The impact of strike action can be immense for both employers and employees, especially when strikes are drawn out and negotiations are conducted over extended periods of time. In such instances, strikes are typically lose-lose, with neither party receiving any real benefit, even if the demands of workers are met.
Organisations feel the pain of strike action in a diminished or completely non-existent workforce for the duration of the strike, often resulting in the loss of customers when there is a significant drop in production. Workers feel the impact of strike action in other ways such as loss of income which, in some cases, can exceed the amounts that they gain in wage increases – a common reason to strike.
Businesses need to adopt a strategy to mitigate losses, maintain productivity, uphold reputations and wherever possible, retain mutually beneficial employer-employee relationships in the event of a strike.
Strikes – the good, the bad and the ugly
Strikes take place for a number of reasons, and these reasons are not always invalid, according to Sean Momberg, MD of Workforce Staffing Solutions. He explains that there is a common misconception with the general public that strikes take place in order to create disturbance or inconvenience, or as a result of unfair demands for more money. Although there are cases where demands are unreasonable, strikes can ensure that employees receive fair rights and employers do not take advantage, especially in the use of unskilled or semi-skilled labour.
“Workers typically strike due to a demand for increased wages or better working conditions. This is usually in conjunction with the relevant union for the specific industry. There are no specific ‘peak times’ for strikes, although increased strike action is usually noted around annual contract renewal periods and bonus time,” says Momberg. “Regardless of the reasons for a strike, they can be debilitating for businesses.”
There are two types of strikes, protected strikes which are sanctioned by the law, and unprotected strikes which are not. The latter does not have the backing of the law and may result in the strikers’ dismissal from employment for participating in an unprotected strike, depending on the circumstances.
According to Joanette Nagel, Head: Commercial and Labour at Hunts Attorneys, for a strike to be deemed protected, there are certain requirements, regulated by law, which need to be met.
Related: Will A Strike Cripple Your Business?
Says Nagel, “According to law, a protected strike has to comply with the following requirements: the reason needs to be something of mutual interest for both employee and employer, the matter has to be referred to the CCMA and the CCMA has to issue a certificate that the matter remains unresolved, or a period of 30 days, or the extension thereof as agreed between the parties have lapsed after the referral to the CCMA, there needs to be at least 48 hours’ notice given of the intent to strike, whether or not unions are involved.”
Nagel adds that, in the case of protected strikes, employees still forfeit their wages for the duration of the strike, however their positions are not in jeopardy and their employers are obligated to allow them to return to work once the strike is over.
Don’t strike out
Companies are able to prepare for strike action and can take necessary steps to ensure their business is protected against losses and damage, however they need to have a sound Industrial Relations policy and manager who fully understands the processes and parameters for both protected and unprotected strikes.
“Strikes are intimidating for any business, which is why they can be so successful,” says Momberg. “However, businesses are able to implement temporary measures to protect themselves, such as leveraging the assistance of a Temporary Employment Service (TES) agency which has the resources to quickly mobilise large workforces in a short space of time.”
Nagel agrees, saying that while many businesses opt for shutting down operations as a precaution against strike associated violence and intimidation, this is not necessarily the best option. “Businesses have legal recourse to discipline any employee who damages property or engages in intimidation tactics while striking. Furthermore, employees who are violent, abusive or cause damage during a strike may face additional criminal charges for their actions. The risk of losing business and productivity far outweighs the risk of strikes becoming dangerous. A replacement labour force ensures that doors remain open, and business can continue as usual, especially when the TES has a reputation for meeting any employment requirement.”
Momberg points out that organisations can avoid getting involved with strikes altogether, with the right TES partner.
“Reputable TES’ understand strikes and have the right resources in place to not only assist and advise organisations who are subjected to strike action, but also to help businesses avoid them altogether. Outsourcing the HR division and the bulk of a business’s labour requirements means that the responsibility for handling a strike does not lie with the business, but with its TES,” says Momberg.
TES’ typically retain the skills of in-house IR and HR specialists, as well as legal counsel with a specific focus on labour laws, thus owning the ability to both manage the entire HR function for any organisation in any sector, but also the ability to manage strikes – and ensure business continuity – in the event that they occur.
