Vicarious liability

Vicarious liability

Sep 27, 2023 | Business owners tips and advice

Vicarious liability

Vicarious liability is indirect liability for the actions of another person, such as an employee.

Case study:

Mrs X, a receptionist at a busy medical practice, was juggling a high volume of phone calls and patient inquiries. One morning, a caller reached out with concerns about her persistent headache and fatigue. Mrs X listened attentively, empathising with the caller’s discomfort. However, instead of transferring the call to a nurse or doctor as per protocol, she decided to offer some advice herself. Later that day the caller came into the practice with her condition only worse after proceeding with the unauthorised advice she unknowingly followed, believing that she had spoken to a medical practitioner the morning who offered advice. Our caller has now suffered and plans to sue the practice for medical negligence she believes took place.
An act of kindness on the one hand or a potential medical malpractice lawsuit on the other by your employee who acted outside her mandated scope of work.
UPCOMING LABOUR INSPECTION?
LET LWO ASSIST YOU!
Request a call back

What is vicarious liability?

Vicarious liability is indirect liability for the actions of another person, such as an employee. There is a very fine line when it comes to vicarious liability, and it holds an enormous risk to the employer. An employer is vicariously liable for the acts or omissions of its employees committed during the course and scope of their employment.

Legal principle:

The general rule is that an employer will be held vicariously liable for the wrongful acts of an employee if the act in question was committed within the course and scope of the employee’s employment or whilst the employee was engaged in any act subsidiary to it.
When applying this legal principle to your day-to-day operations, it is important for all employers to ensure that employees are entrusted with only as much power as is strictly necessary to ensure that operations run smoothly. In order to reduce any risk of an employee acting outside of their mandated scope of employment (and subsequent vicarious liability for the employer), an unambiguous mandate with clear-cut lines which should not be crossed must be implemented and enforced by the employer to ensure that all employees are performing work within the confines of their mandate.
It might even be wise for employers to consult their insurance consultants or brokers, aiming to confirm they possess suitable coverage to reduce the potential risks linked to prolonged instances of employee misconduct. These situations could lead to legal responsibility towards external parties.
The legal principles for vicarious liability have been extended beyond the traditional principle of “in the course and scope of their employment”, to include other criteria when establishing liability, such as the creation by the employer of risk of harm. Keeping this perspective in consideration, employers ought to pursue comprehensive measures to guarantee the mitigation of the business’s risk concerning vicarious liability.

IS YOUR BUSINESS LABOUR-COMPLIANT?

FIND OUT NOW.

Stay ahead with our comprehensive compliance questionnaire. We’ll help pinpoint any gaps, ensuring you operate within legal guidelines.
Complete the questionnaire

Verso, ASPF and the LWO

Verso, ASPF and the LWO

Jul 27, 2023 | Business owners tips and advice

Verso, ASPF and the LWO

Article supplied by Verso

Verso, ASPF and the LWO: The Verso Group of Companies, established in 2000, has a national footprint and is comprised of several 100% owned companies operating within the financial services sector. The Verso Group has experienced exceptional growth since inception and is an established and trusted brand in the employee benefits industry.
Verso was built on honesty, transparency, integrity, trust and innovation and these foundational principles resonate in everything that the Verso Group does.

The Verso Group includes the following entities and services:

  • Verso Employee Benefits Consulting (Pty) Ltd – Employee benefits consulting and group risk products
  • Verso Benefits Administrator (Pty) Ltd – Retirement fund administration
  • Verso Health (Pty) Ltd – Brokers of medical aid, gap cover, employee wellness and health insurance products
  • Verso Wealth (Pty) Ltd – Financial management; retirement planning; personal risk management; estate planning; investment planning; individual risk cover – death, disability dread disease
  • Verso Trustee Services (Pty) Ltd – Death benefit investigations, retirement fund secretariat, legal and technical services to retirement funds, pension funds adjudicator complaints management, communication services for retirement funds and fiduciary services
UPCOMING LABOUR INSPECTION?
LET LWO ASSIST YOU!
Request a call back

Verso, ASPF and the LWO:

Since 1991 the Agricultural Sector Provident Fund (ASPF) has been improving the lives of farm workers and farmers by providing flexible risk and provident fund solutions, with a growing membership of more than 20 000 members.
The ASPF specialises in risk and provident fund products in the niche, agricultural environment and associated industries. The ASPF knows that no farm, agricultural structure or associated industry is the same and therefore delivering a unique, versatile product is essential to the market. The ASPF products are flexible and can satisfy a variety of needs, while still being uncomplicated to ease administration and limit costs.
The ASPF is supported and managed by a Board of Trustees originating from, Agri SA, TLU SA and the LWO, together with professional independent trustees.
The ASPF Board of Trustees has appointed Verso Financial Services (Pty) Ltd as the fund’s benefits administrator with effect from 1 October 2022. Verso is proud to have secured this appointment and has already showcased efficient, professional and competent administration services to the fund.

