Employment and Labour Law

“There’s no trust, no faith, no honesty in men.” (William Shakespeare, in Romeo and Juliet)

A recent Labour Court decision is a stark reminder to employees that an employment relationship is founded on trust, and that any breach of that trust could justify dismissal.

Pocketing a 50c coin to balance her till

The responsibilities of a bank teller included “balancing cash daily, reporting differences, as well as maintaining effective security controls, including maintaining a high level of honesty, integrity and ethical standards.”

Her clean record over the four years of her employment ended abruptly when a monthly surprise check of the cash balance in her till revealed a discrepancy in the form of a bag of R1 coins totalling R20, unaccounted for and therefore in violation of banking rules and procedures.

The resulting investigation revealed, as recorded on CCTV, the teller’s various failed attempts at balancing her till, which she had ultimately succeeded in doing only by pocketing a 50c coin from the till.

A subsequent disciplinary enquiry found her guilty on charges of misconduct in the form of dishonesty, falsification of balancing records and misappropriation of funds from her till. She referred her dismissal case to the CCMA (Commission for Conciliation, Mediation and Arbitration), which refused her application.

In finding her dismissal to have been fair, the arbitrator rejected both the teller’s claims that her till discrepancies resulted from her ill health, and her denial of taking the 50c to manipulate the system (the CCTV record was, it seems, crystal clear on that point). The court also remarked on her contradictory statements as to the “miraculous” bag of R1 coins.

Critically, the teller had been trained in her duties and was well aware of what was expected of her in line with the bank’s Code of Ethics. Moreover, the bank’s Disciplinary Code provides that falsification of bank records is a dismissible offence as a destroyer of the employer-employee trust relationship.

Undaunted, the teller took the CCMA’s award on review to the Labour Court, which made short work of confirming her dismissal.

It’s the breach of trust that counts, not the amount involved

As our courts have confirmed many times, the employer-employee relationship requires an employee to act honestly and in good faith. The trust which the employer places in the employee underlies their whole relationship, and any breach of that trust risks dismissal.

Even an apparently minor act of dishonesty can justify dismissal if it has resulted in a breakdown of trust that makes continued employment intolerable. The final decision of whether or not dismissal will be appropriate for a particular act of misconduct will depend on all the circumstances.

4 practical tips for employers

For employers, preparation is key in ensuring that you are able to dismiss a dishonest employee without falling foul of our employment laws. Start with the basics:

1. Your employment contracts and codes are critical: As we saw in this case, the bank’s strictly worded Code of Ethics and Disciplinary Code were central to proving the fairness of the dismissal. Your employment contracts should incorporate reference to zero-tolerance policies that leave employees no wiggle room when it comes to understanding that any act of theft or dishonesty, no matter how minor, will justify dismissal. Incorporate reference also to the monitoring and checking processes you will apply – it was the “surprise monthly till check” that cooked this teller’s goose.

   Every workplace will have its own unique requirements in this regard, so contracts and codes tailored to your circumstances are vital.

2. Training is essential: As we again saw in this case, a deciding factor in the Court’s decision was the fact that the teller had received adequate training in her duties and so couldn’t claim ignorance of the requirements that she balance her till, report discrepancies, act honestly, etc.
3. Proof is key: The CCTV footage of the teller pocking money from her till was critical in proving that she deliberately flouted the rules and stole from her till. Whatever monitoring devices and processes you may have in place (and do remember to ask us how you can use things like CCTV monitoring without being accused of an unfair labour practice!), make sure to collate and preserve it as soon as any incident of misconduct comes to light. You might have to retain it for a long time (nearly four years so far in this case).
4. Your disciplinary process must also be fair: Remember that proving “substantive fairness” (a fair and lawful reason for dismissal) is only one part of the equation. You must also be able to show that all your disciplinary processes are “procedurally fair” (i.e. that a fair process was followed).

As always with our employment laws, the requirements are complex and the costs of getting them wrong are high, so don’t hesitate to ask us for advice and help every step of the way.

Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact us for specific and detailed advice.

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“When cognitive capacities are the focus, the 70s are the new 50s.” (IMF)

Fake news articles suggesting that South Africa was implementing a new standard retirement age policy, supposedly from 30 May this year, recently went viral on social media. Convincingly structured to look realistic (AI’s dark hand there?), the articles suggested that 65 is the new universal standard retirement age for all employees across all sectors.

Complete hogwash. 

What the law actually says

• Age discrimination is “automatically unfair”, and any employer found to be guilty of it by unlawfully forcing an employee to retire early faces a compensation order of up to 24 months’ remuneration (double the normal award for a run-of-the-mill unfair dismissal), re-instatement or re-employment. 
• There is, however, an escape clause there for employers: “A dismissal based on age is fair if the employee has reached the normal or agreed retirement age for persons employed in that capacity.”
• Even where a dismissal itself is fair, you must still follow a fair process in implementing it – more on that below.

It’s an important topic, with increasing numbers of employees wanting to (or needing to) work into their 70s. A recent Labour Court ruling showing those principles in action is well worth taking note of.

The plumber forced to retire at 60

An artisan plumber with 12 years of service had his employment terminated when he turned 60.

He asked the Labour Court to declare his dismissal automatically unfair as other employees had been allowed to work until they were 65. What’s more, he denied ever agreeing to retire at 60.

The employer countered that it had a two-tier retirement policy which obliged employees with more physically demanding jobs (site workers such as artisan plumbers) to retire at 60 whilst supervisory and administrative personnel (such as foremen and office staff) only had to retire at 65. 

On the facts, the Court declared the dismissal to have been fair, finding that the evidence pointed to the employee being subject to a retirement age of 60 because:

• The employer’s retirement policy was in line with the rules of the applicable Building Industry Pension Scheme. 
• Although no signed copy of his full employment contract could be found, the employer did produce a standard annexure to such a contract, confirming retirement at 60 and “probably” signed by him (he denied signing it but agreed the signature looked like his).
• A number of his fellow plumbers had also been retired at 60 (he attended their retirement functions), and other cases of retirement at age 65 cited by him related to employees in the “65 tier” – that is in supervisory or administrative positions.
• Another plumber’s contract was produced, with the retirement provision in place.

Bottom line: the employee hadn’t proved that his retirement at the applicable retirement age of 60 was an automatically unfair dismissal, and the Court held his dismissal to be fair.

How to ensure that an age-related dismissal is fair

First prize is to specify an agreed retirement age in all your employment contracts, ideally from day one. If you want to add a retirement clause later, or to change anything about an existing clause, be sure to do so by negotiation and agreement, not unilaterally. And be sure to keep the original, fully-signed contract safe and accessible (unlike the employer in this case who had to rely on a scan of just the annexure to the contract).

Alternatively, be ready to prove that there is a “normal or agreed retirement age” for employees employed in the same capacity. 

The dismissal must be genuinely based on the employee having reached retirement age and cannot, for example, be a disguised retrenchment or a dismissal for some other reason. 

It’s crucial that you follow a fair process. Open communication, reasonable notice, and applying the rules consistently to all employees could be critical here.

Every case will be different, so ask us for advice specific to your situation. 

Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact us for specific and detailed advice.

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“The legal principles, as I understand them, do not confer on me the powers of Father Christmas. I cannot rescue the un-rescuable.” (Quoted in the judgment below)

We all want loyal, competent staff who remain motivated to stay with us in the long term, but the reality is that a degree of employee churn is always inevitable. 

Imagine then this scenario – a key employee (someone senior, a specialist, or perhaps even a partner or director) is fired or leaves you. They take with them intimate knowledge of your business. They know all your trade secrets, your pricing processes, your marketing strategies, and all your trade connections. Plus, they’ve built up client relationships and credibility in your industry while employed by you. 

If they now decide to start up their own business in opposition to you, or if they take their insider knowledge to your competitors, you have a real problem. 

