Employers have to manage business risks on a daily basis to safeguard the undertaking’s profitability and sustainability. Intimidating labour regulations is one of the most problematic factors for business owners in South Africa.

It is presently a modern tendency amongst business owners to contract out non-essential activities, such as security, financial services, transport and marketing. This allows the employer to spend more time on managing his essential activities.

What are the options?

The moment when an employer/employee relationship originates, employers have to comply with strict legal requirements irrespective of the number of employees. To comply with these requirements, an employer may entertain a number of options:

Internally:

The employer deals with it personally or create an internal capacity to do so by, for example, appointing a full-time legal officer (labour law).

Contract out:

The employer makes use of the services of one of the following:

– A Local attorney;

– A labour consultant;

– An unregistered employers’ organisation; or

– An employers’ organisation registered with the Department of Labour.

Employers should undoubtedly realise that there are definitive differences between these options, which may hold serious implications regarding cost, specialist knowledge, spectrum of services, infrastructure, and availability. When an employer wants to contract out, the following should be considered about the potential contractor:

Is the organisation authorised to represent employers at the CCMA, Negotiating Councils and the Labour Court? Please note that only employers’ organisations registered with the Department of Labour are qualified to appear in these forums.

Does the institution specialise in Labour Law?

• Does the establishment have the required experience?

• Does the establishment provide specialist services on the employer’s premises?

• Does the establishment provide a cost-effective solution?

• How long does the establishment exist and can it guarantee business continuity?

• Is there management continuity in the organisation, and

• Is the ground level needs of employers the driving force of the organisation and

may the employer give input in the management of the undertaking?

Evaluate your labour risk

Employers may, in instances of non-compliance with Labour Legislation, be fined heavily and even receive a jail sentence by the Department of Labour.

Below is a control list to evaluate your labour risk:

Applicable legislation – Do you know which legislation applies to your business? And do you understand each of the requirements you have to comply with?

National minimum wage – Do you at least pay the national minimum wage? Although the minimum wage, in terms of Sectoral Determination 13 – which regulates labour relations in the agricultural sector – has been determined at R16,25 per hour, all employers have to comply with the National Minimum Wage Act, which became law on 1^st January 2019. It is compulsory for employers to pay at least the national minimum wage, which has been determined at R20,00 per hour for all employees in South Africa.

The agricultural and forestry sectors have been exempted and is allowed to pay 90% of the national minimum wage, calculated at R18/hour. This exemption is valid for two years, after which all employers have to pay at least the laid down national minimum wage.

Placards – Do you display posters with summaries of the Act on Basic Conditions of Service, the Act on Equitable Employment Opportunities, and the Occupational Health and Safety Act in the workplace?

Service contracts – Do you have a signed service contract with every employee? Do you use the correct form of service contract and do these service contracts comply with applicable legislation?

Other documentation – Do you at least have the following in place and does it comply with legislation? – attendance register, salary slips, personnel files, registration with the Unemployment Insurance Fund; and are you registered with the Workmen’s Compensation Commissioner?

Union rights – Do you know what your rights are as employer regarding union activities?

Discipline in the workplace – Is your disciplinary code practically feasible and up to date? Do you always follow the correct procedures when it comes to progressive discipline and disciplinary hearings?

It is important to keep the role played by labour in the working environment in mind at all times and to understand that legislation can be used to the advantage of the employer to protect his business.