Decisive action, better conflict resolution

Many employers often decide to leave disciplinary matters for a later date and/or overlook matters of concern to avoid conflict. However, when handled well, conflict can have a positive impact on an employee’s performance and behaviour after they have made an error.

Did this ever happen to you as a teenager? You’re sitting in the backseat of the car after being picked up from school and one of your parents says something you disapprove of, and before you know it you’ve given them lip and voiced your unwanted opinion. The next words you hear are the most dreadful words any teen can hear – “Just wait until your mom/dad gets home”.

Those few words are enough to strike fear into the most entitled of young’uns, and it makes the rest of the day unbearable. While your parenting style is very much a matter of opinion (barring obvious wrongs), the same style of discipline in the workplace leaves much to be desired and can, in fact, lead to unwanted conflict and legal repercussions down the line.

Delays in the process have the following results:

  • Employees are anxious

When you delay discipline and the relevant employee is aware of their error, it often leads to anxiety and unproductivity. This happens because the employee can become so fixated on the problem to be discussed and be mentally consumed by constructing a defence.

  • Evidence is lost

When you delay discipline, you allow the evidence for the error on the part of the employee to get away. Reconstructing the facts at a much later point often leads to misrepresented, exaggerated, or understated claims. Taking decisive disciplinary action and detailing events and relevant documents is easier when it is done sooner.

  • It devalues legitimate issues

When you don’t take decisive disciplinary action soon enough, it makes it appear as though the error of the employee is less serious than it may be. It also sets an undesirable precedent and could lead to resentment for the employee who has made the error from their peers.

  • It often comes across as (and can be construed as) unfair

When discipline is delayed (especially with the addition of the factors mentioned above), the eventual discipline can feel like a personal, discriminatory action. It raises the legitimate question of why action wasn’t taken sooner.

Quick, decisive action, on the other hand, has the following results:

  • Course correction 

When discipline is taken quickly and decisively, it leaves the employee in a position to correct their action going forward and encourages unity in the workplace. Good disciplinary procedures will set out a clear description of what went wrong with a clear action plan to improve the employee’s behaviour or performance going forward.

  • Fair hearings with relevant evidence

When action is taken without delay, it allows everyone to gather the most relevant available information. Everyone can share their experiences and present their best case before a plan of action is made. The employee is also given a fair opportunity to appeal the decision made with the case they present.

  • Better case for escalation if the issue persists

Often, bad behaviour or poor performance persists if action isn’t taken timeously. It then makes it much more difficult to escalate your approach if no formal disciplinary action for the first instance of misconduct has taken place. Not only is decisive action good for correcting the behaviour, but it also ensures that there are no delays to escalation if the situation does not improve.

  • More respect for management

Good managers lead well. If you set a clear example every time of how discipline is approached in the workplace, you only stand to earn respect. Too many managers are seen as weak managers for their inability to take action when conflict arises.

Don’t let poor behaviour or performance slip and cause you unnecessary problems down the road. Get in touch with your Labour Law adviser to ensure that the policies and procedures that you have in place are both secure and relevant and make your workplace an environment that is conducive to fast and effective conflict resolution.

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 financial adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

Drafting employment contracts for ad hoc activities

It often happens that employers give instructions to employees that do not form part of their usual routine. This article will briefly discuss whether employees are obliged to execute all instructions received from their employer or supervisor, even if it is not what the employee was employed to do.

As a point of departure, normally, an employee’s job description will be contained in their employment agreement. However, in practice, you often get scenarios where the employee does not have an employment agreement, or the employment agreement does not expressly provide for the “extra instruction”.  In A Mauchle (Pty) Ltd t/a Precision Tools v NUMSA & others 1995 16 ILJ 349 (LAC) the employer informed the employees of a change in work practice and warned them that disciplinary action would follow should there be a refusal to accept the change. Accordingly, there was a collective refusal from the employees, which resulted in the employer dismissing employees who refused to comply with the lawful and reasonable work instruction. The court a quo held that the instruction was unreasonable, and it was a unilateral change in the terms and conditions of employment. However, on appeal, the Labour Appeal Court, found that the amendment of the conditions did not amount to an extensive change in work and that the change did not involve a term of employment. Accordingly, the court found that a refusal to obey a lawful and reasonable instruction amounts to a serious, deliberate form of insubordination and that it could be a valid reason for dismissal.

Therefore, it is possible that employers can instruct employees to perform duties that are not excessive to their normal working conditions.

It is also important to remember that, in modern times, employment agreements will intentionally be drafted to give employers the freedom to impose various instructions, apart from the “normal” instructions associated with the job description without any restrictions. The said clauses will typically read as follows: “the employee undertakes and will execute any alternative tasks as requested to do so, regardless of whether or not such work falls within the normal scope of the position as set out in this agreement” or “is subject to the provisions of this agreement and is further regulated by the conditions of service of the Employer, as amended from time to time as well as any other applicable labour legislation or regulation.”

