The move to a much greater level of remote working this year has reinforced the need for small businesses to ensure that they classify the people that work for them correctly. One of the biggest challenges for small businesses is to ensure that independent contractors, especially sole proprietors, do not drift into a position where the South African Revenue Service or the Department of Labour would classify such a person as an employee. The failure by a small company to manage the relationships with their independent contractors can lead to great costs for the company if the authorities find that the relationship with any of them is an employment relationship and the firm then needs to rectify the situation.

Less than two months after the commencement of the Protection of Personal Information Act (POPIA), South Africa was affected by a massive data breach. Experian, a consumer, business and credit information services agency, said on 19 August that it had “experienced a breach of data which has exposed some personal information of as many as 24 million South Africans, and 793,749 business entities, to a suspected fraudster”. What does all of this mean for you or your company and how can you avoid becoming a victim?

“Human capital will go where it is wanted, and it will stay where it is well treated,” says former chairman of the Citicorp, Walter Wriston. In the highly competitive local economy, disrupted by the arrival of the COVID-19 pandemic, businesses more than ever cannot afford to lose their best staff and skills. Read here for practical advice that you can implement to ensure you retain your best performing staff and skills.

With the recent changes in the economy and with TERS benefits lasting an uncertain amount of time, we realise that retrenchments are sadly a reality. The UIF’s COVID-19 and lockdown specific benefit, TERS, has helped thousands of employers retain their staff and ensure staff earned some income during the period, however the financial strain that has been placed on employers has led to many having to lay-off their employees. However, the UIF still offers relief to employees that have been retrenched, dismissed or whose contracts have expired through the unemployment benefits. Read here to see if you qualify.

One of our new realities in this topsy-turvy world of global crisis is the many businesses that have had to close their offices and work remotely. The resultant explosion in the number of people working from their home environments brings with it many serious challenges for businesses. Fortunately however there is a lot of guidance available on how to maintain high levels of morale, loyalty and productivity amongst your work-from-home employees. Read on for some thoughts on them.

“It is the duty of an employee when rendering his or her services always to act exclusively in the interest of the employer … an employee is not entitled to use his or her employment relationship with the employer without the employer’s permission to make a profit or earn commission for his or her own account” (Extracts from judgment below)Employees have very strong rights in our law, but employers also have effective remedies when employees “go rogue”.A recent case, in which an employee was ordered to repay his employer R33m in “secret profits” including R9m in damages, provides a good example. Diverted sales opportunities and secret profits A manufacturer employed a “Key Accounts Manager” as its agent in dealing with customers. He was trusted with an “almost unlimited discretion” and minimal management oversight to act in his employer’s interests.His employer sued him in the High Court on allegations that he breached both his employment contract and his duty to his employer, firstly by selling product to customers at below-minimum prices, and secondly by selling through his own companies to secretly profit thereby. The employee’s denials of wrongdoing cut no ice with the Court, which held that he “was clearly under a general obligation to do his best for his employer and to conduct the plaintiff’s business in good faith and for its benefit” but “was in breach of his fundamental obligation of loyalty and good faith which he owed to … his employer”.The secret profits claim. Ordering the employee to “disgorge” his secret profits of R33,291,599.24 (less any “amounts paid in making such profits” which the employee is able to prove), the Court held that the employer had proved the three elements needed to succeed in such a claim -The employee owed it a “fiduciary obligation” (a duty to act honestly and in utmost good faith),In breach of that obligation he placed himself in a position where his duty and his personal interest were in conflict, andHe made a secret profit out of corporate opportunities belonging to the employer. The damages claim was for losses on product sold to customers at prices well below the employer’s base price “in order to further [the employee’s] secret profit-making activities.” Finding that but for the employee’s wrongdoing the customers would have bought product at no less than the base price, the Court awarded the employer R9,407,651.05 in damages (to be allocated, when paid, to the R33m claim). Rubbing salt in… To really rub salt into the employee’s wounds, he was ordered to pay costs, and the bill will be a big one, including – Costs on the punitive “attorney and client” scale, an appropriate order said the Court “given the secret and unlawful nature of the scheme which the defendant ran for four years at the expense of his employer”, The cost of audio visual equipment used in the trial, andThe (no doubt substantial) travel and subsistence costs of both the employer’s legal team and its six witnesses, all of whom travelled from…

