Dear Reader

Welcome to my first Labour bulletin for 2009.

I was lucky enough to have a really good break and I’m not only rested but also fired up with enthusiasm for the year ahead. I hope you are too! One can either succumb to the doom and gloom and prophecies of hard times or one can see the challenges of these times as an opportunity. As always we’ll strive to help you meet your labour challenges and stay ahead of the game.

How to approach salary increases

In the current economic climate you’re probably asking yourself if you should be more cautious than usual in relation to salary increases. You can look at this issue from two perspectives, the legal one and the bigger 'market-related' picture.

Your employees don’t have a legal right to an increase unless you’ve agreed to it in your employment contracts. If you’ve simply indicated that you’ll review salaries annually then that’s all you have to do, and there’s no guarantee you’ll give an increase or how much that increase will be. You might also not have stated specifically what time of year you’ll do salary reviews, but if you have then stick to what you promised in the contract. This still doesn’t mean you must give an increase at all or to do so on the same basis as you did in the past.

Retaining staff is a key objective

In the context of the bigger picture, you need to consider your key objectives. One of these may be to retain staff. If employees have an expectation of a salary increase in a particular month and you don’t give it to them, it’s likely this will have a negative impact on morale, confidence in the business and the longer term prospects of employees staying with the company. You’re most likely to lose your most valuable employees who are naturally the ones who have more options open to them.

You must also consider the market. Will these employees be difficult to replace? How much will you have to pay to replace staff i.e. the hidden costs of staff turnover? What’s the relationship between supply and demand in relation to the sort of skills you currently need in your business? What’s the broader economic context?

Remember, the economic crisis hasn’t hit South Africa as hard as the US and the UK, for example. So, where employees in the US and UK may be grateful simply to hang on to their existing jobs right now this may not be the case in South Africa.

When looking at whether to give you staff an annual increase, know your legal rights but you must also consider the bigger picture.

Q&A from our subscribers

Do I have to pay employees who didn’t pitch for work?

Question

My employees didn’t pitch up for work on 5 January when we opened after the December break, even though I had made it very clear when they would have to start work again on that day. They only returned a week later and acted as if nothing was wrong.

Answer

You don’t have to pay the employees for the days they didn’t come to work.

You can also level disciplinary charges against them (e.g. insubordination and/or absence from work without authorisation) and subject them to disciplinary action.

Until next month...

Susan Stelzner

Editor-in-chief