The LWO is a proud partner of the ASPF:

Verso has partnered with the LWO to unlock mutual synergies which could also benefit the ASPF and its participating employers and members, thereby strengthening the service offering of the ASPF. Verso is excited to provide wider services to LWO members, which will enhance the partnership.

For products, advice and services you can trust, please contact Suzaan Hamman (Principal Consultant) at Verso at 021 943500 or email her at LWO@Verso.co.za.

IS YOUR BUSINESS LABOUR-COMPLIANT?

FIND OUT NOW.

Stay ahead with our comprehensive compliance questionnaire. We’ll help pinpoint any gaps, ensuring you operate within legal guidelines.
Complete the questionnaire
Origin, overview and purpose of the unemployment fund

Origin, overview and purpose of the unemployment fund

Jul 27, 2023 | Business owners tips and advice

Origin, overview and purpose of the unemployment fund

Article supplied by Narike Kachelhoffer, Evimeria Accounting and Labour Assist

The unemployment fund came into existence on 1 April 2002. The fund is regulated by the Unemployment Insurance Act 2001 and the Unemployment Insurance Contributions Act 2002.
The fund provides temporary financial assistance for workers who, for specific reasons, can no longer earn an income in the economy from employment. The different scenarios in which a worker can claim unemployment insurance are controversial and are measured by the period that the worker did make a known contribution to the fund. Apart from the scenarios in which a worker can claim, there are also scenarios where the worker cannot claim, such as resignation.
UPCOMING LABOUR INSPECTION?
LET LWO ASSIST YOU!
Request a call back

The application of the unemployment fund:

Although there are many controversial reasons why employers and employees do not always see eye to eye when it comes to the fund, one thing is certain – no employer may choose not to deduct it and no worker is exempt from making a contribution, given that in both cases the worker works more than 24 hours per month, earns a basic salary, is not an immigrant on contract, or is employed as a student. It is therefore a compulsory deduction, which must be declared and paid over to the unemployment fund.

The legal contribution obligation towards the unemployment fund:

The unemployment fund contribution is calculated at 1% of the worker’s earnings and 1% contribution from the employer on the worker’s earnings. So a 2% contribution calculated on earnings and which is very fair seen in the light that the payout that workers can receive is more than the contribution made.

The employer and the unemployment fund:

Apart from the obligation to deduct your workers’ 1% contribution from their earnings, this must be declared and paid over to the fund together with the business’s statutory declarations. The South African Income Tax Service is only a payment option in respect of the fund. This is not a declaration to the fund. Therefore, the declarations of contributions by the employer must be maintained monthly through the Unemployment Fund’s platform at www.uif.co.za.

The declarations regarding earnings in businesses (EMP501) are not a declaration and the declarations must still be made to the fund itself. Owners of businesses can be heavily fined if they neglect, or fail to make, the necessary deductions, declarations and payments to the fund.

The worker and the unemployment fund:

It’s not all workers employed by businesses who have to make a mandatory contribution. The following cases are exempt from the mandatory contributions:
  • Students employed by businesses in relation to their studies (students who are employed and study completely independently are seen as normal workers)
  • Workers who earn commission and no basic salary
  • Workers on learning programs supported by the business
  • Immigrant workers employed on contract
  • Government agency employees e.g. municipal workers
  • Workers who work less than 24 hours per month

Claiming from the unemployment fund:

Workers can claim from the fund in the following cases:

  • Students employed by businesses in relation to their studies (students who are employed and study completely independently are seen as normal workers)
  • Workers who earn commission and no basic salary
  • Workers on learning programs supported by the business
  • Immigrant workers employed on contract
  • Government agency employees e.g. municipal workers
  • Workers who work less than 24 hours per month

There is also a death benefit available to the survivors of a deceased worker who made contributions to the fund.

When can the worker not claim against the fund?
  • Resignation
  • Worker who deserts (when an employee is absent from the workplace without the intention of returning to work) associated with case studies
  • If no contribution to the fund was deducted or made during the period of employment
  • Temporary suspension pending a hearing

IS YOUR BUSINESS LABOUR-COMPLIANT?

FIND OUT NOW.

