Equity-Skills News & Views     SOUTH AFRICA'S most widely distributed & read INDEPENDENT HUMAN RESOURCE PUBLICATION

----------------------------------- Equity Skills News & Views Volume 3, Issue 22, December 15, 2004 Registered as an electronic newspaper: ISSN 1684-5722 ------------------------------------ *********************** Season's Greetings *********************** Dear Equity Skills News & Views Subscribers AND Contributors:   I wish you and yours the warmest of holiday seasons this year.  May the coming year bring you and your colleagues much success and joy.   Reinvigorate your thinking and take on new challenges in 2005 armed with all the thought provoking material you can.  The Newsletter Archives include issues dating back to August 2001.  To access the archive online please visit www.equityskillsweb.com for back issues you may still wish to read. ------------------------------------ In This edition 1. HR People Are From Mars, CEO's Are From Venus! 2. Executive Compensation: Pay Without Performance 3. Managing the Contingent Workforce: From Temps to Free Agents 4. Case Law & Legislation Review: Unfair labour Practices - Suspension of employees 5. Unsubscribe & Moving Soon Jeff Sacht: Publisher-editor www.equityskillsweb.com jeffs@worldonline.co.za 'A MUST TO PRINT & READ' 30,000+ AND STILL GROWING! ------------------------------------ ------------------------------------ LATEST PRODUCT RELEASES: WORKINFO.COM JOB DESCRIPTION COMPILER T ------------------------------------ As demands on your time increase, you and your team need to make the most of every moment.  The Workinfo.com Job Description CompilerT helps you compile comprehensive company and job specific job descriptions in a matter of minutes. # Legally compliant; # Non-discriminatory; # Task specific; #Competency based Workinfo.com Job Description CompilerT is cost effective, efficient, and represents an effective method of defining job requirements for current and new employees. For more information, please visit http://signup4.c.topica.com/maacYiYabcxzYbnFRwGb/ ------------------------------------ LATEST PRODUCT RELEASES: MOVING HR INTO LINE TOOLKIT ------------------------------------ Stop talking about becoming a Line Partner. Start today, and master the practices required to reposition and transform your HR function with this tried and tested toolkit developed for the highly acclaimed workshop "Moving HR Into Line For The New Economy". TheToolkit is now available as an electronic download. The kit consists of a detailed 125-page manual, a project workbook, & 8 PowerPoint slide shows. Contact Jeff Sacht on jeffs@worldonline.co.za or call Jeff Sacht on 082 4561049 for a preview pack and pricing details. Don't delay start today with your HR top team for the price of one download. ---------------------------------------------------------------------- 1. HR People Are From Mars, CEO's Are From Venus! By Dr. John Sullivan who can be contacted at www.drjohnsullivan.com ---------------------------------------------------------------------- 1. Introduction Have you ever noticed that VP's of HR almost never become CEO's at their own firm's? Think about it! Their failure to move up is partially caused by the dramatic differences between how HR people and CEO's think and act. it's almost like they are from different planets. HR professionals have been fighting for years to gain the respect of CEO's and managers. Many HR professionals have gained a degree of respect as business partners. Now, however it's time to raise the level of HR recognition even further. That means moving beyond the business partner level to become "business leaders". 2. Competitive advantage HR In order to make that transition, it is essential that senior HR professionals begin to look at themselves as others see them. If you take a step back and look at HR as an outsider would, you will see that HR people talk, think and respond to issues differently then a CEO or CFO would. It's not difficult to see the difference. Just read HR publications and visit HR websites. Compare the topics, terminology and focus to those found in mainstream business magazines like CEO, CFO and Fortune. You will see a profound difference.  