Employers and employees have different interpretations when it comes to the notice period to terminate the employment relationship.

The Basic Conditions of Employment Act (BCEA) stipulates that an employment contract may be terminated on notice of not less then four weeks if the employee has been with the employer for one year or longer. 

It is interesting to note that it does not stipulate that notice should be a month or calendar month’s notice. For this reason employers usually regulate the notice period in the employment contract.

The BCEA defines a “month” as a “calendar month”. Despite this, you still have to consider the interpretation of the term by looking at the context of employment contract as a whole.

Does the phrase mean:

• • Any 30-day period, with the result that the employee may give notice on any day of the month. The notice period will then terminate in 30 days’ time.

  OR

  • The beginning of any given month to the end of the same month. Thus, employees must give notice on the first day of the month and the notice period will continue until the last day of the month. Accordingly, when an employee gives notice on any day of the month, the notice period will only commence on the first day of the following month and will continue until the last day of the same month.

  It is important that the employer clearly qualify and define the termination notice period in the employment contract. Employers can do this by using the word “calendar” and referring to other provisions. These provisions include payment of remuneration and benefits such as pension and medical aid contributions on a “monthly basis”.

  By explicitly using the qualifier word of “calendar” in the termination clause would be a significant indicator to anyone interpreting the notice period that the parties clearly intended a different meaning to be given to the term “calendar month” then the term month.

  Contact the LWO at 086 110 1828 for more information and/or assistance in this matter.

Labour law sets clear requirements that employers must comply with and the LWO’s primary goal is to ensure that your business meets all of these requirements.  Labour law is not negotiable and compliance requires specialist knowledge, which poses a business risk to the employer.  The LWO has a team of highly trained legal advisors with roughly 235 years’ relevant experience and has been providing world-class labour law advice to employers across all business sectors for over 28 years.

The LWO and AccTech Systems hosted a workshop highlighting all the labour issues that employers may face on Wednesday, 21 February 2018 in Centurion.

Areas covered included:

• Digital transformation in the workplace
• Legislation overview and the labour environment in South Africa
• Employment contracts
• Rules in the workplace
• Myth busters – what you think you know!
• How technology can assist your HR environment
• Preparing yourself for tax yearend 2018
• Discipline in the workplace – consultations, warnings, hearings, proof, procedures, etc.
• CCMA cases
• Document management and auto reminders
• Managing your documents in the cloud

Areas covered included:

• Tertius Zitzke – CEO, AccTech Systems
• Karl Dinkelmann – Director:  Data Enablement, Business Intelligence and Analytics, AccTech Systems
• Christo Bester – Manager:  Legal Services, LWO
• Adv. Ernst Richter – Regional Representative, LWO
• Louis Croukamp – Director:  Human Resource Systems, AccTech Systems
• Karen Beukmann – Sage HR and Payroll

Download the presentations here:

• Tertius Zitzke:  digital transformation in the workplace
• Karl Dinkelmann:  data enablement in the workplace
• Christo Bester:  labour environment in SA, employment contracts, rules in the workplace, myth busters
• Louis Croukamp:  sage 300 people
• Karen Beukmann:  tax yearend 2018
• Adv. Ernst Richter:  discipline in the workplace, CCMA, myth busters
• Karl Dinkelmann:  doculine

Thank you for attending our workshop, we will keep you updated with regards to the next one!

Labour risk is a huge business risk. To ensure the sustainability and profitability for of your business, labour legislation 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 respective for growth.

Herewith a few tools to assist employers in managing labour relations in their businesses:

Registration

Documentation

Employment contracts

The employment contract is the basis of the relationship between the employer and the employee. The employment contract states the terms and conditions agreed upon by both parties. Terms and conditions of a verbal agreement cannot always be proven. Therefor, the written particulars of employment in the form of an employment contract creates clarity and certainty between the employer and the employee. The employment contract also diminishes the risk of disputes arising about these terms and conditions. An employment contract is the most important document for the employer in managing labour relations. Employers must take care not to use any generic employment contract, but rather invest in the best contract for your specific industry and type of business. By doing this you protect your business and put yourself as the employer in the best possible position for the employment relationship going forward by managing possible future disputes proactively.

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 then 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
• 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 terminations of employment.

Payslips

• Employer’s name and address
• Employee’s name and address
• Period of remuneration
• Deductions
• Overtime worked
• Time worked on public holidays
• Amount payable to the employee
• Leave taken and leave available

Leave

By law, there are four types of leave:

1. Annual leave
2. Sick leave
3. Family responsibility leave
4. Maternity leave

Specifying the types of leave and the amount of days applicable of 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. However, take care that the policy is not less favorable 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 regards to leave should be implemented in writing and explained to the employees to ease record keeping and limit absenteeism.

Rules

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 an conditions as agreed upon, cannot be amended without proper consultation with the employee. Therefor, 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 employer’s own rules, which must be reasonable, for the workplace, e.g. smoking, leave, the use of cell phones, etc.

The disciplinary code serves as a guideline for employer of what the appropriate sanction is for certain offences. These offences includes:

• absenteeism,
• control at work,
• strikes and industrial action,
• disorderly behavior,
• offences relating to theft or fraud and breach of confidentiality and trust,
• 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.

