October 2024 | Employment and Labour Law
“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
September 2024 | Employment and Labour Law
“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
July 2024 | Employment and Labour Law
“Many people including workers in South Africa do not have the wherewithal to determine between a qualified doctor, an unqualified doctor and one who is operating illegally. That is why there are regulatory and law enforcement bodies to whom suspicious practices by doctors should be reported.” (Extract from judgment below)
“Sick leave season” is still in full swing and many employers will be struggling with high levels of absenteeism. There’s no problem of course with genuinely ill staff staying at home to recover – no one wants them at work spreading their germs around or damaging their health! But what if you suspect malingering?
When can you demand a sick note?
According to the relevant provisions of the Basic Conditions of Employment Act:
- You can require a medical certificate from any employee who’s absent from work for more than two consecutive days or more than twice in an eight-week period.
- The medical certificate must state “that the employee was unable to work for the duration of the employee’s absence on account of sickness or injury.”
- “The medical certificate must be issued and signed by a medical practitioner or any other person who is certified to diagnose and treat patients and who is registered with a professional council established by an Act of Parliament.”
But what can you do if you suspect that a medical certificate has been bought or falsified? Let’s have a look at a recent Labour Appeal Court decision which provides a timely warning to employers who reject certificates without good cause.
Dismissed for dodgy sick notes
- A store employee in Witbank was dismissed after being found guilty of misconduct by dishonestly producing two medical certificates in support of sick leave absences, thus breaching her employer’s policies, procedures, and honesty code.
- We’ll detail the employer’s reasons for suspicion in a moment, but the upshot was that the dismissal was found to have been substantively unfair, a finding confirmed by both the Labour Court and the Labour Appeal Court.
But why did they reach that conclusion?
Strong suspicions, but…
The certificates had been issued two years apart by a doctor of whom the employer was justifiably suspicious for a variety of reasons, including:
- An email warning the store to be cautious about medical certificates issued by this particular doctor.
- Apparently contradictory responses given by the employee when questioned about the notes, one of which had been issued by a nursing assistant and the other by the doctor.
- Investigations into the doctor and his practice. These included a visit to his consulting rooms by two managers, who concluded that the doctor might not be a real doctor and that he might be selling fake sick notes on the basis of their observations that:
- The place did not look to them like a doctor’s surgery, with broken gym equipment, ragged curtains, torn posters and only a makeshift partition wall between a reception area and a consultation room featuring an untidy table cluttered with papers, plates, cups and an old computer monitor. They saw no files or filing cabinets, only copies of medical certificates and a stamp.
- None of the usual questions were asked about “medical aid or cash patient” status, and “patients” would emerge from the consulting room in less than a minute holding medical certificates. It seemed clear to the managers that they had bought these medical certificates from the doctor’s assistants.
- The doctor himself did not look to the managers like a doctor. He was not wearing a dustcoat and did not have a stethoscope. What’s more his appearance was unhygienic, with “long nails”.
One of the managers even testified that the doctor and his assistant had been arrested for illegally operating a surgery, dispensing medicine and issuing illegal sick notes. Strong grounds, one would think, for the employer to be extremely suspicious. But in the eyes of the law, they were not enough to justify the employer’s rejection of the medical certificates.
Why did the employer lose its case?
- It failed to prove its suspicions about the genuineness of the doctor or of the certificates. The doctor testified that he wasn’t just fully registered with the Health Professions Council of South Africa (HPCSA), he also had an impressive list of international qualifications and experience to his name.
- Critically, said the Court, “Ordinary people including workers surely cannot be expected to conduct an investigation into which doctor is qualified, which one is on suspension, and which one is for some or other reason not entitled to practise as a doctor. That is the function of the regulatory bodies.”
- The evidence that there may have been “certain untoward happenings in the running of the medical practice” was irrelevant, held the Court, to the key question of whether the medical certificates were irregularly sought and issued.
As an employer, please tread carefully with dodgy-looking medical certificates – you will need more than just strong suspicion to justify rejecting them. Contact us if you aren’t sure what you need to do.
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
May 2024 | Employment and Labour Law
“It is declared that the [employer]’s Alcohol and Substance Abuse Policy is irrational and violates the right to privacy in section 14 of the Constitution, to the extent that it prohibits office-based employees that do not work with or within an environment that has, heavy, dangerous and similar equipment, from consuming cannabis in the privacy of their homes.” (Court order, below)
A recent Labour Appeal Court (LAC) decision highlights the complexities of workplace policies regarding cannabis use and provides guidelines to employers and their employees on the intersection of individual rights and workplace policies.
Unfairly dismissed for off-duty cannabis use and awarded R1m
- Under medical guidance, an office worker had turned to cannabis to manage severe anxiety. She smoked a nightly “joint” and daily used cannabis oil and the like, but only after hours and over weekends.