CEO's see business as a battlefield and they expect HR to provide the strategies and the talent to give the firm a distinctive competitive advantage. I call that role "competitive advantage HR". In stark contrast, HR is devoid of "warriors". CEO's are generally people that draw their "mentality" from military, business school and competitive sports experiences. HR generally gets over 50% of its employees from the social sciences, where cooperation and helping the "less fortunate" is taught rather than competition. "Our #1 opportunity is to build a competitive advantage, not to build benefit plans for our organization"  --VP of HR Cisco I've met/ worked for over 100 VP's of HR and dozens of CEO's over the last few years and although there are clearly exceptions, I've found that CEO's and HR executives are like oil and water. And I see little shrinkage in the immediate future in the chasm between CEO's and HR executives. One can argue that CEO's should become more like "us". However, it's more realistic to assume that if HR professionals are truly to become "business leaders" that they must learn to think, talk and act more like senior management, rather than vice versa. This article is designed to make you think. It is by design critical of many in the HR profession (even though generally HR people don't take kindly to criticism). I realize you can't easily generalize about all HR professionals but my research and observations have shown that we are in fact different. I don't believe it's in our DNA but rather it's a result of a history of promoting people with a lack of line management experience and business degrees. I've been in HR for over 30 years. I've served as a Chief Talent Officer for a Fortune 500 company, a professor in a business school and a CEO. During that time, I've found that when you interview or observe CEO's you find that they are dramatically different then "we" are. They are generally aggressive types that try to make a big splash and enjoy the direct line of fire while too many HR executives are happy as staff officers. Unfortunately, if we choose to remain comfortable as part of overhead" we may also be simultaneously degrading the importance of the "people function" to the level of purchasing, accounting and shipping. If VP's of HR are to become future CEO's and business leaders we need to look at our perspective, our thinking and our language and then dramatically shift it so it comes more into alignment with the approach taken by senior business executives! The differences between the "focus" of CEO's and HR professionals are dramatic. This differentiation can be characterized into 12 different "degrees of separation". They include: # 1:  COMPETITIVE ADVANTAGE CEO's are highly competitive. They continually focus on the opposition and look for ways to gain the upper hand. They want to win, and win big. For example, Jack Welch the CEO of GE expects each and every business to be #1 or #2. or he will sell it off! This means CEO's constantly do side-by-side comparisons both in business practices and results between their firm and the top ones in their industry. CEO's continually strive to improve his or her own firm, while simultaneously "hurting" the competitor. HR executives couldn't be more different. For example, the VP of sales constantly tries to steal away customers from the competitor. In contrast, HR is reluctant to steal away the competitors' top talent because of "ethical concerns" or for fear of retaliation. Few HR managers have done a side-by-side competitive analysis comparing "us to them". And almost no one in HR does a monthly comparison of their results (for each HR function) with the results of each of the direct competitors as well as the top firm in the field. HR executives also tend to have a preference toward "cooperation" and they often look at things only from the positive side. They need instead to learn how to identify the competitor's weaknesses and yes, even take actions that directly harm the competitors. This is especially true in the talent area, where there is a "war" for talent going on. HR action steps: >> Do a function-by-function comparison of "our" and "their" HR. Compare our people results, not just our practices >> Identify and design a plan to exploit your competitors, weaknesses >> Target the competitors' top talent for poaching >> Develop plans to continually improve our people practices faster than our competitors can "copy" them >>  Include in the design of all new programs a continuous improvement component to ensure that the program provides us with a continuing (measurable) competitive advantage >> Hire HR people who are highly competitive and that have both business degrees and line experience (i.e., production, sales, product development or marketing) # 2: REVENUE NOT COSTS CEO's are laser focused on increasing revenues (top line growth), profit and the stock price. The measure everything in either dollars or numbers. HR executives seldom see the relationship between HR and profits, revenue and the stock price. When they do focus on money it's almost always on cost savings. For example saving HR costs (when they make a less than 1 percent of the total company's revenues) are unlikely to have any strategic impact on the business. For example, HR often measures the cost of the hire (COH) when the COH is generally less than 5% of the revenue generated by each employee during a year. Beware; it's not acceptable to focus on only half of the business equation (expenditures). HR needs to focus on the "other" more important half. generating revenue, profit and increasing the stock price! For some reason HR never takes the time to measure the revenue generated by hiring and retaining top performers compared to the revenue generated by a newly hired average performer. In contrast to the relatively minuscule HR budget over 60 percent of the total variable costs of most corporations go to people costs (salaries and benefits). However, HR routinely fails to measure or demonstrate the return on investment (ROI) that great people practices can yield. Everyone knows in his or her mind that recruiting, incentivising  and hiring top talent can dramatically increase revenues but HR has failed to quantify that impact. "This would include... running (HR) operations based on return on investment" --CEO of Cisco Systems HR action steps: >> Quantify the revenue generation differential between top and average performers >> Calculate your "people profit ratio" (which is the number of cents of profit generated for each dollar spent on people costs) >> Identify and target the jobs and employees that generate the most revenue and profit >> Calculate the ROI on each HR function and focus on those with a high return (and drop those with a low return) >> Shift HR resources and emphasis to programs that have a positive business impact rather than putting resources into administration, processes and other low value areas # 3: METRICS, RESULTS AND SPEED CEO's "think big and act fast". Senior managers are driven by the need to continually produce results. They live in a world driven by quarterly results. Failure to meet the quantifiable quarterly expectations of the industry analysts and investors will have an immediate negative impact on the stock price. HR must also realize that great hiring and retention among top executives is closely watched by analysts and thus impacts the firm's stock price. In contrast HR people often think tactically and move at deliberate speed. HR professionals frequently acknowledge the need for speed and metrics but in reality they seldom count more than program costs. HR professionals often even consider "having a program" as an indication of success rather than focusing on actual results. Most of the HR metrics that do exist are done at year-end rather than monthly. They also almost always leave out the most important components... quality and the impact on productivity and profit. If HR professionals are to be recognized as business leaders, they must continually measure and distribute their monthly results (as they relate to attraction, retention and people productivity) among all managers. Feelings and intuition must be replaced by data driven decisions. "Senior management will create the opportunity for HR to take on this new role as strategic business partner but HR must step up the challenge-and do so in Internet time". --CEO Cisco Systems HR action steps: >> Stop measuring and rewarding "process efficiency" and effort. Instead measure and reward only results and business impacts >> Compare our results to the best in our industry/ class, not to the average >> Require every major HR program to have monthly continuous improvement goals and metrics >> Always include quality and manager (employee or applicant) satisfaction in any priority thing you do >> Develop an HR "dashboard" as well as a single over-all HR index which measures the overall effectiveness of our people effort >> Monitor people productivity (dollars spent on people compared to the dollar value of their output) >> Eliminate barriers, silos, excessive meetings and the need to "build relationships". Replace them with incentives for working together and project completion # 4: FOCUS ON TOP PERFORMERS Top executives commit their time and resources to the products, services and customers that have the highest return on investment (ROI). They focus on developing new products with a high return and they drop the low return products. In addition, when it comes to employees, they prioritize their time and focus on top performers. HR, in direct contrast, spends most it's time on bottom performers. It develops rules, policies and training for the average employee, rather than focusing on the needs of higher return top performers. HR, instead of firing poor performers, tries to "fix" them or give them "another chance". HR action steps: ------------------------------------ To read the full article click on  www.workinfo.com/newsletter ------------------------------------ *Reprinted by permission of the author ------------------------------------ PERFORMANCE MANAGEMENT e-TOOLKIT ------------------------------------ The e-Toolkit takes the 'theory' and 'jargon' out of Performance Management. The kit contains all you need - a comprehensive set of line manager friendly policies, procedures, and