Restructuring: what to consider/what it entails

Restructuring: what to consider/what it entails

Restructuring: what to consider/what it entails

Businesses operate in a challenging environment where the economic climate and other external forces can leave a business with little choice but restructuring: realign, restructure and reorganise to become more competitive or to maintain an existing position in the market. Operational changes can create opportunities for both the business and employees with regards to skill and personal growth, leading to better and more efficient use of human resources and the implementation of better procedures, ultimately improving efficiency and profitability.

What is restructuring?

Restructuring is the act of reorganising a business’s structures (legal, ownership, operational or other structures) for the purpose of making it more profitable or better organised for its present requirements.
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When does restructuring take place?

Restructuring will most likely take place in cases of operational changes, for example a change in structure (ownership, management, or departments), goals and visionfinancial position (the economy, amended legislation impacting on the cost of doing business, entry of competitors into the market, the minimum wage, recent drought, etc.) and technology (progress in terms of new techniques and methods of completing tasks quicker, as well as technological inventions).

Follow the correct procedure

Section 189 of the Labour Relations Act specifies a strict procedure that employers must follow when considering restructuring and/or retrenchment.  Employers must take care to follow this procedure and avoid making any unilateral changes to the employment contract.

Restructuring is a formal consultation process that allows both parties to engage in discussions to consider other alternatives, minimise changes, establish timeframes and reduce the negative impact of restructuring.  The employer should in all good faith keep an open mind throughout the process and seriously consider proposals put forward by employees.  Meetings should be held with all possibly affected employees as well as the trade union where applicable.

Employers should also take note of training as a means to avoid retrenchment.  Where an existing or new position requires a higher performance level or new skills, the employer is obliged to consider any additional training that may assist the employee in achieving the level of performance required.

Communication is key

Change is difficult and can leave employees anxious. We advise employers to be open and clear with regards to why changes are needed and to explain the business’s needs and goals, as well as make regular announcements to all employees in terms of progress made. Restructuring is more likely to be successful when managers understand the fundamental strategic problem or opportunity the business faces.

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Suspension: Punitive and precautionary

Suspension: Punitive and precautionary

Suspension: Punitive and precautionary

Suspending an employee is a common occurrence in the workplace. Employers must however take care to follow the correct procedures when imposing both precautionary and punitive suspension to avoid putting their business at unnecessary risk.

What is precautionary suspension?

Precautionary suspension is imposed when an employer suspects that an employee might have breached either the business’s disciplinary code, or the terms and conditions of employment.  Due to the nature of the alleged misconduct or breach and lack of proof of guilt, the employer can proceed to suspend the employee on a precautionary basis pending an investigation, especially if there is a possibility that the employee can interfere with the investigation in any way.  Precautionary suspension is with full pay and benefits.  The employee should understand that he/she is not being punished and should not suffer any prejudice in general or in respect of remuneration.

Before suspending an employee on a precautionary basis, the employer should ensure that there are justifiable reasons for removing the employee from the workplace pending an internal investigation.
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What is punitive suspension?

Punitive suspension is a form of punishment following a disciplinary hearing where an employee is found guilty of misconduct or a breach of the terms and conditions of employment.  Punitive suspension is a sanction which can be imposed on the employee as an alternative to dismissal and is without pay and benefits. The employer should make it very clear to the suspended employee whether he/she is being suspended on a precautionary or punitive basis to avoid any confusion and possible subsequent Commission for Conciliation, Mediation and Arbitration (CCMA) referrals.

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Sale (transfer) of business and labour law

Sale (transfer) of business and labour law

Sale (transfer) of business and labour law

In terms of the Labour Relations Act (LRA), an employee’s employment contract is automatically transferred to the new employer when a business is sold as a going concern. Any dismissal associated with such a transfer of business, will be deemed as automatically unfair. An employer selling his/her business may also not dismiss the employees if the buyer does not want to keep the employed employees.
As with any form of alleged automatic unfair dismissal, the court will first have to determine that the dismissal is causally related to the transfer of the business. If the employee makes a prima facie case that the dismissal is linked to the transfer of the business, the employer must be able to prove that the dismissal was due to a valid reason or fair operational requirement. Otherwise, the dismissal can be automatically unfair.
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What about the new employer?

A new employer is entitled to restructure his business to the extend he deems necessary to accommodate the acquisition of another business, even if it involves the retrenchment of a transferred employee. Such restructuring may continue if there are sufficient and fair reasons to retrench a “redundant” employee shortly after the merger of the business, provided that the dismissal is justifiable. It is also very important that the employer follows the prescribed process in terms of labour law. The only way employers, who are involved in a transfer of business, can avoid a potential automatically unfair dismissal is to enter into an agreement with the employees or their recognised representatives, before the business is transferred.

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Refusal to vaccinate – dismissible offense?

Refusal to vaccinate – dismissible offense?

Refusal to vaccinate – dismissible offense?

