SOUTH AFRICA'S most widely distributed & read INDEPENDENT HUMAN RESOURCE PUBLICATION
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News & Views SOUTH AFRICA'S most widely distributed & read INDEPENDENT HUMAN RESOURCE PUBLICATION
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----------------------------------- Equity Skills News & Views Volume 4, Issue 22, 30 November 2005 Registered as an electronic newspaper: ISSN 1684-5722 ------------------------------------ In This edition 1. When Managers Misunderstand HR 2. A Successful Outsourcing Engagement - Step-By-Step 3. Death Of The Corporate University - Birth Of Learning Services 4. Chicken Or Egg - Talent Or Profit 5. Book Reviews: Leading Leaders: How To Manage Smart, Talented, Rich, And Powerful People 6. Downloads: Executive Briefing: On The Line: The Manager’s Role In Performance 7. Case-Law & Legislation Review: Subject: Unfair Dismissal Contract Of Employment 8. Unsubscribe & Moving Soon NB: If your Internet service provider (ISP) or server administrator filters incoming e-mail, please add Equity Skills News & Views to your list of approved senders to ensure you receive this e-journal to which you are subscribed. Jeff Sacht: Publisher-editor www.equityskillsweb.com jeffs@worldonline.co.za 'A MUST TO PRINT & READ' >25,000 & still growing! ---------------------------------------------------------------------- 1. When Managers Misunderstand HR* By Dan Bobinsky who can be contacted at www.management-issues.com ---------------------------------------------------------------------- Why do so many companies drop the ball when it comes to making the most of their human resource department? At the core of the issue, be it through intentional or unintentional ignorance, is misunderstanding HR's strategic capability. Either people don't know, or they don't want to know. A major castigation of the HR profession can be found in the August, 2005 Fast Company article by Keith H. Hammonds, Why We Hate HR. Essentially, Hammonds puts HR through a meat grinder. Some of it for effect, some of it true. For example, Hammond accuses HR of not being strategic players. He portrays them to be either without business acumen, or whips of the accounting department when personnel cuts need to be made. Although he makes some valid points, Hammond's perspective lacks the bigger picture. His focus was on human resource management, and by definition within the HR profession, the main focus of HR management is maintaining an organization, not developing it. As I thought about Hammond's frustration, I considered a person looking for a tool to pound a nail. We all know a hammer will do the trick, but for the sake of illustration, let's say Hammond doesn't know tools. He goes to the hardware store and finds hammer heads in a bin - heads without handles. Hammond considers them for a moment and then leaves in frustration because using only the head will be ineffective. He doesn't realize that an additional piece is needed to make the tool more functional. To Hammond and millions like him, only half of the true equation is seen as the sum total of HR. To prove my point, ask anyone what "HR" does, and you're likely to get a description of a Personnel Department from twenty years ago. But HR has grown past that to where it has two major roles: Maintaining an organization (human resource management, or HRM - formerly Personnel Department functions), and developing an organization (human resource development, or HRD). Although some overlap exists, each role has its own distinct responsibilities. A common problem in today's workplace is blaming HRM professionals for not doing HRD's job responsibilities. Not only are most people unaware of HRM-HRD differences, many of today's business schools fail to emphasize these distinctions. As a result, numerous managers categorize all HR responsibilities as belonging to the HRM side of the equation. It's an understandable error. Every company covers HRM for the legal aspects of employment. But HRD is not urgent, so these plus shared HRM-HRD responsibilities are often back burnered. Overcoming these misunderstandings and bridging the gap is necessary for a company's success. Why? Because at the heart of all workplace and management issues are people, and all workplace activities are tied to the bottom line. It's called strategic alignment. In strategic alignment, human resource development is an integral part of the big picture. For example: 1. A company that knows where it's going has a clearly articulated vision. Part of HR’s responsibilities includes coordinating individual and organizational goals to achieve that vision. Leadership teams should charge and empower HR to do this. If they don't, they're shortchanging themselves and the profitability of the company. 2. HR should be involved in hiring the right people to take the company where it wants to go. Jim Collins, author of Good to Great, emphasizes that without the right people in the right seats on the bus, a company will have a difficult time moving forward. Strategic alignment includes having a methodical approach for selecting people according to what a company needs. Management should work with HR in identifying key performance factors in alignment with company goals. 