That’s why it’s essential to consider, right up front when you’re hiring someone and drawing up their employment contract, whether you need to protect your business from this sort of unfair competition. That’s where the tried-and-tested restraint of trade clause comes into play. It’s as easy as including one in your employment contract, and making sure that your new hire is fully on board with it. Or is it?

The basic requirements for legal validity

As a starting point, our courts are cautious about curbing anyone’s constitutional right to be economically active and to earn a living. 

So, while we are all generally held to the agreements we make, and while restraint clauses have long been recognised in our law as a legitimate way for businesses to protect their interests from unfair competition, our courts are unlikely to enforce restraints unless they are:

• Reasonable: You cannot impose an unreasonable restriction on your former employee’s freedom to trade or to work. Go too wide on time period, geographic area or scope, and your clause could be held wholly or partially void.
• Protective of a legitimate business interest: You must have a real commercial interest in imposing the restraint, you can’t use it just to block competition.
• Not contrary to public policy: There must be no other aspect of public policy weighing against the clause.

Each case will be judged on its own facts and merits, with the court balancing your rights against those of your former employee in a bid to ensure fairness to both of you. 

As a starting point, make sure that your clause isn’t “void for vagueness”, or you could end up in the same position as the employer we discuss below.

Too vague to enforce, and no Father Christmas to the rescue

An employer, providing physiotherapy services to two major hospitals in the Umhlanga area of KwaZulu-Natal, employed a senior physiotherapist in January 2023. Eight months later she resigned.

The restraint of trade clause in her agreement was a particularly terse one. Headed “15. Trade Restriction”, it read simply: “2 year 8km restriction in event of termination / expiry of Contract.”

When the employer tried to enforce this clause, the High Court refused, pointing out that it was “lacking in substance” and contained no indication of:

• A definite commencement date for the two-year period
• What the “8 km restriction” referred to
• What exactly was restricted
• What interests it sought to protect

What’s more, it contained no mention of the two particular private hospitals which the ex-employee was not to practice at. The Court refused the employer’s request to “read in” more wording to the clause to remedy its vagueness and lack of detail, quoting from another High Court decision: “the legal principles, as I understand them, do not confer on me the powers of Father Christmas. I cannot rescue the un-rescuable.”

It also warned against the trend for smaller businesses to cut corners by going the “DIY contract” route: “SMME businesses are reluctant to seek advice from attorneys, and less so to employ attorneys to prepare important legal agreements. This pattern, fuelled undoubtedly by the rising cost of legal charges, often results in unforeseen circumstances by the time the matter reaches a litigious stage”. 

That’s putting it mildly – defective restraint clauses like this one literally aren’t worth the paper they’re written on. A properly drawn clause is essential, and we’re here to help.

Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact us for specific and detailed advice.

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It’s vital for both employers and employees to understand the practical and legal differences between permanent and fixed term employment arrangements.

What is a fixed term contract?

A fixed term contract is a temporary employment arrangement with a specified start date and an agreed end date. This could be a fixed end date or a reference to a specified task or project reaching completion, or to a specified event. Importantly, you must be able to prove that your employee agreed to the end date.

A standard contract of employment, by contrast, is for an unlimited period and ends only when your employee resigns, or reaches retirement age, or is lawfully dismissed or retrenched by you.

Any employer tempted to misuse a fixed term contract in order to dodge the many legal protections given to a full-time employee should think twice – our courts do not look kindly on attempts to prejudice employees by disguising the true nature of an employment relationship.

The basic requirements

The contract (and any renewal contracts) must be in writing and must state the reasons justifying the stated fixed term.

The protections

The Labour Relations Act (LRA) provides a range of protections to fixed term employees. Let’s address them under two main headings.

Firstly, the “reasonable expectation of renewal” protection that applies to everyone

Simply put, you could face an unfair dismissal claim (with all that that entails) if you give the employee reason to believe that the contract will be renewed or converted to full-time employment.

