Welcome to Bizland News - Edition 12

October 2002

Editor's Note

I recently discovered that I am allergic to farms. My hubby and I spent the September long weekend on a farm in Swellendam and I spent the entire weekend with a tissue pressed up to my nose and eyes half closed - hayfever which promptly turned into flu - needless to say, I was not impressed. I am still debating whether it was the fruit trees in full bloom, the abundance of hay and grass, or the cows outside our window that affected me, but suffice it to say that I will not be spending a weekend on a farm again any time soon - particularly not in Spring! However in between all the sniffing and sneezing and severly doped up on

Sinutab, we managed to get in a couple of hours fishing, and as usual I put my husband to shame with the first catch of the day! And of course the puppy was most intrigued with this slippery flapping thing that "mommy" pulled out of the water - don't worry I did let it go - my fishing expertise does not go so far as to skin and gut the thing! So I guess the weekend wasn't all wasted - and I must admit that the cottage was well-equiped and would have made for a relaxing stay had I not been allergic to everything in a five mile radius! For those of you who are interested (and non-allergic!) we stayed in a fully equiped self-catering cottage that sleeps six, with a kiddies play area, indoor fireplace and outdoor braai (wood provided) and best of all - pets are allowed. It's a great place for kids, with lots of farm animals and beautiful scenery, and at only R100 per night per person, certainly affordable. For more information click here (tip - take your own bottled water).

Moving right along... can you believe that this is the twelfth edition of Bizland News? A whole year has gone by already! As a special treat to say THANK YOU to all our loyal readers, we bring you a R500 gift voucher for Kalahari.net - but there's a catch! We want to know if what we are bringing you every month is what you want - so please take a minute to fill out our quick survey to be in line to win that voucher! Click here or scroll down to enter - your input helps us to bring you a better newsletter in the months to come! This month's success story is on two determined women who developed a new product called Stretch-a-Tac, a brand you are bound to see on your supermarket shelves in the near future - read about there trials and tribulations further on. Again, we are always looking for new stories, so let us know of any other "up-and-comers" who might like to feature in our newsletter! Don't forget to also read our special feature on labour updates - important information for the business owner. Please let us know if there is a particular topic that you would like us to investigate! As always, feel free to send this newsletter on and encourage your friends and associates to subscribe - removal instructions at the bottom.

In this month's issue: Feature Article - Recent Amendments to the Labour Relations Act - A Hurdle for SME's? by Kevin Alborough Competition - Fill out our quick survey and WIN! Book of the month - Financial Freedom for Women - by well known financial fundi, Bruce Cameron Success in the making - Lisa Becker and Beverley van Wyk of Stretch-a-Tac Next month's issue

Feature Article: Recent Amendments to the Labour Relations ACt - A Hurdle for Small Business?
by Kevin Alborough, Managing Director, Human Alliance (Pty) Ltd.

Introduction
The recent enactment, after much debate, of a series of amendments to parts our employment law, namely the Labour Relations Act (LRA), Basic Conditions of Employment Act (BCEA) and the Insolvency Act (IA), entrenches further the notion of 'regulated flexibility' that pervades the legislative web that governs our labour market and seemingly ushers in further hurdles for small business in SA. The changes are the product of negotiated compromise at NEDLAC.

There are numerous and a wide variety of amendments, some of which are controversial. This article aims to provide a very concise overview of the most important changes in the LRA that will affect small business.

