Out of court settlements on the rise
Posted on 30. Jan, 2010 by admin in Business-Industrial Relations
BY Ivan Israelstam, Chief Executive of Labour Law Management Consulting.
Disputes dealt with by the CCMA and bargaining councils include unfair dismissals, unfair labour practices and unfair discrimination including sexual harassment. Sometimes these disputes arise because employees fabricate such complaints. However, more often it is because employers either do not know or understand labour law, are not expert in implementing the law or believe that they can get around the law.
Some employees, especially those at higher levels, prefer to ignore unfair treatment at the hands of employers. This is because these senior employees and executives:
- Are intimidated by the employers and their teams of lawyers; and/or
- Do not know how to gather proof of their complaints
- Do not want the hassle of a CCMA process; and/or
- Are scared that prospective new employers may be put off by an employee known to have taken an employer to the CCMA.
As a result the employee or executive gives up and finds another job. They forget that, by doing so, they have allowed unfair action to be swept under the carpet and may have sacrificed a number of years of service. As a result of the employee’s reluctance to take up the matter many types of unfairness are perpetuated. These include, amongst others:
Sexual harassment
Forced resignations
Unfair retrenchments
Firing for misconduct
Poor performance terminations
Scape-goating
Nepotism
Favouritism
Victimisation
Making room for “buddies” or relatives
Cutting of pay
Reduction or removal of benefits and allowances
Verbal abuse
Threats
Assault
Despite the above types of mistreatment many employees either resign and drop the matter or accept a small settlement to keep quiet. Strangely enough this capitulation occurs most frequently in the R10 000 to R50 000 per month remuneration bracket. This is possible because employees at this level are not unionised or do not want to tarnish their reputations by taking the employer to the CCMA.
However, most employers who settle do so because they fear the CCMA, want to avoid hassles, time wasting and costs, do not want their name dragged through the mud or are unsure of the strength of their case.
Employees often accept a settlement because they:
- Are nervous about the possibility of having to represent themselves at CCMA
- Want to avoid confrontation
- Are concerned about their reputations
- Want a quick settlement and fear the cost of litigation
Where there is a financial settlement the employee usually gets the short end of the stick by accepting a one-month to three-month settlement package. However, it is very often in the interests of both the employee and the employer that a fair settlement is reached. The party that wins the settlement negotiations will be the one who:
- Has the wherewithal to provide proof of his/her/its case
- Best understands labour law
- Has access to a labour law expert with strong negotiation skills.
Should the employee or the employer want to achieve a favourable out of court settlement the above three ingredients are available in the market. For example, a reputable labour consultant will not only be able to negotiate a favourable settlement but should be able to do so at a reasonable hourly rate or contingency fee. A favourable settlement for an employer is up to three months; but a favourable settlement for an employee would be six to 12 months remuneration.
Ivan may be contacted on (011) 888-7944 or 0828522973 or on e-mail address: labourlaw@absamail.co.za. Go to: www.labourlawadvise.co.za.
To attend his 12 March 2010 seminar on CHANGES AND DANGERS IN LABOUR LAW please contact Ronni at ronni@labourlawadvice.co.za or on 0845217492 or (011) 782-3066.