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Labour Complexity

CCMA – Against The Odds

Play it safe and talk to the experts about labour law to avert costly disputes.

Entrepreneur

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South Africa’s labour laws are complex and tend to favour the employee, making life tough for any business that feels the need to dismiss staff, for whatever reason. The mistake many small businesses make is not realising that labour laws apply to all types of employers, not just big business.

To gain an understanding of the numerous pitfalls confronting business, Entrepreneur spoke to Ivan Israelstam, a specialist in the field. Israelstam’s career spans 27 years in labour law and industrial relations; twelve of these as a litigator at the Commission for Conciliation, Mediation and Arbitration (CCMA) and four as a CCMA commissioner. He writes numerous labour law columns in major publications and has authored several labour law books.

Israelstam says that a key error made by SMBs is that they seem to think that if they dismiss an employee, they can repair the problem by paying the employee off; however, the default remedy for unfair dismissal is full reinstatement to the job often with full back pay.

“The answer to this, and all the other problems I will outline, is to simply pick up the phone before acting against an employee and spend a few minutes talking to a labour expert, as this will be cheaper than making the mistake first and turning to the expert later,” he says. “A vital piece of advice I can give employers is never to fire someone while you’re angry – think things through first, otherwise you may be setting yourself up for some serious legal troubles.”

He says that it is important to be aware that anytime you consider the termination of someone’s employment, there is a specific legally required procedure to follow, dependent on the type of dismissal.

“It is for this reason SMBs should contact a reputable expert in the field, as the expert will be able to help you draw up a disciplinary code and procedures, as well as employment contracts, performance standards and so on. I don’t believe it is possible to run a business successfully in the long-term without this sort of input.”

Israelstam points out that should you dismiss someone, you have to be able prove that no reasonable employer could continue such a working relationship. Also, he says that once a case goes to the CCMA, failing to use an expert representative will be detrimental, since arbitration is in effect a court case, so you must be prepared.

“Failing to investigate allegations properly is another common mistake – one always needs to remember that there are two sides to every story. Badly selected or badly worded disciplinary charges can also negatively impact your case, so you should always formulate the charges correctly in order to suit the proof you do have.

“Remember that there is no institution that is stricter on employers than the CCMA, so the odds are stacked against you from the beginning with the onus being on you to prove the dismissal was fair, the employee doesn’t have to prove it was unfair.

“Labour law is a minefield for the employer, and the proof of this is in the fact that the CCMA deals with 140 000 cases annually, of which about 80% are dismissals. Therefore, it is clearly in your own best interest to talk to an expert before following through on anything related to this subject,” says Israelstam.

Top 10 labour law pitfalls

  • You cannot solve an unfair dismissal by throwing money at the problem
  • There are specific procedures to follow when terminating employment, dependent on the type of dismissal
  • You cannot dismiss someone without a legally acceptable reason
  • Failure to use an expert representative if taken to the CCMA could be disastrous
  • Failure to investigate allegations properly could cost you plenty
  • Badly selected or badly worded disciplinary charges can negatively impact your case
  • There are far-reaching labour law consequences around the subject of mergers and acquisitions
  • Placing fixed-term employees into permanent jobs, then failing to renew the contract at term’s end may be seen as unfair dismissal
  • Hiring employees and disguising them as independent contractors. If they are treated as normal employees they must be hired as employees
  • Not following the correct process for dismissing employees for being sick or injured

For more information contact Ivan Israelstam at Labour Law Management Consulting on +27 11 888 7944 or email labourlaw@absamail.co.za

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Labour Complexity

Charity Begins At Home This Festive Season

3 Ways to invest in your own employees.

Nation Builder

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We often only think of corporate social investment (CSI) as an organisation’s actions in the surrounding communities (philanthropy and volunteering), but CSI is also inward facing. By promoting employee well-being, your business can be a vehicle for change, not only in the society around it, but also directly in the lives of those working there.

Here are some ways you can invest in your own employees during the festive season:

1. Involve your employees in a higher purpose

This might sound like a bit of circular reasoning, but studies have shown that involving employees in CSI activities has several benefits. People involved in meaningful activities tend to be more motivated and willing to go that extra mile because of the higher good associated with the work. CSI programmes also:

  • Increase co-operative behaviour and employee relationships
  • Enhance the sense of company identity
  • Improve employee retention and commitment
  • Create an attractive company culture.

Related: What’s The Fuss About Corporate Social Investments?

2. Provide the space for physical and mental breaks

The end-of-year and festive period is often a very stressful period. Balancing festive and family duties with increased pressure at work due to colleagues taking leave, looming year-end targets and planning for the next year can take a toll.

You, as the employer, can ease this stress by ensuring that there are systems in place that define holiday working policies. Promote time and productivity management to plan workflows and keep the momentum going in these last weeks of the year. Also make sure you have effective communication strategies in place for plans that are in the pipeline for the new year, so that employees can get their heads around upcoming changes. This will allow employees to plan ahead and build in time to switch off, knowing that all of the boxes have been ticked.

3. Constructive feedback/motivation

Also, take the time to acknowledge and show appreciation for the hard work that your staff has put in throughout the year. As the saying goes “valued employees are valuable employees.”

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Company Posts

How Medical Savings Accounts Are Changing – For The Better

By Jeremy Yatt, Principal Officer of Fedhealth

Fedhealth

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The concept of medical savings accounts (MSA) emerged in the industry in the early 1990s, reputedly when Discovery founder Adrian Gore was working at Liberty. At that time medical scheme benefits for different kinds of day-to-day healthcare were specified, so for example, you’d get a certain amount of Rands to spend on your over-the-counter medicine, or for optometry services. But this was problematic, as people’s daily medical needs are all so different. So, you’d have medical aid members calling their medical schemes saying, “I haven’t used my spectacle limit this year, so can I transfer it to use on medication instead?”.

