Business Practice 3

Module 1: Demonstrate an understanding of employment

relations in an organisation

Module 1: Demonstrate an understanding of employment relations in an

organisation• After completing this module, you will be

able to:– demonstrate an understanding of various

stakeholders and their roles in an organisation.

– demonstrate an understanding of organisation policies and procedures related to employment.

– demonstrate an understanding of employment related agreements.

1. DEMONSTRATE AN UNDERSTANDING OF VARIOUS STAKEHOLDERS IN THE EMPLOYMENT RELATIONSHIP

After completing this outcome, you will be able to:• correctly identify different stakeholders.

• correctly explain the roles of the identified shareholders.

1.2.1 Duties of the employer

• To pay remuneration

• To receive the employee into service

• To provide leave

• To provide safe working conditions

1.2.2 Duties of employees

• To report for duty• To perform diligently and competently• To obey all lawful and reasonable

instructions of the employer• To promote the employer’s business and act

in good faith:– Confidential information– Promoting the employer’s business– Dishonesty

Activity 1

• List four duties of an employer

• List four duties of an employee

1.3 The stakeholders at collective level

• Management or an employer’s organisation

• Workplace forums or trade unions

1.3.1 The organisational rights of a trade union

• Trade union access to the workplace• Deductions of trade union subscriptions or

levies• Leave for office-bearers for trade union

activities• A majority trade union is entitled to the

following additional organisational rights:– Trade union representatives– Disclosure of information– Establishment of thresholds of representatives

1.3.2 The role of the shop stewards

• The recruitment of members in the workplace.• Assisting in the administration of union business. • Representing members in disciplinary and grievance

procedures.• Facilitation of communication between the workforce

and management.• Participating in consultation and negotiation processes.• Ensure that management adhere to agreements on an

individual and collective level.• Participating in workplace forums and health and safety

committees.

1.3.3 Workplace forums

• Section 79 of the LRA describes the functions of a workplace forum as follows:– To seek to promote the interests of all employees in

the workplace whether or not they are trade union members.

– To enhance efficiency in the workplace.– To be consulted by an employer, with a view to

reaching consensus about matters referred to in section 84.

– To participate in joint decision-making about the matters referred to in section 86.

The difference between a trade union and a workplace forum

• A trade union is a legal person that can sue and be sued in its own name.

• Only a representative trade union can call for the formation of a workplace forum.

• A trade union negotiates wages and wage related issues whereas a workplace forum does not deal with wages.

• A workplace forum cannot embark on industrial action. A trade union can embark on industrial action.

• Non-union members can belong to a workplace forum.

Activity 2

• Which unions function in the education sector in South Africa? List at least three.

• Who do these trade unions represent?

2. DEMONSTRATE AN UNDERSTANDING OF ORGANISATION POLICES AND PROCEDURES RELATED TO EMPLOYMENT

After completing this outcome, you will be able to:• Correctly identify relevant policies and procedures.

• Provide a satisfactory explanation of the mechanics of grievance and disciplinary procedures.

• Correctly utilise grievance procedures.

Polices and procedures

• Conditions of service

• Disciplinary procedures

• Disciplinary code

• Grievance procedures

• Retrenchment procedure

• Strike procedure

2.1.1 What is the purpose of discipline in the workplace?• To change undesirable behaviour of

employees and to make sure that employees contribute effectively and efficiently to the goals of an organisation.

• All employers should adopt disciplinary rules that establish the standard of conduct required of their employees.

• The courts have endorsed the concept of corrective or progressive discipline.

What are the requirements for fair disciplinary action?

• Substantively fair• Procedurally fair• A fair procedure:

– Normally, the employer should conduct an investigation to determine whether there are grounds for dismissal

– Discipline against a trade union representative or an employee who is an office-bearer or official of a trade union, should not be instituted without first informing and consulting the trade union.

– If the employee is dismissed, the employee should be given the reason for dismissal and reminded of any rights to refer the matter to a council with jurisdiction or to the Commission or to any dispute resolution procedures established in terms of a collective agreement.