paperwork. The e- manual has been developed in South Africa by South African Legal and HR professionals for companies to meet the requirements of the key labour Acts that stress the importance of fair & developmental people management practices. For a preview click on: http://signup4.c.topica.com/maacYiYabcxzZbnFRwGb/ ---------------------------------------------------------------------- 2. Executive Compensation: Pay Without Performance* By Mallory Stark who can be contacted at Working Knowledge at http://signup4.c.topica.com/maacYiYabcxz0bnFRwGb/ ---------------------------------------------------------------------- 1. Introduction In the new book Pay Without Performance: The Unfulfilled Promise of Executive Compensation, Lucian Bebchuk and Jesse Fried make the case that the executive compensation system in the U.S. is fundamentally broken. We like to think that executive pay is the product of arm's-length negotiation, that the executive bargains in his or her own best interest, while the board of directors bargains for the best interests of the shareholders. Bebchuk and Fried argue that, in fact, soaring executive pay is the result of management power. "Compensation arrangements have often deviated from arm's-length contracting because directors have been influenced by management, sympathetic to executives, insufficiently motivated to bargain over compensation, or simply ineffectual in overseeing compensation," the authors write. "Executives' influence over directors has enabled them to obtain "rents"-benefits greater than those obtainable under true arm's-length bargaining." The book opens with a quote from Harvard Business School Dean Kim Clark asking the fundamental question about executive scandals: "Is it a problem of bad apples, or is it the barrel?" For Bebchuk and Fried, the problem is in the barrel, and to an extent, well underplayed. In this interview, Bebchuk and Fried discuss their book and their ideas for how executive pay and corporate governance could improve. Bebchuk is Friedman Professor of Law, Economics, and Finance and Director of the Program on Corporate Governance at Harvard Law School. Fried is professor of law at the University of California at Berkeley. Q: MALLORY STARK: WHY DID YOU WRITE PAY WITHOUT PERFORMANCE? Lucian Bebchuk: Although there is now widespread recognition that many boards approved executive pay packages that did not serve shareholder interests, there is still insufficient understanding of the scope, source, and severity of the problems. We wanted to provide a full account of the widespread flaws in compensation arrangements and the resulting costs to shareholders. Studying pay arrangements also enabled us to identify some more basic problems with our system of corporate governance. Finally, we wanted not only to improve recognition of existing problems, but also to contribute to solving them. The book puts forward proposals for improving both executive compensation and corporate governance more generally. Q: HOW IMPORTANT ARE EXECUTIVE PAY PROBLEMS IN THE GRAND SCHEME OF THINGS? Bebchuk: The problems of executive pay are of real practical significance for investors and the economy. The amounts paid to executives are significant even relative to the large market capitalization of public firms. In a recent study with Yaniv Grinstein, we find that the aggregate compensation paid by public firms to their top-five executives during 1993-2002 was about $250 billion. Aggregate top-five compensation was equal to 10 percent of aggregate corporate earnings in 1998-2002, up from 6 percent of aggregate corporate earnings during 1993-1997. Thus, if compensation could be cut without weakening managerial incentives, which we show it could, the direct gains to investors would have real practical significance. Moreover, the excess pay obtained by executives is not the only, and probably not even the primary, cost of flawed pay arrangements. Executives' influence has produced pay arrangements that provide diluted and sometimes perverse incentives. These distortions might well have been the biggest costs arising from executives' influence on their own pay; eliminating them could produce substantial benefits. Q: IN WHAT WAYS HAVE THE PROBLEMS OF EXECUTIVE PAY BEEN UNDER APPRECIATED? Jesse Fried: There are many who believe that concerns about executive pay have been exaggerated. Some hold the "rotten apples" view that flawed compensation arrangements have been limited to a small number of firms. In contrast, we conclude that problems have been widespread, persistent, and systemic. We conclude that problems have been widespread, persistent, and systemic. - Jesse Fried  There are also those who accept that flaws in compensation arrangements have been common but maintain that these flaws have resulted from honest mistakes and misperceptions on the part of