3. HR should be involved in analyzing company problems. Training is not always the solution, but when it is, connecting "what is" and "what needs to be" is part of what designing and developing training is all about. Strategic alignment includes tying learning objectives to key performance measures associated with the bottom line, and ensuring all inter- and intra-department training efforts are on the same page. This increases the likelihood of a solid return on training dollar investment. These are just some of the components of strategic alignment. Again, leadership teams should charge and empower HR to do these things for the betterment of their company and the bottom line. Misunderstanding HR is a common malady, but the solution depends on everyone. Many in HR need to step up to their capabilities, and management needs to recognize and take advantage of what HR can do for them. But bottom line, misunderstanding or underutilizing HR can be a costly mistake. *Reprinted by permission of Management Issues ---------------------------------------------------------------------- 2. A Successful Outsourcing Engagement - Step-By-Step* By Kellye Whitney, Associate Editor who can be contacted at www.clomedia.com ---------------------------------------------------------------------- To conduct a successful outsourcing engagement, learning organizations must devote considerable time and energy to pre- and post-planning. Jim Hanlin, Ph.D, chief operating officer of TrainingOutsourcing.com, describes the relationship between the learning organization and its outsourcing provider like dating. “You’re learning about each other through examination, questioning, documentation, further clarification. You need to get that dating out of the way before you get married,” he said. TrainingOutsourcing.com’s process has seven steps. Step one is an internal assessment, where the learning organization looking to outsource takes a hard look at its own business and chooses what function has the greatest potential to create organizational value if outsourced. Hanlin said that many organizations find this first step to be the most important. “If you don’t get that part correct, the following steps are all going to be focused in the wrong areas,” he said. “It’s a critical path analysis to any project management—every step is the most important step after the previous step. The internal assessment can be done with an outside partner that is very objective, but we recommend that the internal assessment be done by people within the organization because they’re the ones who are going to look objectively at the situation.” Step two is the RFP or proposal phase, where the learning organization defines what its vendor or outsourcing provider relationship and responsibilities will entail. “Depending on the complexity of it, you may need to involve financial people, line management, legal and human resources, particularly if the RFP involves a transfer of employees,” Hanlin said. “I think financial and procurement people always have to be involved in the team that puts together the RFP. Vendors need to respond in a manner that indicates their capabilities, obviously. It needs to be short, to the point and really involve solutions. In some cases, it may involve some cost estimates, although cost is typically not the number-one reason a vendor is selected. It’s not even a number one reason why companies decide to outsource. They are looking to enhance the value of their learning organization to the business. In outsourcing you’re looking for a partner who can improve your practices and your learning organization for the company.” The RFP should be well documented and thought out, and should express the important items defined in the internal assessment. “When you move along the spectrum of complexity in training processes, the more you’ve got to look at any potential risks that there might be in outsourcing. For example, when you outsource administrative functions, registration, record keeping, e-learning development and delivery, those are usually low-risk business processes,” Hanlin explained. “When you come to content development and delivery where you’re involving internal processes and products, you have to look and see if it will be advantageous for the company to outsource those. Is the risk worth it, and can they really do it better than we can do it?” Step three is the due-diligence phase. Hanlin said that this process looks at both sides of the outsourcing formula with a fine-tooth comb. “Did you define what the outsourcing company should do, and do they have the capabilities outlined in the RFP? Do they have the resources and experience? Literally, it’s a very intensive examination on both sides to determine whether or not everything that has been presented and decided up until that point is true. If not, make adjustments,” Hanlin said. “Or in some cases, say, ‘Hey, this deal shouldn’t go forward.’ Most of the bad outsourcing deals fall apart in the due-diligence phase because they’re not done thoroughly enough, and two companies become partners who really don’t know each other and haven’t explored. The last thing you want are surprises down the road.” Step four is contracting, which defines variability in the learning organization. For instance, Hanlin said if an organization does customer training for an average of five product releases a year, and then suddenly there are 10, is that contractually acceptable? Will there be penalties? Further, there are often legal considerations involving intellectual property rights. If a learning organization outsources content development to a supplier, who owns the intellectual property for those training materials? “That’s very important to most organizations. When you go through the contracting process, you need an experienced outsourcing legal counsel. Also, whenever there’s a transfer of human capital, human resources issues must be covered properly,” Hanlin said. Step five is transition. The learning organization should have a transition management plan to assuage employee nervousness or anxiety