Are you aware of your firm’s internal legal risks?

by Madelein
Are you aware of your firm’s internal legal risks?

By Sunette Ansara, director of Sensible Legal Services

Many businesses that operate in a complex technical specialist and legally regulated environment, often neglect their own internal legal risk environment.

This is no different for architectural practices. Although legislation and professional bodies regulate and monitor relationships with clients and other stakeholders to a large extent, the inherent risk of owning and managing your own practice is immense, and one of the biggest challenges you will face is labour law disputes and contracts with day-to-day service providers.

The rules of the game
When employing staff, it is extremely important to establish an employment framework that supports your architectural practice and your specific needs. This refers to the introduction of the correct employment contracts with staff and trainees, the human resources (HR) and company policies and procedures you wish to apply, the disciplinary code of conduct and more.

All of these elements – as a collective – are called an employment framework, or “the rules of the game”. This framework literally creates the structure within which your practice and employees will operate to create maximum productivity and efficiency.

Employment contracts and company policies clarify the expectations and obligations that the practice owner and the employees have of one another. With these clearly communicated, there can be no misunderstanding. Without rules, there is no accountability on either side and no way that either party can protect their respective rights.

Every business is different, and your employment framework will be determined by the industry you are in, and having the wrong employment framework in place will be counter-productive. It is very important for practice owners to intensively look at their business’ activities, the industry it operates in, applicable regulations and codes of conduct, and then to create a suitable employment framework.

Labour legislation
Some business owners think that having no employment framework in place would exempt them from adhering to labour legislation. This is not the case. If you don’t have employment contracts in place for your employees, the Basic Conditions of Employment Act (BCEA) will still ensure that those employees are protected. The BCEA provides the minimum standard of employment conditions to all employees, even those without contracts.

It is always better to get some expert advice in getting the correct employment contracts and HR policies, specific to support your practice’s needs, in place.

Once an appropriate employment framework has been introduced, you can utilise this as a platform to run a compliant and operationally efficient work environment, and manage employee performance issues and misconduct effectively and in line with the labour legislation.

Managing performance or misconduct
Do you understand the difference between performance management and disciplinary action?

Performance management is the ongoing process of creating a work environment or setting in which people are enabled to perform to the best of their abilities. It starts with recruiting and appointing the right candidate for a specific job, employee induction into the business, mentoring and training.

Practice owners can use the performance management process to identify employees who are struggling to perform in their roles, or are not meeting targets and more. The objective should always be to enable employees and not to punish, so it is a constructive communication process.

The term “discipline” is used to cover any action by an employer in relation to an employee which is designed to correct the employee’s behaviour – in response to a perceived misdemeanour, wrongdoing or refusal of duty by the employee.

Depending on the circumstances and the seriousness of the offence, disciplinary action takes the form of one of the following: Verbal reprimand and explanation, a written warning, a final written warning or dismissal.

When to enable and when to punish
How would you decide whether to apply performance management or take disciplinary action against an employee?

This is where the employment framework kicks in. A practice owner will use an employee’s employment contract, job description, the business’s HR policy and disciplinary code of conduct as a guide. If an employee is struggling to meet the performance criteria for the job, then performance management will be used to identify the shortcomings and then assist the employee to improve. This can be done through mentoring and training, and is a lengthy consultative process.

However, when an employee is perceived to have committed a misdemeanour, which can range from poor timekeeping, theft or fraud, assault, sexual harassment, to insubordination and absence without leave, disciplinary action can be instituted. Your HR policies and code of conduct will usually define these types of misdemeanours and the sanctions applicable.

Do it right
Why is it important to follow the correct procedure when dealing with employees in these circumstances?

Both procedures, if not handled correctly, can result in an employee taking the employer to the Commission for Conciliation, Mediation and Arbitration (CCMA). So it is vital for employers to ensure that the process is procedurally and substantively fair. If an employee can prove that the process an employer has followed was either procedurally or substantively unfair towards the employee, the CCMA will find against the employer, which can have serious financial consequences.

Therefore, doing things right is critical and can save practices a lot of money, hardship and frustration.

It is strongly recommended that you engage the services of a labour law expert to assist you by firstly determining which procedure would be appropriate in a given situation and whether it requires performance management or disciplinary action to be taken.

If it is a performance management issue, such an expert will guide you through the process. If disciplinary action is the appropriate mechanism in a specific situation, a labour law expert can assist in the preparation of the charge sheet to reflect the correct charges, prepare for the hearing and provide guidance in terms of the correct procedures to be followed regarding the service of notices and timing.

It is also recommended that you engage the services of an independent chairperson to chair disciplinary hearings, who can record and transcribe the proceedings and provide you with an outcome which is both procedurally and substantively fair.

In conclusion, by implementing the appropriate employment framework and then utilise this to manage labour law issues arising from time to time, you can significantly reduce your internal risk profile and simultaneously create a working environment geared for optimum productivity, efficiency and profitability.

For more information, contact Sensible Legal Services on Tel: 010 612 0379, Email: sunette@legalsense.co.za or via www.legalsense.co.za.

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