BankservAfrica’s latest take-home pay and private pensions indices show that 2018 is off to a good start, with growth experienced in both nominal and real terms.

The BankservAfrica Take-home Pay Index shows average formal sector pay was R14,675 in January 2018, 5.8% higher than January 2017 before inflationary adjustment.

This increase was lower than December’s growth of 7.3%. However, when adjusted in line with inflation, take-home pay increased by 1.2% on a year-on-year basis, and represents the slowest increase in five months.

“This positive real increase for money banked by employees’ points to a gradual increase in living standards for most formally employed people,” said Mike Schüssler, chief economist at Economists dot coza.

The typical formal employee experienced a real increase of 2.2% – nearly double that of the average take-home pay increase.

The share of employees who receive up to R4,000 per month declined to 13.7% in January 2017 compared to 15.2% in January 2018. This is a 7.8% decline in the number of employees receiving less than R4,000 per month over the last year.

Those earning monthly salaries between R12,000 and R1,000 now stand at 474,000 people, which is more than the 436,900 who earn below R4,000.

While the number of employees taking home between R12,000 and R16,000 only grew by 1.2% , this number is still higher than the number of earners in the low-income category.

A quick review of the salary index shows that the real increase average was 1% more than in 2016, the group said.

Real take-home pay declined in the first two months of the year and then gradually increased. In the last three months of 2017, take-home pay increased by 2.8% on average after inflation.

Source: Business Tech

How to calculate your credit score

An excellent credit score is one of the most priceless assets a potential home buyer can have. This tool has the power to secure favourable mortgage and refinancing rate, influencing everything from the size of the loan repayment to the interest rate on the home loan.

“It is advisable that potential home buyers check their credit score before even starting to look for homes or applying for a home loan, as the banks will look into your financial history and the application will be declined if you have a low credit score. The important thing is that your accounts are up to date and that you have the ability to afford the bond,” said Craig Hutchison, CEO Engel & Völkers Southern Africa.

South Africans are entitled to a free copy of their credit record every year.

“Many South Africans are surprisingly unaware of the importance of a good credit profile, many do not know what a credit profile even is, and even if they do, they seldom check their own personal credit profile. Today many potential employers look at credit profile reports as a way to judge a person’s character and level of responsibility,” said Mellony Ramalho, group executive African Bank.

Your credit score is typically a number from 0 to 999 and is calculated by using all the details on your credit profile. “It reflects a ‘score’ summary of all your financial decisions, it is often used by lenders, such as home loan and personal loan companies, to make accurate decisions on whether they should lend to you or not,” said Michael Bowren, CEO and founder Fincheck.

Overall, a credit score measures the amount of potential risk the consumer is to the creditor.

How does a credit score work?

The higher your score the better your credit health will be, which will be an advantage when applying for a home loan, making it easier for you to borrow money at lower interest rates.

“The lower the score, the higher the risk which then influences the outcome of the credit application,” advises Andile Fulane, CEO, Seed of Prosperity.

By managing your credit profile effectively, you can ensure your image and profile is viewed favorably by lenders or other organisations. A bad credit score would mean the exact opposite of this and result in almost no financial institution willing to offer you a home loan.

How do they calculate your credit score?

Your credit score is calculated by a credit bureau based on your credit report. They consider how you pay your bills, how much debt you have and more importantly, how all of that compares to other credit active consumers.

Each bureau has a different way of calculating your score and take into account different forms of information, including information their organization already holds on you, or your employment circumstances.

Your credit score is only one part of your credit report although it is almost the single most important item on your credit report; the full report gives you some handy information. Your credit report is a combined summary of your financial background with an overview of your credit score, financial accounts, profile, and rating.

What influences your credit score?

As you start transacting with various banks, retailers and other financial institutions like lenders, you start building a financial history. Your credit history will be determined by the amount of money you have borrowed in your life and how much of it you have diligently paid back on time.

Credit score is affected by the following:

  • Missing payments or not paying on time, even if you make double payment the following month the score will affect your credit history. “While adverse legal information is cleared as soon as the account is settled, the negative repayment history however remains for a couple years,” said Ramalho.
  • Too much debt – how much you owe and how much of your available credit you’re using – it is advisable to try to keep the use of your current credit facilities to less than 35% of your limit.
  • Negative information like a court judgment taken against a consumer’s name (commonly known as blacklisting).
  • Length of credit history.
  • Account application and enquiry activity – within a short period of time, how many account applications the consumer submitted and how many new accounts you opened.