Stay ahead with our comprehensive compliance questionnaire. We’ll help pinpoint any gaps, ensuring you operate within legal guidelines.
Complete the questionnaire
Sick leave abuse

Sick leave abuse

May 3, 2023 | Business owners tips and advice

Sick leave abuse

Earnings threshold 2023: It is vital for every employer to determine which employees earn in excess of the earnings threshold and which employees earn below the threshold, as this has a huge impact on the terms and conditions of employment the employer and employee can agree on. The earnings threshold has seen yet another increase as from 1 March 2023 and is currently set at R241 110.59 (a monthly amount of R20 092.55). The previous threshold of R224 080.48 has been in effect since 1 March 2022.
UPCOMING LABOUR INSPECTION?
LET LWO ASSIST YOU!
Request a call back

When is it due?

Section 22(1) to 22(4) of the Basic Conditions of Employment Act 75 of 1997 (BCEA) stipulates that an employee is entitled to paid sick leave. During the first six months of employment, paid sick leave is calculated as one day paid sick leave for every 26 days worked. In a 36-month leave cycle, an employee is entitled to 30 days paid sick leave (if the employee works five days per week) or 36 days paid sick leave (if the employee works six days per week). This leave cycle commences, irrespective of a probation period, on the first day of employment and paid sick leave taken during the first six months of employment can then be deducted from the total leave cycle. Remember sick leave is only due to employees genuinely too ill to perform their duties.

Is it paid or unpaid leave?

Firstly, is paid sick leave due? If yes, the employer must determine whether a medical certificate is needed. A medical certificate has to be presented if an employee is absent from work for more than two consecutive working days, or on more than one occasion within an eight-week period.

If paid sick leave is not due, there are two options:

  1. the employer can process it as unpaid leave;  or
  2. process it as paid leave and deduct it from the employee’s annual leave.

An employer is not required to pay an employee in terms of Section 22 of the BCEA if the employee has no available sick leave days, does not provide a valid medical certificate when required to do so, or is absent without the employer’s permission.

Abusing sick leave

In general, if a valid medical certificate is provided, the absence should be dealt with as a form of incapacity as the employee is inherently unable to meet fixed performance standards due to ill health.  When the employer however suspects abuse of sick leave, it is important to follow a fair process to investigate a claim of misconduct to produce evidence.

Ask these questions to determine if the employee’s behaviour amounts to misconduct or incapacity:

  • Is the employee taking a certain number of sick leave days in a short period of time?
  • Is the employee’s sick leave exhausted?
  • Do the dates of the sick leave suggest a pattern, i.e. is the employee typically sick on Mondays and Fridays, before or after a public holiday, or after payday?
  • Has the employee submitted valid medical certificates?
  • Is there any evidence that suggests that there may be other reasons for the employee’s absences (e.g. domestic violence, depression)?

Consider these two procedures in serious cases of incapacity or misconduct:

  • Incapacity procedure:  The frequently absent employee is genuinely suffering from ill health and could potentially be dismissed for incapacity.  Have the employee undergo a medical investigation to determine if the employee is capable of performing their duties and meeting the employer’s fixed operational standard.
  • Disciplinary procedure:  The medical investigation shows that the employee has no severe health problems.  The employer is now alerted to investigate sick leave absences in future, to determine if the employee was really sick or should be charged with misconduct lead by a medical investigation to proceed with a disciplinary hearing.

It is important that employers deal with issues in the workplace as quickly and effectively as possible, while taking care to act objectively and consistently.  By being proactive, the employer can greatly contribute towards the business’s sustainability and profitability and ensure a working environment with reduced conflict, friction and misunderstanding, which in turn creates a structured environment receptive to growth.

IS YOUR BUSINESS LABOUR-COMPLIANT?

FIND OUT NOW.

Stay ahead with our comprehensive compliance questionnaire. We’ll help pinpoint any gaps, ensuring you operate within legal guidelines.
Complete the questionnaire

Annexures to the employment contract

Annexures to the employment contract

May 3, 2023 | Business owners tips and advice

Annexures to the employment contract

An employment contract is the most important document in the workplace and defines the terms and conditions as agreed upon between the employer and employee. It regulates the employment relationship and by including proactive clauses and annexures in the employment contract, the employer is better positioned to address and limit disputes that may arise from this relationship.
In addition to the employment contract, the employer can add annexures to further protect the business going forward. Typical annexures that form part of the employment contract include a restraint of trade and a confidentiality agreement. These agreements are crucial for more specialised business activities to prevent competition and protect confidential information, unique methods and procedures, patents, etc.
UPCOMING LABOUR INSPECTION?
LET LWO ASSIST YOU!
Request a call back

2 most common annexures:

Restraint of trade agreement

A restraint of trade is an agreement between the employer and employee that prevents an employee from using his/her work, aptitude or training in the same field as the employer for a specific time period and in a specific area, after employment with the current employer came to an end. The restraint of trade seeks to protect the interests of the employer with specific reference to confidential information, clients, and goodwill (the business’s good name).
Aspects to consider for a restraint of trade to be successfully enforced:
  • What: What are the specific tasks, aptitude, work or field in which a former employee cannot become involved.
  • Where: Refers to the geographical area.  Take note that there should be a connection with the specific area.
  • Time: Refers to the period after the employee has left employment, during which the restraint of trade will be valid. This must be a reasonable period of time.

