Lack of labour law knowledge could put your new business at risk

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Contemporary employers and nascent commercial entrepreneurs should take extra care and diligence in familiarising themselves with the provisions of the Labour Relations Act 66 of 1995 (as amended) (‘LRA”) and Basic Conditions of Employment Act 75 of 1997 (“BCEA”) or their fledgling business could be exposed to numerous CCMA referrals and employee-dissatisfaction and/or unrest. While the clear focus for new businesses is market consolidation, exponential financial growth and other pecuniary interests, employers must also diligently ensure that their business, its policies and its overarching employment provisions are labour law compliant.

If employers don’t do this they could find themselves both establishing their company and its place amongst the economy, while also fending off CCMA claims and disputes with bargaining councils, inclusive of non-compliance orders and arbitration set downs.

Labour law training is essential

To avoid this unpleasant scenario, it is indispensable for all new employers, employed supervisors and line managers to be trained in the drawbacks and dangers of labour law, its importance in the administration of company policies and discipline and the essential nuances that make for an effectively run workplace. Employers and management need to be made aware that the LRA and BCEA provisions substantially limit the employer’s autonomous management of its employees.

Furthermore, the Employment Equity Act 55 of 1988 (“EEA”) places additional obligations on employers to design and implement an employment equity plan. Companies are required to implement a plan empowering the employer to achieve reasonable progress towards employment equity, promote the elimination of unfair workplace discrimination and to achieve equitable representation of employees from designated groups by means of affirmative action measures. While the employment equity plan must be clear and coherent, the EEA does not recommend a strict or rigid format for the plan and employers are encouraged to implement business specific plans which allow for the utmost proficient administration. Companies fall within different designated groups and must adhere to the reporting requirements as prescribed by the EEA, failing which the Director-General of Labour may impose fines and other appropriate sanctions.

Due to the procedural and substantive requirements imposed by the LRA, as well as the inescapable golden thread of South African labour law, employers also are obliged to assist in incidents of poor work performance and cannot merely initiate disciplinary procedures.

Where employees feel that the employer is failing to implement provisions of the BCEA, LRA and/or EEA, they can report the employer to the relevant tribunal, CCMA, Labour Court and, in some cases such as in terms of Chapter 3 of the EEA, report the employer directly to the Director-General of Labour.

Forewarned is forearmed

In light of the ever-changing and progressive competition between capitalism and socialism within the South African labour market context, Employers are urged to ensure that all necessary employment and labour law requirements pertaining specifically to the employer’s business be identified and implemented. It is important that every existing employee is made aware of all relevant company policies and procedures relating to employment issues, that managers and supervisors are well trained to both manage employees and stringently exercise the LRA, BCEA and EEA provisions and that a culture of astute employment governance within the workplace is developed.

Focus on growth, not damage control

To avoid falling on the wrong side of labour law, it would be prudent to schedule a consultation with and utilise the services of our qualified legal practitioners to facilitate the administration and incorporation of the appropriate labour law requirements within your company’s ethos, to ensure that your company’s profits are going towards its growth and not its internal demise.

References:

This article is a general information sheet and should not be used or relied on as legal or other 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 legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

Matthew Schoonraad
C & A Friedlander Inc.- Labour & Employment law.

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