loyal boards that can be expected to fix the problems on their own. But the problems we identify have stemmed not from transient lapses that boards can be expected to self-correct; rather, they have stemmed from basic defects in the underlying governance structures that enable executives to exert considerable influence over their own pay. Finally, there are some who maintain that recent reforms, which strengthen director independence, would fully address past problems. We show, however, that the problems are ones that cannot be expected to go away merely by strengthening the independence of directors. Directors, we argue, must be made not only independent of insiders, but also more dependent on shareholders. Q: WHAT ARE THE PROBLEMS YOU IDENTIFY IN THE PAY-SETTING PROCESS? Fried: We show that directors have persistently failed to negotiate at arm's length with the executives whose pay they set. We identify a myriad of factors that lead directors to go along with pay arrangements favorable to executives. Executives' influence on pay setting can explain a wide range of compensation practices and patterns, including ones that have long been viewed as puzzles by economists assuming arm's-length contracting. The role of managerial influence also explains why pay is higher and less sensitive to performance in firms in which executives are more entrenched or have more power vis-à-vis the board. The flaws in the pay-setting process have resulted in substantively flawed outcomes. Pay has been insufficiently linked to performance. And pay schemes have been designed in ways that camouflage both the amount of compensation and its insensitivity to performance. Q: DO YOU AGREE WITH THE VIEW THAT INCREASING PAY LEVELS IS NECESSARY TO PROVIDE MANAGERS WITH POWERFUL INCENTIVES TO ENHANCE SHAREHOLDER VALUE? Bebchuk: No, we don't. Pay schemes fail to provide incentives in a cost-effective way, and shareholders have been receiving much less bang for their buck than possible. Indeed, pay is far less sensitive to performance than is commonly recognized. To begin, there is evidence that cash compensation, including the large amounts paid in bonuses, is little correlated with managers' own performance. In addition, much value is delivered to executives through what we call "stealth compensation"-forms of pay whose dollar amount is not included in publicly filed compensation tables-and this stealth compensation also isn't tightly linked to performance. Even with respect to equity-based pay, the link between pay and performance is much weaker than possible. Most of the payoffs from executives' equity-based compensation come from market-wide and industry-wide movements, as well as from short-term fluctuations in stock prices, rather than from managers' own long-term performance. Furthermore, compensation contracts and provisions provide executives with substantial downside protection that further decouples pay from performance. Compared with other employees, executives receive an unusually large fraction of their full-term compensation in the event they leave due to under-performance. Finally, current compensation arrangements not only fail to provide incentives to enhance shareholder value in a cost-effective way, but also provide perverse incentives. For example, broad freedom to unload options and shares has provided executives with incentives to produce short-term stock price increases that come at the expense of long-term value. Q: YOU TALKED ABOUT THE CAMOUFLAGING OF PAY. CAN YOU GIVE AN EXAMPLE OF HOW PAY HAS BEEN CAMOUFLAGED? Fried: Firms have used retirement benefits, for example, to provide executives with substantial amounts of stealth compensation. Given the lack of tax subsidy, firms' substantial use of nonqualified pension and deferred compensation arrangements is difficult to explain on efficiency grounds. But such arrangements can serve an effective camouflage role, providing executives with large amounts of performance-insensitive pay below investors' radar screen. Under current disclosure requirements, firms do not have to place a monetary value on retirement benefits and include it in the compensation tables that companies file and outsiders follow. Indeed, the executive compensation figures used by the media and researchers, as well as the figures of aggregate compensation Lucian noted earlier, do not include these retirement benefits. Q: HOW CAN PAY ARRANGEMENTS BE IMPROVED? ------------------------------------ To read the full article click on  www.workinfo.com/newsletter ------------------------------------ *Reprinted under license agreement with the regents of Working Knowledge and the Regents of Harvard Business School ---------------------------------------------------------------------- 3. Managing the Contingent Workforce: From Temps to Free Agents By David Creelman who can be contacted at creelmanresearch@canada.com ---------------------------------------------------------------------- 1. Introduction Americans has long used the term "temps" to refer to workers who, unlike "permanent employees", were only working at a firm temporarily-such as clerical workers hired for a few weeks to handle a seasonal rush.  