My credit score is lower than I expected. Why is this?

Fincheck provide some reasons:

  • A credit history of fewer than 6 years, which is the time frame used to calculate your total credit score.
  • Missed or late payments over the last 6 years.
  • Holding very few credit accounts means there will be less credit history available on your profile.
  • Court judgments or record of insolvency.
  • Having a lot of unused credit available could lead to a large balance of debt if you decided to use it all at once.
  • Balances on your accounts that are very close to the credit limit indicate that you rely on credit to get through each month.

Why improve your credit score?

Credit providers measure their risk in taking you on as a client before they approve or decline your application for credit, so improving your credit score increases the chances of being granted credit on favorable terms.

How to improve your credit score

  • Regularly checking your credit report to confirm all the details are correct.
  • Making sure you make payments on any outstanding credit accounts on the due date. (Should you have difficulty in making your payments, you should contact your credit provider to agree on a payment plan, or to reduce your regular payments to an amount that you can afford to pay).
  • Consider setting up regular automated payments rather than doing manual payments.
  • If you have too many old, unused credit accounts, consider closing them.
  • If you are almost reaching your credit limit on one or more accounts, try and reduce your balance. Outstanding balances mean you have a lot of outstanding debt in your name.

    How long does it take to improve your credit score?

It depends on how long it will take to improve areas that need attention and maintain them, real improvement will start showing after three months of consistency, as you show progress your credit score will automatically get updated.

If you have had a couple bad experiences with your credit health, it is helpful to know that, credit inquiries stay on your credit report for up to two years, whereas more serious activities that incur namely late payments, lawsuits, bankruptcy and tax liens will stay on your credit record for up to 10 years.

How to build up a credit score if you don’t have debt

Unfortunately you won’t have a credit score if you don’t have any debt because your credit score is calculated and based on your credit habits. This doesn’t mean your financial health is bad, there’s just simply not enough data to give you a credit score.

This can be bad news if you’re looking for a home loan though, so your first steps will be to apply for financial products where you can start building a credit record.

These can include:

  • Credit card
  • Vehicle finance
  • Phone contract
  • Clothing accounts
  • Consequences of a bad credit score

Not paying your account on time or at all which can result in you not getting further or desired credit when needed.

Lenders will see you as a high risk meaning that should they decide to take on that risk, they will charge high interest rates compared to someone with a good credit score.

Depending on what industry you are in – some industries such as banking – check a potential employee’s credit report and score. They consider a bad credit score as someone who is not trustworthy to work in a banking environment.

Consequences of not checking one’s credit score

It is advisable for a consumer to check their credit report every 3 to 6 months. Statistics show that only 3% of the 24 million credit active South Africans have seen and understood their credit report.

This comes as a threat of potential identity theft where someone can use a consumer’s ID to clone their profile and open lines of credit. A credit report contains so much personal information including addresses, phone numbers and employment that the leak of such information poses a big risk of fraud to the individual.

How a credit score affects you when applying for a home loan

When it comes to taking out forms of credit like a home loan, your credit score plays a vital role in your eligibility for a home loan, however it’s not the only factor to affect your application, your debt-to-income ratio will also play a big role.

What score do you need to qualify for a home loan?

There’s no specific score which will qualify you, if you follow the step to build a healthy credit score and maintain a healthy debt-to-income ratio, lenders will see you as eligible for things like home loans. Most lenders prefer to lend to an individual whose debt is less than 36% of their gross income.

This, along with healthy credit habits that keep your score in the ranges above 650 will put you in a good position to secure a home loan.

If you are declined for a home loan, what should you do and when do you apply again?

It’s important to know that if you apply for any hard forms of credit like a personal loan, credit card or home loan, you will get a hard inquiry against your credit report, too many of these are a red flag to lenders.

If you have had an unsuccessful home loan application, take a step back and start improving your credit health. There’s no fixed time frame for this, it will take as long as you take to form healthier credit habits, pay back debt and wait for that very happy green indicator on your credit report.

Source: Business Tech

Government amends UIF Bill

A new Unemployment Insurance Fund (UIF) Bill has been signed into law which will see improved benefits for employees.

The purpose of the Unemployment Insurance Act, No 63 of 2001 is to provide for the payment from the Fund of unemployment benefits to certain employees and for the payment of illness, adoption, maternity and dependents’ benefits related to the unemployment of such an employee.