and address their productivity concerns if they have transferred to the new organization. “If you have a plan to show what the affects will be, a realistic objective plan and present that to people, you can avoid potential problems,” Hanlin said. Step six is governance or the structure the learning organization establishes once the outsourcing deal has been consummated to administer and manage the relationship. “In most cases you’ve got different levels on that governance structure,” Hanlin said. “At the strategic or highest level, people from both sides meet maybe on a quarterly basis to determine the goals, objectives and review results. Then you’ve got the programming level of governance, which may involve the highest-level reps from the learning or IT organization from a supplier side. They may meet monthly or bi-weekly. You may have line managers there as well. Then there’s an operations level who do the day-to-day work. They meet more frequently to talk about design, content development, delivery schedules, etc. There should be reps from both sides.” Step seven is the transfer of processes or repatriation during the implementation phase and establishes how the learning organization moves its processes and people to get to the next stage in the relationship or, if necessary, how outsourced processes can be repatriated back into the company. Jill Kidwell, vice president of business transformation outsourcing at IBM, said her company has defined four key areas a learning organization should consider in order to launch and sustain a successful outsourcing engagement. Several of these steps gel with the steps laid out by TrainingOutsourcing.com. First, make sure the company has the right leadership capabilities to oversee the deal. These include analytical approaches to problem solving, the ability to conduct financial analysis and experience in deal making. Also, establish the vision for what the learning organization hopes to accomplish by outsourcing. Essentially, where do you want to be in five years, or seven years? “We also see the need to involve people who are familiar with change management because at the end of the day, there will be a lot of impact—some to directly affect the employees but also to the organization as a whole. Having somebody on board who can do that is really critical,” Kidwell said. Second, focus on transition management. Don’t just assume that things will go well. Instead, put some discreet effort to ensure that there are fewer hitches. “You’re taking processes that you do today and asking someone else to do them tomorrow,” Kidwell explained. “You don’t just turn one off and turn the other one on. You really need to migrate from one way of doing something to another way of doing it. What’s the pathway both the company that’s outsourcing as well as the outsourcing provider needs to take to get from what is today to what needs to be in the future? Sometimes clients tend to let that go over to the side of the vendor, but it requires a very close partnership where both sides are looking at the activities that would be undertaken.” Third, develop a governance and relationship management process that will help facilitate the relationship. Make sure that all the right people from both organizations are engaged to oversee the delivery of services on a strategic, program and operations level. “At the strategic level, the two senior execs will be looking at the overall delivery, making sure that service-level agreements are met, focusing on the future and what initiatives do we need to engage in this year? The program level is focused more on meeting the key milestones, hitting critical satisfaction issues and looking at activities that might need to be brought into place to keep service levels high,” Kidwell explained. “At the operations level—and this is where I think learning outsourcing engagements are different—in some areas, the provider is simply executing against the plan. They have processes in place and move forward. At the operational level, there is not as much engagement between the client team as there is in a learning outsourcing deal. You almost need a permeable membrane between the two organizations so that those teams can be in contact when needed, as needed, to really make sure that day-to-day issues are addressed.” Finally, build a measurement and reporting framework to measure success and manage the output of the outsourced function. “We frequently see coming from the client teams a series of inputs, or 200 or so measures, and it’s really important that the teams net those measures out to a smaller number and focus on the outputs and the outcomes.” Kidwell said that people need to spend quite a bit of time on that to make sure they understand the true levers that make a difference in the way services are delivered. “Make sure that once they (learning leaders) agree on the service levels to be provided, they have a way to come back and adjust those, perhaps on an annual basis, and weight them differently because their priorities may be changing and they need to change the way things are measured as well,” she concluded. * Reprinted by permission of CLO Media ------------------------------------ IN-COMPANY WORKSHOP: EMPLOYMENT EQUITY COMMITTEE TRAINING ------------------------------------ An Intensive 2-Day In-Company programme For ELECTED EMPLOYMENT EQUITY (EE) MEMBERS & CHAIRPERSON To Competently & Confidently Represent Co-Workers. Contact Jeff Sacht to request a workshop flyer and to arrange an in-company workshop customised to your requirements. Facilitation is charged on a realistic daily rate and not a per person cost. Also available as a web download for