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How to approach salary increases

How to approach salary increases

In the current economic climate you’re probably asking yourself if you should be more cautious than usual in relation to salary increases. You can look at this issue from two perspectives, the legal one and the bigger 'market-related' picture.

Your employees don’t have a legal right to an increase unless you’ve agreed to it in your employment contracts. If you’ve simply indicated that you’ll review salaries annually then that’s all you have to do, and there’s no guarantee you’ll give an increase or how much that increase will be. You might also not have stated specifically what time of year you’ll do salary reviews, but if you have then stick to what you promised in the contract. This still doesn’t mean you must give an increase at all or to do so on the same basis as you did in the past.

Retaining staff is a key objective

In the context of the bigger picture, you need to consider your key objectives. One of these may be to retain staff. If employees have an expectation of a salary increase in a particular month and you don’t give it to them, it’s likely this will have a negative impact on morale, confidence in the business and the longer term prospects of employees staying with the company. You’re most likely to lose your most valuable employees who are naturally the ones who have more options open to them.

You must also consider the market. Will these employees be difficult to replace? How much will you have to pay to replace staff i.e. the hidden costs of staff turnover? What’s the relationship between supply and demand in relation to the sort of skills you currently need in your business? What’s the broader economic context?

Remember, the economic crisis hasn’t hit
South Africa as hard as the US and the UK, for example. So, where employees in the US and UK may be grateful simply to hang on to their existing jobs right now this may not be the case in South Africa.

When looking at whether to give you staff an annual increase, know your legal rights but you must also consider the bigger picture.


Four steps to motivate your employees to accept change:


Step #1: Make people dissatisfied with the way things are now

People only change when they feel there is a problem with the way things are done and realise they can’t go on as before.


To make people dissatisfied with the existing way of working, you will need to:

·      Tell your staff about the things worrying you as a manager or owner, like deteriorating performance, safety or customer service

·      Get agreement that something must be done if the business is to survive or grow. 


Step #2: Develop a picture or vision of where you want to go

Most people find it difficult to believe that there is another way of working, after years of doing the same thing over and over. As a leader, you must talk to your staff and share ideas about new ways of working together to achieve better results.


Step #3: Decide what must change

Once you have agreement on the need for change and a vision or picture of where you want to go, narrow things down and agree what must be changed to achieve this vision.


Step #4: Show that the desired future is practical and achievable

People are sceptical about the future, they don’t believe things will really ever change. You can show your staff that change is achievable and possible by:


·      describing the first few concrete steps which can be taken

·      finding a practical example of where things are already starting to change

·      identifying “quick wins” or early achievements.


Hiring Workers from a labour broking company


You may have workers at your company who have been supplied to you by labour brokers. The consequences that arise when workers are supplied by a labour broker are different to those that arise when you employ workers directly. The following is a list of the liabilities, risks and obligations that arise.


1.            You must report any misconduct committed by the worker to the labour broker and require the labour broker to deal with it.

2.            Make sure that the labour broker doesn’t contravene minimum wage or minimum conditions of employment requirements – if this happens you (as the client) will be jointly and severally liable.

3.            Sign a contract with the labour broker before using its services where the labour broker undertakes to fulfil all its legal obligations.

4.            Never openly (or covertly) instruct a labour broker to commit an act of unfair discrimination – you will be jointly and severally liable with the labour broker if you do so.

5.            If workers are seen to work under your control and supervision, you will be obliged to carry out the same health and safety requirements under OHSA for these workers as you do for your own employees.

6.            If a worker suffers an injury at your premises, the worker will be able to make a claim against you if the injury was caused by your negligence.

7.            You must withhold or deduct employee’s tax from the remuneration you pay to a labour broker unless the labour broker is in possession of a valid exemption certificate granted to the labour broker by SARS in terms of the Income Tax Act exempting you from deducting or withholding employee’s tax.


8 tips to control strike action


Strikes can have a number of unpleasant consequences for you. As strikes are typically characterised by misconduct and intimidation, you’ll have a lot on your hands. Take note of the following:


1.      When a union has given notice of intention to strike, employees sometimes ready themselves for the strike by asking non-union members to join in the strike. Unfortunately, this will often take the form of intimidation. You should advise the union that they are obliged to ensure that non union members are not intimidated as soon as notice of intention to strike has been given. Suggest that it is the union’s responsibility to control its members.


2.      Place a notice on notice boards advising employee that you are adopting a zero tolerance approach towards intimidation. Advise employees that any employee who intimidates another employee will be disciplined and if found guilty, may be dismissed.


3.      It is difficult to prove intimidation as the only witness who can give evidence that they were intimidated is the employee who has been the recipient of the intimidation and usually they don't want to give evidence in an enquiry.


4.      You also can’t tolerate misconduct such as violence and verbal abuse during a strike. It’s imperative that you advise the union and its members in no uncertain terms that any employee who engages in any acts of misconduct will be disciplined and, if guilty, may be dismissed.


5.      Place a notice on the notice board setting out the company’s policy on misconduct. In the letter to the union advise them that if their members engage in acts of violence and/or damage to property the company will hold the union liable for such losses.


6.      Deal with the issues of intimidation and misconduct in one letter and advise the union that if there is violence, intimidation and damage to property you will approach the Labour Court for an urgent interdict.


7.      In the letter seek a written undertaking from the union that they acknowledge that they have a duty to control their members during a strike.


8.      After the strike has ended proceed with disciplinary action if there have been acts of misconduct. It is important to establish a precedent that irrespective of the outcome of the strike, misconduct will not be tolerated.


