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Labour Complexity

Cover All Your Bases When It Comes To Employment Agreements

Employment agreements are amongst the most important agreements a company will ever enter into.

Kyle Torrington

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There are two pieces of legislation that employers of large labour forces need to be familiar with, and which set out the basic entitlements of employees: The Basic Conditions of Employment Act (the BCEA) and the Labour Relations Act.

Most considerations listed below are regulated by these two Acts, particularly the BCEA.

Let’s explore five of the most important considerations when it comes to employment agreements.

1Confidentiality & restraint of trade

Protecting the confidential information of your business is extremely important and you should secure customised provisions relevant to your business and industry to ensure that you are appropriately protected.

To protect confidential information and unlawful competition, include a confidentiality and restraint of trade clause in an employment agreement.

This seeks to prevent employees from using your confidential information for their own gain, or prevent them from working with certain of your customers, or in a competitive field of trade for a certain period and within a defined geographic area, after the employee leaves your company.

Related: What The Law Says About Employee Leave And Absence

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2Termination of employment

The BCEA sets out the following:

  • If an employee is employed for four weeks or less, at least one weeks’ notice of resignation is required
  • If an employee is employed for more than four weeks but less than one year, at least two weeks’ notice of resignation is required
  • If an employee is employed for one year or more, at least four weeks’ notice of resignation is required.

For employees whose position in the company is crucial to its success, or requires a lot of expertise to fulfil, employment agreements may allow for three months’ notice.

3Employee duties & responsibilities

This is real nuts and bolts stuff, and differs vastly from employee to employee — why did you employ this person? What do you expect them to do daily, monthly and annually?

These duties and responsibilities need to be recorded in an employment agreement so that both the employer and employee understand exactly what is expected of them and there is an agreed upon foundation for the relationship between the employee, the company and its structures.

4Hours of work per week

The BCEA prescribes a maximum of 45 working hours per week for normal time work. Where an employee meets certain exemptions, this will not apply, and must be negotiated with the employee and included in the agreement.

The BCEA has set the maximum allowed overtime at ten hours weekly. Employees are generally entitled to meal and tea breaks, but these are not included in the 45 hour work week, and are generally unpaid. 

Related: Apply for Leave – From Your Smartphone

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5Leave

Annual leave

The annual leave granted to an employee may not be less than 21 consecutive days for full-time workers, or by agreement, one day for every 17 days worked, or one hour for every 17 hours worked.

Annual leave must be granted not later than six months after completion of twelve months of employment, and must be on full pay.

Sick leave

During every sick leave cycle of 36 months, an employee is entitled to an amount of paid sick leave equal to the number of days he or she would normally work during a six week period. For example, should an employee work five days per week, they will be entitled to 30 days’ sick leave over a three year period, or ten days per year.

During the first six months of employment, however, an employee is entitled to a single day’s paid sick leave for every 26 days worked.

Maternity leave

A female employee is entitled to at least four consecutive months’ maternity leave.

The maternity leave commences four weeks before the expected birth, or when a medical practitioner certifies it as being necessary for the health of the employee or unborn baby. An employee is not allowed to work for at least six weeks after the birth, unless a medical practitioner certifies that she is fit to do so.

Protect your business and employees

Properly drafted employment agreements that protect your business and its assets are crucial in preventing costly litigation and CCMA hearings.

Kyle Torrington is the co-founder of Legal Legends, a company that aims to revolutionise the legal industry by being Africa’s first eCommerce website for quality legal services aimed specifically at start-ups and entrepreneurs

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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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year-end-review

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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