By Atta Legal Advisor in South Africa - Louis Nel

People may be at the heart of any business but what do I mean by people? Let’s make things simple and say for the sake of this discussion there are four categories namely:

·                     Staff (whether full time employees or independent contractors – who incidentally are not employees and don’t fall within the jurisdiction of the CCMA)

·                     Third party service providers (‘TPSP’)

·                     Business associates be they partners, shareholders, directors, members or trustees (Bear in mind that that in terms of the Consumer Protection Act – ‘CPA’ – all of these and associations and bodies corporate are deemed to be legal personae which is unusual)  

·                     Customers (Note that in the CPA – even a potential customer is a customer for the purposes of the CPA!)

Each category brings different challenges to the table and if you don’t realize this, have proper contracts, systems and strategies in place, you may well ‘caught with your pants around your ankles’ and embarrassment will be the least of your worries! 


Here are some of the problems that can arise as far as staff is concerned and related contracts/systems:

·                     Contracts of employment  - not having same or it being inappropriate, unsigned etc

·                     An important and often overlooked aspect is the exact nature of the contract being used: sometime it is the intention to engage the person as an independent contractor but due to incorrect wording and/or the nature of the engagement i.e. control over activities and working hours may result in a presumption that the person is an employee as opposed to an independent contractor   

·                     Grievance and disciplinary procedures – if these are proper and the issue dealt with in a substantive  and procedurally correct manner , it may save you a trip to the CCMA  

·                     A team effort and getting everyone board singing off the same hymn sheet is one of the keys to a happy staff complement and a successful business – remuneration by means of mutually agreed targets (KPA – Key Performance Areas and KPI – Key Performance Indicators) and incentive based remuneration may be well worth considering – if an individual is not adding value, it is not good for the morale (to say the least!).

·                     Regular discussions with and understanding your staff and when required, empathy’ is a good thing

·                     It should be borne in mind that the CPA does not apply to the employment relationship

·                     A recent statute that requires addressing is the Protection of Personal Information act (‘POPI’) and this act must be read with the well-known Promotion of Access to Information Act (PAIA) – staff awareness and training (As with the CPA – vis a vis customers) is an absolute prerequisite and an addendum to/provision in the employment contract pertaining the right to intercept communications of staff is required.

·                     It should also be noted that in terms of POPI some of the following aspects have given great rise to information being ‘hi-jacked’ and systems infiltrated i.e. the so-called ‘BYO’ – ‘Bring Your Own’ – staff brining their cell phones and other electronic devices onto/into the premises, the use of ‘cloud’ & social media in general – a clear policy & guidelines are required as the statutory penalties  include fines of up to R10 million and an obligation to publish invasion of your systems in the press!

·                     Recordkeeping is an integral part of good contract management and you will not regret it when there is a call up to the CCMA or alleged intellectual property or restraint of trade transgressions!

·                     Ensure that you have adequate and appropriate errors & omissions, professional indemnity and fidelity (Fraud) cover.

Adv Louis Nel

B.Comm, LL.B. LL.M.

Corporate Legal Facilitator


PH 27 11 463-4556

FX 27 11 463-4557

MOB 27 83 679-4556

EM louis@louisthelawyer.co.za