Among several amendments, the bill:

  • Increases UIF benefits from 238 to 365 days
  • Allows employees to apply over 12 months instead of six
  • Allows employees to apply for maternity leave benefits eight weeks before delivery and up to 12 months after birth
  • Sees a flat rate for maternity benefits (66% of a female employee’s salary)
  • Let’s the female employee who have lost their child in the last trimester qualify for maternity benefits
  • Grants people on learnerships to apply for benefits
  • UIF benefits will not be stopped when a beneficiary dies, but will be paid out to their dependents.
  • Claims from the UIF can be made for longer period

Prior to these amendments, the employee were only able to claim from the UIF for 238 days’ work. Now it is possible to claim from the UIF for 365 days work. These benefits may be claimed over 12 months instead of the previous six months.

Dependents benefits

Dependents’ benefits can be claimed by the spouse or minor children of someone who has died, who had been paying UIF contributions to the Fund.

The dependents of a deceased breadwinner now have up to 18 months in which to apply for the dependent benefit.

This is especially positive for those in low-income jobs because they often learn about such benefits being available to them long after the breadwinner has died, and traditionally in many black communities, widows are not allowed to be outside their homes for long periods while they are in mourning, which takes anything from six months or longer.

Another change is that there is now a provision that allows contributors to the Fund with no dependents to nominate beneficiaries of their choice in the event of death, provided the deceased had no spouse, life partner or dependent children.

Illness benefits

Illness benefits can be claimed if the employee is off work for two weeks due to illness and will not receive a salary from the employer. This has now been changed to seven days, meaning the employee can now claim for illness benefits if they are off work for seven days.

New additions

Learners who were on ‘learnership’, Public Servants and Foreign Nationals are now able to claim for UIF benefits.

Now let’s have a look at the changes to the Maternity Benefit and how they will impact Employees.

Maternity

Previously the employee had six months in which to claim for maternity benefits, meaning that if six months passed before the employee claims, the employee was unable to put in a claim. The time in which the employee can put in a claim has now been increased to 12 months. This means that the employee now has a year within which the employee can submit the employer application for benefits.

If the employee has claimed for maternity benefits before, the employee will recall that if the employee had claimed for any type of benefits within a four-year cycle, such as unemployment, this negatively affected the employee when the employee applied for maternity benefits during this four-year period because the employee would not be able to claim for full maternity benefits.

Fortunately, this has changed and now the employee claim for any other benefits would not affect the employee’s ability to claim for full maternity benefits.

A fixed rate of 66% of a female employee’s salary (instead of the current sliding scale of between 38% and 60%), has now been introduced, subject to the maximum income threshold as set out in the Act.

The following also applies:

Full maternity benefits can now be claimed by female employees who had miscarriages in their third trimester. The contributor is entitled to benefits for 17-32 weeks. To claim, the contributor must have been employed for 13 weeks prior to claiming the maternity-related UIF benefit.

Application for benefits can now be made before or after the birth of a child – but no later than 12 months after the birth of the child.

And after a traumatic experience of losing a child – this may go a long way towards providing the support and time to recuperate.

Source: Labour Net

Successful companies the world over are making the necessary shift of recognising the value of the workplace as a business tool to help hire and keep the best talent.

Linda Trim, director at workplace specialists Giant Leap, says that for South African companies, the overarching imperative must be to see workplace strategy as a business opportunity rather than a just a design challenge and a cost containment exercise.

With 80% of the average company’s costs tied to its talent, which is increasingly globally mobile, here are the top 5 workplace changes South African companies will need to adopt in the next 2 years to keep pace with international trends:

1. Build the ‘Internet of Workplace’
In larger companies, “Internet of Things” (IoT) integration has so far primarily been at the building level, using real-time dashboards to track workplace occupancy, building water consumption, elevator usage, temperatures and more.
“However, threads of the next stage of this are starting to emerge, “ Trim notes.

“Companies are starting to embrace everything from smartphone apps that control the window shades, to tablets in meeting rooms that enable employees to order a coffee through a virtual concierge or to adjust the temperature.”
Companies that build a workplace linked by internet connectivity – an “Internet of Workplace” – will leverage devices, furniture and environments that interact digitally to drive productivity.
For example, Dutch bank ABN Amro is using occupancy data to help employees find available workspaces, and analysing traffic patterns around lunchtime to manage lift rush hours.