The objectives of the recent changes can be summarised as follows:
· To increase the sensitivity of the legal framework with the imperative of creating jobs
· To address unintended consequences of our labour laws
· To improve the application of the LRA and BCEA
· To ensure effective alignment of labour laws with the changing labour market environment

The main areas of change focus on the following four dimensions of labour relations:
· Collective bargaining and Bargaining Councils
· Dispute resolution
· Conditions of employment and contractual relationships
· Rights and responsibilities of employers and workers

Amendments to the LRA
The most significant amendments to the LRA are contained in the following areas:

·	Collective Bargaining
	Some employer's organizations and trade unions were merely formed to represent employers and employees in the CCMA. The Registrar now has to be satisfied that an applicant is "genuine" before registration. Guidelines regarding "genuine" are to be published by the Minister of Labour. This amendment is designed to eradicate an unintended consequence of the 1995 LRA.
·	Bargaining Councils
	Provisions have been made in Bargaining Councils for: · extension of functions · enforcement of collective bargaining agreements · clarification of dispute resolution powers · rationalization of BC's in public service · information to be supplied to Registrar by BC's The Registrar has been given increased power to oversee the conduct of councils' affairs- can suspend, withdraw or charge with misconduct.
·	Dispute Resolution
	The CCMA has been given powers to make Rules regulating the practice & procedure of dispute resolution instead of such matters being specified in the principal Act. Consequently, the representation provisions at CCMA have been withdrawn. Bargaining Councils or Private accredited Agencies may confer the powers of a Commissioner on the person appointed by them to resolve disputes. A Commissioner may now make a costs order and may make a contempt finding (previously in the ambit of the Labour Court). Any witness fee must now be paid by the CCMA or the person requesting the CCMA to subpoena - e.g. the employer or trade union. The Labour Court may confirm, vary or set aside a Commissioner's finding. The CCMA may make a settlement agreement an Arbitration Award. Arbitration Awards may be enforced by the CCMA directly (instead of Labour Court). The CCMA can be requested to conciliate even after deadlock reached and certificate issued.
·	Unfair dismissal
	Four important changes in this area have been introduced: Firstly, the following new additions to the definition of unfair dismissal:
	· after a transfer (sale of business), the new employer provided conditions of employment or circumstances substantially less favourable than those provided by old employer · automatically unfair if:   · dismissed for reasons of transfer (sale of business) · dismissed for making a protected disclosure
	Secondly, the introduction of a new provision, pre-dismissal arbitration, which gives employers and employees an option to request by mutual consent the CCMA or Bargaining Council or accredited Agency to appoint an arbitrator to conduct a final and binding disciplinary enquiry. This will eliminate the duplication of proceedings involved in having both an internal inquiry and arbitration at the CCMA or Labour Court hearing. The employer would be required to pay the cost of pre-dismissal arbitration. The effect of the award will be the same as an arbitration award when an employee has referred the matter to the CCMA. Private arbitrators may conduct pre-dismissal arbitrations only if they are accredited by the Commission. Representation at pre-dismissal arbitration must either be:
	· Co-employee · Director or employee of the company · Union official or member of employer organization · Legal Practitioners - by agreement between the parties
	N.B. - Persons earning in excess of R97 140,00 per annum can consent to pre-dismissal arbitration generally in contracts of employment. Other employees need to consent for each specified allegation at the time.
	Thirdly, the introduction of a new provision, Con - Arb, which introduces a speedier one - stop process of conciliation and arbitration for individual unfair dismissals and unfair labour practices. The 'Con-Arb' process allows conciliation and arbitration to take place as a continuous process on the same day, if necessary. The process will only be followed where no party has objected to the matter being dealt with by the con-arb process However, the CCMA must commence arbitration immediately after certifying that a dispute remains unresolved for the following:
	· Disputes over dismissals or unfair labour practices relating to probation · Conduct or capacity dismissals, constructive dismissals or where the employee does not know the reason for the dismissal.
	Fourthly, limits on compensation have been introduced. Commissioners have been given discretion as to the amount of compensation that may be awarded for dismissal, which is capped at 12 months. At the moment there is no discretion and unrealistic high amounts of compensation have been awarded, especially in cases affecting workers with short service.
·	Unfair Labour Practice
	The right not to be subject to Unfair Labour Practices has been introduced. ULP means:
	· unfair conduct in relation to promotion, demotion, probation, training, provision of benefits · unfair suspension or unfair disciplinary action · failure or refusal to reinstate or re-employ in terms of an agreement · occupational detriment where employee has made protected disclosure under the Protected Disclosures Act