The idea for MSAs was to pool these separate benefits into a total Rand amount, that you could then spend how you wanted, and more importantly, retain if you didn’t use them all. Initially, medical schemes were reluctant to follow this idea, as they thought it would lead to under-servicing: medical aid members might be unwilling to spend their savings, and so might not get the proper day-to-day medical attention until it became a crisis and they were hospitalised. However this was not the case, and MSAs proved very popular.

At first, there was no real limit on how much of your contributions as a member could go into your MSA, so most schemes allocated around 40-50%. Many schemes also pushed major medical procedures like MRI scans into savings, which was effectively a way of forcing members to self-fund these costly medical expenses. As a result, the Medical Schemes Act was amended in 1998 to impose a 25% limit on the benefits that could be put into MSAs, which largely forced the schemes to be responsible for these major costs.

Related: Why Your Employees’ Health Is Your SME’s Wealth

Under the previous structure there was no disincentive not to use your benefits, particularly as they didn’t roll over from year to year like Medical Savings do. It was therefore not uncommon for a call centre to get queries from members asking how much was available in their different benefit areas, so that they could make sure they used them all up.

MSAs solved these sorts of problems by giving medical aid members increased convenience and autonomy, which is why schemes have been using them for the past 20+ years.

The concept of an MSA isn’t far removed from a loan. Like a loan, an MSA lets you use a sum of money when you want to, but you still have to pay for it regardless of whether you use it or not. It forms part of the registered gross contribution to the medical scheme. Take the example of a member who has R12 000 they can access in their MSA each year. Effectively they are paying for this “loan”, contributing R1000 a month, starting in January. However an MSA means they can use all of that R12 000 upfront, such as if they need expensive dental treatment (crowns etc.) at the start of February that costs R12 000.

In this situation, the member has only paid for R1000 worth of that R12 000 “loan” (with their January contribution), so they effectively “owe” the medical scheme R11 000, which they then pay off over the remainder of the year. If the member left the scheme straight after their dental work, the scheme would then contact the member to repay the R11 000, as they still owe that amount.

Related: Is There A Link Between Physical And Financial Wellness?

The concept of giving members access to medical financing led us to develop our new MediVault offering for day-to-day medical expenses. Describing it as a loan holds negative connotations for some, but it’s not that different from the concept of an MSA: in fact, we see the MediVault as a natural evolution. All it means is that you won’t need to pay for day-to-day savings upfront. Instead, you’ll be allocated money for these everyday medical expenses in your personal MediVault and, once you’ve taken the money out, you only have to pay it back over a period of 12 months – completely interest-free. This is a far better option than taking out an expensive loan from a traditional loan company, or getting it from an unscrupulous loan shark.

Our MediVault offering is not at all about loaning funds to people irresponsibly. We’re not creating a monster that’s going to indebt you – we’re just changing the way you can access funds for your healthcare. After all, health is everyone’s most worthwhile investment, and we want to give people the flexibility to make it their top priority.

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Labour Complexity

Year-End Reviews Are Not Always A Positive Experience

This is largely due to parties entering into it without proper preparations, thinking that it can be done in one meeting.

Adri Dörnbrack

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Performance reviews are similar to entering a race. It’s all about race day, but what you put in before the event (the discipline to wake up and train, the commitment to push yourself and stick to your training plan) is what makes race day either a great positive journey or a terrible experience. The same principle applies to performance reviews. It should not be a once-a-year meeting. It should be part of the monthly job description for both the manager and employee to be able to compare, adjust and review on an ongoing basis. Then, once a year, all the insights gathered during the year should be reviewed to plan for the next year. 

Performance excellence reviews contribute to the culture of a company

We always say that attitude determines outputs or achievements. Personal attitudes, and the character of the business, is the culture. A great culture will lead to great achievements.

Performance excellence reviews are the tool we use to compare, adjust and shape what we want to achieve and then benchmark to know if it has been achieved. 

Employee performance reveals a lot about the business’ achievements. A business is great when it is profitable, cares about and looks after their people, and contributes towards the wellbeing of society and/or the planet. It is all about performance. What you put in is what you get out. And this is what we need to understand. 

Related: How to Set Up Employee Assessments

Performance excellence reviews can be a positive experience

Know the individual and their needs. There are really no one size fits all generic option.

There are however a few general good practices :

  • Managers should firstly understand the value that performance excellence reviews contribute towards overall achievements.
  • When the manager is positive about the reviews and the value it adds, automatically the employees follow.
  • On a monthly basis, review the employee’s feedback relating to the progress of the functions / tasks.
  • Be understanding as a manager – not all functions might haven been able to be completed due to job changes or the complexity of a growing job function.
  • As employee, understand that a manager is employed to manage the performance of the team, the department and the business. This entails understanding the employees’ performance.
  • New employees need to be reviewed more frequently eg. Bi weekly. When the employee has found their feet, review monthly or bi monthly.
  • Do not review performance once a year only. Review frequently, and once a year have a focused meeting around performance to discuss what was achieved during the last 12 months.
  • Managers should be responsible, and held accountable, to get all staff to complete their reviews (monthly, quarterly etc). It is the managers responsibility and it should be one of their functions.
  • Employees should know that performance reviews are simply there to understand the job, and help to align the job and the person’s talents to get the best outputs. It’s about continuously striving towards efficiency and effectiveness.
  • As a manager: Communicate progress feedback and offer assistance.
  • Be consistent. Review frequently.
  • Celebrate achievements.

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