Employment Contract - Part 2 of 3

           Last week we looked at part 1 of 3 of the employment contract which dealt with "The essentials of a contract of employment" and the "Contractual capacity". This week we will be looking at part 2 of 3 which deals with the "Obligations of the parties to the contract of employment" and "Conditions of employment".

Obligations of the parties to the contract of employment

Duties of the employer

·         To receive the employee into his services and to retain him

·         To pay the employee wages/salaries

·         To provide safe working conditions

·         To treat the employee fairly and reasonably

·       Not to assign the services of the employee to another employer without the employee's consent

·         Not to give the employee tasks significantly junior in status to those for which the employee was engaged

Duties of the employee

By applying for and accepting a position/job, the employee implies/guarantees that he is competent to do the work and undertakes:

·    To serve his employer faithfully and with reasonable diligence.  This includes reasonable punctuality and regular attendance, etc.

·       To obey all reasonable instructions given to him in the normal course of his employment.

·         To deal honestly with the employer's property

·         Not to compete with the employer in the particular trade in which he is employed.

·         To maintain reasonable efficiency

·         To further the employer's business interests

·         To be respectful and obedient

·         To refrain from misconduct

Conditions of employment

Generally the obligations/duties of the employer and of the employee together form the conditions of employment with the employer are spelled out in writing in the following documents:

·         The individual employment contracts/agreements of service

·         The relevant laws

·     Collective agreements if entered into between the employer and recognised employee representative bodies, including trade unions

Next week we will be looking at part 3 of 3 of the employment contract which deals with the:

"Formation of the contract" and the "Types and duration of contracts of employment"

Until then happy trading and don't forget to have "FUN"

The Master Retailing Team

The Worlds Most Innovative Companies

Hot of the press from "Fast Company", the wolds most innovative companies. 

There is no surprise in the top three being first "Apple"; second "Facebook" followed thirdly by "Google". The first retail company comes in at number four being Amazon.

Go check out the Top 10 Retail Companies in the world for the retail sector to see what they are doing from an innovation point of view that sets them apart from their competitors, they are:

1. Amazon;
2. Square;
3. Patagonia;
4. Kiva Systems;
5. UPS;
6. OpenSky;
7. Fast Retailing;
8. Relay Rides;
9. Shopify; and
10. Warby Parket.

I am sure you will agree that many of these names are unfamiliar, however they must be doing something right to be rated in the TOP 10.

Kind Regards

The Master Retailing Team

The Employment Contract

The Employment Contract Overview

Due to numerous requests, we have been requested to shed further light on the “Employment Contract”, both from an employer as well as an employee’s perspective.

 Many problems in today’s business which could have been averted occur between the employer and employee due to the misunderstanding and/or inferior and/or lack of an effective employment contract.

Over the next couple of weeks we will be looking at the employment contract in more detail and focussing on 6 main aspects which include:

1) The essentials of a contract of employment;

2) Contractual capacity;

3) Obligations of the parties to the contract of employment consisting of the duties of both the employer and employee;

4) Conditions of employment;

5) Formation of the contract; and

6) Types and duration of the contracts of employment

Today we will be looking at the first two being:

1) The essentials of a contract of employment; and

2) The contractual capacity.

The Employment Contract

A contract of employment is an agreement, enforceable by law, for future performance entered into by two parties capable of contracting.

The essentials of a contract of employment

For the contract of employment to be legally binding and therefore enforceable by law, it must meet with certain essentials, i.e.

·         There must be two parties - the employer and the employee;

·         The parties must have the capacity to enter into a Contract of Employment;  

·         The parties must have serious intention to enter into the contract and to meet the obligations under the contract;

·         The contract of Employment must be clear, i.e. it must spell out the rights and obligations of both parties;

·         Performance agreed to must be possible;

·         Obligations agreed to must be lawful, i.e. not against public interest, of a criminal nature etc; and

·         The parties must be of the same mind or agree to the subject matter, terms, conditions and obligations of the contract.

Contractual capacity

Some contracts may be held to be void or voidable because one of the contracting parties has exceeded the limit of his contractual capacity by entering into it.  In employment contracts, the limited contractual capacity of a party to the agreement may affect the validity of employment contracts entered into with him.  Examples are:

·         Minor children

Children under age as stipulated in the relevant laws may not be employed.  Persons under 18 require the assistance of their legal guardian.

·         Mental stability

A person, who is mentally defective to the extent that he is incapable of managing his affairs, cannot enter into a binding contract of employment.

Next week we will discuss points three and four being:

3) Obligations of the parties to the contract of employment consisting of the duties of both the employer and    employee; and

4) Conditions of employment.

Should anybody require any assistance in this regard, please contact us on info@mretailing.co.za

The Master Retailing Team

The Basics of Employment Termination

How often do employees end up being employed in a managerial position and have to manage staff without the proper training of basic managerial skills?

We have come across numerous managers, not just on branch level, but in regional manager capacity that does not know the basics of applying discipline and on what basis can you terminate employment. How often have we not come across a situation where we have had enough of a certain employee only to find the HR department telling you, you cannot dismiss the employee for a whole host of reasons which sounds to you like a whole lot of gibberish?