self-delivery/in-house use under license agreement. Contact jeffs@worldonline.co.za ---------------------------------------------------------------------- 3. Death Of The Corporate University; Birth Of Learning Services* By Josh Bersin who can be contacted at Bersin & Associates; www.bersin.com ---------------------------------------------------------------------- In our High Impact Learning Organization® research and workshops we talk with training managers and directors about their challenges in organization, management and governance. Nearly every organization tells us the same thing: their current organization model for corporate training is undergoing a dramatic change. This article summarizes these changes and what they mean for you. The Traditional Corporate University Model In the traditional corporate university model, developed over the last 30 years, companies create a "place to go" to learn. These organizations have many offerings to choose from, they are centralized and located at corporate headquarters, and are staffed for peak demand. In this model the corporate training organization develops a wide set of offerings and then markets them to managers, directors, executives, and line employees. Each individual business unit decides whether or not to send their people to "be trained." The Corporate University is funded and staffed for "peak demand." There are a wide set of programs, facilities, and staff to help meet any possible demand from the organization. Why this Model is becoming Obsolete: A Changed Workforce The business environment in the last 5-10 years has changed dramatically. Today the economy is growing yet most organizations face a talent "squeeze." A significant number of older workers are retiring - and with them go some of the most critical skills in the organization. Workers no longer sit in an office next to their managers where they can be coached and trained: they now work everywhere and anywhere (i.e. the "flattening of the earth"). HR managers no longer speak of learning and development; they now worry about "talent management." These changes have led to three important demands for learning: Learning must available "on-demand," it must be "job-relevant," and it must be "constantly changing." These new drivers are making the corporate university model impossible to maintain. Consider the issues which training managers now face. Training must be aligned, relevant, and efficient. It is no longer possible to offer a course for year after year with a small number of attendees. Training must be totally aligned to today's most current business needs. The University model breaks down. Employees can no longer wait for the University to offer the right courses. Employees want to be able to get information online when they need it. New hire, management training, and other soft-skills programs are now "blended" with online activities, events, and reference materials. The New Model: Learning Services There is an entirely new approach: the Learning Services organization. Learning Services is process-centric, not program centric. It offers programs, content, performance consulting, and outreach programs to help business managers improve operational performance. The organization uses technology to increase reach and range -- not just to save money. Learning Services "comes to you." The Learning Services approach differs greatly from the traditional corporate training organization. It manages courses and content, which can be delivered anywhere. It uses performance consultants to reach out and understand business issues -- and delivers programs, content, resources, references, and more. Its focus is not as a "place to go" but rather an organization that "comes to you." An Analogy: Data Processing to Information Technology We know this transition is taking place. Forward-thinking organizations like Lockheed Martin, IBM, and others have made this transition already. Consider what happened to the Data Processing departments in the 1980s. They used to be an organization which held "data and processing" in the basement with the mainframe. You used to walk into the DP department and ask for help with your data and applications. Today, by contrast, the IT department is everywhere. They run networks and systems, which are self-service in nature. They no longer sit in the basement -- they are everywhere and available 24x7 when you need them. IT, like training, is a support function. Alone it does not generate revenue, gain market share, or create competitive advantage. Used correctly, however, it does all three. As the business and technology changed so did IT. Training is going through precisely the same transition. What does this all mean to you? It has many implications. It changes the way you are organized, how you use technology, how your resources are allocated, and how you measure what you do. It demands that you implement a "shared-services" model rather than a "program-centric" model. It forces you to build and manage a performance consulting organization. It mandates measurement of operational efficiency and service levels -- not just learning outcomes. *Reprinted by permission of Bersin & Associates ------------------------------------ IN-COMPANY WORKSHOP: MANAGING FOR DIVERSITY (NOW UPDATED & ENLARGED) ------------------------------------ An Intensive and Practical 2- DAY MANAGEMENT/ SUPERVISOR WORKSHOP to develop insight and self-knowledge about intercultural competence and enhance your capacity to work with a diverse workforce. Contact Jeff Sacht to request a workshop flyer and to arrange an in-company workshop customised to your requirements. Facilitation is charged on a realistic