Society

Good job contracts lower labour rows

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Summary

  • Labour disputes are often a risk that businesses ought to minimise because these have the capacity to negatively impact a company’s strategic direction and even operations.
  • A few years ago a labour action against an entity in the banking industry led to the delay of a proposed merger. Labour disputes are costly and may give the company a bad public image.
  • A lot of focus has traditionally been given to employee rights.

“If you take care of your employees, they will take care of your clients’’ Richard Branson

In the recent years’ human resource has been given a lot of spotlight and has increasingly been recognised as one of the most important resources available to any business. This is why human resource best practices are increasingly focused on attracting and retaining the right staff as this is very crucial to business performance.

Labour disputes are often a risk that businesses ought to minimise because these have the capacity to negatively impact a company’s strategic direction and even operations. A few years ago a labour action against an entity in the banking industry led to the delay of a proposed merger. Labour disputes are costly and may give the company a bad public image.

A lot of focus has traditionally been given to employee rights. However today I want to highlight employer rights and the practices that can be adopted to minimise labour risks.

Employer rights are set by statute, common law and contract laws. The employer has the right to enforce an employee’s contractual obligations under the contract. Therefore, the employer has the right to demand for quality work and to the requisite quality and level of performance contracted for.

The employer has a right to oversee the implementation of contractual terms like office attendances, punctuality and so on. He also has the right to enforce the relational aspects of the contract which include respect, courtesy, discipline and others. The employer has the right to loyalty and fidelity. This is why an employee is not allowed to work for a competing entity and furthermore, has to keep the information provided by the employer confidential.

The employer has the right to defend himself against any employee claims and also institute any claims against employees. Some claims brought in by employees are frivolous and have no merit. The employer has a right of response which is not just a contractual right but also constitutional. This is why it is important to brief a lawyer before settling any employee claims.

Here are a few tips to minimise labour action risks. The first way is by having sound employment contracts in place. The employment contract ought to be sound, relevant, holistic and enforceable. At times, the employment contracts given to staff are not legally sound and some even expose the employer to legal risk. The employment contract ought to properly capture the relationship between the parties adequately.

To minimise legal risk, I recommend inclusion of sound performance review mechanisms and the action to be taken if the performance is not sound. A good employment contract also ought to have a detailed dispute resolution clause with arbitration being the preferred means of dispute resolution. Your lawyer ought to assist you in reviewing the adequacy of your employment contracts and if the same minimise risk.

To reduce legal risk, it is important to maintain proper communication with the staff. I recommend written communication which can serve as documentary evidence in the event of a legal action. Some aspects that must be in writing include reprimands, warnings and disciplinary actions.

It is important for the employer to monitor performance and communicate poor performance in writing. All the above would serve in the employers’ interest in the event of any legal action.

It would be advisable for an employer to get insurance for employee claims. Two main types of insurance include Employers Liability Insurance and Employers’ Practices Liability Insurance. The latter covers legal actions by employees.