Refusal to vaccinate – A recent arbitration award found that it was substantially fair to dismiss an employee who was opposed to compulsory vaccination in the workplace.

There are three recognised grounds for dismissal, namely: misconduct, operational requirements (retrenchments) and incapacity:

  • For an employer to take disciplinary action against an employee, there must be a violation of a rule in the workplace.  For example, when implementing a policy that regulates employees’ behaviour, the employer can take disciplinary action if the employee does not respect and comply with this policy.

  • Secondly, an employer can retrench an employee due to operational requirements if there are no other alternatives, subject to section 189 of the Labour Relations Act.

  • The third recognised ground for dismissal is incapacity.  Here, for example, it is first considered whether the worker can be placed elsewhere and whether his job description cannot be adjusted.

Regarding compulsory Covid-19 vaccinations and the refusal to vaccinate, there is currently tension between two sets of legislation:  the Constitution and the Occupational Health and Safety Act.  The employee has the right to exercise his choice about bodily integrity, but the employer again has the right and obligation to ensure a safe working environment for employees as well as visitors.  The employer is entitled to implement a compulsory Covid-19 vaccination policy, provided that it is fair and complies with the requirements and guidelines set by the Department of Health as well as the government.

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If the employee is dismissed as a direct result of non-compliance with a Covid-19 vaccination policy, or due to his/her refusal to take the vaccine, the employee can refer an unfair labour practice dispute to the Commission for Conciliation, Mediation and Arbitration (CCMA).

Each of us has a constitutional right to exercise choices, especially when it comes to bodily integrity.  The real question is whether individual rights to bodily integrity and religion may be curtailed in favour of public interest.  This question will have to be decided on constitutional provisions.

The LWO is not prescriptive regarding members’ Covid-19 vaccination policy.  We believe in fairness and advise members to do business within the guidelines set by labour legislation, especially with regards to the Occupational Health and Safety Act.

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Bargaining Council – what about it?

Bargaining Council – what about it?

Bargaining Council – what about it?

Labour legislation applies to all employers and employees. The Basic Conditions of Employment Act (BCEA) defines the minimum terms and conditions of employment on which the parties may contract. However, if a business falls under an industry that is part of a specific Bargaining Council’s scope of application, the Bargaining Council’s collective agreement will regulate labour relations in that industry and employers are legally obliged to comply with this. Note that certain Bargaining Councils only apply to specific regions. The obligation rests with the employer to determine under which industry the business falls and then to comply with applicable legislation.

Employers that fall within a Bargaining Council’s scope of application must ensure that their employment contracts are drafted in line with this legislation.  Note that the minimum terms and conditions of employment as contained in the Bargaining Council’s collective agreement rank higher than those contained in the BCEA. If any labour disputes arise between the employee and employer, ʼn Bargaining Council will have jurisdiction to deal with these disputes, as opposed to referring the dispute to the Commission for Conciliation, Mediation and Arbitration (CCMA).

Functions of a Bargaining Council include to:

  • conclude and apply collective agreements;
  • prevent and resolve labour disputes;
  • establish and administer a fund to resolve disputes;
  • encourage and establish training and education;
  • to establish and administer pension, provident, unemployment and medical aid funds, as well as sick pay, holiday pay and training schemes for the benefit of one or more of the Bargaining Council’s parties or their members.
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Sexual harassment in the workplace

Sexual harassment in the workplace

Sexual harassment in the workplace

Sexual harassment is a serious offence and is also deemed a form of unfair discrimination.  The Employment Equity Act (EEA) stipulates that an employer violates the law if he/she fails to take the necessary steps in cases of alleged sexual harassment.  Section 60(3) of the EEA holds an employer liable for the unlawful, discriminatory conduct of its workers.

Defined as “unwanted behaviour of a sexual nature that violates the rights of an employee”, this behaviour includes any physical, verbal or non-verbal sexual conduct that makes the victim feel uncomfortable.
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Sexual harassment violates the following rights of the victim:

  • The right to a work environment free from sexual harassment
  • The right to be treated with respect and dignity in the workplace
  • The right to equality and not to be discriminated against on the grounds of sex
Behaviour will only be considered sexual harassment if it has a sexually unwanted undertone. The unwanted nature is distinguished from behaviour that is welcomed and reciprocated.

Sexual attention becomes sexual harassment when:

  • The recipient has made it clear that the behaviour is not welcome
  • The behaviour persists
  • The offender should have known that the behaviour was considered unacceptable
  • Sexual harassment can occur between any sexes, and is independent of ethnic origin. The employer as well as the employee can be guilty. Even contractors and suppliers do not escape responsibility.

Employers need to put policies and procedures in place to curb this conduct. It must be clear to all employees in the workplace that sexual harassment will not be tolerated, what actions are considered sexual harassment, how it should be reported and how it will be dealt with. An employee who is suspected of being a victim must be reassured that all conversations will be confidential and handled with the necessary sensitivity. In addition to the fact that such behaviour can harm a victim, it can also damage the reputation of the business.

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