Finweek English Edition - - MONEY -

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.

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