Therefore, it can be expected of employees to comply with reasonable and lawful instructions received from their employer, even if it does not form part of their regular duties or job description contained in their employment agreement. Employees should carefully read through their employment agreement before addressing issues with executing instructions, otherwise, it can amount to insubordination.

Reference List:

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 financial adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

Distributions to beneficiaries of an employee trust

Binding Private Ruling 330 (“BPR330”) was issued on 3 October 2019 and relates to the tax implications arising from distributions of dividends and other amounts from an employee trust to beneficiaries on the termination of their employment.

The taxpayer (a resident trust) was established for the benefit of the black permanent employees of Company A. The object of the trust was to invest funds from time to time and to use the return on these investments for the economic, health, educational and emergency benefits of its beneficiaries.

The trust funds to be administered in this regard will include donations made to the trust, any assets the trustees may acquire (not limited to shares), any net revenue capitalised by the trustees in their discretion and any other interest, dividends or accruals in favour of the trust.

The trustees of the trust are entitled to, in their discretion, select one or more of all the employees to allocate or distribute all or part of the trust’s net revenue. These employees will only have a claim against the trust from the date of vesting of the benefit and are not entitled to deal in any way with the respective trust funds or interest in the trust before such date.

It is envisaged that the trustees will, from time to time, vest dividends in the employees that the trust receives from Company A. These dividends will be distributed immediately after it is received by the trust.

The trust deed furthermore provides for the allocation of beneficial units. Employees that hold these units may only dispose of them to the trust. Also, the trust must repurchase the units when the employee ceases to be an employee at a repurchase price determined by the trustees in their discretion.

The proposed transaction that was considered in terms of the BPR was the repurchase of a beneficial unit from a beneficial unitholder on the date the unitholder ceased to be an employee. The repurchase was funded by existing funds and not a specific dividend that was received.

In terms of the BPR, the unitholder received an amount as a beneficiary of the trust by reason of the termination of its employment and confirmed that this amount would be included in the employee’s gross income, in terms of paragraph (d) of the definition of “gross income”, and be subject to employees’ tax as provided for by the Fourth Schedule to the Income Tax Act.[1]

Also, all amounts to be distributed to the beneficiaries will constitute remuneration as defined in the Fourth Schedule and will be subject to employees’ tax.[2]

[1] No. 58 of 1962

[2] See section 10(1)(k)(i) and the definition of “remuneration” in paragraph 1 of the Fourth Schedule.

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 financial adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

The importance of having a work-life balance

Having a job and a steady income plays a significant role in any person’s life, as it keeps us afloat and drives us to reach our full professional potential. However, when we have an unhealthy work-life balance, this can all come tumbling down.

An employee’s ability to establish and maintain a healthy balance between their work and personal commitments and responsibilities is referred to as a work-life balance. Companies have begun to recognise the importance of helping their employees to achieve this balance. Work responsibilities have also seen an increase recently and this leads to increased stress among employees as they struggle to find a balance between work and personal commitments.

Over the years, there have been dramatic changes in employees’ work patterns, as well as how and where they work. More and more companies have begun to embrace the digital and technological age, which means that work is no longer restricted to the workplace only. Technology enables employees to work anytime, anywhere, and from any internet-enabled device. This means that employees can be reached by employers and even clients 24/7, which makes achieving a healthy balance between work and your personal life even more difficult.

Having an unhealthy work-life balance has a negative effect on both employees and the companies they are employed by. Having an unhealthy work-life balance leads to high levels of stress which results in decreased productivity. Increased stress can also lead to health problems and absenteeism, which costs the company money. Finally, personal relationships and co-worker relationships amongst the employees can suffer, and lead to reduced job satisfaction.

Companies can implement various policies that will aid their employees in establishing and maintaining a healthy work-life balance. Many companies have started to provide their employees with flexible working hours, which helps employees shape and mould their work pattern to fit into their personal schedules. This reduces the conflict between professional and personal responsibilities significantly. Managers can also encourage their staff to use their annual leave, and set clear boundaries which state that staff should not respond to work-related emails and calls during non-working hours.

Finally, it’s not all about job satisfaction, personal satisfaction is equally as important. An employee’s ability to meet personal commitments has an enormous impact on their professional success. When employees have the opportunity to meet these personal commitments, it benefits the company, as the employee is not experiencing conflict between their professional and personal lives.

Helping employees establish and maintain a healthy work-life balance leads to increased job satisfaction as well as increased loyalty to their employer.

Once a company recognises the benefits of healthy work-life balance and implements policies to promote this balance, they will experience an enormous increase in productivity and increased retention of staff, which ensures that the company continues to thrive and succeed.

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 financial adviser for specific and detailed advice. Errors and omissions excepted (E&OE)