Although these tips all indicate possible ways of dealing with intimidation and misconduct once you have a strike on your hands, it is better to address these issues before you are in a strike situation. Put your rules in place or negotiate rules with the union about strike related conduct when you are not in dispute and when you are more likely to get a sensible and reasonable arrangement in place. Of course if the pre-agreed arrangement is breached you will have to take action but you will be in a stronger position to do so.


Steps to take when you deal with allegations of discrimination:


You have to take swift decisive action when an employee cries foul play, such as reporting that he has been a victim of racist behaviour. In SACWU v Chlorchem, an employee alleged exactly this. However, his allegations turned out to be false. In this case, the court warned that false allegations of racism are seen in a very serious light, justifying appropriate disciplinary action. So, you are legally obliged to take action against discriminators, harassers and bullies, but you must also act against those who make unfounded and false allegations of discrimination or harassment.


  1. Don’t dismiss the allegations. You must take all complaints seriously
  2. Investigate the matter as soon as possible after the allegations are brought to your attention. Remember to act quickly. Speak to both the complainant and the alleged wrongdoer to get a sense of what happened. Check with any witnesses if necessary as to what went on.
  3. Try to work out an amicable resolution to the matter if possible. Do this with the parties’ agreement.
  4. If a solution can’t be reached or the matter is too serious and warrants further action, advise the parties of their rights to take the matter further. This will usually be in the form of lodging a grievance in terms of your policy and established procedures.
  5. Try expediting the period of delays between each step of the grievance procedure if possible. You must get the parties to agree to this as they must be given enough time to prepare.
  6. Appoint a manager at the right level to hear grievances in allegations of serious misconduct such as racism and harassment.
  7. If it turns out there was merit to the grievant’s allegations, institute disciplinary proceedings against the employee who allegedly committed those actions.
  8. If it transpires the grievant made groundless allegations or was actually untruthful, institute disciplinary proceedings against that employee.
  9. Advise employees of their rights every step of the way.
  10. Make sure your conduct supports your policies on anti-discrimination, etc.

Steps when you suspend an employee:

Step #1: Call the employee in for a meeting and advise her that you are
considering suspension.
Step #2: Give brief reasons why you are considering suspension. This does
not mean you need to give a detailed justification for your intention.
Step #3: Give the employee an opportunity to respond. This could be in the
form of asking her if she has anything to say or any representations to
make before you make your final decision as to whether she should be
suspended or not.
Step #4: Consider the representations (if any) in the actual suspension of
the employee. If the employee says anything to change your mind and/or
convince you that suspension is inappropriate, then the process will stop
here. If, however, after listening to anything the employee has to say you
still decide to proceed with suspending the employee, then continue with
the steps below.
Step #5: Inform the employee of her suspension. You should inform the
employee in writing. This will usually require you to hand the employee a
notice of suspension or a notice of a disciplinary enquiry which contains a
paragraph dealing with suspension.
Step #6: You must continue to pay the employee while she is on suspension,
but you can ask the employee to return her access card/keys/access disk to
the workplace to ensure she doesn't access the premises when she is not
allowed to/while she is suspended.

If you consider step #5, you'll see that you have to give the employee a
written notice of suspension.


When will restraints be enforceable?

In the case of Automotive Tooling Systems v Wilkens, the Supreme Court of
Appeal was required to determine whether a restraint of trade provision was
enforceable. The provision in question sought to prevent two former
employees from taking up employment with a competitor, in the light of the
technological know-how that the employees had obtained whilst employed by
the company (ATS).

Whilst employed by ATS, the two employees were directly involved in the
manufacturing of specific marking machines used in the manufacturing of
automotive parts.The two employees resigned to take up employment with
another company, AMS, where they would conduct the same manufacturing
functions that they had conducted at ATS.  ATS launched an application to
prevent the two employees from taking up employment with AMS alleging that
it had a proprietary interest in the technical know-how the two employees
had acquired during their employment with ATS.

In determining whether ATS had a proprietary interest worthy of
protection, the Court restated the position that restraints of trade are
enforceable, unless they are held to be unreasonable.  For the interest to
be proprietary to the employer it should be an interest belonging to the
employer, rather than the employee, such as a trade secret or confidential
information. The Court further stated that the specific know-how, knowledge
and skills that an employee acquired whilst employed, and which were in the
public domain, didn't constitute a proprietary interest that could be
protected by way of a restraint of trade.  A restraint that sought merely
to exclude or eliminate competition without a legally recognisable interest
was unreasonable and unenforceable. In short, an employee couldn't be
restrained from merely using the knowledge, skills and experience that he
had acquired at his previous employer.


Smoke brakes in the work place


Companies often complain about productivity loss due to employees taking
frequent smoke breaks. To make matters worse, employees tend to want
company when they do take a smoke break so typically three or four
employees will congregate to smoke together and sometimes non-smokers will
join them. The effect of this on productivity can be major.

To stop this problem, you should try to control the number of smoke breaks
that smokers take. To keep productivity loss to a minimum you should:
* find a mechanism to record the amount of time a smoker spends on smoke
breaks (clocking system)
* ensure that the smoking area is not too far from the workplace so that
time is not wasted accessing the smoking area
* limit the number of smoke breaks that can be taken during working hours
* limit the duration of the smoke breaks
* ensure that the smoking area is visible (glass partitions) so that the
occupants of the area can be monitored
* maintain discipline so that your smoking policy is adhered to.



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