PLAYING UGLY ON THE PLAYGROUND
Eventually a successful entrepreneur will have to employ one or more staff members in order to take his or her business to the next level. The inevitable consequence of this is that the entrepreneur, who, up to now, only had himself and the business to worry about, now needs to learn a new set of rules and how to make the transition to being an employer. Employing staff brings a host of employ
ment laws into play and the entrepreneur would be well advised not to fire from the hip when dealing with staff and staff matters. The consequences of breaching, among others, the Basic Conditions of Employment Act and the Labour Relations Act, can lead to dire cash flow consequences for the business. This could occur, for example, if the Commission for Conciliation, Mediation and Arbitration (CCMA) orders the errant employer to pay compensation of up to 12 months’ salary to a staff member who was unfairly dismissed. This interruption in the cash flow is compounded by the loss of time and money while the entrepreneur waits idly at the offices of the CCMA for the matter to be heard.
Initially, the commissioner will attempt to broker conciliation between the parties – i.e. the staff member usually requests either reinstatement of his position or compensation for unfair treatment, the employer then makes a counter-offer and perhaps a negotiated settlement is reached. If conciliation is not possible, an arbitration enquiry ensues and the commissioner then needs to decide who wins and who loses. As a result, the entrepreneur will lose a great deal of time during which she could have been productive..
A large proportion of matters taken before the CCMA relate to matters of fact and/or procedure. In order to win her case, the employer needs to prove that her actions were procedurally and substantively correct. Failing to prove either the one or the other renders the business liable for compensation to the employee. Unfortunately, it often happens that an employer who has acted correctly and is not at fault will relent and pay compensation based on economic considerations, because it is far cheaper to pay compensation to the employee than to spend more time out of the office.