2. Ingrain the co-working mentality in real estate strategy
By 2020, there will be 26 000 co-working locations worldwide. By comparison, there are 24 000 Starbucks globally. Initially, co-working was simply a term for the use of a shared workspace that businesses – many of them individual entrepreneurs or small startups.

“Today, top class co-working spaces like FutureSpace in Sandton, are used by a wide variety of businesses, including multinational companies,“ says Trim.
In the future, companies will also need to think more about accessing office space rather than owning or leasing it. This paradigm shift will require an evaluation of “core” and “ flexible” space needs so that businesses can execute a real estate strategy that minimises cost and maximises opportunities.

3. Make employee experience a core part of business strategy
While most business leaders already have an understanding of the importance of employee engagement, three-quarters of those surveyed in a Harvard Business Review study said that most of their employees are not highly engaged.

Says Trim: “Engagement and productivity can have a direct impact on the bottom line. One of the best ways that companies can ensure that their employees are engaged is to dedicate someone entirely to the employee experience. By creating a position of a chief experience officer, you can focus attention and resources to reduce work-day friction and create positive experiences for employees.”

4. Create a workplace that makes people healthier
Low productivity due to poor health damages companies profitability. In the U.S. for example, overweight workers and those with chronic health conditions account for more $153 billion in lost productivity annually.
“To combat these trends, wellness is and will remain one of the hottest topics in workplace design, “ said Trim.
“Employees will soon expect to be healthier when they leave the office than when they arrived. This will be thanks to access to high-quality air, natural light, water and healthy food choices, plus wellness programs with opportunities for exercise, health care services and social engagement.”

Technology can also play a role. Some European companies encourage employees to wear Fitbits and answer daily questions to assess exercise levels, stress levels, productivity and overall well-being. Employees then translate data-driven insights into decisions around how, where and when to work.
“By 2020, we expect that the importance of benchmarking built- environment performance to wellness standards will increase dramatically,” Trim adds.

5. Enable an agile organisation
Most organisations have dedicated teams with certain expertise that work on specific products or services for clients.
“Due to changing client demands, a quickly shifting environment and evolving technologies, organisations are starting to rethink these structures by prioritising collaboration between teams, breaking down silos.
The “agile organisation” is a term that’s getting a lot of attention right now,” said Trim.
To boost collaboration between people with different areas of expertise and backgrounds, agile organisations must be able to bring people physically together to work. Collaborations are key, which means that more people will come to the office and average occupancy rates will increase. Additionally, formal planned meetings are replaced by short, effective “meeting moments” and continuous informal collaboration within teams.
According to a study from McKinsey & Company, businesses that are deploying agile development at scale have accelerated their innovation by up to 80 percent.
“The year 2020 isn’t that far away. It is critical for South African companies to make space and location decisions that create engaging and productive experiences for employees,” Trim concludes.

Life lessons from three 100-year-olds

Imagine you were 100 years old and you were looking back on you life. Would you still be anxious about the little things currently on your mind?

If all human beings were honest, we would have to say that far too often, we allow the craziest things to rule our brains and cause us anxiety. We get stuck in the here and now and before we know it, we are caught in a rut. Most times, all we need is a small shift in perspective.

I personally believe that successful people don’t wait for these shifts in perspective to sporadically happen to them but rather create “road blocks” and purposely put them in their own paths so that something is constantly telling them to look at the bigger picture.

This is why there is such value in “informal education”. If you can make it a priority to listen to podcasts daily, read as much as you can and watch really fascinating YouTube videos across a variety of topics, you are going a long way to hacking your own life for growth and perspective.

Not too long ago, I came across this absolute gem of a video that I’d like to share with you today. Three centenarians are asked what their most valuable life lessons are, and also their regrets. I found their answers and perspective to be so powerful and I hope you do too.

This is informal education at its best!

By Mark Sham, founder and CEO of Suits & Sneakers and Impello incubation hub

Eight habits of successful people

There are no guaranteed paths to success and wealth, but there are certain habits and lifestyle choices that most wealthy and successful people employ in their daily routine. Adopting them could help you on your way.

1. Reading
Warren Buffet has said that he spends 80% of his work time reading and learning. His enormous wealth obviously creates space for that when many of us would need to be getting on with our more standard jobs. However, the lesson remains. Those with a greater understanding of the world around them are exponentially more prepared to deal with the difficult decisions that life will throw at the.

