 7(7) and 7(8) of the Divorce Act of 1979 authorise a court hearing a divorce to order that a portion of a memberís "pension interest" be assigned to a former spouse and that this be paid by the fund referred to in the court order to the former spouse when any pension benefit "accrues" in respect of the member.

Employment Law
New legislation makes directors personally and criminally liable for payment of company contributions to retirement funds

The timely payment of contributions by participating employers to retirement funds on behalf of member employees is crucial for various reasons. First, the later the contribution payment, the less interest can be earned on that money for the benefit of the member. Second, a memberís risk coverage could lapse due to non payment of the insurance premiums, which will particularly affect employees in high-risk sectors who are more likely to be injured in the workplace. Third, the deduction of contributions from a memberís salary and the withholding of payment to the fund may constitute a breach of the employment contract. For these reasons the timeous payment of contributions on the part of employers is extensively regulated by statute, albeit with questionable success.

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