Now HR talks about "the contingent workforce".  "Contingent" is just a fancy word for "temp", but the change in terminology reflects something serious, temps didn't matter too much, the contingent workforce does. In Canada, two of the pioneers of the temp industry were Bill Pollock and Jim Shore, founders of Drake International.  In 1949 they were in the business equipment business and noticed that firms were staffed to meet peaks in demand.  This seemed wasteful. They saw the opportunity to provide temp workers so that firms could adjust the workforce to meet changing production needs.  It was a compelling argument and demand for temporary workers grew quickly.   Demand was readily filled with a supply of women eager to enter the workforce. Temps became a useful, but not particularly important, part of most organizations. Things changed in America in the 1980s when downsizing increased the demand for temps.  In many cases managers faced restrictions on headcounts of permanent staff and hiring temps was the only way to get the work done.   Importantly it was not just low-level jobs being filled by temp workers but contract programmers, bookkeepers, project managers and other important jobs.  The widespread use of contractors in important jobs, especially IT, led HR to start using the term "contingent workforce." This was all part to the broad change of employment relations described in Dr. Peter Cappelli's excellent The New Deal at Work.  Companies no longer had loyalty to their employees and so the scope for using temps increased. The mood of the new era was captured in Dan Pink's Free Agent Nation.  Pink claimed roughly one-third of the workforce were "free agents" (his word for "temps" and "contractors") and that they liked it that way.  While Pink's estimates are probably on the high side the fact that Pink's book was a bestseller shows he had captured the zeitgeist. 2. Managing the Contingent Workforce The contingent workforce captured the attention of corporate America when firms noticed just how much they were spending on that category.  Elaine Taylor of iLogos Research estimates that Fortune 500 companies spend hundreds of millions on the contingent workforce. And while firms knew they were spending a lot they didn't know how much or what for.  The contingent workforce was the largest area of what procurement managers (i.e. purchasing managers) call an "uncontrolled spend".  Temps were-and still are-hired by individual managers and paid out of that manager's budget.  No one knew what the firm was spending in total, whether they were getting good value for the money, how many contingent workers were on staff, or what they were doing. This led to many concerns.  The two biggest concerns were, firstly that the firm was probably wasting a lot of money, and secondly that the firm might be unintentionally violating US legislation.  US labour legislation requires that temp workers be treated differently from permanent workers-if they are not then the temps can sue for additional benefits. There have been a number of costly law suits in this area and Ms. Taylor believes that many more are to come. More visionary HR leaders were also concerned with a broader notion they called "Total Workforce Management."  These HR leaders see their workforce as comprised of permanent employees, part-timers, contract workers, and temporaries.  All of these categories are important and care needs to be paid to selection, compensation, motivation, development, and knowledge transfer of the total workforce, not just permanent employees. 3. Methods for Managing the Contingent Workforce The big push for solutions is coming from firms offering what are called Vendor Management Systems (VMS) and Contingent Workforce Management Systems.  These firms promise software and services that will provide centralized control of the contingent workforce.  If hiring is done centrally and tracked by the software then management will be in a position to better control the process.  The big benefit initially is that they can negotiate better deals with temp agencies, but the longer view is that once the process is centrally controlled they can do everything (compensation, on-boarding and all the other HR processes) the right way. Initially VMS's have struggled because managers hire temps when they have an urgent need to accomplish a business result and don't appreciate having procurement or HR stand in their way.  Nevertheless, technology and central control are clearly coming in America.  