daily rate and not a per person cost. Also available as a web download for self-delivery/in-house use under license agreement. Contact jeffs@worldonline.co.za ---------------------------------------------------------------------- 4. Chicken or Egg - Talent or Profit* By Aiden Choles who can be contacted at www.tomorrowtoday.biz ---------------------------------------------------------------------- A CEO’s performance is generally measured on two things: share price and shareholder value. This is the plight of a business leader in a capitalist society, and most of his/her time is dedicated to these criteria. However there is a pain that is pulling business leaders away from their focus on these criteria: that of the Talent War. This is not surprising because running a business on capitalist notions does very little in keeping your brightest young talent - except make them jealous! Soon, share price and shareholder ROI will be meaningless unless a CEO is able to be a Talent Manager; a leader who fields, grows and retains the best young talent. And so a CEO, and his/her Board, should really reconsider the fervor with which they throw themselves to the capitalist dream. My hunch is that the business that will succeed in today and tomorrow’s world is developing a greater interest in an environment where our brightest talent acknowledge their readiness to leave us, and choose to stay, rather than an all-out offense on short term profit and the bottom line. My stance is this: if you build it (the environment for bright young talent), they (share price, shareholder value) will come. Our biggest pain There are the important issues and then there are the urgent issues to be dealt with in business. Sadly, many businesses are great at addressing the urgent and then leaving the important for later – if later ever comes. And so we have to confront day-to-day pain in the form of quarterly results, share price fluctuations, investor confidence, media reports and operational constraints. The pain associated with these priorities is very deft at taking our eye off of the diffused pain of the talent war. Many managers do not really know how to address the fact that their bright young talent is departing so quickly. Young talent is jumping ship quicker than older more ‘loyal’ generations. We feel the pain in recruiting the brightest young talent becoming futile because they will inevitably leave quicker than they came in. We are not suffering from a shortage of talent, as the proponents of the ‘skills shortage’ would want us to believe. Rather, we are suffering from an inability to keep talent. These are the guys (and gals) who are calling the shots: you do not attract them, they attract you! This is a global trend – companies throughout the world are suffering similar pain. So what do we do when talent leaves us? We hear leaders saying, “HR are the ‘people people’, let them sort this out. My job is to keep our organization alive!” In the end the responsibility for this problem should land in the lap of our leaders – our CEOs and managing directors. Too often the responsibility for Talent ends up in the dark recesses of HR Department where the paperwork trolls focus more on certification than talent. Don’t we see that keeping our organizations alive cannot be separated from keeping our people ‘alive’? Perhaps this is where Capitalism can learn a little from Communism. Our businesses need to be environments that provide the capitalist dream – the offer of self-interest, wealth, development and ownership. But too often this dream is interpreted as an Individual Quest. But what can we learn from communities of talent? How does an organization really cater for hundreds of bright young stars without embracing communal aspects of inclusion, connectedness and care? Communities have vested interests – ownership cannot be individualistic. We all agree that greater performance comes from a sense of ownership in your work. So, how do we foster greater sense of ownership when we are so focused on share price and individual shareholder value? What about the whole? Some of the answers to these questions lie in changing the way we approach talent. One of the boldest champions of talent is writer and management guru Tom Peters. He unashamedly proposes that our business leaders should be the best talent managers. He parallels today’s business leader with professional sport coaches. A lesson from the world of sport … Can business leaders learn from those in other disciplines? What about sport, a field dominated by talent and talent wars? Certainly, the success of the sports Coach is measured by acquisition of trophies. But on a more immediate level, they are judged by their people-skills: squad selections and so on. In a sense, his people-skills is actually his key measure! The trophies would not come but for the talent he fields. A few years back sports men and women would turn for their country as a matter of pride and allegiance. But that is changing. Playing for loyalty is turning into a professional loyalty that demands sponsorships, high packages and high publicity. I am not knocking the old paradigm of loyalty but believe that the dynamics of sport have changed and that we need to stay on top of them. The older supporters cry out at this abomination – they criticize players for being self-centered and greedy. The reality, though, is that players are now professionals. Their job is to play, and as such will play by the rules of the game when it comes to talent, demand, packages and publicity. The same thing is happening in the commercial talent war. A few years back, employees were loyal such that they became employees for life. Today