That’s because – and this applies to all fixed term contracts in that none of the exclusions listed below apply here – the LRA says the termination of a fixed term contract is seen as a “dismissal” if:

• The employee “reasonably expected” you to either renew the fixed term contract on the same or similar terms, or to convert the contract into indefinite employment (again, on the same or similar terms), and you didn’t do so. 

Anything could land you in hot water here, with particular risk areas being things like continual renewal of fixed term contracts without justification, verbal or implied reassurances of renewal, a workplace culture of renewing contracts etc. To be on the safe side, consider giving your employee specific written notice of non-renewal in good time. Every scenario will be different here, so in some instances you may be advised that multiple contract renewals are justified, in others that they aren’t – specific legal advice is essential, and the bottom line is that professionally drawn contracts and clear communication are critical.

Secondly, other protections that apply only to certain employees

These additional protections do not apply in any of these exceptions:

• The employee earns more than the earnings threshold set by the Basic Conditions of Employment Act (currently R261,748.45 per year or R21,812.37 per month).
• You employ less than 10 employees.
• You employ less than 50 employees in a business that is less than two years old (and that hasn’t been formed by dividing or dissolving an existing business).
• The fixed term contract is permitted “by any statute, sectoral determination or collective agreement.”

The three-month limit, and the need for justification 

You can only use a fixed term contract (or successive contracts) for over three months if:

1. The work involved is of limited or definite duration, or
2. You are able to prove a justifiable reason for fixing the contract’s term, with the LRA specifically mentioning situations such as:
   
   • Covering another employee’s absence (on maternity leave perhaps)
   • Addressing a temporary increase in work not expected to last over 12 months
   • Providing work experience to students and new graduates
   • Specific projects of limited or defined duration
   • Seasonal work
   • Positions funded externally for a limited period
   • An employee who has reached retirement age
   This is not an exhaustive list so you may well have other justifiable reasons, such as perhaps needing to establish the viability of a new venture, a new branch, or a new position before committing to long-term employment.

Watch out here! If you employ someone on a fixed term contract for more than three months without complying with the above, the contract is automatically deemed to be a full employment contract of unlimited duration.

Other things to watch

• Equal treatment after three months: Even if you have justification for exceeding the three-month limit, you must then treat the employee no less favourably than a permanent employee in the same position, unless again you have justification for different treatment.
• Right to apply for vacancies: Fixed term employees must have the same access to apply for vacancies as permanent employees.
• Retrenchment pay if a project exceeds 24 months: Any project-specific fixed term employee who is employed for over 24 months must, when the contract ends, be paid a week’s remuneration for every completed year of the contract or offered other employment (with you or another employer) on the same or similar terms.

A properly drawn employment agreement that both protects your interests and complies with the law is essential – and we’re standing by to help you.

Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact us for specific and detailed advice.

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From 1 April 2025, the earnings threshold under the Basic Conditions of Employment Act (BCEA) will increase, impacting not only the BCEA but also employee protections under the Labour Relations Act (LRA) and Employment Equity Act (EEA). 

Broadly speaking, employees earning less than the threshold amount are entitled to stronger labour protections.

The new threshold 

The threshold rises by only 2.9% this year, increasing from R254,371.67 per year (R21,197.64 per month) to R261,748.45 per year (R21,812.37 per month).

What counts as “Earnings”?

“Earnings” (for this purpose only) means “the regular annual remuneration before deductions, i.e. income tax, pension, medical and similar payments but excluding similar payments (contributions) made by the employer in respect of the employee: Provided that subsistence and transport allowances received, achievement awards and payments for overtime worked shall not be regarded as remuneration”.