It will just be a matter of time before firms learn how to do this effectively. The broader HR question of how you do "Total Workforce Management" (or even the question of what exactly we mean by that term) remains less clear.  American firms are constrained by laws that are both vague and restrictive, for example if you invite contingent workers to a Christmas party then that could imply they are actually permanent workers and hence are entitled to the benefits of a permanent employee.  Legal difficulties aside, firms have a real challenge in dealing with the fact that instead of having one predominant type of relationship with the worker (a permanent relationship) they have many different types of relations.  This creates complications and room for conflict.  The complications make general solutions unlikely. Every firm has a unique culture and a unique way of using contingent workers and it is likely that in the near term each firm will have to find a unique solution to total workforce management. 4. What HR Must Do In any firm that has a significant number of contingent workers HR must do two things.  One is to use technology to manage the hiring of these workers so that the firm is in a position to control costs, improve the quality of processes and reduce legal risks.  Secondly, they must take adopt the concept of total workforce management and take the issues around the contingent workforce seriously.  This means assigning staff or launching projects that ensure that good HR practices are being applied to all workers, not just permanent workers.  Of course, this requires figuring out what "good HR practices" means for all the different types of workers. In America, no employee is really "permanent" any more.  Striving to understand the HR practices that work for free agents will likely lead to better practices for all workers-including outsourced workers, but that's a very big topic which we'll leave for another time. ------------------------------------ DOES YOUR EMPLOYMENT EQUITY COMMITTEE HELP YOU WIN BEE SCORECARD POINTS? ------------------------------------ It simply makes good business sense to position the work your company's Employment Equity & Skill Development Committee/forum to contribute to your company's BEE standing. The draft Codes Of Good Practice issued by DTI now gives teeth to the work of these forums. Train an entire committee for the price of 1 electronic manual with full reproduction rights. http://signup4.c.topica.com/maacYiYabcxz1bnFRwGb/ ---------------------------------------------------------------------- 4. Case Law & Legislation Review: Unfair labour Practices Suspension of employees By Gary Watkins who can be contacted at www.caselaw.co.za; www.workinfo.com ---------------------------------------------------------------------- SUBJECT: Unfair labour Practices Suspension of employees ISSUE:  two types of suspension, preventative suspension and punitive suspension - employer did not give the reasons for the suspension and the conditions of the suspension - held that the employee was suspended and his suspension was both substantively and procedurally unfair SUMMARY OF FACTS:  The employee started working for the employer on the 19 October 2002 as a security guard earning R1900-00 per month. On 8 March 2003, the employee was arrested when he visited the site in his capacity as a site supervisor and saw people stealing. He took the employer's firearm and ran after the thief but could not find the thief as he disappeared into the crowds. He went back to the employer's premises and was arrested for possession of firearm and negligence. On the same day his supervisor made an entry in the occurrence book (OB) that he was suspended. The employee was kept in custody until the 21 March 2003 when he was released on bail. On the 27 March 2003 he reported for duty at his usual site in Hammanskraal and was told to report to Pretoria, Church Street the following day. On the 04 April 2003 when he reached the employer's offices he spoke to Mr. Downing who told him that he (the employee) was suspended pending the outcome of the magistrate court case against him. He used to be called as a reliever during the suspension period where there was a shortage of guards. He accepted this because he needed food on his table and he was also hoping that the employer would resolve the suspension issue against him. His supervisor and Mr. Downing told him that he was a reliever during that time. On the 04 August 2003 the court case was withdrawn against him due to lack of evidence. On the 05 August 2003 the employee provided proof of case withdrawal to the employer.  