Page 384 - SAIT Compendium 2016 Volume2

IN 26 Income Tax acT: InTeRPReTaTIon noTes IN 26 de nition. Applications for directives, to determine the amount of employees’ tax to be deducted from the awards, must
be submitted by the employer to the relevant SARS branch of ce.
7. Annexures
7.1 Annexure A
Annexure A contains a list of typical awards that are taxable.
7.2 Annexure B
A comprehensive example to take the contents of this note into account is found in Annexure B.
7.3 Annexure C
This annexure deals with the taxation of awards that were made in the recent landmark Labour Court judgment, Ntsabo v Real Security CC, C 259 of 2000.
ANNEXURE A
Types of awards made to employees
Income Tax Act provision
A lump sum payment received by an employee for refusal to accept a new shift system which amounted to an unfair dismissal.
(Fry’s Metals (Pty) Ltd v NUMSA & others 2003 2 BLLR 140 (LAC)) Reason: Payment received for the termination of employment.
Paragraph (d) of gross income
An amount paid by an employer who refused to renew an employee’s xed term contract because the employee is pregnant which amounted to unfair labour practice.
(Solidarity obo McCabe v SA Institute for Medical Research 2003 9 BLLR 927(LC)) Reason: Payment received in commutation of breach of contract of employment.
Paragraph (f) of ‘gross income’
Payment in respect of dismissing employees who refused to accept a nal wage offer and locking them out. This amounts to unfair dismissal.
(NUMSA & others v Zeuna-Starker Bop (Pty) Ltd 2003 1 BLLR 72 (LC)) Reason: Payment received for the loss of employment.
Paragraph (d) of ‘gross income’
The employer retrenches employees before the sale of the business and does not inform the employees that their contracts of employment have been automatically transferred to the purchaser. The retrenchment of employees without explaining the consequences of the sale of the business is considered to be unfair.
(CEPPWAWU & Others v Herber Plastics (Pty) Ltd & Another 2002 1 BLLR 44 (LC))
Reason: Payment received for the termination of employment.
Paragraph (d) of ‘gross income’
The selection of employees for retrenchment with no prior consultation with the affected group of employees on possible alternatives can constitute unfair dismissal.
(Delport v Parts Incorporated Africa of Genuine Parts (Pty) Ltd 2002 8 BLLR 755 (LC))
Reason: Payment received for the termination of employment.
Paragraph (d) of ‘gross income’
The retrenchment of employees that unsuccessfully apply for positions during a restructuring of the business. The actions of the employer by means of lling positions may be considered to be unfair in light of the dismissed employees.
(Wolfaardt & another v IDC of SA Ltd 2002 11 BLLR 1127 (LC)) Reason: Payment received for the loss of employment.
Paragraph (d) of ‘gross income’
The employer retrenches before consultation with the employees and the unions.
(Mabaso & Others v Univseral Product Network (Pty) Ltd 2003 9 BLLR 871 (LC)) Reason: Payment received for the termination of employment.
Paragraph (d) of ‘gross income’
The dismissal of strikers for no reason other than their participation in collective bargaining will generally be considered to be unfair.
(Cobra Watertech v NUMSA 1995, 6 BLLR 1 (LAC)) Reason: Payment received for the termination of employment.
Paragraph (d) of ‘gross income’
An employee is dismissed for an alleged operational reason. Paragraph (d) of ‘gross income’
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