Procedures

By following the correct procedures, 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
• injuries on duty

With procedures in place matter 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 business. Not only does it minimise the risk of disputes and uncertainty between employers and employees, but also ensures that the most prevalent labour legislation specific to the industry is complied with.

The employee resigns

The employee reaches retirement age

The employment contract will terminate when the employee reaches the agreed upon retirement age. The agreed upon retirement age must be stipulated in the employment contract. The employer must also remunerate the ex-employee for accumulated leave due to the employee. Any ex gratia (out of goodwill) payment is solely at the discretion of the employer. This is not a legal requirement.

The employee is dismissed

Under no circumstances can an employee be dismissed prior to holding a disciplinary hearing. Once the employee has been found guilty and there are sufficient grounds to proceed with a dismissal, an employee can be dismissed. The ex-employee is entitled to his/her salary up to the last working day. This includes the finalisation of the disciplinary hearing. The employer must also remunerate the ex-employee for accumulated leave due for accumulated leave due to the employee.

It is important to determine whether the dismissal is with or without a notice period. If a notice period is applicable, the employer has to decide whether the ex-employee is required to work the notice period. If not the employer still has to pay the employee for the notice period.

The employee is retrenched

A retrenched employee is entitled to remuneration for accumulated leave, notice pay (if applicable) and severance pay of at least one week’s remuneration for every completed year of service. The employer has an obligation to provide an ex-employee with a certificate of service and final payment from upon termination of employment. A U119 has to be completed and submitted to the Department of Labour. It is advisable to provide the ex-employee with a copy of the U119 form.

The employer must continuously evaluate and assess the work performance of the employees in his/her employment. As a result, the assessment can then be utilised to motivate the awarding of bonuses and other salary adjustments. All employees have the obligation to perform duties and tasks as agreed upon. Hence, these duties and tasks must be carried out in a manner which satisfies the employer’s required standards in terms of quality and quantity. It is the employer’s duty to exercise control in the workplace if an employee’s performance does not meet the required standard.

Bonuses

A thirteenth cheque

This type of bonus is considered a condition of employment. As a result, the employee has the expectation of a thirteenth cheque every year as part of his/her compensation package. If the employer wishes to terminate or amend the practice of paying a thirteenth cheque, the employer must consult with the employee and the employee must agree to the change in the terms and conditions of employment.

The employer may not amend the terms and conditions of employment unilaterally. A unilateral change in terms and conditions of employment can be regarded as unreasonable and unfair. The employee may refer the matter to the CCMA. A valid reason to terminate the practice of paying the employees a thirteenth cheque will be when an employer cannot afford to pay bonuses due to financial constraints and withholding bonuses could be regarded as an alternative to retrenchments. Employers must be cautious not to discriminate against any employee in terms of the employee’s terms and conditions of employment, policies and benefits.

Performance bonus

Production bonus

When an employee alleges he/she is entitled to a bonus, the onus rests on the employer to prove the contrary. It is important that an employer continuously assesses the employee’s work performance, as well as keep records of these assessments.

In conclusion

When an employee enters into an employment agreement, the last thing on his mind is the ending of an employment relationship. One of an employers’ priorities is to protect his/her intellectual property, trade secrets, reputation and good will.

Does a restraint of trade clause or agreement provide sufficient protection for the employer’s business and is it enforceable?

To answer this question we need to look at the precedents set by the courts and Reddy v Siemens Telecommunications (Pty) Ltd (251/06) [2006] ZASCA 135; [2006] SCA 164 (RSA) (30 November 2006)is a good example and we still use this Appeal Court judgement today.

In this matter Mr Reddy signed a restraint of trade agreement which prohibited him from working for Siemens’s competitors. In the agreement Mr Reddy also agreed not to disclose trade secrets and confidential information belonging to Siesmens. Siesmens applied to the High Court for an interdict to prevent Mr Reddy from going to work for Ericson, a major competitor at the time. The Court held that it was sufficient cause to grant such an interdict if Siesmens showed that Mr Reddy had the knowledge and that he could use it to the detriment of Siesmens.

Therefor one can conclude that the purpose of a restraint of trade agreement would be to prevent a person from using information he learned at his previous employer to the detriment of such an employer when he moves on to a new job.

When determining the reasonableness, the following factors need to be considered:

Public interest – parties should comply with their contractual obligations.

In the interest of society, all persons should be permitted to engage in trade and commerce or be employed, in order to earn a living.

Is there an interest that deserves protection? If such an interest exists, is such an interest threatened by another party?

In Reddy’s case, his restraint had limited restriction. He was allowed to work and make use of his own skills, and he was just not allowed to work for a competitor. This agreement restrained his choice of employer. The Court found that the restraint was not unreasonable, as Reddy’s loyalty would lie with the new employer. Due to the knowledge and technical know how Reddy has, he may very well have an opportunity to use it. This poses a real risk to Siesmens.

Our courts do enforce restraint of trade in principle. The enforcer of restraint of trade must however be aware of the factors that are considered by our courts. It is of the utmost importance for employers to seek professional advice with regards to the content of restraint of trades. The courts may very well not grant the relief sought due to the incorrect content or terms and conditions.