His supervisor did not deny that he was suspended, instead he asserted that he was waiting for the finalisation of the case of misuse of the firearm before he could call the employee back as he had proof that the case was still pending. Later the employee was told that he would be taken back when the employer received its firearm back from the police. In response to this the employer's version was that the employee had never been suspended, but merely moved to a site where he did not need a firearm, pending the outcome of the case against him and that the employee chose not to take up the offer of employment at a different site. SUMMARY OF JUDGEMENT:  The commissioner found that the employee had been suspended.  The employee was never subjected to any disciplinary hearing, the employer suspended the employee pending the outcome of the court case but still failed to reinstate the employee after the case was withdrawn and the firearm recovered. The employer's client's request that the employee be removed from its (client's) site is not reason enough to suspend the employee under the circumstances. The employer had a duty to enlighten its client about the laws and regulations of this country. The suspension of the employee was flawed as far as the procedure is concerned in that the employer did not give the reasons for the suspension and the conditions of the suspension; and did not inform the employee as to when the suspension would be lifted. It was aggravated by the employer's lack of action even after the firearm was recovered from SAPS, and the employee submitted proof of case withdrawal from the magistrate's court. The employee's suspension was substantively and procedurally grossly unfair. Commissioner ordered that the employee be reinstated and paid his salary for the 11 months elapsed since the case had been withdrawn against him. ------------------------------------ MANAGING FOR DIVERSITY WORKSHOP ------------------------------------ New and improved version of this workshop for supervisors & managers now available! Comprehensive facilitator's guide and participant workbook is now available as a download. Train as many groups as you like for the price of 1 download! http://signup4.c.topica.com/maacYiYabcxz2bnFRwGb/ ---------------------------------------------------------------------- 5. Unsubscribe & Moving Soon ---------------------------------------------------------------------- UNSUBSCRIBE: Scroll to the end of the newsletter where you will find a code directly linked to your name. Click on the unsubscribe link. PLEASE DO NOT REPLY TO THIS NEWSLETTER TO UNSUBSCRIBE. MOVING SOON: If you are changing your email address soon and would still like to continue receiving this newsletter, please email us your new or temporary email address to ensure that you do not miss out on the next edition. ------------------------------------ About the e-Journal/e-Newspaper ------------------------------------ Equity-Skills News & Views is a free bi-monthly newsletter for business owners, Line Managers, and Human Resource Practitioners (who support Line Managers) with the implementation of fair and developmental people management systems and practices. The style of this e-Newspaper fits between the traditional email newsletters and printed professional trade journals & magazines. Subscribers will be kept up to date with the latest developments in the world of people management, receive handy people management tips, and feedback about labour court rulings that relate to the implementation of the key Labour Acts. Please add equity skills news & views to your list of approved senders if your Internet provider, or server administrator filters incoming e-mail, to make sure you receive periodic e-mail alerts and this newsletter to which you are subscribed. ------------------------------------ Opinions expressed by contributors DO NOT NECESSARILY REPRESENT the standpoint of the publisher-editor of Equity-Skills News & Views. Information published here is for general information, and is not intended as legal advice. The authors, editors, and publishers do not accept responsibility for any act, omission, loss, or damage occasioned by any reliance upon the contents hereof. This message is sent in compliance with the ELECTRONIC COMMUNICATIONS AND TRANSACTIONS ACT. 2002, Act No. 25, 2002 [South Africa] passed on 20 May 2003. Sender: Jeff Sacht URL: www.equityskillsweb.com E-mail: jeffs@worldonline.co.za Telephone: +27 011 485 4943 Facsimile +27 011 485 4943 Publisher-Editor: Equity-Skills News & Views 'A MUST TO PRINT & READ' ------------------------------------ Copyright (c) 2003 Registered electronic newspaper: 1SSN 1684-5714 ==================================================================== Update Your Profile:    http://signup4.f.topica.com/f/?a2i6Ic.bnFRwG.d29ya2lu Unsubscribe:    http://signup4.f.topica.com/f/?a2i6Ic.bnFRwG.d29ya2lu.u Confirm Your Subscription:    http://signup4.f.topica.com/f/?a2i6Ic.bnFRwG.d29ya2lu.c Delivered by Topica:    http://www.topica.com/?p=T3FOOTER

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