South Africa is getting an ‘extra’ public holiday next month

Thanks to a technicality under the Public Holidays Act of 1994, South Africans will enjoy an ‘extra’ public holiday on 17 June 2024, which is bad news for business.

Of the 12 public holidays provided for by the Public Holidays Act 36 of 1994 (Public Holidays Act), Youth Day on 16 June falls on a Sunday, meaning the holiday will be observed on Monday, 17 June 2024.

This is because, According to section 2(1) of the Act, “whenever a public holiday falls on a Sunday, the following Monday shall be a public holiday”.

While this sounds like great news for employees, the public holiday will have cost implications for any businesses with employees under the Basic Conditions of Employment Act (BCEA).

If an employee works on a public holiday, their employer must consider the provisions of the BCEA when determining the amount to pay them.

If the public holiday falls on a day on which the employee would ordinarily work, and the employee works on that public holiday, then the employee is entitled to double their ordinary wage for the day.

If the amount earned by the employee for the time worked on that day is greater than double their ordinary wage, they should be paid that amount instead.

The debate over whether a public holiday benefits or harms an economy is contentious.

Some authorities argue that it promotes extra spending by boosting domestic tourism, retail sales, and hospitality industries.

In 2011, Italy added a one-off holiday to celebrate the 150th anniversary of Italian unification.

An analysis of the economic data three years later by Francesco Maria Esposito, then at the Catholic University of Milan, showed a small but positive impact.

Another study in Italy found that a paid day off had a positive impact on staff morale, leading to increased productivity the day after the holiday due to workers being “rested and relaxed.”

Others argue that adding public holidays can negatively impact significant contributors to GDP, such as manufacturers and mining.

For example, in 2011, when acting President Kgalema Motlanthe unexpectedly added another public holiday to South Africa’s calendar on the 27th of December, BDO South Africa estimated the cost to the GDP was R7 billion in lost revenue.

Similarly, consultants at PwC, when considering the impact of adding an extra bank holiday in the Australian state of Victoria, advised that the costs outweighed the benefits, leaving a $150 million hole in the economy (R1.74 billion), even after increased consumer spending.

Cameron Bagrie, the managing director of research firm Bagrie Economics, stated, “An extra holiday might be good for people’s well-being and provide a temporary lift to the tourism sector, but it’s another cost on business.

“If we want to see a sustained recovery in the tourism sector, people will need money in their pockets. The best way to achieve that is getting the economy working and people back into paid employment.”

SOURCE:South Africa is getting an ‘extra’ public holiday next month – BusinessTech