In this post we are going to look at a brief overview of what the reasons are and the ways of terminating employment without trying to get to legalistic. Obviously there are different legislation applicable in different countries however in a Southern African context the below is fairly universal.

In order for an employment relationship to exist there has to be an agreement between the employer and employee, simply put the employee will provide his labour for a wage and the employer will provide work for the employee and pay a wage for it.  This agreement does not have to be in writing, and a verbal agreement will suffice therefore be cautious if you think you can get away not having anything in writing and hire and fire at will. Generally employees are protected from this form of termination. Herewith following are the grounds on which an employment relationship to terminate.

EMPLOYEE

Resignation

This is the only form where an employee can terminate their employment and it is where the employee informs the employer (verbally or in writing)  of his/her intention to terminate the employment relationship by the giving required notice of their intention to terminate. An employer cannot refuse this and once an employee has given notice of termination there is not much an employer can do about this. If an employee is forced to resign it could be viewed as a form of dismissal, called constructive dismissal.  

EMPLOYER

For an employer there are 3 legal grounds on which employment can be terminated. Each of them does have certain legislative requirements to be fair. It has to be procedurally fair (the procedure followed leading up to the termination was a fair procedure) and it has to be substantively fair (the reason for the termination must be a valid and fair reason).

The 3 grounds for termination are herewith as follows:

Organisational Requirements

This is known as a no-fault dismissal on behalf of the employee and is commonly referred to as a retrenchment. In this instance employees services are terminated based on the company’s operational requirements. It is often perceived by employees that these types of terminations are the easy way out for companies however there is a myriad of legal procedures that are linked to it and should not be attempted without seeking professional advice as it could be costly and time consuming if done incorrectly.

Performance (or lack of it)

This is where an employee is unable to perform their duties as per their contract of employment. To simplify it, the employee is willing but not able to perform. Examples of this is an employee that cannot perform on the desired level i.e. achieve a sales target however is trying to do so. Alternatively a very sick employee cannot resume with their normal daily duties as a result of their illness. In cases where performance is a concern there is an onus on the company to make sure that they have looked at alternatives in trying to accommodate the employee by providing training to or adapting the workplace to suit the employee, who is ill. Therefore the next time you come across the sales consultant who is failing to achieve target ask yourself is this individual willing but not able and if this is the case you would need to implement measures to accommodate this individual by providing training and follow up consultation sessions before an employee can be dismissed on the grounds of performance. As a last resort an employer can dismiss an employee based on performance if they can proof that they have reasonably tried to accommodate the employee. 

Misconduct

In this instance the employee is not willing but able or not willing and not able. Generally misconduct is linked to the attitude of the employee towards their employers and behaviour is willful, intentional or knowingly and their actions are detrimental to the company and that of the employment relationship. Examples of this type of behaviour is where an employee is dishonest, negligent, disregarded rules/ policies and procedures, insubordinate, and this list goes on. Depending on the type of organisation some offences are taken more seriously than others and may justify dismissal on the first offence, it all depends on whether the employment relationship has been broken or been damaged.

If you work for a medium to large organisation you should have a disciplinary code which should provide guidance on what type of punishment can be imposed in which events i.e. a verbal warning for a first late coming offence or dismissal for a dishonesty related offence.  The question that needs to be addressed in misconduct cases is to what extent has the employment relationship been affected. This is normally established through a disciplinary hearing or interview where the facts are investigated and tabled, presenting a finding on a balance of probabilities and comparing the outcome against past precedents set in a company and what company rules make provision for.

Without getting to legalistic we hope that the above has provided you with some insight on the grounds of termination and would assist you going forward in a managerial capacity.

Please note that on all the above termination scenarios there are various legalistic procedures that have to be followed and complied with. It is advised that professional assistance be sought if you are not 100% sure how to address with these matters.

Customer Emotions

It is a known fact that the body releases endorphins which gives us that “Good Feeling” we experience when purchasing something we want. This is the reason why despite events like for example depressions, recessions and slow economic downturns females as an example still go and have their nails and hair done in order for them to get that endorphin kick. This is no different for males.

Knowing this, selling can take on a whole new level by addressing the so called “emotional hot buttons” of customers. Take a moment to think what benefits your clients could experience when purchasing any of your products or services. Once you know this all you now have to do is focus on these customer’s emotions.

We have all heard of keeping up with the Jones’s, it just takes on a different level, this is why we classify products into the categories of “good” “better” and “best”. What I am trying to say is people don’t necessary want the best of anything, as long as they have something a little bit better than their social circles they move in, this gives them the experience of feeling “good, better, best”. When you appeal to these customers’ emotions, then normal needs and logic just diminishes.

It is crucial that your sales team understand and know not just the features of a product, but more importantly the benefits of the product. When conveying this they will far likely appeal more to your customer’s emotions. When achieving this, the sales consultant will make your customers experience the “good, better, best” feeling, thereby resulting in them having a perception that they are happier, better off and will be more socially acceptable and will be more likely to part with their hard earned money. 

Role play this with your sales team, and if they can master this technique, then you are bound to see sales increase.

Good luck, and don’t forget to have fun!

The Master Retailing Team