The impact on employee protections 

• BCEA: Employees earning above the new threshold aren’t entitled to statutory protections for working hours, overtime pay, Sunday, public holiday and night work, daily and weekly rest periods and meal intervals. 
• LRA: Those earning below the threshold gain stronger protections:
  
  • If working for a client via a labour broker for more than three months, they are deemed employees of the client – unless they really are performing a temporary service. 
  • Fixed-term contracts exceeding three months are presumed indefinite unless the employer has a justifiable reason for fixing the term of the contract. 
• EEA: Employees earning above the threshold can only take unfair discrimination disputes (except sexual harassment cases) to the Commission for Conciliation, Mediation and Arbitration (CCMA) if both parties agree. Otherwise, they must approach the Labour Court.

Exceptions to the BCEA protections

Some employees have limited BCEA protection regardless of their earnings, including:

• Senior managerial employees – defined as “an employee who has the authority to hire, discipline and dismiss employees and to represent the employer internally and externally”.
• Sales staff who travel to customers and set their own work hours.
• Employees working less than 24 hours a month.

Please ask us for specific advice if you need it. This article is merely an overview of a complex topic with many pitfalls for the unwary.

Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact us for specific and detailed advice.

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The National Minimum Wage (NMW) for each “ordinary hour worked” has been increased from 1 March 2025 by 4.4% from R27,58 per hour to R28,79 per hour. 

Domestic workers: Assuming a work month of 22 days x 8 hours per day, R28,79 per hour equates to R230,32 per day or R5067,04 per month. Of course, this is just a bare legal minimum: the Living Wage calculator will help you check whether you are actually paying your domestic worker enough to cover a household’s “minimal need” (adjust the “Assumptions” in the calculator to ensure that the figures used are up-to-date).

Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact us for specific and detailed advice.

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“Only in our dreams are we free; the rest of the time we need wages.” (Terry Pratchett)

Retrenching employees can be an expensive business. You’ll have to pay each employee a minimum of one week’s pay for each completed year of ongoing service, and that total liability can add up alarmingly.

A recent Labour Court ruling has however set out clear guidelines for avoiding that cost by arranging alternative employment for your retrenched employees.

A lost cleaning contract and a raft of retrenchments

A contract cleaning services company, fearing it would lose a particular contract in an upcoming tender process, warned all staff employed at the factory in question that they could face retrenchment.

Sure enough, the tender went to a competitor. The company was able to absorb 130 employees into other positions and locations, but 41 had to be retrenched. Eleven of them were given severance pay, but the employer declined to pay anything to the 30 who accepted alternative employment. 

The employees were having none of that, and approached the CCMA (Commission for Conciliation, Mediation and Arbitration). The CCMA awarded them both retrenchment pay and notice pay.

The employer then took the matter to the Labour Court, which set aside those awards. So, the employer is off the hook on both counts – and employers and employees should understand the Court’s reasoning for that decision.

Having your cake, and eating it

• The BCEA (Basic Conditions of Employment Act) provides that employees cannot demand severance pay if they are offered alternative employment and unreasonably reject it. As the Labour Court here put it, “the raison d’être of [severance pay] is to compensate an employee who has been dismissed for operational requirements, through no fault of her own, to be paid compensation for her loss of employment. However, the legislature considered that an employee who unreasonably refuses an offer of alternative employment is not without blame. She should therefore shoulder the loss of employment without any compensation.” (Emphasis added)
  
• Equally, “where an employee accepts alternative employment, arranged by the employer, she forfeits her right to receive severance pay.” Being paid both severance pay and a salary is a double benefit not intended by the BCEA.

Employers: Two practical steps to avoid liability 

Employers should take two lessons from this ruling:

1. Don’t just “sit on your hands watching the world go by”! As this Court put it, employers are incentivised to ensure that their employees get another job. Which is exactly what the cleaning company did here: it “did not just sit on [its] hands and impassively watch the world go by,” it managed to find alternative employment for 30 employees. It was extremely pro-active in this regard, meeting with the new employer, giving it all the information it needed, and allowing employees paid time off to attend interviews at a venue which it arranged. 
   
2. Act early and urgently. This employer avoided the claim for notice pay by giving over four weeks’ notice of termination. What’s more, it engaged in the consultation process and issued notice of retrenchment circulars at the earliest opportunity, then acted “as a matter of some urgency” to collaborate with the new employer in arranging new job offers.   