- She was dismissed after pleading guilty at a disciplinary hearing to having tested positive during a routine medical check at work, in contravention of her employer’s zero tolerance policy on alcohol and substance abuse.
- On appeal from the Labour Court, the LAC considered the legality and fairness of the employer’s zero-tolerance policy towards cannabis use, and whether it infringed upon the employee’s rights to privacy and dignity.
- Importantly, the employee was an office worker, not required to drive, to operate heavy machinery, or to perform any duty where impairment from cannabis could have caused risk. Nor was there any evidence of intoxication or that her ability to perform her duties had been impaired, nor that she had caused an unsafe working environment.
- The Court declared the employer’s policy irrational, overbroad and an infringement of the employee’s right to privacy. Her treatment as someone who was intoxicated when in fact she was not, amounted to “unfair discrimination because it singles out cannabis users compared to alcohol users, for what they do at home, even in situations where their conduct carries no risk for the employer.”
- The dismissal was accordingly automatically unfair and amounted to unfair discrimination. The LAC ordered the employer to pay the employee 24 months’ compensation (a total of some R1.037m).
Employers: The balancing act with your workplace policies
The outcome here serves as a strong reminder to carefully consider the implications of all your workplace policies, particularly regarding sensitive issues such as cannabis use.
You must balance legitimate safety concerns at work with respect for your employees’ rights to privacy and autonomy. Adopt nuanced approaches that take into account your workplace environment, employee duties, individual circumstances and evolving societal norms.
Note that the new “Cannabis for Private Purposes Act”, which has just been signed into law, is unlikely to have any bearing on the effect and import of this judgment.
In conclusion, you need to stay informed and adapt to the evolving legal landscape surrounding cannabis use, so ask us to review and update your workplace policies accordingly.
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
February 2024 | Employment and Labour Law
“…the prospect of continued employment must be shown to have been objectively intolerable and the employee must have resigned due to the intolerable situation and not for another reason.” (Extract from judgment below)
Perhaps you are an employer, and that troublesome employee who you’ve been hoping would resign does exactly that. Saving you, as you see it, from the risk, hassle, and expense of disciplinary or retrenchment proceedings. But are you really home and dry?
Or perhaps you are an employee, driven to resign by your employer’s constant maneuvering to make your continued employment unbearable. Do you have any recourse?
The answer to both questions lies in the Labour Relations Act’s definition of “dismissal”, which includes an employee resignation when “an employee terminated employment with or without notice because the employer made continued employment intolerable for the employee.”
And when there’s a dismissal, it has to be a fair one or the employer is in for a very expensive lesson. As we shall see …
The three requirements for “constructive dismissal”?
As confirmed in the Labour Court judgment we discuss below, there are three requirements for constructive dismissal to be established, all three of which must be proved by the employee –
- The employee must have terminated the contract of employment, and
- The reason for termination of the contract must be that continued employment has become intolerable for the employee, and
- It must have been the employee’s employer who had made continued employment intolerable.
Note that there is no constructive dismissal if an employee resigns for any other reason, for example “because he cannot stand working in a particular workplace or for a certain company and that is not due to any conduct on the part of the employer.”
And a test for “intolerability”
“Intolerability”, said the Court, “is a high threshold, far more than just a difficult, unpleasant or stressful working environment or employment conditions, or for that matter an obnoxious, rude and uncompromising superior who may treat employees badly. Put otherwise, intolerability entails an unendurable or agonising circumstance marked by the conduct of the employer that must have brought the employee’s tolerance to a breaking point.”
The case of the specialist fraud and risk investigator in a bullet proof vest
- A specialist fraud and risk investigator resigned from his employment with a bank after 17 years’ service, then successfully referred an unfair dismissal dispute to the CCMA (Commission for Conciliation, Mediation and Arbitration), claiming constructive dismissal.
- Suffering health problems and involved in high-risk investigatory work which put his physical security at risk (hence no doubt his wearing a bullet-proof vest), he claimed to have been subjected to ongoing victimisation, bullying and harassment. His complaints included grievance disputes not being attended to, refusal of compassionate leave, poor work performance assessments, disciplinary and incapacity proceedings – the list goes on.
- Finding on the facts that there was “an accretion of conduct creating an increasingly oppressive work relationship for [the employee], with no functioning mechanism available to halt the deterioration”, the Court held that the employer had made the employment relationship intolerable. The employee was entitled to regard his resignation as a constructive dismissal and, that dismissal being an unfair one, the Court confirmed the CCMA’s compensation award of ten months’ remuneration.
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
February 2024 | Employment and Labour Law
The National Minimum Wage (NMW) for each “ordinary hour worked” has been increased from 1 March 2024 by 8.5% from R25-42 to R27-58.
Domestic Workers: Assuming a work month of 21 days x 8 hours per day, R27-58 per hour equates to R220-64 per day or R4,633-44 per month. The Living Wage calculator will help you check whether or not 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 your professional adviser for specific and detailed advice.
© LawDotNews