however, employees are loyal to the extent that their package meets their desires and that their talent is on demand (oh, and that they’re working on noteworthy and passion-inspiring projects!). So a Sports Coach is measured on results and managing the best talent. In the world of CEO evaluation, I see an imbalance. CEOs are not valued for their talent management skills and responsibilities. Need I say that with each day we trade, the trends of technology and globalization are rendering our rote work redundant? Need I say too that it will be your people that will keep your business alive in the future workplace? At the moment you may have the strongest brand, lucrative share prices and dominant market share but if your people are not listed among those assets (with intent!) and your leadership evaluation criteria are not aligned to managing that talent superbly (the practice!), your company will lose the high position it enjoys today. Too often we hear leaders getting the intent right by listing their people as their most prized asset. However, this statement is met with disdain by our young talent because they know from experience that this intent is often only intent that lacks practice. Where to from here? The problem is that to develop the right environment and right measures for our CEOs, we have to re-look at our fervent approach to capitalism. We will need to re-evaluate our bias towards share price and bottom line and look more towards goodwill and culture as indicators of success. Why? The changes that are required in changing our environments will eat into our resources heavily, such that short-term profit is jeopardized. So what is the good news? These changes, despite being initially taxing and burdensome, will create for you a longer lasting, noteworthy company in which talent ‘stays the course’. In the long run, that what is needed to plug the hole through which our talent is draining. *Reprinted by permission of the author ---------------------------------------------------------------------- 5. Book Reviews: Leading Leaders: How To Manage Smart, Talented, Rich, And Powerful People ---------------------------------------------------------------------- # How To Manage Smart, Talented, Rich, And Powerful People To Buy This Book Click On: http://www.kalahari.net/e-trader/referral.asp?toolbar=mweb&linkid=5&partnerid=293&sku=28296751 By Jeswald W. Salacuse, AMACOM, 2005 Leading Leaders tackles a topic woefully under-analyzed in the literature: how to drive change when you lack compelling authority over other leaders. Salacuse states it bluntly, “Unless you are a total megalomaniac, you recognize, readily or grudgingly, that many of the people you are supposed to lead are smarter, more talented, richer, or more powerful than you are. . . . Many of the people you lead, whether you like it or not, are themselves leaders.” This common fact of corporate life makes leadership efforts all the touchier. Salacuse's solution is to break the challenge down into “seven daily tasks,” each of which merits a chapter in this book: 1) negotiate the vision, 2) make stars a team, 3) settle leadership conflicts, 4) teach the educated, 5) motivate other leaders, 6) lead outside the organization, and 7) create trust and capitalize on your leadership. To make stars a team, for instance, he offers the practical suggestion of seeking common ground among all players. Lead by example: Demonstrate on a consistent basis that you put the interests of the group above your own ego. (Give up that reserved parking spot, highlight others' accomplishments, and roam the halls and chat with colleagues rather than hunkering down in your office.) ---------------------------------------------------------------------- 6. Downloads: Executive Briefing: On The Line: The Manager’s Role In Performance ---------------------------------------------------------------------- INTRODUCTION The challenge presented by effective and strategic performance management has ignited intense interest and debate. Beyond performance reviews, performance management systems and processes are being integrated with hiring, retention, learning, compensation and career transitions initiatives. For performance management solutions to fulfill their potential, they must inform the other critical components of strategic talent management. Strategic and integrated performance management not only drives effective measurement, it aligns hiring and retention efforts with corporate objectives and focuses those efforts where they will produce the greatest returns. Traditionally, HR spends considerable time trying to improve (and enforce) performance management systems. But if performance in general is considered, it is the line manager, who is fundamentally accountable for the performance of the team. With the availability of technology-driven performance management processes, line managers and HR face a typical predicament. Line managers have conventionally focused on day-to-day business processes geared to producing business results, whereas HR devises programs to enhance and measure such processes. Given this delineation of organizational roles, it is almost always the case that HR chooses and introduces performance management programs and technology and then expects line managers to embrace them. Whether it is paper and spreadsheet driven or assisted by sophisticated web technology, performance management is only effective when line managers see value in the systems in use. Given the prevalence of broken and dysfunctional performance management processes in organizations, combined with the promise of new technologies designed to ease the pain of performance reviews