Employers and employees need to know about four new Acts which will usher in important changes to our labour laws. The summary below is a short one of only those changes likely to affect a significant number of people and businesses, so take advice on your specific circumstances. In a nutshell - Parental leave extended Until now, mothers have been entitled to unpaid leave when welcoming a new child into the world, in the form of 4 consecutive months’ “maternity leave”. Plus they can claim maternity benefits from the UIF if they are contributors. New fathers, however, have been limited to at most 3 days’ family responsibility leave.That will now be extended to – “Parental leave”: “Parents” (i.e. including fathers and same-sex partners) - 10 consecutive days’ parental leave.“Adoption leave”: Adoptive parents of a child under 2 years old - either 10 consecutive weeks’ adoption leave or 10 consecutive days’ parental leave (where there are two adoptive parents, they decide between them who gets 10 weeks and who gets 10 days).“Commissioning parent leave”: Commissioning parents in a surrogacy agreement – same provisions as for adoptive parents. Parents taking unpaid leave as above also become eligible for UIF benefits.Employers with maternity leave policies, and those who offer paid as opposed to unpaid maternity leave, should take advice on reviewing these policies. Minimum wages introduced The new national minimum wage is set as follows – Farmworkers - R18 per hourDomestic workers - R15 per hourWorkers in an ‘expanded public works programme’ – R11 per hourOther employees - R20 per hour. Separate allowances apply to those in learnership agreements.Employers who cannot pay the minimum wage will be able to apply for exemption for up to a year, but draft (at time of writing) regulations allow for only a 10% exemption.Failure to pay the minimum wage will expose employers to fines of the greater of 2x the value of the underpayment, or 2x the employee’s monthly wage (going up to 3x for second or further non-compliances). Strikes, lockouts and picketing An “advisory arbitration panel” can be (and presumably will be) appointed to help resolve protracted or violent strikes or lockouts, and those causing or exacerbating an acute national or local crisis. New picketing regulations are also in the wind.

In a recent UK survey 72% of employees felt that their employers were eavesdropping on them. Why are employers doing this? A good example of how keeping tabs on employees can be beneficial is the destruction of the World Trade Centre on 11 September 2001, where many firemen died needlessly searching for people who were not in the buildings. Technology is available that pinpoints who is in an area and how long it will take to get everyone to safety. It is also possible to determine when people enter sensitive areas or try to access confidential information. An employer also needs to know if its staff are passing on business secrets or running down the company to friends, fellow employees and the public – damage to a firm’s business reputation is one of the biggest existential risks faced by a company. Employer versus employee The most important issue is to maintain trust between employer and employee. Once this is undermined the harm to both parties can be lasting and severe. Management need to be open with their staff if they intend to monitor them. Tell the staff what you plan to track (emails, social media, telephone conversations etc) and that any employee can request the information you have gathered and how you will use it, and destroy it once it is no longer needed. Update staff contracts and conditions of employment with these measures. An open process with staff will help to clear up uncertainties they have and will keep the trust between you and your employees. It will also enable your business to protect itself against reputational damage from employees leaking negative information about your business. Protection of Personal Information Act (POPIA) POPIA awaits the announcement of a commencement date before the one year grace period starts running and among other things will allow staff to compel employers to give their staff access to all the information that the business holds on them. Technological advances have made it feasible to intercept and analyse your employees’ communications. In view of the arrival of POPIA and more importantly the relationships you have with your staff, think about this carefully, particularly as there will be harsh penalties for any material POPIA lapses.