SHOULD AN EMPLOYEE ON PROBATION BE PAID ALLOWANCES?

In responding to the question by one of the Human Resource Practitioners struggling with their employer who does not want to pay allowances and an employee on probation is threatening to take this matter to Authorities, our response to this matter is as contained herein.

#1. Who is an Employee?

To begin with, it is important to understand who an employee is. Therefore, check what legally constitutes an employee as per the labour laws in your country of operation.

In Zambia for instance, the Employment Code Act No. 3 of 2019 (the "Code") in Section 3 provides that an, "Employee means a person who, in return for wages, or commission, enters into a contract of employment and includes a casual employee and a person employed under a contract of apprenticeship made in accordance with the Apprenticeship Act, but does not include an independent contractor or a person engaged to perform piece work."

Therefore, if the person is an employee, ensure that you provide them with everything they are entitled to.

#2. Rights of Employees on Probation

As we have said from time to time, the law is clear on this matter in many countries. Please check the provisions of the law in your country of operation.

In Zambia for instance, the Code in Section 27(6) provides that, "An employee shall, unless the contract of employment or collective agreement provides otherwise, have the same rights and obligations during the probation period as an employee who has successfully completed the probation period."

#3. To Pay Allowances or Not?

It is important to understand that the law is very clear about who the Protected Workers are and those who are not. To this effect, one needs to know what classification of the employee under discussion.

Unprotected Workers are basically understood to be able to negotiate for their salaries and conditions of service. It is important to however understand that such conditions should be in line with the Law. Please check the provisions of the law in your country of operation.

In Zambia for instance, the Fourth Schedule Section 5(3) of the Code stipulates that, "Where a contract of employment made prior to the commencement of this Act is materially inconsistent with the provisions of this Act, an employer shall comply with the provisions of this Act within one year of the commencement of this Act." Take note that the transition period already expired therefore all employers need to comply except where new laws providing for exemptions apply.

On the other hand, the Protected Workers have laws that stipulate their Minimum Wages and other Conditions apart from the general ones enjoyed by all the other employees.

Protected Workers may include but not limited to the General Workers, Watch Persons, Drivers, Receptionists, and Qualified Clerks.

In Zambia for instance, in line with the Statutory Instrument No. 2 of 2011, a Protected Worker is entitled to a monthly Full Pay or Gross Pay broken down as follows:

> Basic Pay/Wages - as per Section 1.

> Housing Allowance - as per Section 19.

> Transport Allowance - as per Section 14.

> Lunch Allowance - as per Section 15.

For the rates/amounts that should be paid to an employee, refer to the Statutory Instrument No. 71 of 2018 and any other such new laws as may be issued from time to time.

Take note that for those who are not Protected Workers, the employer and employee may agree as per the Contract of Employment that only Basic Pay and Housing (in line with Section 92 of the Code) are paid coupled with selected allowances. It is however advisable that Basic Pay, and the three (3) other allowances stipulated above are paid to avoid unnecessary confusion with employees.

Further, for those under Collective Agreements, payments that shall apply shall be as per those agreed upon in the respective Collective Agreements.

For the avoidance of doubt, it is important that it is clearly understood that Basic Pay is not the same as Ful Pay/ Gross Pay as may be stipulated in your country of operation. Ensure that you are compliant with the laws of your country of operation.

The Code in Section 3 has clarified that, "Basic pay means the standard rate of pay before additional payments such as allowances and bonuses for a period not exceeding one month."

On the other hand, the Code in Section 3 has stipulated that, “Full pay means basic pay, allowances and the cash equivalent of any allowances in kind applicable for a period not exceeding one month, but does not include payments in respect of any bonus."

Conclusion

With the foregoing, we are hopeful that it makes things clear as you navigate the competing demands of employers and employees.

It is important to do the correct and ensure that both the employer and employees understand clearly what their rights and obligations are in an Employment Relationship.

Get in touch with your trusted Advisors to assist you with the development or review of your Company's Contracts of Employment, Conditions of Service, and all attendant human resource and management practices in your Company so that they are aligned with the prevailing Labour Laws of the country.

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Owen Katongo Kabanda

Management and Leadership Advisor

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