All employers have two goals: to make a profit and be sustainable. Employers should therefore regularly evaluate all factors that can have an influence on the long term success of the business in order to create a cost effective environment enabling the business to stay competitive within the market. In the current economic climate, many employers struggle and consider different options to adjust to a changing environment.
An option is to amend the terms and conditions of employment as agreed upon in the employment contract. Employers should note that if these changes are made unilaterally (one sided), the employee can refer the matter to the Commission for Conciliation, Mediation and Arbitration (CCMA). This can result in preventing changes to the terms and conditions of employment and restoring the original terms and conditions as agreed upon.
Proposed changes may include changes to an employee’s:
- reducing an employee’s working hours and salary accordingly
- implementing short time
- increasing an employee’s normal working hours to 45 hours per week
- reducing an employee’s salary (make sure the employee still earns at least the minimum wage if applicable)
- reducing an employee’s benefits, e.g. cell phone, medical aid, fuel allowance, pension fund, etc. (make sure the employee still receives at least the prescribed benefits if applicable)
- amending the conditions on which a bonus is payable – is it a thirteenth cheque or is it linked to work performance and at the employer’s discretion
Steps to follow:
It is vital that the employer follows the correct procedure and keep record of it, when proposing changes to the employee’s agreed upon terms and conditions of employment. These steps include:
- Notify the employee in writing, stating clear reasons for the proposed changes. The employer must give the employee at least 48 hours’ notice enabling him/her to prepare for the consultation with regards to other workable solutions and general input.
- Consult with the employee in order to reach consensus. Parties must keep consulting and engage in discussions until consensus is reached.
Make sure that every employee has a written employment contract clearly stating terms and conditions agreed upon. The employer can also use labour legislation to his/her benefit in drafting the employment contracts by including proactive clauses that require the employee’s permission.
Contact the LWO at 0861 101 828 for advice and/or assistance in this matter.