Conditions of Employment

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Employees have lion's share of legal rights

All the more reason for employers to know where they can stand ground

 

South African labour legislation gives employees a plethora of rights, so much so that many employers wonder whether it is worth continuing to run their business.

For example, employees have the right to:

  • join trade unions;
  • go on strike;
  • procedural fairness at disciplinary hearings;
  • a fair reason for dismissal;
  • protection from unfair demotion;
  • be promoted under certain circumstances;
  • minimum wages in many cases;
  • sick leave, holiday leave, maternity leave and compassionate leave;
  • overtime pay;
  • consistent treatment;
  • protection from unfair discrimination; and
  • representation at the CCMA by a trade union representative.

    On the other hand, labour legislation gives employers few rights and those that they do have are very restricted. This means that employers may exercise limited rights as long as these do not infringe on the rights of employees.
    However, one area in which employers can exercise their rights is that of fiduciary duty. This means that the employee has the duty to put the employer's interests first.

    This does not mean that employees must forfeit their rights to leave, legal working hours or fair discipline in order to benefit the employer, but that employees may not take advantage at the expense of the employer.

    Specifically, this means that employees may not:
  • misuse the employer's trade secrets.

    While this principle applies generally to employees, it applies more specifically to senior employees. In deciding on the extent of the fiduciary duty that an employee has, the courts consider a number of factors, including:
  • place themselves in positions where their interests conflict with those of the employer;
  • make a secret profit at the expense of the employer;
  • receive a bribe or commission from a third party;
  • give a third party the employer's confidential information; and
  • The degree of freedom that the employee has to exercise discretion in making and executing business decisions;
  • The opportunity for the employee to exercise this discretion in his/her own interest;
  • The extent to which the specific circumstances open the employer
    to abuse of the employee's discretion;
  • The extent to which the employer relies on the employee for expertise and judgment in conducting the business; and
  • The extent to which the employee is in a position of trust.

 

Clearly, the more junior the employee, the less these fiduciary factors are likely to prevail. Junior employees normally do not have the rights or duties to make crucial business decisions or the opportunity to misuse decision-making powers.

But the lines between who is a senior employee and who is not, and the lines between who is in a position of trust and who is not, are blurred. Whether, for example, a junior salesperson is in a position of trust or not depends on the specific circumstances of each case.

So, to protect itself from employees acting against the employer's interests, every employer should:

  • Have checks and balances that prevent the abuse of power;
  • Inform all employees of their fiduciary duties in relation to their positions of trust;
  • Ensure employees at all levels know the seriousness of any breach of their fiduciary duties;
  • Take swift, fair and consistent action against employees who breach their fiduciary duties; and
  • Obtain expert legal advice before acting against suspects.

 

Ivan Israelstam is chief executive of Labour Law Management Consulting. Phone 011-888-7944 or e-mail

Our thanks to Ivan and The Star newspaper for permission to publish this article.

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