The recent economic downturn within the global community and slow economic recovery locally have perpetuated a sharp rise in the cost of living across the board, hitting lower-middle income groups especially hard. This has perpetuated the recent increase in union action in relation to the compensation and benefits attached to it.
For many years, the restaurant industry has largely escaped the reach of the law in labor terms, such as the minimum wage. However, disputes around labor issues are on the rise within this industry. Such litigation poses a particular risk for restaurant and catering companies, a large number of which go bankrupt within their first year of business solely for the mere lack of revenue. Add to this the current economic climate and increased Union action, the risk of failure increases dramatically.
A prominent issue that must be explored in connection with employment disputes of this nature is the definition of an employee. The definition has been constructed so broadly that essentially a person does not require a work contract to qualify as an employee. This means that such people may be entitled to certain benefits even without a formal employment contract.
A very difficult and uncertain position arises in relation to the payment of the minimum wage for waiters. The bartenders were initially described as “hired bartenders” in terms of their job description. Recently the description has changed to “work for hire”, please note that the above should not be confused with the terms “independent contractor” or “casual worker”. The law appears to be open to interpretation regarding what constitutes the minimum wage in this context. In essence, there are two possible interpretations: the first is that a commissioned worker should receive the minimum wage without including any commission, in other words, the employee is paid a basic salary and keeps any commission; the second possible interpretation is that the minimum wage includes any commission, which essentially means that the remuneration of the party in question will be constituted by setting a fixed amount as salary and then any amount earned above that amount constitutes commission. The difference between the first and second is that in the first situation, the party will earn R x as a base and keep any commissions/tips earned. Under this latter construction, the party salary is R x and the commission will only be paid on the amount that is earned on Rx. Therefore, if the salary is R 1,200, if the party only earns R 200 in commission, it will only receive R 1,200; however, if you earn R2000, you will earn R600 commission.
The last consideration in the context of minimum wage for prospective restaurant owners is simply the sustainability of paying it over a long period of time, since restaurants typically have massive fluctuations in their income, it is advisable to hire an attorney to draft the minimum wage. employment agreements for all staff, so that contracts are tailored to better protect the financial needs of companies.