Another point to consider

It’s worth noting perhaps that the Court also mentioned in passing (“obiter dicta”) that even if an employee were to find her own new employment “through her own efforts and without the aid of her retrenching employer” she “needs no soft cushion of severance pay to land on” and would have to justify any such claim. 

Still, on the “better safe than sorry” principle, employers should not take chances here – rather be pro-active in arranging alternative employment as soon as you can.  

A final thought for employees

Before you decide to reject any offer of alternate employment bear in mind that, as this court confirmed, it will be up to you to prove your entitlement to severance and/or notice pay – it’s not automatic!

Whether you’re an employer planning to retrench staff, or an employee facing an impending retrenchment, getting the best legal advice is key.

Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact us for specific and detailed advice.

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“One of the hallmarks of an enlightened egalitarian society is the right to freedom of religion.” (Extract from judgment below)

Our courts do not tolerate unfair discrimination in the workplace, and employers need to tread particularly carefully when it comes to the concept of “automatically unfair discrimination”. Get that one wrong and you could be penalised with an order to pay your employee two years of earnings as compensation.

What is “automatically unfair discrimination”?

A dismissal is automatically unfair if based on any “arbitrary ground”, including, but not limited to, a person’s race, gender, sex, pregnancy, marital status, family responsibility, ethnic or social origin, colour, sexual orientation, age, disability, religion, HIV status, conscience, belief, political opinion, culture, language or birth (aspects relevant to this case have been highlighted).

However, “a dismissal may be fair if the reason for dismissal is based on an inherent requirement of the particular job” (emphasis added).

Let’s discuss these concepts with reference to a recent Labour Appeal Court (LAC) case.

“Sorry, I can’t work on the Sabbath”

Employed as a regional marketing manager by an international hospitality company, an employee signed a standard employment contract which, after specifying “normal hours of work” as being 8.30 a.m. to 5 p.m., Mondays to Fridays, with an hour for lunch, also provided for circumstances in which he could be required to work outside those hours.

Two months after starting work, the employee dropped what presumably came as something of a bombshell to his bosses. He said that as a Seventh Day Adventist, his religious beliefs precluded him from travelling or attending events on the Sabbath (i.e. from sunset on Friday until sunset on Saturday). He hadn’t made any mention of this in his job interviews, nor had he challenged the wording of his contract as to the required work hours.

Initially his line manager was able to accommodate him by covering for him on the problem days (travelling, it seems, to Kenya, Mozambique and Zambia as well as locally), but after 16 months she could not continue. He was offered an alternative position which didn’t require him to work on the Sabbath, but that came with a 45% pay cut.

The manager declined this offer, and he was dismissed after a disability enquiry. He challenged his dismissal, and the Labour Court, after finding it to have been automatically unfair, ordered his reinstatement.

His employer appealed this judgment to the LAC, which overturned that ruling and held that the dismissal was in fact fair.

Lessons to learn, points to ponder

The reasoning and the legal principles that underpinned the employer’s success in this case provide a useful blueprint for both employers and employees who might find themselves in a similar situation. Let’s address them point by point:

