Labour risk is a huge business risk. To ensure the sustainability and profitability of your business, labour risk needs to be managed in a proactive manner. This ensures a working environment with reduced conflict, friction and misunderstanding, which in turn creates a structured environment receptive to growth. Labour law in South Africa is based on principles of fairness and equitability.
Herewith a few tools to assist employers in managing labour relations in their businesses:
All employers must be registered with the Compensation Commissioner for workmen’s compensation. This ensures that all injuries on duty are reported and employers and employees are compensated accordingly. Employers must also register at the Unemployment Insurance Fund (UIF) and ensure that all employees working more than 24 hours per month are also registered and that UIF contributions are deducted from their remuneration. An inspector from the Department of Labour will always check this during an inspection.
Administration regarding labour relations largely consists of the following:
- Employment contracts
The employment contract is the basis of the relationship between the employer and the employee and states the terms and conditions as agreed upon. Terms and conditions of a verbal agreement cannot always be proven. Therefore, the written particulars of employment in the form of an employment contract creates clarity and certainty between the employer and the employee and diminishes the risk of disputes arising about these terms and conditions. An employment contract is vital as the most important document for the employer in managing labour relations.
- Displaying of legislation
All employers must display the following legislation:
- Basic Conditions of Employment Act
- Employment Equity Act
- Occupational Health and Safety Act (if you have more than 5 employees)
These Acts are easily displayed in the form of posters available for purchase at most employers’ organisations as well as the local Department of Labour.
- Personnel files
Being organised will ensure that documentation regarding employees can easily be accessed when needed. A personnel file should consist of at least the following documentation: an employment contract, leave forms, payslips, disciplinary records such as warnings issued for misconduct, a copy of the employee’s identity document/passport/work permit, his/her personal information and contact details. It is very important to keep this information up to date. Personnel files should be kept for three years after termination of employment.
Legislation requires all employers to issue employees with payslips when wages are paid. The following information must be displayed on a payslip:
- Employer’s name and address
- Employee’s name and address
- Period of remuneration
- Overtime worked
- Time worked on public holidays
- Amount payable to the employee
- Leave taken and leave available
By law, there are four types of leave: annual-, sick-, family responsibility- and maternity leave. Specifying the types of leave and the amount of days applicable to each in the employment contract ensures that the employee is informed of the amount of leave he/she is entitled to. We advise employers to implement a leave policy that stipulates how and when leave must be applied for, but take care that the policy is not less favourable than the applicable legislation which should be adhered to. It is important to make sure record is kept of each employee’s leave, a process facilitated by a leave policy. To ensure that leave does not infringe on operational requirements of the business, leave must be approved and approval is on the employer’s discretion. Policies and rules with regard to leave should be implemented in writing and explained to the employees to ease record keeping and limit absenteeism.
Clear rules and guidelines in the workplace ensure that friction and misunderstandings are kept to a minimum, which in turn promotes not only productivity but also a positive working environment. Rules are implemented in the workplace through the employment contract and policies. The employment contract, stating the terms and conditions as agreed upon, cannot be amended without proper consultation with the employee. Therefore, the majority of rules in the workplace is implemented through policies.
A policy informs employees of the rule/s in respect of a certain topic. The employer puts these rules in place to ensure the smooth and efficient running of his/her business operations. Policies are not underwritten by labour legislation, but define the employer’s own rules, which must be reasonable, for the workplace, e.g. smoking, leave, hygiene, the use of cell phones, etc.
The disciplinary code serves as a guideline for employers of what the appropriate sanction is for certain offences, referring to absenteeism, control at work, strikes and industrial action, disorderly behaviour, offences relating to theft or fraud and breach of confidentiality and trust and, offences relating to housing as part of an employment agreement. These sanctions may be adjusted depending on the circumstances and merits of each case as well as how progressive discipline should be applied. The disciplinary code also ensures that all employees are aware of the rules present at the workplace as well as the consequences should these rules be broken.
By following the correct procedure, the employer can ensure fair labour practice and further minimise the risk of disputes. We advise employers to adopt procedures in cases of the following eventualities: disciplinary hearings, appeal procedures, grievance procedures, termination of service, appointment of employees and, injuries on duty. With procedures in place matters are dealt with effectively without delay. This way both the employer and employee will have a clear guideline with regards to procedural aspects.
In conclusion, no employer can afford not to address registration and have labour related documentation, policies and procedures implemented in their businesses. Not only does it minimise the risk of disputes and uncertainty between employers and their employees, but it also ensures that the most prevalent labour law specific to the industry is complied with.