and performance management in general, the Human Capital Institute assembled an expert panel to delve into this topic. Our intent was to shed some light on best practices and new ideas for effective performance management, particularly through better HR, line manager relationships. WHAT DO LINE MANAGERS THINK THEY SHOULD DO IN MANAGING PERFORMANCE? Line managers have very different sets of expectations, aspirations and ideas around performance management. Download this Executive Briefing at http://www.workinfo.com/free/downloads/180.htm ---------------------------------------------------------------------- 7. Case-Law & Legislation Review: Subject: Unfair Dismissal Contract Of Employment By Gary Watkins who can be contacted at www.caselaw.co.za; www.workinfo.com ---------------------------------------------------------------------- # NUMSA obo Buthelezi & Others vs. LTR Appointments CC Case No: MEKN1064 Award Date: 20 May 2005 Jurisdiction: MEIBC: Durban Commissioner: Owen L Subject: Unfair Dismissal Contract Of Employment ISSUE: The employees were employed on fixed term contracts, which expired. The meaning of the word “dismissal” was central to the resolution of this matter. None of the employees were formally informed that their contracts were expiring and would not be renewed. They were informed to return where there could possibly be jobs for them. Held that the 56 employees were dismissed. The failure to renew the contracts of employment was caused by the non-availability of work and the employees were advised that they had the right to refer this dispute to the Labour Court. SUMMARY OF FACTS: The employees had been employed by LTR Appointments PMB on fixed term contracts which expired on 15th December 2004. On 15th December 2004 they stopped working as they had been informed that they were to be paid their leave pay on the 24th of December 2004. This decision was amended and it was agreed that leave pay would be paid on 15 December 2004. They were then informed to return to work on 10 January 2005 when they would be re-employed. On returning to work on 10th January 2005 they were informed that there were no jobs for them and their fixed term contracts were not renewed. Subsequently, 8 of the employees had been re-employed. SUMMARY OF JUDGEMENT: The Commissioner held that the meaning of the word “dismissal” was central to the resolution of this matter. According to Grogan (Workplace Laws) “The notion of a reasonable expectation clearly suggests an objective test: the employee must prove the existence of acts which would lead a reasonable person to anticipate renewal. The facts that will found a reasonable expectation will differ from case to case, but will most commonly take the form of some prior promise or past practice – e.g. where the employer has habitually renewed the contract.” And du Toit in Labour Relations Law “The wording of the contract is important, but not conclusive. Subsequent conduct may give rise to reasonable expectation, notwithstanding the declared intent of the parties.” Although the test is an objective one, the expectation is “essentially of a subjective nature, vesting in the person of the employee” and not necessarily shared by the employer. The surrounding circumstances must determine whether the termination of a fixed-term contract at the end of the period was fair. Employers do not have an unfettered discretion to renew or not to renew in terms of fixed-term contracts. The Commissioner found that the employer informed the employees on 15 December 2004 that they should return on January 10th where possibly there would be work for them. They interpreted this to mean that there would be work for them and as a result the employees reported for work on 10 January 2005. This interpretation was reinforced when none of the applicants were instructed to return their work issued clothing and nothing was said about the UIF aspects on 15th December 2004. It was only on 10th January 2005 that the applicants were told to return their work issued clothing and were informed about the UIF aspects. Additionally, in a notice to the union office dated 8 December 2004, no mention was made of the termination of fixed term contracts, but dealt only with the shut down period in December/January and payment dates for leave pay. If the employer had intended to terminate the contracts at the end of December he should have been clearer. The Commissioner found that the employees did have a reasonable expectation that their contracts would be renewed and that they were dismissed. As the employer alleged that the reason for the termination of the contracts were operational requirements, the employees were advised that they could pursue the matter in the Labour Court. ------------------------------------ THE IR PROTECTOR ------------------------------------ Is your company spending valuable time and resources handling disciplinary issues? Does your business contribute to the 130 000 cases at the CCMA each year? Is your share of the R14 000 000 000 in South African industrial relations costs affecting profitability? Take the next logical step in people management and protect your organisation. To find out more about "The IR Protector" visit www.workinfo.com/sponsors/irprotect.thm Brought to you by Workinfo.com and Camargue, Hollard's labour dispute specialists. --------------------------------------------------------------------- 8. 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. 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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) 2004 Registered electronic newspaper: 1SSN 1684-5714 |
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