• Job interviews: It no doubt counted against the employee that he hadn’t mentioned the limitations on his working hours in his interviews, nor had he queried the wording of his employment contract. As a job applicant, be clear about any constraints on your work availability outside of normal hours, and query anything in your contract that might conflict with them. As an employer, make it an integral part of your interview process to check that the applicant understands your requirements as to both normal and additional work hours, and agrees to them.
• Employment contracts: The employer’s success in the LAC would not have been quite as easily won if its contract hadn’t clearly stated that the manager “will be required to work longer hours from time to time without additional compensation” (emphasis added). A “job flexibility requirement clause” also helped it when it came to the offer of an alternative position.
• Automatically unfair discrimination: There are two questions here. Was there discrimination? And if so, was it based on an arbitrary ground such as the employee’s religious beliefs? The employer in this case conceded on both aspects.
• “An inherent requirement of the job”: It was then for the employer to convince the court that the discrimination was permissible because the job requirement in question is “inherent or inescapable in the performance of the job”. Such a requirement has to be “rationally connected to the performance of the job”, “adopted in a genuine and good faith belief that it was necessary to the fulfilment of a legitimate work-related purpose” and “reasonably necessary to the accomplishment of that purpose.” The employer had no problem in proving all that. But that wasn’t the end of it…
• Accommodating the employee: As an employer, you can’t simply say “tough luck, your religious beliefs mean you can’t do the job as per its inherent requirements so off you go.” You must prove “that it is impossible [for you] to accommodate the individual employee without imposing undue hardship or insurmountable operational difficulty.” It was on this leg that the employer nearly came unstuck – while two of the judges agreed that it had passed this test, the third judge disagreed. If the decision had gone against it, the employer would have been penalised with a compensatory order of 24 months’ earnings.

Bottom line here is that you must act reasonably and in context in trying to enable an employee to continue in employment.

Our employment laws are complex and the penalties for getting them wrong are severe – so don’t hesitate to ask us for help if you’re in any doubt.

Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact us for specific and detailed advice.

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“The best investment you will ever make are your employees” (Peter Drucker)

As the end of the year approaches, many employees are eagerly awaiting their 13th cheque or year-end bonus. However, not every employer is in a position to pay bonuses, and this can lead to disappointment, disputes, or even legal action if expectations aren’t managed properly.

Read on to find out whether you’re legally required to pay a bonus, and how you can avoid potential conflict.

What does the law say?

There’s a common misconception that South African law obliges employers to pay annual bonuses. This is not true. There’s no automatic legal requirement to pay a 13th cheque or other bonus unless certain conditions apply:

• Employment contracts: If the employee’s contract states that an annual bonus or 13th cheque is part of their remuneration or guaranteed rather than discretionary, you are legally obliged to pay it.
• Company policies or agreements: Bonuses may also be provided for in company policies, collective agreements, or other documents. You need to follow these agreements unless circumstances make it impossible to do so.
• Custom and practice: If your business has consistently paid bonuses in the past, this may have created a “right of expectation.” In such cases, suddenly discontinuing the bonus without prior consultation may be viewed as unfair, and employees could take legal action for unfair labour practices.

How to avoid disputes: Prepare, plan and communicate

You can avoid the common disputes over bonuses by focusing on three essential actions: preparing, planning and communicating.

1. Prepare

• Review all employment contracts and company policies. Ensure these documents are up-to-date and clearly state whether bonuses are discretionary or dependent on conditions such as company performance or employee contributions.
• Be aware of any past practices. If bonuses have been paid regularly in the past, employees will almost certainly assume this will continue, even without it being part of their contract. They could also think that bonuses are an automatic right, and not based on performance. If you’ve paid bonuses in previous years, structure your policies carefully so that paying a bonus in good years doesn’t create enforceable rights (or even unrealistic expectations) in less profitable years. Specific legal advice on this point is crucial to avoid disputes.

2. Plan

• Use cash-flow planning to assess your ability to pay bonuses so you can make informed decisions about whether or not you can afford bonuses, and to give you early warning of any possible challenges.
• When you’ve made your decision, think about how and when to tell your staff about it.

3. Communicate

• Clear and early communication is key to managing employee expectations. If you won’t be paying bonuses this year, or will be reducing the amount, let your employees know well in advance to avoid last-minute disappointment.
• If you are able to pay bonuses, take the opportunity to reinforce the link between performance and reward. Thank everyone for their hard work and contributions to the success of the business.
• Remind staff about the taxman waiting in the wings for his cut. This could come as a nasty shock, particularly if the bonus pushes an employee into a higher tax bracket.
• Open communication and consultation build trust and help maintain morale and productivity, even if the news is disappointing. Employees will appreciate honesty and clarity, especially if you’re facing financial difficulties.

