Please note that this pertains to South African labour Relations and Best Practice requirements.
To follow on from last week – in this instance, Mike, our favorite protagonist works in a branch of a South African company, we will call ABC Consulting, in Kenya.
Like many companies throughout the world, ABC Consulting in Kenya found itself in trouble because of the recession and it was forced to retrench its staff.
Fortunately for Mike, the proper procedures pertaining to retrenchment were not followed and no negotiations were entered into.
Mike referred the case to the Labour Court here in South Africa.
The Labour Court decided the following:
• Both Mike and the Head Office of the Company, were based in South Africa, therefore South African Labour Laws applied.
• Both Mike and ABC Consulting had agreed that the employer’s (South African) policies would apply
• ABC Consulting had not approved or adopted Kenyan Law or their Labour Relations Act in any other part of the business.
• Both Mike and the CEO of ABC Consulting had been under the impression that the contract was enforceable under South African Law, when they signed the contract
Therefore South African Labour Law had jurisdiction and Mike won his case.
In this particular instance, Mike was awarded damages for ABC Consulting’s breach of contract as well as relocation costs, his share options, accrued profit shares, salary, notice pay, leave pay and his severance pay. In addition to all of this, Mike was also awarded compensation to the value of 12 months pay.
A very expensive lesson for ABC Consulting, I am sure you will agree.
So be sure that you know exactly what the legal requirements are if you are a ‘foreign’ company or if you are a South African Company with branches in other countries, it could be your saving grace.