·	Retrenchment
	The most controversial of the amendments and the area most likely to become a hurdle for small business are those related to dismissals for operational requirements (referred to a retrenchment). One of the unintended consequences of the 1995 LRA was a preoccupation with procedural fairness that, in COSATU's view, led to a consultative process that has become a charade in many cases. Labour's view was that this area should be tightened up in order to provide proper, bona fide consultation. Two new legal regimes to retrenchment have been introduced, determined by a formula of the number employed (< or >50) and the number to be retrenched (sliding scale):
	· Small scale retrenchment - s189 · Large scale retrenchment - s189A The major policy shifts in respect of retrenchment are as follows: · Engagement in joint consensus-seeking process · Disclosure of information disputes - onus on employer · Different rules for small and large scale retrenchments · Statutory facilitation in cases of large scale retrenchments (Facilitator) · Prevent dismissals until conclusion of facilitation or conciliation · Retrenchments now strikeable/lockout issue · More scope for labour to challenge · Will take longer to effect a retrenchment Retrenchment consultations: Parties (s189(1)): - the parties to any consultation are: · In terms of Collective Agreement; or · Workplace Forum + registered Trade Union; or · Any Trade Union; or · Employees/Representatives Joint Consensus-seeking process on (s189 (2)): - this must focus on: · Measures to avoid, minimize, change etc · Selection Criteria · Severance Pay Written Notice inviting other party (s189 (3)): - formal notice that starts the process: · Disclosure of information - new items · Onus on Employer in dispute Representations (s189(5)): - each party may make representations: · Other party allowed to make representations · Obligation to respond with reasons · If in writing, respond in writing Selection (s189 (7)): · Criteria agreed; or · Fair and Objective (employment equity?) Employers employing more than 50 employees (Large Scale) - s189A · Contemplates retrenchment of employees (scale - includes previous 12 months) · New notice periods apply (BCEA) · Right to strike & lockout · May vary time periods for facilitation & consultation · Facilitator appointed if:     · Employer requested     · Majority consulting party requested     · By agreement Facilitator If appointed & after 60 days (s189A (5)): · Employer - notice of termination of employment · Union/employees     · Notice of strike - 48 hrs/7 days     · Refer to Labour Court i.r.o fair reason only No Facilitator (s189A (8)): · Refer to Council/CCMA after 30 days from written notice · After s64(1)(a) periods lapsed (Certificate issued):     · Notice of strike - 48 hrs/7 days     · Refer to Labour Court i.r.o fair reason only Regulations (s189A(6)): · Time periods for facilitation · Powers & duties of Facilitators · Fees for facilitation Strikes · Shorter notice of strikes if Employer terminates employment early (s189A (9)) · No strike if referral (fair reason) to Labour Court (s189A (10)(a)(i)) · No Labour Court if notice to strike (s189A (10)(a)(ii)) · Binding on Union Members and where extended to other employees (s189A(10)(b)) · Chapter IV of LRA applies except:     · Standard notice periods except where Facilitator appointed     · Lock-out only where strike notice issued     · Secondary strikes:         · 14 days notice         · Director to appoint Commissioner (on request of Employer only) to attempt to resolve dispute     · Labour Court intervention if Employer doesn't follow fair procedure         · Compel fair procedure         · Stop dismissal, reinstate, Compensate Dismissal fair if (s189A (19)): · Based on ETSOS (economic, technological, structural or similar needs) · Operationally justifiable on rational grounds · Proper consideration of alternatives · Selection Criteria - fair and objective
·	Transfers and Insolvencies
	Sale of business as going concern · New employer automatically takes over contracts of employment from the old -previously employers were able to agree whether or not the new employer would take over the old employees · Failing an agreement by the employees, the contracts of employment will transfer by operation of law, in spite of what the employers may want · New employer to employ on conditions on the whole not less favourable (previously, the only obligation on the new employer was to take over the period of service which the employee had with the old employer) · For 12 months after the date of transfer, old employer is jointly and severably liable in respect of payment which employees are to receive on dismissal for operational requirements Insolvency · Where employer is insolvent - new employer is automatically substituted for old employer · Previously, contracts of employment came to an end on insolvency · An employer who is facing financial difficulties - that may result in winding up or sequestration must advise trade union or employees · If applies to be wound up or sequestrated, must provide trade union or employees with copy of application · Consultation process with employees or representatives to explore options of saving the business. Previously no obligation in this regard
·	Probation
	· Provides employers with a detailed guideline on the process to follow with a probationary employee · Clarifies that the reasons for dismissals during the probationary period may be less compelling than the reasons for dismissals after the completion of the probationary period