“As a TES company we have an open and transparent relationships in place with various trade unions as well as the legal entities. We are able to manage the staffing process from start to finish, including employee engagement, grievance handling, and matching the right people to the right positions, so that employees are happy and rarely find reason to strike. Organisations who outsource their staffing component, either in its entirety or when strikes arise, will find that strikes do not strike out their businesses,” concludes Momberg.
SMEs: Staying On The Right Side Of The Taxman
Remaining SARS compliant can be a constant challenge for small- to medium-enterprises (SMEs), especially when they are trying to focus on growing their businesses and streamlining their operations.
EasyBiz Managing Director, Gary Epstein, says submitting taxes can be a seamless process that does not have to take up more time than is necessary. “If business owners understand what is required of them and they put a few processes into place to deal with their tax submissions properly, their lives will be so much easier.”
What are the top three considerations for SMEs when submitting tax returns?
“Firstly,” says Epstein, “SARS returns must be accurate and submitted in terms of the relevant Act. Secondly, returns should be submitted and paid on time to avoid unnecessary penalties and interest, and thirdly, business owners must follow up on queries issued by SARS. “Do not ignore these queries, act on them as soon as possible”.
What are the major SARS submission deadlines for SMEs?
Epstein points out that small business owners need to adhere to various tax deadlines, each with their own particular dates for submission. “It is important that business owners diarise the dates (and set advance reminders for themselves) and/or enlist the services of an accountant or financial adviser to help them keep abreast of requirements.”
Value-added tax (VAT)
VAT payments need to be submitted in the VAT period allocated to the business, according to various categories and ending on the last day of a calendar month. This may mean making payments once a month, once every two months, once every six months or annually, depending on the category.
Provisional tax should be submitted at the end of August (first provisional) and at the end of February (second provisional) – for February year-end companies.
In addition to submitting an annual reconciliation (EMP501) for the period 1 March to end of February for Pay-As-You-Earn (PAYE), Skills Development Levy (SDL) and Unemployment Insurance Fund (UIF), employee tax, in the form of an EMP201 return, needs to be submitted by the seventh of every month.
When can SMEs get extensions and is it worth it?
Epstein says SMEs can apply for various extensions, but these are subject to the Income Tax Act and Tax Administration Act.
“It is best for SMEs to consult their tax professionals to get advice regarding extensions for their businesses.”
What is SARS not flexible about?
SARS is not flexible when it comes to late returns and late payments.
“I cannot stress enough how important it is for SME owners to ensure their tax returns are submitted on time. In this way, they will avoid the inconvenience and expense of additional fines and interest,” notes Epstein.
What skills do SMEs need in their organisations to be able to submit to SARS efficiently?
Business owners often don’t have the time or expertise to deal with tax submissions throughout the year. If the business cannot afford to employ a full-time accountant or financial services expert, it would do well to outsource its tax requirements to a registered tax practitioner.
“I would recommend that even if they are not submitting the tax returns themselves, business owners should have a broad understanding of the tax regulations and what is expected of them. There is a lot of helpful information on the various Acts and tax requirements on SARS’ website,” says Epstein.
How does the right software help SMEs remain SARS compliant?
SME’s (and their accountants’) jobs can be made easier by using reliable accounting software to calculate accurate VAT reports. These reports are only as accurate as the data entered into them, which means care needs to be taken when inputting data into the accounting programme. Epstein says a good accounting software package must be reliable, easy to use and functional.
“SMEs need to check that the software has thorough reporting capabilities and can interface with other software solutions. Of course, it is also important to find out whether the software is locally supported by the vendor or not.”
4 Dangers Of Business Under-insurance
A common short-term insurance peril that many SMEs face when submitting a claim following an insured event is the risk of being underinsured.
Malesela Maupa, Head of Products and Insurer Relationships at FNB Insurance Brokers says, many small business owners mistakenly believe that by merely having a short-term insurance policy in place they are adequately protected against unforeseen events.
“This is technically correct provided that the business is covered for the full replacement value of the items insured. However, in circumstances where the sum insured does not cover the full replacement value or material loss of the item insured, the business is underinsured,” explains Maupa, as he unpacks the dangers of business underinsurance:
1. Financial loss
The most common risk is financial loss on the part of the business. If the business is underinsured or the indemnity period understated, the short-term insurance policy will only pay out the sum insured for the stated indemnity period as stated in the schedule, with the business owner having to provide for the shortfall. This often leads to cash flow challenges, impacting profit margins or rendering it difficult for the business to recover following the financial loss.
