South Africa’s labour laws are complex and tend to favour the employee, making life tough for any business that feels the need to dismiss staff, for whatever reason. The mistake many small businesses make is not realising that labour laws apply to all types of employers, not just big business.
To gain an understanding of the numerous pitfalls confronting business, Entrepreneur spoke to Ivan Israelstam, a specialist in the field. Israelstam’s career spans 27 years in labour law and industrial relations; twelve of these as a litigator at the Commission for Conciliation, Mediation and Arbitration (CCMA) and four as a CCMA commissioner. He writes numerous labour law columns in major publications and has authored several labour law books.
Israelstam says that a key error made by SMBs is that they seem to think that if they dismiss an employee, they can repair the problem by paying the employee off; however, the default remedy for unfair dismissal is full reinstatement to the job often with full back pay.
“The answer to this, and all the other problems I will outline, is to simply pick up the phone before acting against an employee and spend a few minutes talking to a labour expert, as this will be cheaper than making the mistake first and turning to the expert later,” he says. “A vital piece of advice I can give employers is never to fire someone while you’re angry – think things through first, otherwise you may be setting yourself up for some serious legal troubles.”
He says that it is important to be aware that anytime you consider the termination of someone’s employment, there is a specific legally required procedure to follow, dependent on the type of dismissal.
“It is for this reason SMBs should contact a reputable expert in the field, as the expert will be able to help you draw up a disciplinary code and procedures, as well as employment contracts, performance standards and so on. I don’t believe it is possible to run a business successfully in the long-term without this sort of input.”
Israelstam points out that should you dismiss someone, you have to be able prove that no reasonable employer could continue such a working relationship. Also, he says that once a case goes to the CCMA, failing to use an expert representative will be detrimental, since arbitration is in effect a court case, so you must be prepared.
“Failing to investigate allegations properly is another common mistake – one always needs to remember that there are two sides to every story. Badly selected or badly worded disciplinary charges can also negatively impact your case, so you should always formulate the charges correctly in order to suit the proof you do have.
“Remember that there is no institution that is stricter on employers than the CCMA, so the odds are stacked against you from the beginning with the onus being on you to prove the dismissal was fair, the employee doesn’t have to prove it was unfair.
“Labour law is a minefield for the employer, and the proof of this is in the fact that the CCMA deals with 140 000 cases annually, of which about 80% are dismissals. Therefore, it is clearly in your own best interest to talk to an expert before following through on anything related to this subject,” says Israelstam.
Top 10 labour law pitfalls
- You cannot solve an unfair dismissal by throwing money at the problem
- There are specific procedures to follow when terminating employment, dependent on the type of dismissal
- You cannot dismiss someone without a legally acceptable reason
- Failure to use an expert representative if taken to the CCMA could be disastrous
- Failure to investigate allegations properly could cost you plenty
- Badly selected or badly worded disciplinary charges can negatively impact your case
- There are far-reaching labour law consequences around the subject of mergers and acquisitions
- Placing fixed-term employees into permanent jobs, then failing to renew the contract at term’s end may be seen as unfair dismissal
- Hiring employees and disguising them as independent contractors. If they are treated as normal employees they must be hired as employees
- Not following the correct process for dismissing employees for being sick or injured
For more information contact Ivan Israelstam at Labour Law Management Consulting on +27 11 888 7944 or email firstname.lastname@example.org