2. Personal care
Specifically, exercise and personal hygiene. The benefits of even limited exercise once a day are well established. It makes you sharper and more positive in your approach – Richard Branson claims his productivity has doubled since he started an early-morning bicycle ride. Personal hygiene is critical to how you are regarded by your colleagues, and somebody who cannot take care of themselves is unlikely to be able to take care of a business. Diet is also critical – eating the wrong food at the wrong time of day can upset your ability to focus.

3. Rise early
Early risers have the benefit of a quiet couple of hours to clear their minds or to really focus on something while there is still peace, or to exercise. This quiet time for reflection is a common theme in surveys of wealthy people, and is said to reduce stress.

4. Sleep
Another common theme among the successful is that sleep is considered a priority. Albert Einstein is said to have required ten hours of sleep a night, which might be somewhat extreme – but surveys reveal that successful people make sure they get seven or eight hours of sleep a night. So, perhaps eschew that extra episode on Netflix and get to bed instead.

5. Don’t sweat the small stuff
Getting wound up about stuff you have absolutely no control over, such as bad traffic and slow WIFI or technical issues does nothing but reduce your ability to think straight. Successful people understand that they ought to control what they can, and laugh off what they cannot. Of course, you have options to avoid traffic and install reliable WIFI and, more generally, you can keep timewasters and negative people out of your life, but when the unavoidable happens, just take it in your stride.

6. Live with moderation
This isn’t a call for miserable austerity, but a reflection that a key feature of the behaviour of many successful people is that they live reasonably moderate lives. It’s not that they don’t live very comfortably, however they do often eschew the wasteful expressions of enormous wealth. Many have a single, expensive passion – be it wine, whisky, cars, travel or art – but it is usually indulged quietly and in a context of more generalised restraint.

7. Treat your juniors with respect: make time for them
Getting younger and junior people “on your team” is often as simple as acknowledging their work and according them respect. The most junior people in your sphere of influence will one day move on to greater things, and your behaviour towards them when there was a gulf in power dynamics will never be forgotten. Use your power to uplift and encourage people, to ensure that they have the tools they require to do their work, and you’ll be repaid with interest over the years. It’s a simple, easy and valuable habit.

8. Trust your gut
Despite whatever confidence issues you might have, the chances are that you’re doing the job you’re doing because you’re good at it. Create enough quiet in your daily routine to hear your instincts. They’re often quieter than the many other people demanding your attention and that you take a certain course of action. However, more often than not, your gut is worth listening to.

 

Under labour law employees have the procedural right to a fair hearing before being disciplined or dismissed for misconduct or poor performance.

The following is a checklist of employee rights that employers holding disciplinary hearings must adhere to – the right to:

• prepare for the hearing
• the assistance of a representative
• an interpreter
• bring witnesses
• cross examine witnesses brought against them
• an impartial presiding officer chairing the hearing.

Other than under a few isolated exceptional circumstances these rights are strongly entrenched.

More employers are starting to afford employees some of these rights but are still falling short as regards the employees’ right to an impartial hearing chairperson. The reasons for this include:

• The employer’s intention is to hold a kangaroo court and get the employee fired regardless of the consequences OR
• Those employees assigned the task of chairing hearings are not properly trained OR
• The employer does not understand what constitutes bias.

There are in fact a number of factors that may suggest that the hearing chairperson could be biased. These include, amongst others, situations where the chairperson:

• Has previously had a clash with the accused employee
• Has prior knowledge of the details of the case
• Is a close friend of the complainant bringing the charge on the employer’s behalf
• Unreasonably turns down requests from the employee for representation, witnesses, an interpreter or other requirements
• Makes a finding that is unsupported by the facts brought before the hearing.

What does not necessarily constitute bias is the refusal of the chairperson to:
• Allow legally impermissible evidence,
• Hear irrelevant testimony or
• Allow unjustified adjournments.

However, it is extremely difficult for a hearing chairperson to distinguish fairly between reasonably and unreasonably turning down the accused’s request for a witness, representative, adjournment or other requirement. The ability to make rulings in this regard that will stand up in court can only be acquired via substantial formal training and solid experience of the hearing chairperson.