Conclusion
Whilst the Dept of Labour have attempted to streamline and correct some of the previous deficiencies in the LRA, the new retrenchment provisions are very complex and small business owners are urged to obtain sound advice before embarking on such action. The thought of some external statutory facilitator is both daunting and in volatile circumstances, welcomed.

Kevin Alborough is the MD of Human Alliance, and holds a BSocSc Natal, PG Dip Employment Law Cape Town. He can be contacted on (021) 715 5061.

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Fill this out now and stand a chance of winning a R500 gift voucher! 1. I am (select one): An entrepreneur / small business owner An employee of an entrepreneur / SME A manager of a larger concern An employee of a larger concern A student / researcher Unemployed Other 2. I (select one): Subscribe to Bizland News Receive Bizland News from a friend Read Bizland News on the Bizland website 3. I read Bizland News: Immediately on receiving it Within a day or two of receiving it Within a week of receiving it When I get time (rarely) When I clear out my inbox 4. I forward my issue on: Always Only if there is something of interest to someone in particular Never 5. I visit Bizland: Regularly (weekly or more) Occasionally (a couple of times a month) Rarely (once a month or less) When I see something of interest in the newsletter Never 6. Please rate the various regular features of Bizland News (1 - most enjoy; 5 - least enjoy): Editor's Note Feature Article Book of the Month Success Story Netbit / Announcements / Special Features 7. Please note any items you would like to see featured in Bizland News on a regular basis:   8. Please note any topics that you would like covered in the articles / success stories:   9. Please tell us if there is anything that you would like to add:   10. I (select one): Already subscribe to Bizland News Would like to subscribe to Bizland News Would not like to subscribe to Bizland News / would like to unsubscribe Name: Email: Please check this box if you would like more information on Bizland's products or services Thank you for filling out our survey! Your input is valuable to helping us bring you what you want! Your name will be entered into the draw for that R500 Kalahari.net gift voucher - winner will be notified via email and will be announced in the November issue. Closing date: 23 October 2002. Employees and associates of Saratoga Software (Pty) Ltd / Bizland and families thereof are unfortunately not eligible to enter. (click once - the entry will go through!)

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Book of the Month

Success Story

This is YOUR space. We want to know who you are, what annoys, inspires or impresses you in small business, funny stories, advice, or how you got on the road to success. Please share with us and we might publish your stories or comments in the next issue. Send your contributions to success@bizland.co.za - we look forward to hearing from you.

This week's Success Story: Lisa Becker and Beverley van Wyk of Stretch-a-Tac:
Stretching the Boundaries to Success!

Lisa Becker and Beverley van Wyk are both excellent examples of what it takes to be a true entrepreneur - hardworking, innovative, and most important - determined! This is one of those rare stories where an idea for an invention is turned to reality - the stuff dreams are made of. We got the story behind these two persevering, motivated women - the inventors of the award-winning product - Stretch-a-Tac - a product destined to be a regular on every supermarket shelf in the near future!