Confidentiality agreement

Confidentiality agreements are legal contracts that protect the employer’s confidential information and trade secrets. These agreements require employees to maintain confidentiality and not disclose any sensitive information to third parties. Confidentiality agreements can be used to protect various types of information, such as financial data, business plans, client lists, product designs, etcetera. These agreements can also be used to ensure that employees do not use confidential information for personal gain or to benefit their new employer after leaving the business.
These types of agreements also serve as a deterrent for employees not to incriminate themselves in these actions knowing that they may be subject to legal action. These agreements are enforceable in court, provided they are reasonable and do not place unnecessary restrictions on the employee’s ability to work and earn an income.

IS YOUR BUSINESS LABOUR-COMPLIANT?

FIND OUT NOW.

Stay ahead with our comprehensive compliance questionnaire. We’ll help pinpoint any gaps, ensuring you operate within legal guidelines.
Complete the questionnaire
Time wasters in the workplace – ‘I don’t have time’

Time wasters in the workplace – ‘I don’t have time’

Feb 10, 2023 | Business owners tips and advice

Time wasters in the workplace – ‘I don’t have time’

by Abrie Bronkhorst

Time is money. When an employee is employed, they undertake to be available for a number of hours to provide service. In exchange for this, the employer undertakes to compensate the employee for his availability and expertise. It then follows logically that the employer can expect the employee’s attention to be at work.

Several time wasters in the workplace are counterproductive. Employers should take note of the following:

UPCOMING LABOUR INSPECTION?
LET LWO ASSIST YOU!
Request a call back

Absenteeism

Absenteeism and tardiness are two of the most significant time wasters in the workplace. Apart from the employee who does not provide services according to agreed hours, absence has far-reaching consequences regarding colleagues’ service delivery. For example, a colleague has to stand in for the absent employee and cannot focus on his own activities, or the progress of a project or task is slowed down because the absent employee’s input and contribution are awaited.

Apart from not being at work, absenteeism also means:

  • Arriving late (it is still absent as long as the employee is not at work)
  • Leaving early
  • Unauthorised breaks
  • Extended breaks (smoke, toilet, lunch, tea, etc.)

Extended smoke breaks:

Firstly, there is no obligation for an employer to provide for smoke breaks. The Basic Conditions of Employment Act only provides for meal breaks. If the employer allows smoke breaks, it should preferably be regulated by a smoking policy. If not, smoke breaks can get out of hand by happening irregularly and creating the opportunity for extended chatting and gossip. This can lead to smoke breaks during working hours being easily abused, resulting in valuable working time lost. Four smoke breaks of 15 minutes each represent an hour of working time.

Extended tea/coffee breaks:

Making coffee often involves chatting, and socialising in a workplace’s kitchen can easily last up to 20 minutes per coffee break. Three coffee or tea breaks of 20 minutes each represent an hour of working time.
  • Feigned illness
  • Other unexplained absences from the workstation or the premises.
It is the employee’s duty to commence and end duties at times required by the employer.

Lack of attention

A lack of attention often leads to unnecessary repetition, mistakes, and even negligent damage and/or loss of the employer’s property. In addition, precious time is lost because the employee did not give the necessary care and attention to the employer’s instructions, and tasks sometimes must be redone. This lost time cannot be made up.

Cell phone distractions

It is no secret that mobile phones disrupt the workplace by constantly interrupting employees’ concentration when a message, notification or call comes through. There is such a wide variety of smartphone applications available, which only increases the potential for disruption – Facebook, YouTube, TikTok, WhatsApp, and so on. Even if the employee uses their own data and airtime for personal messages, calls and internet access, working time still belongs to the employer. It must be used to promote the employer’s interests.
Depending on the employer’s business activities, using (personal) mobile phones can create a real problem. By implementing a mobile phone policy, the employer can create clear guidelines for using personal mobile devices so that the employer’s operational requirements are not negatively affected. Employees must also be able to use integrity and judgment to know when it is appropriate to be on their phones.
Time wasters in the workplace raise two critical questions in the labour environment. First, can employees who take frequent smoke breaks and extended coffee sessions be required to cover the lost hours? And can employees who neither smoke nor take extended coffee sessions receive this extra time in the form of time off?

IS YOUR BUSINESS LABOUR-COMPLIANT?

FIND OUT NOW.

Stay ahead with our comprehensive compliance questionnaire. We’ll help pinpoint any gaps, ensuring you operate within legal guidelines.
Complete the questionnaire