In the case of FAWU obo Sotyato vs JH group Retail Trust (2001, 8 BALR 864) the employee confessed to having stolen two bottles of beer from the employer and to drinking one of them during working hours. The arbitrator did not accept the confession as valid and also found that the chairperson of the hearing was biased. This was because the chairperson had caught the accused employee with the beers and had been involved in drawing up the charges. This created a reasonable apprehension of bias and rendered the dismissal procedurally unfair. The employee was reinstated with full back pay.

In SACCAWU obo Mosiane vs City Lodge Hotels Ltd (2004, 2 BALR 255) the employee was dismissed for stealing an item belonging to a guest of the hotel that employed the accused. The arbitrator found the dismissal to be substantively and procedurally unfair because the chairperson of the hearing had been biased and reinstated the employee.

In order to ensure that employers do not lose cases due to chairperson bias or alleged bias at disciplinary hearings employers must ensure that:

• Hearing chairpersons have no involvement in or knowledge of the case prior to the hearing

• Hearing chairpersons have a solid understanding as to what constitutes apprehension of bias

• They contract in a labour law specialist to chair hearings where the employer has no internal official with the necessary qualifications and knowledge to carry out the task properly.

By Ivan Israelstam, chief executive of Labour Law Management Consulting 

Remote work is a global, growing phenomenon that only seems to be gaining in acceptance but there are many misconceptions about it from thinking it’s a way of skiving off or that it leads to employee disengagement.

There are eight things about remote work you probably didn’t know:

1. It can increase worker productivity
Companies and employees alike say remote work is a boon to productivity. Said Trim: “Distractions like water cooler gossip, impromptu meetings, and loud colleagues are a non-existent.” According to data from SurePayroll, a payroll provider, two-thirds of managers say employees who work remotely in co-working spaces increase their overall productivity.

2. It drives employee efficiency
Fewer diversions for remote workers can lead to higher efficiency, says a survey from ConnectSolutions. Some 30 percent said it allowed them to accomplish more in less time, while 24 percent of those surveyed said they were able to accomplish more in about the same amount of time.

3. It’s often how project and consulting teams prefer to work
Teams tasked with special projects or consultants advising a company, often find it best to work away from the home office even if space is available there. Said Trim:” There is often a benefit to be away from the office and look at things from a distance and fresh eyes. Co-workings spaces are particularly well resourced for special team projects.” These teams are often exposed to like minded professionals in co-working spaces that often spark new ideas.

4. It reduces employee turnover
Offering work at co-working spaces reduces staff turnover, and job attrition rates fell by over 50 percent, according to a study published by Stanford University. “This is obviously a massive cost saving to companies because it takes a lot of time and money to continually look for new talent,” Trim noted.

5. It decreases real estate costs and overhead
Companies of all sizes report significant decreases in operating costs, remote work stats show. According to a Forbes magazine report, Aetna (where 14,500 of 35,000 employees don’t have an in-office desk) shed 251 000 square metres of office space, saving $78 million. American Express reported annual savings of $15 million thanks to its remote work space options.

6. It often leads to greater employee engagement
It seems counterintuitive, but remote workers are often more engaged with colleagues and supervisors than in-office workers, Harvard Business Review concluded. “Technological tools like Slack and easy video conferencing offered by co-working offices like FutureSpace that help workers stay connected makes all the difference,” Trim added.

7. It positively impacts the environment
For many employers, going green is a big incentive in the shift toward remote work. Studies show that employers who don’t travel in to an office have helped reduce their carbon footprint.

8. It meets demands of younger workers
Sixty eight percent of millennial job seekers said an option to work remotely would greatly increase their interest in specific employers, according to a survey by AfterCollege, a US career network for college students. Policies that cultivate a “flexible, fun, and casual” work environment have a positive impact on young people’s interest in specific employers the survey found.

Co-working spaces are now one of the fastest growing sectors of real estate worldwide in anticipation of the growing demand for a new way of working.

Dismissal for poor performance

While the law allows employers to decide what the proper standards of performance are, the employer will, if taken to the CCMA, be required to prove the fairness of the dismissal.

Employers must therefore ensure that their performance management systems and practices are designed to enable the employer to prove at arbitration that:

• The employee knew what the required performance standard was;

• The standard was realistically achievable;

• The employee was given sufficient opportunity to achieve the standard; and

• It was the employee’s fault that he/she failed to achieve the standard.

How must the employer’s systems be geared to provide legal proof in these four areas?

Did the employee know what the performance standard was?

The employee’s signed employment contract or performance agreement must spell out that, for example, that he/she is required to make 10 sales per month, reach 2 million rand turnover per year, pack 100 boxes per month or make 3 widgets per hour.