How we can help

If an employee believes they are contractually or customarily entitled to a bonus and you fail to pay it, they may cry “unfair labour practice” and take the matter to the CCMA (Commission for Conciliation, Mediation and Arbitration).

If you’re uncertain about your obligations or if you anticipate disputes, we’re here to help. We can review your employment contracts, assess past practices, and provide guidance on how to manage employee expectations legally and fairly.

Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.

© LawDotNews

“It takes leadership to improve safety.” (Jackie Stewart, Formula 1 legend)

One of your key duties as an employer is to create a working environment in which your employees are protected from harassment and abuse. As a recent High Court judgment graphically illustrates, dropping the ball will cost you dearly.

Meet the protagonists

The cast of characters in this unhappy tale features:

The employer: A private hospital in Bloemfontein, operated by a national healthcare group.

The employee: A Surgical Theatre Manager employed to oversee and manage the hospital’s operating theatres, manage the theatre staff and monitor patient care in the theatres.

The surgeon: Who conducted a private practice at the hospital and performed surgeries in its surgical theatres.

11 years of staggering abuse

To summarise a long saga of woe, the employee endured eleven years of abuse from the surgeon, the highlights (or, more accurately “the lowlights”) being:

• Eleven years (!) of verbal abuse in which the surgeon’s aggressive personality and temper tantrums saw him “hurling profanities, insults, blasphemous language and obscenities at [the theatre manager] while in the presence of other operating theatre staff and even members of the public”.
• The Court summarised the surgeon’s behaviour as “disgusting” – unsurprising given the employee’s evidence that the surgeon had once gone to the extent of flinging a patient’s colon at her, together with a volley of swear words.
• Only her sense of duty, and her pity for the patients (many of them cancer patients in dire need of urgent surgery), caused her to endure the constant abuse, defamatory remarks and insults for so long.
• She submitted numerous complaints to the hospital over the years, both on her own behalf and on behalf of other theatre staff (including several scrub nurses who refused to work with this surgeon), without any appropriate response. Indeed, she testified that the hospital told her that she and the other staff “were not allowed to lay any complaints against a medical doctor”, who was constantly touted as a “money spinner” for the hospital.
• It’s important to note here that, although the surgeon wasn’t a hospital employee under its direct control, the hospital had the right to revoke his “admitting privileges” at the hospital for any reason including “abusive behaviour or harassment”.

The theatre manager sued the hospital for failing to come to her assistance and endured almost eight years of litigation. She eventually accepted an award of R300,000 as damages for the humiliation, degradation, shock, anguish, fear and anxiety she suffered. This included “severe psychological and psychiatric trauma manifesting as post-traumatic stress syndrome and major depressive disorder for which she requires psychotherapy treatment”.

The Court confirmed her damages award of R300,000, together with a large portion of her costs including a portion on the punitive attorney and client scale.

The hospital (eventually) paid up. But what about the surgeon?

If you’re an employee unfortunate enough to fall victim to this sort of abuse you may wonder if you can sue your tormentor directly in addition to suing your employer. The answer is an emphatic yes.

The theatre manager in this matter did sue the surgeon for damages. And while he died before the matter was finalised, she obtained a confidential settlement from his deceased estate.

The bottom line

All of your employees deserve to work in a civilised environment. This can be achieved by having common sense policies in place – and enforcing them uniformly, regardless of the seniority of the staff member, or their value to your business.

No doubt the negative media coverage that accompanied this trial has rubbed a lot of salt into the hospital’s monetary wounds. Their humiliating court defeat was very public, and the reputational damage they suffered surely exceeded the R300,000 they ended up paying the victim.

Actions speak louder than words

Good idea then to learn from the hospital’s mistakes. On the plus side, it had in place detailed policies to underpin its zero-tolerance approach to harassment, together with clear grievance procedures. What went wrong, it seems, was its failure to implement them.

Don’t make the same mistake!

Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.

© LawDotNews