2.1.3 Representation during disciplinary procedure

• Unless the collective agreement provides for outside representation, which would include union organisers that are not employees of the organisation, a shop steward may not be represented by such a person.

• The Code only places the duty on the employer to inform and consult with the union, not allow representation.

2.1.4 Guidelines for misconduct

Guidelines in cases of dismissal for misconduct• Any person who is determining whether a dismissal for

misconduct is unfair should consider:– whether or not the employee contravened a rule or standard

regulating conduct in, or of relevance to, the workplace; and – if a rule or standard was contravened, whether or not- – the rule was a valid or reasonable rule or standard; – the employee was aware, or could reasonably be expected to

have been aware, of the rule or standard; – the rule or standard has been consistently applied by the– employer; and – dismissal was an appropriate sanction for the contravention

of the rule or standard.

2.1.4 Guidelines for misconduct

Guidelines in cases of dismissal for poor work performance• Any person determining whether a dismissal for poor

work performance is unfair should consider:– whether or not the employee failed to meet a performance

standard; and – if the employee did not meet a required performance

standard whether or not: – the employee was aware, or could reasonably be expected to

have been aware, of the required performance standard; – the employee was given a fair opportunity to meet the

required performance standard; and dismissal was an appropriate sanction for not meeting the required performance standard.

2.2 The mechanics of disciplinary procedures

• General warnings

• Specific warnings

• Written warnings

• Final written warnings

• Demotion

• Dismissal

2.2.1 Guidelines to determine appropriate sanction

• Disciplinary measures short of dismissal:– Informal advice and correction– When deciding on dismissal the employee should

consider (in addition to the gravity of the misconduct):• Length of service• Previous disciplinary record• Personal circumstances• The nature of the job• Circumstances of the infringement

– The employee should apply dismissal consistently

2.2.2 Disciplinary procedure in the case of ill health

• Incapacity on the grounds of ill health or injury may be temporary or permanent.

• In the process of the investigation referred to in subsection (1) the employee should be allowed the opportunity to state a case in response and to be assisted by a trade union representative or fellow employee.

• The degree of incapacity is relevant to the fairness of any dismissal.

• Particular consideration should be given to employees who are injured at work or who are incapacitated by work-related illness.

Guidelines in cases of dismissal arising from ill health or injury

• Any person determining whether a dismissal arising from ill health or injury is unfair should consider:– whether or not the employee is capable of performing

the work; and – if the employee is not capable – the extent to which the employee is able to perform the

work– the extent to which the employee’s work circumstances

might be adapted to accommodate disability, or, where this is not possible, the extent to which the employee’s duties might be adapted

– the availability of any suitable alternative work.

2.3 Grievance procedure

• Any dissatisfaction or feeling of injustice experienced by an employee or a group of employees and which is communicated to the employer is called a grievance.

• When dissatisfaction is not a grievance:– Most grievance procedures specifically exclude the use

of grievance procedures for appealing against disciplinary action.

– Collective wage grievances are not admissible, but must be handled via negotiating procedures that should be set out in the recognition agreement.

– Grievances involving large groups or all employees should be resolved by negotiation.

2.3.1 Informal phase

• When an employee has a grievance, he/she must firstly discuss it with his/her immediate supervisor

• Grievances must be lodged as soon as possible after they arise.

• The supervisor must then investigate the grievance, take such action as he/she deems fair and inform the aggrieved employee accordingly.

• Where the grievance is lodged against the immediate supervisor, the employee can initiate the grievance procedure at the next management level.

2.3.2 Formal phase

• A formal grievance must always be accompanied by a completed grievance form. In this form the employee sets out his/her dissatisfaction, and also the action desired to resolve the grievance.

• The process by which the grievance will be resolved will be similar as that described at the informal phase. When the supervisor informs the employee of the action being taken, he/she must complete the form and the employee should then sign it, confirming that he/she was present and understands the contents of the form.