Was the standard achievable?

The employer’s formal records of actual past performance of the employee and others who have done the same work must clearly show that the agreed standard (e.g. 10 sales per month) has regularly been achieved and that therefore the standard is achievable and fair.

In the case of White vs Medpro Pharmaceutica (2000, 10 BALR 1182) the employee failed to meet her targets in nine out of ten months. The CCMA nevertheless found her dismissal to be unfair because the employer had set targets that were not achievable in the CCMA’s view.

Has the employee been given sufficient opportunity to achieve the standard?

The employer’s records relating to the employee’s performance must clearly show that, for example, the employee:

a) Has been given sufficient work to do to provide the necessary practice to become proficient
b) Has the time to get the work done properly.

Was it the employee’s fault that the performance standard was not met?

The employer’s performance monitoring records must show that:

• The employer has consistently provided the employee with the necessary work materials, training and equipment;

• The market demand for employer’s product has not reduced; or

• That there were no other reasons beyond the employee’s control for the employee’s poor work performance.

In Robinson vs Sun Couriers (2003, 1 BALR 97) the CCMA found Robinson’s dismissal to be unfair because the employer had neither established the reason for the poor performance nor brought any proof that the poor performance was the employee’s fault.

Employers must therefore be able to prove that they have:

• Set targets that are provably reasonable;

• Adjusted targets when new circumstances dictate this;

• Given employees a real chance to achieve the desired performance level; and

• Removed all obstructions to the achievement of the standards.

Thus the format of a good performance control system would be as follows:

• Details of the quantity, quality and time frame requirements of each employee;
• Proof that these standards have been achieved regularly;
• The nature of the specific tasks that the employee has been given during each performance period, the number of hours that the employee has been given to perform those tasks;
• The availability to the employee of all resources in good order needed for successful completion of the work; and
• The contact details of a reputable expert in labour law and performance management.

By Ivan Israelstam, chief executive of Labour Law Management Consulting

The future of work could be in freelance

Today freelancers present 35% of the workforce in the United States, 16% in the European Union and – while South African figures are harder to determine – the number is thought to be about 10% and rising strongly.

Linda Trim, Director of FutureSpace, said: “The data shows that freelancing is on the rise worldwide.

“And that’s partly because of the ‘gig economy’, people working independently for companies like Uber which is a relentlessly evolving phenomenon.”

In OECD countries, studies show that freelancers individuals work chiefly in the services sector (50% of men and 70% of women). The remainder are everything from online assistants to architects, designers and photographers.

A recent study called “A snapshot of today’s on demand workforce” by software firm Xero, showed that the majority of freelancers in OECD countries are “slashers”, meaning that their contract work supplements another part-time or full-time position.

These additional earnings can vary considerably. Those who spend a few hours a month editing instruction manuals from home may earn a few hundred euros (R3 to R4k) a month. Freelance occupational therapists may pull in ten times that working full-time (R30 to R40k/month).

Said Trim: “Perhaps the most glamorous face of freelancing are the ‘creative classes’ an agile, connected, highly educated and globalised category of workers that specialise in communications, media, design, art and tech, among others sectors.

“They are architects, web designers, bloggers, consultants and the like, whose job it is to stay on top of trends.”

Freelancers constitute a diverse population of workers – their educational backgrounds, motivations, ambitions, needs, and willingness to work differ from one worker to the next.

“In addition to the rise if the gig economy, the search for freedom with income is another huge motivator. Freelancing is increasingly a choice that people make in order to escape the 9-to-5 workday.”

Trim added that many of the clients that have signed up at FutureSpace work for themselves and are developing their business or have worked for big businesses for years and are now independent consultants.

“We have also noticed that many large corporates are hiring freelancers and are wanting to use shared spaces like FutureSpace for specific projects or innovation drives rather than have them in the established where they will be exposed to how things have always been done.”

Trim noted however that full-time, company-based work is still the standard for employment in most countries, including South Africa.

“But with the rise of telecommuting and automation and the unlimited potential of crowdsourcing, it stands to reason that more and more firms will begin running, and even growing, their businesses with considerably fewer employees.

“This does not necessarily mean an increase in unemployment. Instead, it likely means more freelancers, who will form and reform around various projects in constant and evolving networks,” Trim concluded.

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My Office News Ⓒ 2017 - Designed by A Collective


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