I was contacted by an employer who, pressed by the economic climate, had a financial audit done on his business.
It was found that his operating costs had skyrocketed. Closer inspection revealed the telephone account, petrol costs and office and stationary expenses were excessive.
All these expenses directly affect the company’s profitability and the owner wants to address them, but is hesitant as he may alter his employees’ conditions of service.
He wants to know what he can do and how he should go about it.
It is undisputed that every business owner has the right to run his business as he sees fit within the confines of legislation. It is further undeniable that every owner runs his business to make a profit.
Therefore, every owner is entitled to address aspects and costs that reduce the amount of money he puts in his pocket each month. The one limitation is that he may not unilaterally change the conditions of service of his employees without following a consultative process.
With the appointment of staff, costs increase proportionately and if left unmanaged may eventually cripple a business.
Operating costs should be analysed monthly, including the incidental costs such as telephone, stationary and petrol usage, as these may accumulate to a substantial amount.
When appointing staff, they are often enticed to accept the vacant position by offering additional benefits such as telephone, petrol and car allowances.
When these are included in the contract of employment, it becomes a condition of service. Changes hereto must be done through a consultative process with the aim of reaching an agreement on the changes to the contract of employment.
A unilateral change of conditions of employment may amount to an unfair labour practice, a breach of the contract of employment, and, under certain circumstances, even a dismissal.
Generally, telephone, petrol and stationary expenses do not form part of an employee’s conditions of employment nor benefits and the employer is free to introduce new rules to combat the abuse thereof.
In the case of excessive telephone expenses, the employer is free to introduce a formal policy in which, for example, personal calls are prohibited.
The employer can inform employees that breach of the policy could lead to disciplinary action and that they will be required to pay for personal calls.
Even if employees were allowed in the past to make personal calls, the purpose of an office telephone is for business use. The personal use thereof was only incidental and does not constitute a benefit of employment.
The same can be said of an employee who has the use of a company car for business purposes, but is allowed to use it privately. The employer can limit the use of the car to working hours for business purposes only.
It would also be prudent to monitor stationary and office expenses and introduce limits to the amount of orders and the use of items.
It is always best to request the employees to sign receipt of any new policy or rule introduced into the workplace. This way there is no quarrel about whether the employee knew of the rule or policy when the employer wishes to take disciplinary action.
However, if employees refuse to sign receipt, it can be posted on the notice board and a copy can be placed in their personal files. Inform them that the rule is effective, notwithstanding their refusal to sign receipt thereof.
Employees’ acceptance are not required to introduce these rules as long as it does not affect their benefits or conditions of service and as long as the employer has economic rationale for introducing it.
Robert Niemand from LabourNet in Port Elizabeth is a labour law consultant. He is also a part-time commissioner at the CCMA, a labour law and labour relations lecturer and a contributor to various publications.
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