2.3.3 Third party resolution phase

• Where grievances are of a more technical nature, and where it is not possible to settle the grievance by mutual consent, third party resolution may be the only acceptable way.

Activity 3

• Correctly identify the relevant policies and procedures in your workplace/college.

• Explain the mechanics of grievance and disciplinary procedures.

3. DIFFERENT TYPES OF AGREEMENTS IN THE WORKPLACEAfter completing this outcome, you will be able to:• correctly identify various types of agreements.

• correctly identify, describe and explain relevant conditions of employment in an organisation.

3.1 Introduction

• We can recognise a contract of employment by three basic features: – The rendering of personal services: This means

that the employee him/herself must work for the employer.

– Remuneration: This means that the employee must be paid for his or her services.

– Subordination: This means that the employee must obey the employer’s lawful instructions.

Employee vs. independent contractor

• Dominant impression test

Employee Independent contractor

Subject to the control of the employer Not subject to control of employer

Supervised on a daily basis Not supervised on a daily basis

Only allowed to work for the employer Allowed to enter any contract

Must perform work himself Other people may assist

Paid a fixed salary Paid according to hours worked

Subject to discipline Not subject to discipline

Protected by labour legislation Not protected by labour legislation

Working hours determined Working hours undetermined

Tools and equipment provided Provides own tools or equipment

Two main types of agreements in employment

• The individual contract of employment between the employee and the employer.

• A collective agreement that can be concluded between management and one single trade union, or it can be concluded between an employers organisation or more than one employer and one or more trade unions.

3.2 Requirements for a valid contract

• There must be agreement between the parties.• The conclusion of the contract and the

obligations in terms of the contract must be lawful.

• The parties to the contract must have the necessary capacity to enter into the contract.

• The performance of the parties’ obligations in terms of the contract must be possible.

• Any formalities required by law must be complied with.

3.2.1 The employment relationship

• When the contract is concluded, the employee is usually in no position to negotiate with the employer on the terms of the contract.

• The employer also has a power of command over the employee during the existence of the employment relationship and is able to control what the employee does and how it is to be done.

• Legislation, such as the Labour Relations Act, protects the employee against unfair dismissal.

3.2.2 The contract period

• The fixed term employment contract

• The contract for an indefinite period

• The probationary period

3.2.3 Collective agreement

• Terms and conditions of employment that a collective agreement can regulate–Minimum standards set out in the Basic

Conditions of Employment Act– Employee can only be placed in a better

situation than the Act stipulates

• Different types of collective agreements:– Agency shop agreement– Closed shop agreement

3.2.4 Bargaining council agreement

• A bargaining council agreement is a type of collective agreement.

• The collective agreements that are negotiated in bargaining councils put in place minimum conditions of employment for employees in the service of the employer parties to the council.

• The Minister of Labour may also extend such a collective agreement to non-party employers and employees, provided that the parties that voted in favour of the collective agreement are sufficiently representative of employers and employees in the sector and area.

Functions of bargaining councils

• To negotiate collective agreements concerning wages, working conditions and other procedural issues.

• To administer and enforce agreements, the latter usually by means of designated agents, who are employed by the bargaining council to check that agreements are being adhered to.

• To prevent and resolve disputes, thus every bargaining council must make provision for dispute resolution procedures.

• To establish and administer benefit schemes, such as pension and provident funds, medical aid, sick pay, holiday pay, unemployment funds and funds for training schemes.

• To deal with requests for exemptions.

Hierarchy of regulation

Activity 4

• Visit the website www.legaldocs.co.za.• How many “employment documents” are listed on

the website? • Download the “payslip for an employee”. • Why do the authors of this website require users to

first read the disclaimer before downloading a document? Explain your answers.

• Hand in your payslip as part of your portfolio of evidence.

Activity 5

• Identify the different people and organisations that may be party to one of the agreements that may be concluded.

• Discuss the various agreements that can be concluded in the employment context and their effect on the employee’s terms and conditions of employment.