2. Reputational damage
Should an underinsured business not have sufficient funds to replace a key business activity or critical component following a loss, this may impact its ability to fulfil its contractual obligations, leading to a loss of business or market share, and irreparable reputational damage in the worst-case scenario.
3. Legal action
A small business also faces the risk of customers or clients taking legal action against it, should it fail to deliver on goods and services following a loss or be unable to honour its financial commitments that they committed to prior to the loss.
4. Survival of the business
A catastrophic event such as fire, which could result in the loss of stock or company equipment and documentation, could threaten the survival of a small business that is not yet fully established, if the business assets are not adequately insured.
Working with an experienced short-term insurance broker or insurer is essential when taking up short-term insurance to ensure that business contents are covered for their full replacement value.
Furthermore, depending on the nature of the business or item insured, the policy should be reviewed on a regular basis to avoid underinsurance as the value of items often change overtime due to fluctuations in economic activity. Where it’s necessary, evaluation certificates need to be kept up to date.
“Lastly, SMEs should ensure that the sum insured does not exceed the replacement value, which would lead to over insurance. Should a business submit a claim following a loss, the insurer would only pay out the replacement value, regardless of the higher sum insured,” concludes Maupa.
Inspiring A New Generation Of Learning – Education As A Basic Human Right
Access to education isn’t a privilege, it’s a basic human right – Mzwandile inspires a new generation of learners.
Raised by his aunt and uncle after his parents passed away at a young age, Mzwandile Harmans attended a poor school in Cala, the heart of the rural Eastern Cape. It was his matric year; but with limited resources at Masikhuthale Public Secondary school, the pass rate was low and the learning environment less than ideal for conscientious learners.
Then one day a teacher came round to talk about Engen’s Maths and Science Schools (EMSS) programme, and everything changed for this talented young man who was determined to realise his full potential.
“We were given a chance to take a test to qualify for the EMSS Cala programme. The programme offered supplementary classes in maths, science and English, which ran every Saturday morning, but was 25 kilometres away,” remembers Mzwandile. “Fortunately, I took it seriously and I got in.”
Making the long round trip every weekend to attend the programme saw a steady improvement in Mzwandile’s maths, chemistry, and physics marks, so much so that he was awarded a full Engen scholarship to study Chemical Engineering at the Cape Peninsula University of Technology (CPUT).
Mzwandile later impressed with his tertiary studies and after two-years was offered a one-year internship at the Engen Refinery in Durban, which he passed with distinction. On graduating from CPUT, he landed a two-year employment contract with Engen, as part of the company’s graduate development programme.
Today, Mzwandile is permanently employed as an Environmental Technician at the Engen Refinery. “I am so grateful to Engen for all of this,” says Mzwandile. “I never thought it could happen to me.”
Engen’s Head of Transformation and Stakeholder Engagement, Unathi Magida says access to education is a fundamental human right. “This resonates particularly with Engen as a company, as we believe in the value of education and know how important it is to ensure that young people have the opportunity to realise their full potential.”
Chwayita Mareka, Engen’s Head of Human Resources, says the company’s investment in young talent has focused on the Maths and Science Saturday Schools because they understand the bigger country agenda.
“As Engen, we try and play our part in helping to develop South African’s talent pool, as there is a scarcity of Science, Maths and Engineering skills. We offer bursaries for students to go to universities in these fields and we look after them, especially if they are from disadvantaged communities,” says Mareka.
“Later, they come into Engen as graduate trainees as part of our graduate development programme wherein we assign them a mentor that exposes them to the real business,” she adds.
Mzwandile’s journey is just one of many inspirational Engen stories that will be shared as part of a new TV series that aims to create a positive narrative around South Africa’s success stories. The SA INC. TV series which launches on 7 April is a partnership between Business Leadership South Africa (BLSA), Brand South Africa and producers, Regency Global.
“At Engen, we strongly believe that a country which is educated is a country that will prosper. We are pleased to play a part in helping to develop South Africa talent, especially our young learners based in rural areas,” says Magida
To watch Mzwandile’s story please visit the website: https://regency.global/engen/ and the following hashtags: #JourneyWithEngen #BusinessBelieves #SAINC #humanrightsday #awesomesouthafrica #sustainability #livesouthafrica #weheartsa.
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