Both Lisa and Beverley have always had an entrepreneurial spirit, which have carried them to where they are today. It was in 1994, having been employed as Secretary to Non Food Buyers at Pick 'n Pay Hypermarket Bedworth Park since 1984, that Lisa opened Mona Lisa Arts and Crafts, converting a disused squash court into an old-world style shop selling various hand-crafted goods. Beverley was involved in opening a family business in 1984 called Performance Kawasaki, before joining Pick 'n Pay Hypermarket Bedworth Park in 1987 as Secretary to Food and Perishable Buyers, where she first met Lisa.

Beverley and Lisa - women of substance!

As part of their duties at the Hypermarket, Lisa and Beverley were required to assist with gift-wrapping services for various events and promotions, such as Mother's and Father's Day, Christmas, and Golf Day prizes. Says Lisa: "This always proved to be a messy job with pieces of sticky tape and cutting and tearing wrapping paper. We thought that there must be an easier way of doing this." And so the idea of a cling gift-wrap was born - a product that sticks to itself requiring no sticky tape - the first beginnings of Stretch-a-Tac.

It took Lisa and Beverley three years to locally develop and patent their product, having gone to approximately thirty manufacturers for assistance. Some tried to develop the product, but couldn't get it right, others turned them away outright. Trial and error was becoming an expensive process, as they were required to produce 250kg of the product at a time for a mere sample, which was thrown away when it did not work. Eventually through much discussion and investigation, Lisa and Beverley came up with a solution, and were able to run a few samples at Sasol Polymers Research Lab, where they found that various colours worked better than others, and through a process of elimination came up with a working product currently available in nine colours.

They have since developed "The Lazy Wrap Holder" for easy dispensing of the product. Stretch-a-Tac is also now listed with four Hypermarkets and are currently working on various overseas contacts, with a large order pending in Australia. They also currently market to courier, upholstery, engineering, brick and printing companies, who could benefit from the product's dust and moisture protection properties as well as colour design. Says Beverley: "We are also in the process of negotiations with the ACSA group for wrapping kiosks at all the major SA airports, to wrap large awkward arts and crafts for tourists."

All was not however plain sailing for Lisa and Beverley. After struggling to get the colours right, they were heartbroken when Pick 'n Pay rejected the product the first time, but this just made them more determined: "We actually cried our eyes out, but knew that there must have been a reason for this and now we realise that we weren't ready." They were also let down by a gift paper company who at first wanted sole rights, but then changed their minds after a few months, and a number of overseas deals also fell through. These setbacks, however, did not deter these strong women, who just set out to prove themselves with renewed energy!

Amazingly Lisa and Beverley still find time to have fun and are both members of a motorcycle club - and are regular rally goers. They enjoy spending time with friends and family, going to movies or eating out with their husbands. Lisa and Beverley have high hopes for the future of Stretch-a-Tac. They plan for it to be a household name in the future with large exports overseas, and are also currently developing two new colours. The next phase is to print logos and pictures on the product, which should be available next year. They hope to at last start earning salaries to "be able to spoil our families a bit!"

Lisa and Beverley offer the following advice for aspiring entrepreneurs: "Never give up, and see all criticism in a positive light. Every door that closes will just open up a bigger door with more opportunities. Stay positive and remember to view bad or negative things as a stepping stone and not an obstacle - these things always happen for a reason!" Wise words from two determined, positive women whose product is bound to be a house-hold name in the near future!

Click here to visit Stretch-a-Tac's website.

*Want to share a problem or experience with a fellow small business owner, or simply comment on an issue of relevance? Leave your message on our Discussion Forum!

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Next month
Next month we will be bringing you something a little different, but very interesting - a introduction to hand-writing analysis, offering you an alternative insight into your colleagues... Send us your comments or questions about this topic to sallyh@bizland.co.za or post them on our Discussion Board.

Until next time...

Sally & Piers

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